Law: Civil Procedure Code (V of 1908)

Section: XXIII,3

Law: Arbitration Act, 1940

Section: X,2(c),14,17,21

Civil Procedure Code (V of 1908)-------O.XXIII, R.3---Arbitration Act (X of 1940), S. 21---Matter referred for arbitration during a pending suit, without obtaining an order---Scope---Suit was dismissed as withdrawn---Thereafter, the arbitrators rendered their decision in shape of award---Petitioners moved an application under Ss. 14 & 17 of the Act, 1940 for pronouncement of the judgment according to the award---On objections by the respondents, the application was dismissed by the Civil Court, declaring the arbitration agreement and consequent award as illegal for not obtaining an order for reference under S. 21 of the Act, 1940---Judgment passed by the Civil Court was upheld in appeal---Validity---Record showed that there was no application under S. 21, but the matter in the suit was referred and decided in arbitration through the award---Both the Courts, exercising jurisdiction under the Act, 1940, declared the arbitration agreement and consequential award as nullity in the eyes of law, ignoring the important fact that the suit, having been withdrawn thereafter, was not pending---Essentially the arbitration, in question, was no more during pendency of suit---However, if the suit was withdrawn after the arbitration agreement during pending suit, the question of staying the proceedings in the suit would not arise--Such arbitration agreement, with due deference, was not an unlawful agreement and consequent award would be treated under Chapter II as Arbitration without intervention of Court---Hence, the application under Ss. 14 & 17 of the Act, 1940, for judgment in terms of award could not be dismissed, simply because an order of reference under S. 21 was not obtained before entering into an arbitration agreement---If the award and arbitration proceedings were in accordance with the provisions of the Act, 1940 and there was no suit pending; the award could be filed in the Civil Court, as defined under S. 2(c) of the Act, 1940, and judgment could be pronounced in conformity with such award under S. 17---Both the impugned orders were set-aside by allowing the revision and the matter was remanded to the Civil Court for deciding the same afresh, in…