Appeal No 194 of 1967
Appeal from the judgment and order dated April 27 1964 of the Madhya Pradesh High Court in Misc
First Appeal No60 of 1960
section N Anand and Kailash Mehta for the appellant
section section Khanduja and K C Dua for respondent No 1
The Judgment of the Court was delivered by Khanna J
This is an appeal on a certificate of fitness granted by the Madhya Pradesh High Court against the judgment of that Court whereby that Court in appeal set aside the order of the Additional District Judge Jabalpur dismissed the objections against an award and directed that the award be made a rule of the Court
Naraindas appellant is the brother of Vallabhdas and Durga prasad respondents 1 and 2 and son of Smt
Sukhrani respondent No 3
There were some arbitration proceedings in 1932 between the appellant and respondents 1 to 3 on one side and Pannalal and Smt
Dulari Bahu on the other side
Those proceedings related to partition of property and a claim for maintenance allowance by Dulari Bahu
An award was given in those proceedings and was made a rule of the Court on 13 12 1933
According to the award Dulari Bahu was to get a maintenance allowance of Rs 12 per mensem from the appellant and his brothers 
A charge was created of the maintenance allowance on the house which fell as a result of partition to the 30 share of the appellant and respondents 1 to 3
It was also provided that if the appellant and his brothers failed to pay the monthly allowance Dulari Bahu would be entitled to get the house sold
Out of the sale proceeds Rs 3000 were to be deposited in a bank on the condition that the amount of interest would be paid to Dulari Bahu but she would not be entitled to draw the principal amount
On Dulari Bahu s death Rs 2000 out of Rs 3000 would be paid to the appellant and his brothers and Rs 1000 to Pannalal
The amount of maintenance payable to Dulari Bahu was increased to Rs 30 per mensem in a suit brought by her and decided on 8 10 1949
As the appellant and his brothers did not pay the maintenance allowance to Dulari Bahu she in execution of her claim for maintenance allowance got their houses situated at Jabalpur sold by Court auction
The houses were purchased for Rs 22000 by Sitaram and Laxminarain respondents 4 and 5
After obtaining the sale certificate respondents 4 and 5 took proceedings for obtaining possession of the houses but they were resisted by respondent No 1
The appellant and his brothers further claimed that they had deposited some amount with respondents 4 and 5
The appellant and his brothers and mother on one side and respondents 4 and 5 on the other side thereupon appointed four arbitrators as per agreement dated 8th April 1955
According to the agreement respondents 4 and 5 would have no claim in the houses purchased by them in Court auction and the arbitrators would make award in respect of the amounts to be paid by either of the parties as well as regarding the maintenance allowance payable to Durga Bahu and Sukhrani Bahu
The arbitrators thereafter gave their award dated 20th October 1956 wherein they made provision for the amounts payable to different parties
Regarding the amount of maintenance allowance payable to Dulari Bahu the award provided that Rs 3000 out of the sale proceeds would be withdrawn from the Court and be deposited with Durgaprasad respondent
Durgaprasad was made liable to pay the amount of Rs 30 per mensem as maintenance allowance to Dulari Bahu
The award further provided that out of the amount of Rs 3000  Rs 1000 would be paid to Pannalal and Rs 2000 to Durgaprasad on the death of Dulari Bahu
Dulari Bahu was also given a right of residence in a room and maintenance allowance of Rs 30 payable to her was made a charge on the house allotted to Durgaprasad
After the award had been put in Court objections were filed against the award
Learned Additional District Judge set aside the award on the ground that the award affected the rights of 31 Dulari Bahu and she had not been made a party to the arbitration agreement
The reference to arbitration as well as the award according to the Additional District Judge did not amount to an adjustment and were therefore invalid
It was also held that the award was in excess of the arbitration agreement
Some other grounds were also given but we are not concerned with them
On appeal the High Court reversed the decision of the Additional District Judge and held that there was no infirmity in the arbitration proceedings or the award
In the result the award was made a rule of the Court
Mr Anand on behalf of the appellant has argued that Dulari Bahu was an interested party in the dispute relating to arbitration and as she did not join the arbitration agreement the reference to arbitration and the subsequent award should be held to be invalid
There is in our opinion no force in this contention
The dispute which was referred to the arbitrators related to the houses in question which had been sold in Court auction
The interest of Dulari Bahu pertained only to the recovery of her maintenance allowance
According to the earlier award which Dulari Bahu sought to enforce she was to get the maintenance allowance from an amount of Rs 3000 which was to be kept in deposit
The rights of Dulari Bahu in this respect remained in tact and were in no way affected by the award dated 20th October 1956
The maintenance allowance payable to her was also kept as a charge over the immovable property
The fact that Dulari Bahu did not sign the arbitration agreement as such would not vitiate the arbitration proceedings
The present is not a case wherein the arbitration proceedings are sought to be assailed by Dulari Bahu
On the contrary it is the admitted case of the parties that Dulari Bahu did not raise any objection to the arbitration proceedings or the subsequent award on the ground that her rights had been prejudicially affected
This apart we find that Dulari Bahu according to the learned counsel died about three years ago
In the circumstances it would be purely academic to dilate upon the question as to whether the rights of Dulari Bahu were prejudicially affected by the award in question
It is next argued by Mr Anand that as the reference to arbitrators was made out of Court and as all the parties to the arbitration agreement did not sign the award in token of their acceptance the same could not be made a rule of the Court
There is no substance in our opinion in the above contention
It is always open to parties to refer a dispute to arbitration without the intervention of the Court
In case a suit is pending in respect of the subject matter of the dispute there can be no valid reference during the pendency of the suit to arbitration without 32 the order of the Court
The underlying reason for that is to avoid conflict of jurisdiction by both the Court and the arbitrator dealing concurrently with the same dispute
An award given or a reference during the pendency of a suit relating to dispute which is the subject matter of reference without obtaining the order of the Court cannot be enforced
The only exception to this rule is provided by the proviso to section 47 of the Act 10 of 1940 according to which an arbitration award otherwise obtained may with the consent of all the parties interested be taken into consideration as a compromise or adjustment of a suit by any Court before which the suit is pending
In such an event the award is enforced as a compromise or adjsutment of the suit because all the interested parties give their consent to the award
Where however as in the present case no suit is pending with respect to the subject matter of dispute and the parties choose to refer a dispute to arbitrators it is not essential that the parties should signify their consent to the award before the same can be enforced
Any other view would run counter to the entire scheme and object of arbitration for the settlement of disputes according to which agreement and consent are imperative only at the stage of referring the dispute to arbitrators but not at the stage of the award
The decision of Bachawat J as he then was in Jugaldas Demodar Modi  Co vs Pursottam Umedbhai  Co1 relied upon by the appel lant has no bearing as the said case dealt with an arbitration reference during the pendency of a suit
We are also not impressed by the contention raised on behalf of the appellant that because there had been earlier litigation about the house allotted to the appellant and his brothers the same could not be the subject matter of arbitration dispute
A dispute is referred to arbitration because the parties agreed to such a reference and the mere fact that the property which is the subject matter of dispute was also the subject matter of an earlier litigation cannot prevent the parties to refer the dispute about that property to arbitration
What is referred to arbitrators in such a case is the fresh dispute and although the finding of the Court in the previous litigation may have a bearing on the dispute referred to the arbitrators it would not stand in the way of reference of the fresh dispute to the arbitrators
It is not the case of the appellant before us that the precise dispute which was the subject matter of the award dated 20th October 1956 had been adjudicated upon earlier in a civil Court
The appeal consequently fails and is dismissed with costs
GC Appeal dismissed


Summary:
By an arbitration award given in 1933 D was given a maintenance allowance enforceable against property allotted to the appellant and his brothers and mother
Since the allowance was not paid D secured a decree for the sale of houses belonging to the appellant and his brothers
The property was purchased by respondents 4 and 5 who after obtaining sale certificate from the court sought to obtain possession of the same
On 8th April 1955 the appellant his brothers and mother entered into an arbitration agreement with respondents 4 and 5
According to the agreement respondents 4 and 5 gave up their claim to the houses purchased by them in court auction and the arbitrators were to make award in respect of the amounts to be paid by either of the parties as well as the maintenance allowance payable to D and to the appellant s mother
The arbitrators by their award dated 20th October 1956 made provision for the amounts payable to different parties
The also made on for the payment of allowance to D as well as for her residence
provision the award had been put in court objections were filed against it
The Additional District Judge set aside the award inter alia on the ground that the award affected the rights of D and she had not been made a party to the agreement
The High Court reversed the judgment of the Additional District Judge
In appeal by certificate the appellant contended i that the award was invalid because D was an interested party in the dispute relating to arbitration and she had not joined the arbitration agreement ii that the reference to arbitrators was made out of court and as all the parties to the arbitration agreement did not sign the award in token of their acceptance the same could not be made a rule of court iii that because there had been earlier litigation about the house allotted to the appellant and his brothers the same could not be the subject matter of arbitration dispute HELD  i The rights of D remained intact and were in no way affected by the award dated 20th October 1956
The maintenance allowance payable to her was also kept as a charge over the immovable property
The fact that D did not sign the arbitration agreement as such would not vitiate the arbitration proceedings She did not raise any objection to the arbitration proceedings or the subsequent award
Ac cording to counsel she died three years ago
In the circumstances the question whether her rights were prejudicially affected by the award was purely academic 31 E ii An award given on a reference during the pendency of a suit relating to a dispute which is the subject matter of reference without obtaining the order of the Court cannot be enforced
The underlying reason for the same is to avoid conflict of jurisdiction
However according to section 47 of the  an arbitration award otherwise obtained may with the consent of all the parties interested be taken into consideration 29 as a compromise or adjustment of a suit by any court before which the suit is pending  In such an event the Award is enforced as a compromise or adjustment of the suit because all the interested parties give their consent to the award
When however as in the present case no suit is pending with respect to the subject matter of dispute and the parties choose to refer a dispute to the arbitrators it is not essential that the parties should signify their consent to the award before the same can be enforced
Agreement and consent are imperative only at the stage of referring the dispute to arbitrators but not at the stage of the award
31H 32D
Jagaldas Damodar Modi  Co vs Pursottam Umedbhai  Co AIR 1953 690 held in applicable
iii A dispute is referred to arbitration because the parties agree to such a reference and the mere fact that the property which is the subject matter of dispute was also the subject matter of earlier litigation cannot prevent the parties to refer the dispute about that property to arbitration
What is
referred to arbitrators in such a case is the fresh dispute and although the finding of the Court in the previous litigation may have a bearing on the dispute referred to the arbitrators it would not stand in the way of reference of the fresh dispute to the arbitrators
32 F