il Appeals Nos
112 to 116 of 55
Appeals from the judgment and order dated December 141951 of the Madras High Court in AAO 210 of 1946 C M Ps
3273 and 3274 of 1946 AAO 661 of 1946 and AAO 49 of 1947 respectively arising out of the judgment and order dated January 28 1946 of the Subordinate Judge Devakottah in 1
A No 18 of 1945 in O section No 91 of 1941
A V Viswanatha Sastri K Parasaran and MSK Aiyangar for the appellants
K Rajah Iyer R Rangachari and R Ganapathy Iyer for the respondent
November 13
The Judgment of the Court was delivered by GAJENDRAGADKAR J
These five appeals arise from a partition suit OS No 91 of 1941 filed by the respondent Subramanian Chettiar against his brother Ct
A Ct
Nachiyappa Chettiar and his four sons appellants 1 to 5 respectively in the court of the Subordinate Judge of Devakottai and they have been brought to this Court with a certificate granted by the High Court of Madras under article 133 of the Constitution
The principal appeal in this group is Civil Appeal No 112 of 1955 and the questions which it raises for our decision relate to the validity of the award made by the arbitrators to whom the matters in dispute between the parties were referred pending the present litigation
It would however be convenient at the outset to state broadly the material facts leading to the suit and indicate the genesis and nature of the five respective appeals
The appellants and the respondent belong to the Nattukottai Chettiar community and their family which is affluent had extensive money lending business in Burma
Chidambaram Chettiar the father of appellant 1 and the respondent died on August 20 1926
At the time of his death the respondent was an 212 infant 6 years of age
Appellant 1 had already been associated with his father in the management of the business and on his father s death he became the manager of the family and took charge of its affairs and business
On September 6 1941 the respondent gave notice to appellant 1 calling upon him to effect a partition and to render accounts of his management and the properties of the family
This demand was not complied with and so the respondent instituted the present suit on September 24 1941
According to the plaint the assets of the family consisted of immoveable properties in India which was then described as British India and in Pudukottai an Indian State
These consisted of Items Nos 1 to 12 and Item No 13 respectively in Sch A 
The jewels and moveables belonging to the family were set out in Sch B  whereas two money lending firms which the family owned and conducted at Minhla and Sitkwin in Burma were set out in Schs  D  and E  respectively
The plaint further alleged that Chidambaram Chettiar had entered large amounts belonging to the family in the names of the members of the family in what are called Thanathu maral accounts and these amounts were invested in various firms or lent to several individuals
The total of these investments came to about Rs 1500000 described in Sch C 
The assets thus described in Schs
IC  ID  and  E  included immoveable properties in Burma and the respondent claimed alia If share in all of them
It appears that the family had endowed several properties in favour of charities and they were described in Sch  F 
The respondent claimed that in effecting partition between the parties a scheme should be framed for the management of the said respective charities
According to the respondent appellant I had in the course of his management manipulated accounts and had in fact misappropriated large amounts and so he claimed an account from appellant 1
That in brief is the nature of the claim made by the respondent in his plaint
At the date of the suit appellants 3 to 5 were minors and they were represented by appellant 1
It appears that a written statement was filed by appellant 1 for 213 himself and as guardian of his minor sons in which the relationship of the respondent and his half share to the family properties were admitted
Several contentions were however raised with reference to the properties available for partition
It was alleged that Items Nos 10 and 11 in Sch A  were dedicated to charity and as such not divisible and that Item No 3 was being used as a school
The written statement referred to some more properties which had not been included in the plaint though they were liable to partition
In regard to the jewels and moveables it was contended that several items not belonging to the family and some not even in existence bad been shown in the said schedule
It was also alleged that some of the jewels shown in the said schedule belonged to the several appellants as their separate property
Then as regards the Thanathu maral accounts the appellants gave a detailed history of the amounts and their investments
It was admitted that the said amounts belonged to the family though the investments had been made in the names of the different members of the family
It was however urged that the total value of the assets enumerated in Sch C  would be only Rs 900000 and not Rs 1500000 as alleged by the respondent
The respondent s case that appellant I had manipulated accounts and misappropriated family funds was denied and it was urged that for the purpose of partition the assets of the family as they stood on the date of the partition should be taken into account
The appellants also pleaded that the court had no jurisdiction to divide the immoveable properties situated in Burma
According to them there was a special practice obtaining among the families of the Nattukottai Chettiar community according to which appellant I was entitled to a decent remuneration for the management of the joint family business and properties
According to another custom pleaded by the appellants it was alleged that provision had to be made for future Seermurais for the unmarried daughters of the family
Broadly stated these were the pleas raised by appellants 1 and 3 to 5
Appellant 2 who was a major filed a separate written 214 statement generally adopting the written statement filed by appellant 1  nevertheless he put the respondent to the strict proof of the allegations made by him in the plaint in support of his claim
In reply to the contentions thus raised by the appellants the respondent filed a reply
In this statement he pleaded inter alia that there was a custom amongst the community for a member of the joint family to set up a separate family after marriage and that monies drawn by him thereafter would be entered in a separate account called Pathuvazhi and that at the time of the partition the amounts appearing in the said account would be debited to the said member
The respondent claimed that account should be made in accordance with this custom in affecting the partition of the family
On these pleadings the learned trial judge framed fifteen issues
It appears that an attempt Was made by the parties to have their disputes referred to arbitration and in fact a reference was made on April 6 1943 but this attempt proved abortive and the suit was set down for hearing before the court and the hearing actually commenced on December 11 1943
Meanwhile on December 6 1943 appellant 2 filed an application under 0 8 r 9 of the Code of Civil Procedure for permission to file an additional written statement
This application was numbered as I A No 988 of 1943
It would be relevent to refer to the plea which appellant 2 sought to raise by this application
He alleged that the deceased Chidambaram Chettiar bad set apart on March 25 1925 two sums of money of Rs 210251 4 0 each separately in the name of the respondent and appellant I so as to vest the same in them forthwith and he urged that these amounts and their accretions were not the properties of the family liable to partition in the suit
This application was opposed by the respondent
On December 14 1943 the trial judge dismissed the said application on the ground that it sought to raise a new and inconsistent plea and that had been really inspired by appellant 1
On December 29 1943 the learned judge delivered his judgment in the suit and it was followed by a preliminary decree
215 Against this decision three appeals were preferred before the High Court of Madras
A section No 115 of 1948 was filed by appellant 2 and No 199 of 1944 by appellants 1 3 to 5 whereas A section No 499 of 1944 was filed by the respondent
It appears that under his appeal No 115 of 1944 appellant 2 made an application for stay of further proceedings before the Commissioner CMP No 1402 of 1944
On this petition the High Court ordered that there was no need to stay all proceedings before the Commissioner and that it would be enough if the passing of the final decree alone was stayed
As a result of this order interim stay which had been granted ex parte was vacated
After the final order on this application was passed the Commissioner commenced his enquiry but before the enquiry could make any progress the parties decided to refer their disputes for arbitration
Accordingly on July 18 1944 a joint application was filed by the parties before the trial judge requesting him to refer to the arbitration of Mr VE
Ramanathan Chettiar of Kandanoor and RM
section RM
Chellappa Chettiar of Kothamangalam  all matters in dispute in the suit and all matters and proceedings connected therewith 
An application under 0 32 r 7 was also filed since three of the parties to the dispute were minors
On July 21 1944 the trial court allowed the said application and certified that the proposed reference was for the benefit of the minors and so referred  the matters in dispute in the suit and all matters and proceedings connected therewith  for determination by the two arbitrators named by the parties
The arbitrators then began their proceedings and made an interim award on August 1 1944
It was followed by their final award on December 61944
This award was filed in the trial court
On January 3 1945 the appellants filed a petition I A No 18 of 1945 under sections 30 and 31 of the Indian hereinafter called the Act
By this petition the appellants urged that the award should be set aside on the grounds enumerated by them in the petition
Their case was that the reference to arbitration 216 had been brought about by coercion and undue influence that the arbitrators had not held any proper Chettiar enquiry and that they were partial and biased
Thus the award was sought to be set aside on the ground that the reference was bad and that the arbitrators were guilty of misconduct
The validity of the award was also challenged on the ground that  both the reference and the award were invalid because they contravened the principle of private international law that courts in one country would have no jurisdiction to adjudicate on title to immoveable property situated in a foreign country or to direct its division the reference and the award dealt with immoveable properties in Burma and so they were invalid
The appellants further contended that the reference to arbitration was opposed to the orders passed by the High Court in CMP No 1402 of 1944 and as such it was invalid
This application was resisted by the respondent
He traversed all the allegations made by the appellants and claimed that a decree in terms of the award should be passed
At the hearing of this petition no oral evidence was led by the parties they were content to base their case on the documents produced on the record and on points of law raised by them
The trial judge rejected the appellants  case about the alleged misconduct of the arbitrators
He also found that there was no substance in the contention that the reference was the result of undue influence or coercion
He was satisfied that the arbitrators had made a proper enquiry and that the award was not open to any objection on the merits
He however held that the reference to the arbitrators which included matters in dispute in the suit comprised questions of title in relation to immoveable properties in Burma and so it was without jurisdiction and invalid
In his opinion the reference also included the dispute relating to the sums of Rs 210251 4 0 which had been entered in the Thanathu maral accounts of appellant 1 and the respondent and that this part of the reference contravened the order passed by the High Court in CMP No 1402 of 1944
He thus upheld these two 217 contentions raised by the appellants and set aside the reference and the award
It was against this order that the respondent preferred CMA No 210 of 1946
The High Court has allowed the respondent s appeal
It has confirmed the findings of the trial court in respect of the pleas raised by the appellants as to the misconduct of the arbitrators and as to the invalidity of the reference on the ground that it was the result of coercion and undue influence
It has however reversed the conclusions of the trial court that the reference and the award were invalid inasmuch as they related to immoveable properties in Burma and contravened the stay order passed by the High Court
The High Court has construed the order by which reference was made to the arbitrators in the present proceedings as well as the award and has held that they are not open to be challenged on either of the two grounds urged by the appellants
It was also urged before the High Court that the order of reference was invalid because under section 21 of the Act the trial court was not competent to make the reference this contention has been negatived by the High Court
In the result the High Court has found that the reference and the award were valid and it has directed that a decree should be passed in terms of the award
It is against this decision that Civil Appeal No 112 of 1955 arises and as we have already mentioned the questions which it raises relate to the validity of the award on which the two courts have differed
Before we deal with the merits of these points however we may indicate how the other appeals arise
In A section No 115 of 1944 filed by appellant 2 before the High Court the appellant presented Miscellaneous Application CMP No 2374 of 1946 under 0 23 r 3 for an order that the interim award exhibit P 15 passed by the arbitrators which had been signed by all the parties in token of their consent should be treated as a compromise and a decree passed in accordance with it under 0 23 r 4
The High Court has observed that in view of its decision in CMA No 210 of 1946 it was really unnecessary to pass any order in this appeal but it thought that since the matter was likely to go 28 218 in appeal to this Court it would be better to make a formal order and direct that a decree in terms of the sayinterim award should be drawn under 0 23 r 3
Against this decision the appellants have preferred Civil Appeal No 116 of 1955 in this Court
The appellants had made a similar application in A section No 199 of 1944 and it was numbered as CMP No 3273 of 1946
The High Court has allowed this application for similar reasons and its decision has given rise to Civil Appeal No 115 of 1955
In the trial court the appellants had filed two similar applications under 0 23 r 3 but they had been rejected by the trial court these orders had given rise to two appeals in the High Court CMA No 661 of 1946 and CMA No 49 of 1947
The High Court has allowed these appeals and has ordered that a decree in terms of compromise should be passed under 0 23 r 3
Against the orders thus passed by the High Court in these two appeals Civil Appeals Nos 113 and 114 of 1955 have been filed in this Court
That is the genesis and nature of the four subsidiary appeals in the group
We will now revert to the points which arise for our decision in the principal Civil Appeal No 112 of 1955
The first ground on which the validity of the reference and the award is challenged is based on the assumption that the reference involved the determination of the title to immoveable properties situated in Burma andor that the award has actually determined the said question of title
The appellants contend that there can be no doubt that courts in this country have no jurisdiction to determine questions of title in respect of immoveable properties in foreign countries or to direct a division thereof
This position is not and cannot be disputed
The rule of law on this subject has been thus stated by Dicey The courts of a foreign country have no jurisdiction to adjudicate upon the title or the right to the possession of any immoveable property not situate in such country
1 It is also urged that where a court has no jurisdiction to determine any 1 Dicey s  Conflict of Laws  6th Ed pp 141 and 348
219 matter in controversy such as the question of title in respect of the foreign immoveable property it has no jurisdiction to refer it for the determination of the arbitrators
This position also is not and cannot be disputed
The appellants further argued that if the reference includes properties over which the court had jurisdiction as well as those over which it had no jurisdiction the whole of the reference becomes invalid and in such a case it is not permissible to separate the invalid part of the reference from that which is valid
The correctness of this contention is disputed by the respondent but for the purpose of the present appeal the respondent is prepared to argue on the assumption that even this contention is well founded
The respondent s case is that neither the reference nor the award purports to deal with any immoveable property in Burma and so the challenge to the validity of the reference and the award on the legal points raised by the appellants cannot succeed
It is therefore necessary to examine the reference and the award and decide whether the factual assumption made by the appellants in urging their legal grounds against the validity of both the reference and the award is justified
In dealing with this question it is necessary first to ascertain the scope of the request made by the parties when they applied to the trial court for reference of their dispute to arbitration
In their application exhibit P 12 the parties have briefly indicated the nature of the respondent s claim and have stated that the dispute between the parties was then pending before the High Court in the form of three appeals preferred by them
Then it is averred that appellants 3 to 5 are minors but it is added that the proposed reference was for their benefit and so another application had been separately made for the court s sanction to the said reference in respect of the said minors
The parties desire and agree  said the application that all matters in dispute in this suit and all matters and proceedings connected therewith should be referred to the unanimous decision of the two named arbitrators
They had also agreed that they would abide by the 220 unanimous decision of the arbitrators and that the arbitrators should be empowered to partition the properties of the joint family between the parties and if necessary also by payment of monies to equalise the shares and to take the necessary accounts and to decide all matters in dispute between them including costs
The parties had further agreed to produce their own papers and copies before the arbitrators and that if the arbitrators needed any further papers accounts or documents which had been filed in court they should be authorised to require the Commissioner to send them to the arbitrators
It is on this application that the court made the order that  all matters in dispute in this suit and all matters and proceedings connected therewith  be referred for determination to the two named arbitrators The question which arises for our decision is What was the scope and extent of the matters thus referred to arbitration  In other words did this order of reference include the respondent s claim for a share in the immoveable properties in Burma  The appellants contend that the order of reference includes not only all matters in dispute in the suit but also all matter  and proceedings connected therewith and their case is that these clauses are wide enough to include the respondent s claim for a share in the immoveable properties in Burma
There is no doubt that the latter clause refers to matters and proceedings connected with the suit but the appellants  contention can be upheld only if it is shown that the respondent s claim for a share in the properties in Burma was connected with the suit or was a part of the matters connected with it at the material time
What then was the nature and extent of the dispute between the parties at the material time Let us examine the pleadings of the parties the issues framed by the trial court the decision of the trial court on them and ascertain the nature and extent of the subsisting dispute between them which was pending in the High Court in the three respective appeals
There is no doubt that in his plaint the respondent had claimed a share in the immoveable properties in 221 Burma
In regard to this claim his allegation was that with the aid of the advances made by the family firms in Burma and of those in the accounts described as Thanathu maral accounts lands and other properties had been purchased and they formed part of the assets of the firms and the Thanathu maral accounts
The written statement filed by appellant 1 admitted that there were Thanathu maral transactions during the lifetime of Chidambaram Chettiar and that all sums taken from the family assets though invested for the sake of convenience in the name of one or the other member of the family belonged to the family and had been treated as family assets
According to the appellants however the extent of the Thanathu maral transactions had been exaggerated by the respondent
On the whole the written statement clearly admitted that the branches of appellants 1 to 5 on the one hand and of the respondent and his son on the other are entitled to a half share each but they pleaded that the said shares have to be allotted only after making some provisions out of the joint family funds for the payments of the future Seermurai etc due to the unmarried daughters in the family
They also contended that the court had no jurisdiction to divide the immoveable properties in Burma though it was admitted that the respondent was entitled to the relief in respect of the division of the family assets as set forth in the written statement
This written statement was adopted by appellant 2 though in a general way be denied the allegations in the plaint which had not been expressly admitted by him in his written statement
It would thus be seen that the respondent s share in the family properties was not in dispute nor was his share in the properties in Burma seriously challenged
The only plea raised in respect of the latter claim was that the court bad no jurisdiction to deal with it
This state of the pleadings in a sense truly reflected the nature of the dispute between the parties
It is common ground that the family is a trading family and there could be no doubt that the assets of the family were partible between the members of the family
It was on these 222 pleadings that the trial judge framed fifteen issues and set down the case for hearing
At this stage appellant 2 wanted to go back upon his written statement by making further and additional pleas
That is why he filed an application exhibit P 3 a for leave to file an additional written statement
As we have already mentioned this application was rejected by the trial court but for our present purpose it is relevant to consider the pleas which he wanted to raise by this additional statement
He wanted to contend that the amounts set apart in favour of appellant 1 and the respondent respectively by their father remained invested distinctly and separately during his lifetime and that in law they ought to be taken to be separate properties belonging to the two respective branches
In other words the plea thus sought to be raised was that by reason of the investment of the amounts in the names of appellant 1 and the respondent respectively the said amounts constituted the individual and separate monies of the respective persons and became the separate properties of their branches
Appellant 2 thus raised a Contention about the character of the amounts invested by the deceased Chidambaram Chettiar in the two names of his sons respectively and in that sense the issue which he sought to raise was in regard to the character of the amounts themselves
It had no direct reference to any immoveable properties in Burma
Since the trial court refused to allow appellant 2 to raise this additional plea he proceeded to try the issues already framed by him and as we have already indicated he held that he had no jurisdiction to deal with immoveable properties in Burma and appointed a Commissioner to make an enquiry in pursuance of the preliminary decree
The preliminary decree in terms excluded from its operation the immoveable properties in Burma as well as in the Indian State of Pudukottai
In the proceedings before the Commissioner parties agreed that the properties in Burma and Pudukottai should be left out of account and so no dispute appears 223 to have been raised before him that the accounts of the firms in Burma should be taken by him
In the appeal filed by the respondent against this preliminary decree he did not challenge the decision of the trial court that he had no jurisdiction to deal with immoveable properties out of British India
His appeal raised some other points which it is unnecessary to mention
This fact is very significant
It shows that the respondent accepted the finding of the trial court and did not want the High Court to consider his claim for a share in the excluded properties
In the appeal preferred by appellant 2 he had urged inter alia that the trial court should have allowed him to raise the additional pleas and it appears that he had also raised a point that the trial court bad no jurisdiction to direct a division of the moveable properties of the firms in Burma
The grounds taken by appellant 2 in his memo leave no manner of doubt that none of the pleas which he sought to raise before the High Court had any reference to immoveable properties in Burma
It is therefore clear that in none of the three appeals pending before the High Court was it urged by any party that the immoveable properties in Burma should be brought within the scope of the partition suit
The application made by the parties for arbitration to which we have already referred has deliberately set out the pendency of the three appeals in the High Court at the material time in order to furnish the background for determining the extent and nature of the dispute which was sought to be referred to arbitration
The respondent s claim for a share in the properties outside India had been negatived by the trial court and the decision of the trial court had become final because it was not challenged by the respondent and so there can be no doubt that the said claim was outside the purview of the dispute which was then pending between the parties in the High Court
It was not and could not have been intended to be a matter in dispute in the suit between the parties or any matter and proceedings connected therewith
Therefore we are satisfied that the High 224 Court was right in coming to the conclusion that the reference did not include any claim with regard to the immoveable properties in Burma
It is however urged that the reference did include the points raised by appellant 2 in his appeal before the High Court and that no doubt is true
But what is the effect of the said grounds raised by appellant 2  As we have already pointed out the said grounds did not raise any question about immoveable properties in Burma
They merely raised a dispute about the character of amounts invested by the deceased Chidambaram Chettiar in the names of appellant 1 and the respondent respectively
It was a dispute in regard to monies or moveables and so appellant 2 was driven to contend that the trial court had no jurisdiction to deal with such moveables
This contention is obviously without substance and has not been raised either in the courts below or before us
The only argument raised is that the reference included claims in regard to immoveable properties in Burma and this argument cannot be supported on the ground of the pendency of the appeal by appellant 2 before the High Court because even if the said appeal was allowed it could have no reference to any immoveable properties in Burma
Thus the attack against the reference on the ground that it included immoveable properties in Burma must fail
Does the award deal with the said immoveable properties in Burma  That is the next question which falls to be considered
If it does it would be invalid not only because it purports to deal with foreign immoveable properties but also for the additional reason that it is in excess of the terms of reference
At the hearing of the present appeals in this Court Mr Viswanatha Sastri for the appellants attempted to criticise the decision of the arbitrators on several grounds but we did not allow him to raise any contentions against the merits of the award because both the courts below have rejected the appellants  objections in that behalf and in view of their concurrent findings it would not be open to the appellants to raise the same points over again
That is why we would 225 confine ourselves to those portions of the award which according to the appellants show that the arbitrators divided the immoveable properties in Burma and Pudukottai
In regard to the properties in Pudukkottai this is what the award says in paragraph 3  The plaintiff and the defendants shall enjoy them in equal halves as under marukkal kuttu
In proportion to their respective shares
the plaintiff shall pay one half of the taxes and the defendants 1 to 5 the other half
Since the aforesaid property has been situate in Pudukottai State it has not been divided on the good and bad qualities of the soil if it is necessary the plaintiff and the defendants shall have it divided in equal halves later on when required
 In regard to the properties in Burma paragraph 1 of the award recites that  after communications are restored in Burma the plaintiff and the defendants have to divide the firms in Burma at the places Minhla and Sitkwin belonging to them and the lands godowns homes gardens and the properties items bank deposits jewels movables all assets etc and the subsequent income attached thereto into two halves and the plaintiff has to take one half and the defendants the other half 
Paragraph 2 adds that since both the parties have agreed to divide the movable properties attached to the said shop later on the arbitrators had not divided them
The award has also stated that the sale deeds at Alagapuri and relating to the lands attached to the said firms have been divided into two lots and for the purpose of safe custody two lists known as Schs
A and B have been prepared and both parties have signed the lists
Later on at the time of division of the said lands firms and assets all the documents shall be collected together and the parties shall take the documents relating to their respective shares
The arbitrators then dealt with the additional plea sought to be raised by appellant 2 and in substance they refused appellant 2 permission to raise that plea because they thought that having regard to the conduct of the parties it was futile to raise such a plea
That is why they directed that  the plaintiff s branch 29 226 and the defendant s branch have shares in all the amounts and they added that their conduct fully justified the said conclusion and the parties agreed to it
 It is these portions of the award on which the appellants based their contention that immoveable properties in Pudukottai and Burma have been dealt with by the arbitrators
In our opinion this contention is not well founded
What the arbitrators have done is to divide the properties which were then the subject matter of the dispute between the parties and having done so they have indicated what the legal position of the parties would be in respect of the properties outside the dispute
In appreciating the effect of the words used in the award we must bear in mind that the arbitrators were laymen not familiar with the technical significance of legal expressions and so we must read the relevant clauses as a whole with a view to determine what in effect and substance they intended to decide
Now take the recitals in the award to the Pudukottai properties
The award expressly states that the properties had not been divided by them and that the plaintiff and the defendants shall have them divided when so required
All that the award says is that since the parties had separated and the properties in suit before the arbitrators had been actually divided by metes and bounds the two branches shall enjoy the Pudukottai properties in equal halves
This clause in the award cannot be said to divide the said properties or even to determine their shares in them
The shares of the parties in the said properties were admitted and so the award merely says that as divided members they will hold and enjoy the properties half and half
Similarly in regard to the properties in Burma the award expressly states that the said properties had not been divided and it merely refers to the true legal position that they would be enjoyed by the two branches half and half
The arrangement proposed by the arbitrators in respect of the immoveable properties in Burma is very significant
They merely asked the parties to hold the documents of title half and half for 227 safe custody and they have added that when the parties decide to divide the properties all the documents would have to be brought together and a partition made according to law
That again is an arrangement dictated by commonsense and cannot be said to amount to a decision in any way
It is not as if the award declares the shares of the parties in respect of the properties
What it does is no more than to state the true and admitted legal position of the parties  rights in respect of the said properties
In this connection it would be useful to refer to the observations made by Viscount Dunedin in Bageshwari Charan Singh vs Jagarnath Kuari 1
In that case the Privy Council was called upon to consider the question about the admissibility of a petition which was relied upon as an acknowledgment of liability under section 19 sub section
1 of the Limitation Act and it was urged that the said petition was inadmissible because it purported or operated to create or declare a right to immoveable property and as such was compulsorily registrable under section 171b of the Regis tration Act 1908
In urging the objection to the admissibility of the petition a large Dumber of Indian decisions were cited before the Privy Council dealing with the word  declare  used in section 171b of the  and it was apparent that there was a sharp conflict of views
In Sakha Ram Krishnaji vs Madan Krishnaji 2 West J had observed that the word declare in section 171b is placed along with create  assign   limit  or  extinguish  a right title or interest and these words imply a definite change of legal relation to the property by an expression of will embodied in the document referred to and had added that he thought that is equally the case with the word declare
On the other hand certain other decisions had construed the word  declare  liberally in a very wide sense and it was on those decisions that the objection against admissibility of the petition was founded
In repelling the objection Lord Dunedin observed that though the word 1 Pat 272 53 IA 130
2 Bom
228  declare  might be given a wider meaning they are satisfied that the view originally taken by West J is right
The distinction is between a mere recital of fact and something which in itself creates a title
 These observations assist us in deciding the question as to whether the impugned portions of the award declare the parties  rights in immoveable properties in the sense of deciding them as points or matters referred to arbitration
In our opinion the High Court was right in answering this question against the appellants
Therefore the award is not open to the attack that it deals with immoveable properties out of the jurisdiction of the court
That takes us to the next ground of attack against the validity of the award
It is urged that the award contravenes the order passed by the High Court on the stay petition filed before it by appellant 2
There is however no substance in this contention
All that the High Court directed was that pending the final decision of the appeals before it a final decree should not be drawn
In fact the High Court clearly observed that there was no reason for staying all the proceedings pending before the Commissioner
That is the usual order made in such cases and it is difficult to appreciate how this order has been contravened by reference to arbitration or by the award that followed it
The award is not and does not purport to be a final decree in the proceedings and the proceedings before the arbitrators substantially correspond to the proceedings of the enquiry which the Commissioner would have held even under the order of the High Court
Therefore this contention must also fail
We must now consider another objection against the validity of the reference which has been seriously pressed before us
It is urged that the reference and the award are invalid because the trial court was not competent to make the order of reference under section 21 of the Act
Section 21 reads thus  Where in any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration they 229 may at any time before judgment is pronounced apply in writing to the Court for an order of reference
 Two conditions must be satisfied before an application in writing for reference is made
All the interested parties to the suit must agree to obtain a reference and the subject matter of the reference must be any matter in difference between the parties in the suit
When these two conditions are satisfied the application for reference must be made at any time before the judgment is pronounced
Thus broadly stated the construction of the section presents no difficulty
But when we analyse the implications of the two conditions and seek to determine the denotation of the word  court  difficulties arise
What does the word it court mean in this section According to the appellants  court  means the court as defined by section 2c of the Act
section 2c define the  court  inter alia as  a civil court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit   and this prima facie means the trial court
The argument is that an order of reference can be made only by the trial court and not by the appellate court and so there can be no reference after the suit is decided and a decree has been drawn up in accordance with the judgment of the trial court
In the present case a judgment had been delivered by the trial court and a preliminary decree had been drawn in accordance with it and so there was no scope for making any order of reference
That is the first part of the argument which must be carefully examined
Does the court in the context mean the trial court  This construction cannot be easily reconciled with one of the conditions prescribed by the section
After a decree is drawn up in the trial court and an appeal is presented against it proceedings in appeal are a continuation of the suit and speaking generally as prescribed by section 107 of the Code of Civil Procedure the appellate court has all the powers of the trial court and can perform as nearly as may be the same duties as are conferred and imposed on the trial court
230 If that be so during the pendency of the appeal can it not be said that matters in difference between the parties in suit continue to be matters in dispute in appeal The decision of the appeal can materially affect the nature and effect of the decree under appeal  and there is no doubt that all the points raised for the decision of the appellate court can be and often are points in difference between them in the suit and in that sense despite the decision of the trial court the same points of difference in suit continue between the parties before the appellate court
If during the pendency of such an appeal parties interested agree that any matter in difference between them in the appeal should be referred to arbitration the first two conditions of the section are satisfied
When section 21 was enacted did Legislature intend that during the pendency of the appeal no reference should be made even if the parties satisfied the first two conditions prescribed by the section  In considering this question it would be relevant and material to take notice of the fact that prior to the passing of the Act in 1940 the longstanding practice of Indian courts was to refer to arbitration disputes pending before the appellate court between the respective parties to the appeals
If the object of enacting section 21 was to prohibit such reference at the appellate stage it would as the High Court has observed cause  a revolution in the existing practice 
Was such a revolution really intended  Having regard to the fact that the words used in section 21 are substantially the same as those used in Sch
11 paragraph 1 of the earlier Code it would be difficult to to sustain the plea that the enactment of section 21 was intended to bring about such a violent departure from the existing practice
If that had been the intentionof the Legislature it would have made appropriate changes in the words used in section 21
There fore the word  court  cannot be interpreted to mean only the trial court as contended by the appellants
Similarly the word  suit  cannot be construed in the narrow sense of meaning only the suit and not an appeal
In our opinion court in section 21 includes 231 the appellate court proceedings before which are generally recognised as continuation of the suit and the word  suit  will include such appellate proceed_ ings
We may add that whereas section 41 of the Act is consistent with this view no other section militates against it
The next question is When can an application for reference be made  The section prescribes that it can be made at any time before the judgment is pronounced
It has been fairly conceded before us that the word judgment cannot refer to the various interlocutory orders and judgments that may be passed during the hearing of the suit and so the word  judgment cannot be given the meaning assigned to it by section 2 9 of the Code
It cannot mean in the context the statement given by the judge of the grounds of a decree or order
It must mean a judgment which finally decides all matters in controversy in the suit
Thus it follows that it is open to the parties to apply for a reference at any time before the final judgment is pronounced in the suit
If that be so can the parties apply for an order referring matters indifference between them even though such matters may have been covered by interlocutory judgments delivered in the meanwhile The appellants suggest that though reference to arbitration may be made at any time before the final judgment is pronounced the subject matter of the reference must be such as is not covered by any decision of the court pronounced in the meanwhile
This argument reads the word  judgment  as judgment in regard to a matter in difference between the parties if a difference between the parties has been covered by an interlocutory judgment it can no longer be referred to arbitration that is the con tention
We are not impressed by this contention
In our opinion the scheme of the section does not permit the addition of any words qualifying the word judgment  used in it
The expression  at any time before the judgment is pronounced  is only intended to show the limit of time beyond which no reference can be made and that limit is reached when a final judgment is pronounced
The provision that  any 232 matter in difference between the parties in the suit can be referred to arbitration  cannot be subjected to the further limitation that the said matter can be referred to arbitration if it is not covered by the judgment of the court
The effect of the section appears to be that so long as the final judgment is not pronounced by the court any matter i
e some or all the matters in difference between the parties can be referred to arbitration provided they are agreed about it
If a reference can be made even at the appellate stage when all matters in difference between the parties are covered by the final judgment of the trial court it is difficult to understand why in allowing reference to be made during the pendency of the suit in the trial court any further conditions should be imposed that only such matters of difference can be referred to as are not covered by an interlocutory judgment of the court
We would accordingly hold that it is open to the trial court to refer to arbitration any matters of difference between the parties to the suit provided they agree and apply at any time before the court pronounces its final judgment in the suit
But this construction still leaves one question to be considered
Had a final judgment been pronounced by the trial court in this case at the time when it passed the order of reference  It had delivered a judgment and a preliminary decree had been drawn up  A judgment delivered by a court in a partition suit which is followed by a preliminary decree cannot be said to be a final judgment in the suit
Proceedings which parties may take pursuant to the preliminary decree are still a part of the suit and it is only with the passing of the final decree that the suit comes to an end
As observed by the Privy Council in Jadu Nath Roy  Ors
vs Parameswar Mullick  Ors
1 a partition suit in which a preliminary decree has been passed is still a pending suit with the result that the rights of parties who are added after the preliminary decree have to be adjusted at the time of the final decree
This position is not disputed
Therefore the fact that a preliminary decree had been drawn up in the present 1 1939 40 67 1 A I 233 case and it was based upon a judgment delivered by the court cannot exclude the application of section 21
The judgment which had been delivered by the court not a final judgment contemplated by section 21
The trial court would therefore have jurisdiction to make the order of reference
There is however another fact which introduces a complication and that is the pendency of the three appeals before the High Court at the material time
As we have already observed the three appeals which were pending before the High Court raised before that court matters in difference between the parties in the suit and to that extent the said matters of difference were really pending before the High Court and not before the trial court
In such a case which is the court that has jurisdiction to make the order of reference There is no difficulty in holding that if the suit is pending in the trial court and a final judgment has not been pronounced by it it is the trial court which is competent to make the order of reference
Similarly if a suit has been decided a final judgment has been delivered and a decree had been drawn up by the trial court and no appeal has been preferred against it the matter is concluded and there is no scope for applying section 21 at all
On the other hand if a decree determining the suit has been drawn up by the trial court and it is taken to the appellate court during the pendency of the appeal it is the appellate court that is competent to act under section 21
These three cases do not present any difficulty but where a preliminary decree has been drawn up and an appeal has been filed against it the complication arises by reason of the fact that the disputes between the parties are legally pending before two courts
Proceedings which would have to be taken between the parties in pur suance of and consequent upon the preliminary decree are pending before the trial court whereas matters in difference between the parties which are covered by the preliminary judgment and decree are pending before the appellate court
In such a case it may perhaps be logically possible to take the view that 30 234 the arbitration in respect of the disputes in relation to proceedings subsequent to the preliminary decree can be directed by the trial court whereas arbitration in respect of all the matters concluded by the trial court s preliminary judgment which are pending before the appellate court can be made by the appellate court but such a logical approach is not wholly consistent with section 21  and rather than help to solve any difficulty it may in practice create unnecessary complications
In most cases matters in dispute before the trial court in final decree proceedings are so inextricably connected with the matters in dispute in appeal that effective arbitration can be ordered only by one reference and not by two
We are therefore inclined to hold that in a case of this kind where both the courts are possessed of the matters in dispute in part it would be open to either court to make an order of reference in respect of all the matters in dispute between the parties
It is argued that on such a construction conflict of decisions may arise if two sets of arbitrators may be appointed
We do not think that such a conflict is likely to occur
If the parties move the trial court and obtain an order of reference they would inevitably ask for appropriate orders of withdrawal or stay of the appellate proceedings if on the other hand they obtain a similar order of reference from the appellate court they would for similar reasons apply for stay of the proceedings before the trial court
In the present case proceedings subsequent to the preliminary decree were pending before the trial court and so we must hold that the trial court was competent to act under section 21
On that view the objection against the validity of the reference based on the provisions of section 21 cannot succeed
We may now briefly refer to some of the decisions to which our attention was invited
Before the Act was passed in 1940 the procedure for referring matters in dispute between the parties in pending suits was governed by the provisions of Sch
11 to the Code of Civil Procedure
There appears to have been a consensus of judicial opinion in favour of the view that under Sch 11 paragraph 1 the appellate court could make 235 an order of reference in respect of matters in dispute between the parties in an appeal pending before it
A note of dissent had however been struck by a Full Bench of the Calcutta High Court in Jugessueur Dey vs Kritartho Moyee Dossee 1
In that case the question for decision arose under the provisions of the Code of 1859 and the Full Bench held that an appellate court had no power even by consent of parties to refer a case for arbitration under the arbitration sections of Act VIII of 1859 which applied only to courts of original jurisdiction nor was such power conferred on an appellate court by section 37 of Act XXIII of 1861
One of the reasons which weighed with Couch C J who delivered the principal judgment of the Full Bench was that according to him neither reason nor convenience required that the appellate court should refer a suit to arbitration after the matter had been decided by the trial court
Kemp J who concurred with the decision apprehended that  if the parties are allowed to refer matters to arbitration after a case has been finally disposed of by a court of justice such a proceeding might tend to bring lower courts into contempt 
In our opinion this apprehension is not well founded
Besides it is well known that when parties agree to refer the matters in dispute between them in suit to arbitration they desire that their disputes should be disposed of untrammelled by the rigid technicalities of the court procedure
A search for a short out by means of such arbitration sometimes takes the parties on a very long route of litigation but that is another matter
The Calcutta view was dissented from by the Madras High Court in Sangaralingam Pillai2 in somewhat emphatic words
Entertaining all respect for the opinions of the learned judges of the High Court of Calcutta by whom the case of Jugesseur Dey 1 was decided  observed the judgment  we are not convinced by the reason given in the judgment for holding that an appellate court might not with consent of the parties refer the matters in dispute in the appeal to arbitration Having thus expressed their disapproval 1 2 Mad
236 of the Calcutta view the learned judges proceeded to add that in the case before them an order of reference was sought for under section 582 of the Code of 1877 and they held that under the said provision the appellate court is given the same powers and is required to perform the same functions as nearly as may be as the trial court
The view thus expressed by the Madras High Court was subsequently accepted and approved by the Calcutta High Court in Bhugwan Das Marwari  Anr
vs Nund Lall Sein  Anr
1 and Suresh Chunder Banerjee vs Ambica Churn Mookerjee 2 
As we have already observed prior to the enactment of the Act there has been a longstanding judicial practice under which orders of reference have been passed by appellate courts in respect of matters in dispute between the parties in appeals pending before them
The construction of section 21 has led to a divergence of judicial opinion
In Abani Bhusan Chakravarty  Ors
vs Hem Chandra Chakravarty  Or8
1 the Calcutta High Court has taken the view that the court as defined in the  does not include an appellate court and consequently there is nothing in the Act which enables an appellate court to refer to arbitration matters in dispute between the parties
This decision proceeds on the erroneous view that the it court in section 21 means only the court as defined ins
2c and that the considerations based on the powers of the appellate court prescribedby section 107 are foreign to the Act
It also appears that the learned judgeswere disposed to think that if the matter in dispute between the parties at the appellate stage was referred to arbitration it might tend to bring the lower courts into contempt
There is no doubt that a court cannot claim an inherent right to refer a matter in dispute between the parties to arbitration
Before a matter can be thus referred to arbitration it must be shown that the court in question has been statutorily clothed with the power to make such an order and that would depend on the construction of section 21 of the Act
The Calcutta High Court has construed the said section in 1 Cal
2 Cal
3 237 substance consistently with the view taken by it in the case of Jugesseur Dey 1
On the other hand the Patna High Court has taken a contrary view in Thakur Prasad vs Baleshwar Ahir  Ors
Jamuar J who delivered the judgment of the court has considered the decision of the Calcutta High Court in the case of Jugesseur Dey 1 and has dissented from it
In the Allahabad High Court somewhat conflicting views had been expressed on different occasions but on the question as to whether the appellate court can refer a matter in dispute between the parties to arbitration or not and whether the suit includes an appeal the decision of the Full Bench of the Allahabad High Court in Moradhwaj vs Bhudar Das 3 seems to be on the same lines as that of the Patna High Court
This Full Bench also considered the question about the applicability of section 21 to execution proceedings but with that aspect of the matter we are not concerned in the present appeal
The Madras High Court has taken the same view in Subramannaya Bhatta vs Devadas Nayak  Ors
However none of these decisions had occasion to consider the question about the competence of both the trial court and the appellate court in cases where a preliminary decree has been passed and an appeal has been filed against the said decree
It would thus appear that the majority of the Indian High Courts have construed the words 11 suit  and 11 court  used in section 21 liberally as including appellate proceedings and the appellate court respectively
In the result we hold that the trial court was competent to make the reference and its validity is not open to any objection
That leaves only one point to be considered  It is urged by the appellants that the arbitrators acted illegally and without jurisdiction in directing the Appellants to pay to the respondent Rs 2682 6 0 by way of interest on the amounts specified in the award up to December 5 1944 and from that date at the rate of 5as
per cent
per mensem thus imposing on 1 3 AIR 1955 All 353
2 AIR 1954 Pat 106
4 AIR 1955 Mad
238 the appellants a total liability of Rs 236782 11 9The appellants have also been directed to pay future interest on the same amount at 8as
per cent
per mensem from the said date until the date of payment
This argument is based solely on the observations made by Bose J who delivered the judgment of this Court in Seth Thawardas Pherumal vs The Union of India 1
It appears that in that case the claim awarded by the arbitrators was a claim for an unliquidated sum to which Interest Act of 1839 applied as interest was otherwise not payable by law in that kind of case
Dealing with the contention that the arbitrators could not have awarded interest in such a case Bose J set out four conditions which must be satisfied before interest can be awarded under the Interest Act and observed that none of them was present in the case and so he concluded that the arbitrator had no power to allow interest simply because he thought that the payment was reasonable
The alternative argument urged before this Court that interest could be awarded under section 34 of the Code of Civil Procedure 1908 was also repelled on the ground that the arbitrator is not a court within the meaning of the Code nor does the Code apply to arbitrators
Mr Viswanatha Sastri relies upon these observations and contends that in no case can the arbitrators award interest
It is open to doubt whether the observations on which Mr Viswanatha Sastri relies support or were intended to lay down such a broad and unqualified Proposition
However we do not propose to pursue this matter any further because the present contention was not urged before the High Court
It was no doubt taken as a ground of appeal but from the judgment it is clear that it was not urged at the time of hearing
Under these circumstances we do not think we would be justified in allowing this point to be raised before us
The result is that the conclusion reached by the High Court is right and so its order that a decree should be drawn in terms of the award must be confirmed
Civil Appeal No 112 of 1955 accordingly fails and is dismissed with costs
It is conceded that if the 1 239 principal appeal fails it would not be necessary to make any effective orders on the rest of the appeals in this group
The said appeals also fail and are dismissed but there would be no order as to costs
Appeals dismissed


Summary:
A deed dated September 10 1931 described as a sale deed recited that the transferors were indebted and that to discharge the liability three items of immovable properties described in the deed and separately valued were conveyed in full ownership and that possession was delivered to the transferees
The deed further provided inter alia 1 that if the transferors demanded reconveyable of any or all of the items of the properties within 5 years the transferees shall reconvey to them at their expense for the price mentioned in the deed 2 that if within four years and six months the transferees did not exercise the right of reconveyance as aforesaid and the transferees did not desire to retain all or any of the properties they had a right to get back the amount of consideration of the deed and return all the three or any of the properties in the condition in which by vis major Government action or any reason whatsoever they may be and 118 3that if the transferors failed to comply with the transferees  request to take back the properties a breach of agreement of reconveyance rendering the transferors liable to pay damages shall be committed
There was also a clause that the transferors shall lose the right of getting a reconveyance after the expiry of the period of 5 years
On the same date as the deed of sale the transferors executed an agreement by which they undertook to pay the difference between the net rent to be recovered by the transferees from the properties and interest at the rate of nine per cent on the price till the date of reconveyance
In a suit for redemption brought by the transferors on August 26 1943 on the footing that the deed dated September 10 1931 was A mort gage by conditional sale the transferees contended that by the transaction an absolute conveyance of the properties was intended and that the conveyance was subject to a condition of repurchase to be exercised within a period of five years from the date of the deed
The evidence showed that the price paid for the properties under the deed was wholly inadequate
Held that the question whether a transaction ostensibly of sale may be regarded as a mortgage is one of intention of the parties which has to be ascertained from the provisions of the deed viewed in the light of the surrounding circumstances
In a sale coupled with an agreement to reconvey there is no relation of debtor and creditor nor is the price charged upon the property conveyed but the sale is subject to an obligation to retransfer the property within the period specified
In a mortgage by conditional sale a relation of debtor and creditor is created the transfer being a security for the debt
Oral evidence of intention is not admissible in interpreting the convenants of the deed but evidence to explain or even contradict the recitals as distinguished from the terms of the document may be given
Evidence of contemporaneous conduct is admissible as a surrounding circumstance but evidence as to subsequent conduct of the parties is inadmissible
Narasingerji Gyangerji vs Panuganti Parthasarathi and Others 1924 LR 51 IA 305 relied on
Held further that in the present case the deed dated September 10 1931 on a true construction in the light of the surrounding circumstances showed that the transaction was one of mortgage enabling the transferors to redeem the properties