Case: Hanskumar Kishanchand Vs. The Union Of India(And Connected Appeal)

2. In exercise of the power conferred by S. 75 (A) of the Rules framed under the Act, the Central Government requisitioned on February 19, 1941, certain properties belonging to Hanskumar Kishanchand, the appellant in Civil Appeal No. 224 ofAs there was no agreement on the amount of compensation payable to him, the Central Government referred the determination thereof to Mr. Jafry, Additional District Judge, Khandwa under S. 19 (1) (b) of the Act. On March 31, 1943, Mr. Jafry pronounced his award, by which he awarded a sum of Rs. 13,000 as annual rent for the occupation of the premises. Against this award, there was an appeal to the High Court of Nagpur under S. 19 (1) (f) of the Act, and that was heard by a Bench consisting of Grille, C. J. and Padhye, J. By their judgment dated December 31, 1947, they enhanced the annual rent payable to the appellant by a sum of Rs. 3,250, and they also allowed certain other sums as compensation for dislocation of the High School which was being run on the property. The appellant applied for leave to appeal against this judgment to the Federal Court under Ss. 109 and 110 of the Code of Civil Procedure in respect of the amounts disallowed. A similar application was also filed by the Government with reference to the enhancement of compensation. On August 25, 1949 both these applications were granted, and a certificate was issued that the appeals fulfilled the requirements of Ss. 109 and 110 of the Code- of Civil Procedure. That is how the two appeals come before us. Hanskumar Kishanchand is the appellant in Civil Appeal No. 224 of 1954, and the Union of India, in Civil Appeal No. 225 of 1954.At the opening of the hearing, a preliminary objection was taken by the learned Solicitor-General to the maintainability of Civil Appeal No. 224 of 1954 on the ground that the judgment of the High Court passed in appeal under S. 19 (1) (f) was an award and not a judgment, decree or order within the meaning of Ss. 109 and 110 of the Code of Civil Procedure, and that accordingly the appeal was incompetent. If this contention is right, Civil Appeal No. 225 of 1954 preferred by the Government would also be incompetent. That, of course, does not preclude the Government from raising the objection as to the maintainability of the appeal, though the result of our upholding it would entail the dismissal of Civil Appeal No. 225 of 1954 as well. We accordingly proceed to dispose of the objection on the merits.It will be convenient at this stage to refer to the provisions of the Act bearing upon the present controversy. Section 19 (1) provides.........any action is taken of the nature described in sub-section (2) of section 299 of the Government of India Act, 1935, there shall be paid compensation, the amount of which shall be determined in the manner, and in accordance with the principles, hereinafter set19 (1) (a) provides for the amount of compensation being fixed by agreement, and S. 19 (1) (b) enactsWhere no such agreement can be reached, the Central Government shall appoint as arbitrator a person qualified under sub-section (3) of section 220 of the above-mentioned Act for appointment as a Judge of a High(c) of S. 19 (1) provides for the appointment by the Central Government of a person having expert knowledge as to the nature of the property acquired and for the nomination of an assessor by the person to be compensated, for the purpose of assisting the arbitrator. Sub-section (e) of S. 19 (1) enacts that the arbitrator in making his award shall have regard to the provisions of sub-s. (1) of S. 23 of the Land Acquisition Act, 1894, so far as the same can be made applicable. Then comes sub-s. (f), which is important for the present purpose, and it is as followsappeal shall lie to the High Court against an award of an arbitrator except in cases where the amount thereof does not exceed an amount prescribed in this behalf by rule made by the Centralwe have sub-s. (g), which is as followsas provided in this section and in any rules made thereunder, nothing in any law for the time being in force shall apply to arbitrations under this section".

Reasoning: It may be noted that it was the use of the work "arbitration" in the title to the Act that furnished the ground for the contention that the proceedings before the Commission were of the nature of arbitration. But that description, however, could not alter the true character of the reference under the Act, which was in terms to the Commission as a Court of record. In fact, there was no element of arbitration in the proceedings. It is true that under that Act there could be a reference only by agreement of parties. That, however, could not make any difference in the character of the proceedings before the Commission, as a statute can provide for the jurisdiction of the Court being invoked as a Court on the agreement of parties, as for example, on a case stated under Order 36 of the Code of Civil Procedure. There is thus nothing in 1913 A C 546 (F), which can be said to conflict with the law as laid down in 39 Ind App 197 (P C) (A), that when the reference is to a Court as arbitrator, its decision is not open to appeal.The principles being thus well-settled, we have to see in the present case whether an appeal to the High Court under S. 19 (1) (f) of the Act comes before it as a Court or as arbitrator. Under S. 19 (1) (b), the reference is admittedly to an arbitrator.He need not even be a Judge of a Court. It is sufficient that he is qualified to be appointed a Judge of the High Court. And under the law, no appeal would have lain to the High Court against the decision of such an arbitrator. Thus, the provision for appeal to the High Court under S. 19 (1) (f) can only be construed as a reference to it as an authority designated and not as a Court. The fact that, in the present case, the reference was to a District Judge would not affect the position. Then again, the decision of the arbitrator appointed under S. 19 (1) (b) is expressly referred to in S. 19 (1) (f) as an award. Now, an appeal is essentially a continuation of the original proceedings, and if the proceedings under S. 19 (1) (b) are arbitration proceedings, it is difficult to see how their character can suffer a change, when they are brought up before an appellate tribunal.The decisions in I L R 37 Bom 506   (B), 17 Cal W N 421 ( P C) (C), I L R 41 Mad 943   : (A I R 1919 Mad 626) (D), and 58 Ind App 259 : (A I R 1931 P C 149) (E), proceed all on the view that an appeal against an award continues to be part of, and a further stage of the original arbitration proceedings.In our view, a proceeding which is at the inception an arbitration proceeding must retain its character as arbitration, even when it is taken up in appeal, where that is provided by the statute.15. The question whether an appeal under S. 19 (1) (f) is of the nature of arbitration proceedings, and whether the decision given therein is an award came up directly for consideration in Kollegal Silk Filatures Ltd. v. Province of Madras, ILR (1948) Mad 490 (A I R 1949 Mad 39) (H) before a Bench of the Madras High Court consisting of Patanjali Sastri and Chandrasekhara Aiyar, JJ, and it was held by them that the word "arbitration" in S. 19 (1) (g) of the Act covered the entire proceedings from their commencement before the arbitrator to their termination in the High Court on appeal where an appeal had been preferred, and the High Court in hearing and deciding the appeal acted essentially as an arbitration tribunal. We agree with this decision that the appeal under S. 19 (1) (f) is an arbitration proceeding.We must, therefore, hold that the decision of the High Court in the appeal under that provision is not a judgment, decree or order either within Ss. 109 and 110, Civil P. C. or Cl. 29 of the Letters patent of the Nagpur High Court, which corresponds to Cl. 39 of the Letters Patent of the Calcutta, Madras and Bombay High Courts, and that, therefore, the present appeals areis sufficient answer to this contention that the Federal Court had power under S. 3 (a) (ii) to grant leave only when the proposed appeal was against a judgment, and that, under the definition in S. 2 (b), meant a judgment, decree or order of a High Court in a civil case; and that on our conclusion that the decision in the appeal under S. 19 (1) (f) is not a judgment, decree or order but an award, no order could have been passed granting special leave under S. 3 (a) (ii).