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Nawab Usmanali Khan V. Sagar Mal (1965)

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Citations: AIR 1965 SC 1798

Date of Judgment: 26/02/1965

Equivalent Citations: 1965 AIR 1798, 1965 SCR (3) 201

Case No: 568 and 757 of 1953

Case Type: Civil Appellate Jurisdiction

Appellant: Nawab Usmanali Khan

Respondent: Sagarmal

Bench:

  • Hon’ble Justice Bachawat, R.S
  • Hon’ble Justice Subbarao, K.
  • Hon’ble Justice Shah, J.C

Court: Supreme Court of India

Statues referred: Code of Civil Procedure, Arbitration Act,

Cases referred: N/A

Facts

  • Nawab Usmanali Khan, the former ruler of the Indian state of Jaora, was the appellant. He had made monetary transactions with the respondent.
  • The appellant and respondent agreed to arbitrate their dispute before Lala Durgashankar by an agreement dated 23.02.1957, and the award was given on the same day by the arbitrator.
  • The award ruled that an amount of Rs. 16,00,000 was due to the respondent from the appellant, to be paid in installments.
  • The award was submitted in the court of District Judge Ratlam under Section 14 of the Arbitration Act by the arbitrator on the same day, as the town of Jaora was situated under his jurisdiction.
  • On 9.03.1957, the appellant filed a written submission recognizing the award and sought a decree in accordance with it. An appeal by another agent was initiated to set aside the award.
  • On 5.04.1957, an application was made by the appellant asking the court to withdraw objections and to pass a decree in terms of the award.
  • On April 30, 1957, the arbitrator submitted the requisite documents. On the same day, the appellant’s agent filed an application to set aside the compromise and award.
  • On June 19, 1957, a hearing was held, and a decree was issued about the award of compromise.
  • The appeal was filed under section 39 of the Arbitration Act in the Madhya Pradesh High Court by the appellant against the order passed on 19.06.1957.
  • On September 9, 1957, the respondent obtained an ex parte order transferring the decree to the Court of the District Judge in Delhi.
  • On November 1, 1957, the Central Government issued a certificate under Section 86(3) read with Section 78 of the Code of Civil Procedure, 1908, consenting to the execution of the decree against the appellant’s properties.
  • On November 8, 1957, the District Judge of Delhi issued a prohibitory order under O. 21, r. 46 of the Code of Civil Procedure in relation to payments payable to the appellant on behalf of the privy purse.
  • On January 8, 1958, the appellant petitioned the court of District Judge Ratlam for the revoking of the order, transfer, and cancellation of the certificate, and on March 15, 1958, the court recalled the decree and cancelled the certificate.

Issues involved

  • Whether the Central Government’s approval was required in these proceedings and whether the specific terms under section 86(1) of C.P.C are in context and circumstances in which they occur.

Contentions of Appellant

The appellant side contended that –

  • No decree can be passed in terms of award as the award concerning the immovable property which was not registered and was valued more than 100 rupees.
  • Proceedings were incompetent in the absence of central government’s consent under section 14 of Arbitration Act and under section 86(1) read with section 87B of C.P.C, Therefore the decisions issued in those proceedings are without jurisdiction and null & void.
  • The amount received by the appellant from the Central Government as his privy purse is a political pension under Section 60(1)(g) of the Code of Civil Procedure, and is not subject to attachment or sale in the execution of the decree.

Contentions of Respondents

The counsel on the behalf of respondent contended that-

  • The award indicated that the current documentation relating to debts obtained on properties would continue as before, serving as securities until the debts were paid, and that the appellant would have no right to transfer the land. This portion of the award mentioned an existent fact.
  • It did not create or declare any interest in immovable property. As a result, the document did not fall under the jurisdiction of Section 17 of the Indian Registration Act, 1908, and hence registration was not required.
  • The counsel also raised questions on the construction of section 86 and 87B of Civil Procedure Code.

Judgment

  • The Supreme Court stated that prior assent of Central Government under section 86(1) is not applicable for the enforcement of arbitral award proceeding under section 17 of the Arbitration Act., 1940.
  • It was further established that proceedings under section 14 read with section 17 of the Act are not initiated with a plaint or petition and cannot be regarded as a suit. Neither the parties on whom Section 14(2) provides notice of the award’s filing be considered parties to a suit in any court that would otherwise be qualified to hear the suit under Section 86(1) read with Section 87-B, Civil Procedure Code.

Ratio Decidendi:

N/A

Obiter Dicta:

N/A

Conclusion

The Supreme Court clarified that the Central Government’s approval was not required for the enforcement of arbitral awards under section 17 of the Arbitration Act. Additionally, the court rejected the appellant’s contentions regarding the attachment of his political pension. The decisions issued in the proceedings were upheld, and the appeal was dismissed.

Drafted By: Palak Mehta

Published on: February 12, 2024 at 15:40 IST