JUDGMENT <NAME>, C.J.

1. This special civil application has been referred to a Full Bench by Mr. Justice <NAME> and Mr. Justice <NAME>. No question has been formulated by the learned Judges, but it seems that they took the view that the decision of <ORG> of this Court in <CITATION> ), requires reconsideration inasmuch as a decision of <ORG> in <NAME> v <NAME>, , seems to the learned Judges inconsistent with the view taken of the law in <NAME>'s case (A).

2. Now, curiously enough, the Advocate General emphatically asserts before us that not only the decision of <ORG> is not inconsistent with <NAME>'s case (A), but that the decision of <ORG> supports and reinforces the view taken by this Court in <NAME>'s case (A), and Mr. <NAME> not so emphatically also agrees that it is difficult to find any inconsistency between the judgment of <ORG> and the judgment in <NAME>'s case (A). But inasmuch as the matter has been referred to <ORG> and the matter has been argued at great length and the Advocate General tells us that a decision should be given by us because a large number of petitions are pending and the decision of which would be governed by the view we take in <ORG>, we must proceed to decide the question referred to us.

3. Now, to state the facts briefly, the petitioner was employed as a Khalasi in the Loco Shed of the Central Railway at Kalyan. He was employed on 3rd October 1947. On 26th October 1949 he was arrested on a charge under Sections 457 and 380 of the Indian Penal Code and placed before the First Class Magistrate at Kalyan, and it appears that he was released on bail on 4th November 1949. On 6th May 1953 he was discharged by the learned Magistrate and the learned Magistrate gave him, as it were, a clean bill and said in his judgment that there would be no objection to his being reinstated by <ORG>. He resumed his work -- and we are using a neutral expression -- on 20th October 1953, and he filed a petition before the <ORG> under the Payment of Wages Act claiming wages from the period 25th October 1949 to 19th October 1953. The <ORG> decreed his claim. There was an appeal to <ORG> and the learned District Judge took the view that the <ORG> under the Payment of Wages Act had no jurisdiction to deal with this matter. Thereupon the employee filed a petition under the Constitution before <ORG> consisting of Mr. Justice <NAME> and Mr. Justice <NAME> and it is this Bench that has referred the matter to us.

4. Now, we should have thought, but for the fact that we are sitting here as a Full Bench, that the law as to the jurisdiction of the <ORG> under the Payment of Wages Act is fairly well settled. If it is necessary at all, we will reiterate it as briefly as possible. The leading case on the subject is <CITATION> ), where <ORG> was for the first time called upon to consider the scheme of the Act and the jurisdiction of the <ORG> under the Act, and in that decision we laid down that the <ORG> had no jurisdiction to decide whether the services of an employee had been rightly or wrongly terminated or whether the dismissal was lawful or unlawful. We said that such a question would not come within the purview of the special tribunal set up under the Act. Although that was the question that arose for our determination, we also made it clear as to what was the nature and ambit of the jurisdiction of the <ORG>, and in brief what we said was that the primary function of the <ORG> was to determine what the wages of the employee were and whether there had been a delay in payment of those wages or a deduction from those wages, and in order to determine the wages it may be necessary to determine what the terms, of the contract were under which the employee was employed and under which he was claiming his wages. It may also be necessary, we pointed out, to decide whether the employee was employed by the employed or not because the question of a contract can only arise provided there was employment. Therefore, in order to determine what the contract was, what the terms of the contract were, what were the wages due under the contract, it might become necessary for the <ORG> to determine whether in the first place there was an employment or not.

5. The next decision which followed upon <NAME>'s case (C), was the case of <NAME> v. <NAME>, (D-E). That was really a logical extension of the principle laid down in <NAME>'s case(C), because in that case there was a suspension of an employee by <ORG> and the contention put forward was that in view of the suspension no claim could be made by the employee in respect of the period of suspension, and what the Court held was that it was open to the <ORG> under the Payment of Wages Act to consider whether during the period of suspension the relationship of master and servant subsisted between the employer and the employee and if such relationship subsisted, notwithstanding the suspension the employer was liable to pay to his employee wages for that period. Here again, therefore, the point that we were emphasising was that It was competent to the <ORG> to determine whether during the relevant period the employee was in fact employed by the employer.

6. Then a third judgment to which reference might be made is <CITATION> ). In that case certain employees of <ORG> who had migrated to Pakistan returned and purported to exercise the option given to them to be re-employed by <ORG>, and they claimed the wages of the period antecedent to the time when they exercised the option, and the question that arose first before my brother Mr. Justice <NAME> was whether the <ORG> under the Payment of Wages Act had jurisdiction to decide this question, and the learned Judge at page 864, with respect, correctly enunciates the principles emerging from the authorities that we have considered. "Again, it is well established that it is open to the <ORG> under the Payment of Wages Act , in order to decide what sums are payable as wages, to determine whether a person has been employed or not, because the question of contract of employment can only arise if there was at the relevant time a subsisting contract of employment." Therefore, it will be noticed that again in this case the emphasis is on the question as to whether there was an employment by the. employer of the employee or, in other words, whether there was relationship of master and servant between the employer and the employee or, again to use different language, whether there was a subsisting contract of employment between the employer and the employee. Mr. Justice <NAME> held in favour of the employee. There was an appeal and <ORG> upheld the view taken by the learned Judge.

7. Then we come to (A). In that case there was no dispute as to employment. The dispute was whether the employee was entitled to receive wages under a contract which he had set up or wages under a contract which was set up by the employer. These two contracts were relied upon by the employee and the employer in respect of the same period for which wages were claimed by the employee and what the Court held was that when there is a dispute as to which is the contract that governs the relationship of the parties and if two rival contracts are in the field, then the <ORG> under the Payment of Wages Act has no jurisdiction to decide which of the contracts should regulate the rights of the parties, and the distinction that was drawn in that case was that whereas the <ORG> could determine what was the contract, it could not determine which was the contract. As the Advocate General has rightly pointed out, in <NAME>'s case (A), also we enunciated the principle that was laid down in <NAME>'s case (C). At page 901 (of Bom LR): (At p. 733 of AIR), of the judgment the ratio of <NAME>'s case (C), is thus stated that the jurisdiction of the <ORG> really is to determine the terms of the contract in so far as they relate to the payment of wages and in so far as he has to decide the liability of the employer to pay wages under the terms of the contract.

8. Turning to the decision of <ORG>, which has necessitated this Full Bench, in , the question that arose for the consideration of the learned Judges was an entirely different question. The employee there was a carpenter employed on daily wages. <ORG> subsequently introduced a scheme which created a cadre of skilled labourers on the scale of monthly rates of pay and admitted to it only those who passed a test. The employee did not pass the test and continued to serve as an employee on daily wages, and he sued <ORG> before the <ORG> under the Payment of Wages Act to recover the additional amount of wages that would have become payable to him had he been taken up on the cadre of monthly rated employees, complaining that he was wrongly not treated as such by the <ORG>, and <ORG> held that this was not a claim for actual wages but it was a claim for potential wages and that the <ORG> under the Payment of Wages Act had no right to determine whether the employee was entitled to be put on the cadre which had been created; that was the function of <ORG> and not the <ORG> under the Payment of Wages Act . In this connection <ORG> at page 745 (of Bom LR): (at p. 416 of <ORG>), gives expression to the same principle that has been enunciated both in <NAME>'s case (C) and <NAME>'s case (A), and what Mr. Justice <NAME> says is :

"But it is said on behalf of the respondent that the <ORG> has the jurisdiction not only to make directions contemplated by Sub-section (3) of Section 15 to refund to the employed person any amount unlawfully deducted but also to find out what the terms of the contract were so as to determine what the wages of the employed person were. There is no difficulty in accepting that proposition."

Now, that is exactly the proposition to which legal effect was sought to be given in both the cases of this Court to which reference has just been made. Therefore, we agree with the Advocate General that it is impossible to contend that <NAME>'s case (B), has in any way undermined the authority of <NAME>'s case (A). On the contrary, <NAME>'s case (B), reinforces the decision given by this Court. This was also the view taken by a Division Bench of this Court consisting of Mr. Justice <NAME> and Mr. Justice <NAME> in Special Civil Appln. No. 2520 of 1956 on 23-11-1956 (G), and Mr. Justice <NAME> delivering the judgment points out that in all cases properly filed before the authority there should be no dispute about the contract itself, and the learned Judge, with respect, rightly explains the decision in <NAME>'s case (A) by pointing out that when the employer and the employee come before the authority and rely on different contracts, it is not within its jurisdiction to decide which of the two contracts is subsisting and under which of them the employer is liable to pay wages. The learned Judge refers to <NAME>'s case (B) and points out that the limits of the jurisdiction of the authority under the Payment of Wages Act are no longer in doubt.

9. Now, this being the settled law, let us turn to the facts before us and apply that law to those facts. It is clear that the claim of the employee was made on the basis that he continued to be in the employment of the railway authorities during the relevant period, viz., the 25th October 1949 to the 19th October 1953, because rightly or wrongly his case was that during that period he was under suspension and did not cease to be in the employment of <ORG>. Let us see what the answer of <ORG> was to this claim. They denied in para. 3 of the written statement that the employee was in their employment, and in para. 5, which is the most material paragraph and on which great reliance has been placed by the Advocate-General, <ORG> say :

"After a period of three months he was treated as 'absconding' and a temporary employee engaged in the vacancy. His name was automatically struck off the attendance register as nothing was heard about him. He cannot therefore be regarded as an employee of the opposite party for any length of time."

And in para. 9 <ORG> case is that the employee was re-employed as a fresh entrant on the 20th October 1953, and they end the written statement by saying:

"As he was neither an employee nor can be said to be 'in service' he is legally not entitled to any 'wages'; neither he can claim them under the Payment of Wages Act ."

In our opinion, on these pleadings the issue directly and substantially arises as to whether the employee was in the employment of <ORG> during the relevant period, and there can be no doubt that that is an issue which the <ORG> under the Payment of Wages Act can try and determine. It is not the case of <ORG> that the services of the employee were terminated, nor have <ORG> contended that he was dismissed. They have relied on the fact that automatically his name was struck off from the attendance register for the purpose of contending that he must be regarded as not being an employee during the relevant period. We agree with the Advocate-General that if <ORG>' case was that the employee's services were terminated or that he was dismissed or discharged, then in view of <NAME>'s decision (C), that was an issue which could not have been tried by the <ORG> under the Payment of Wages Act . But when the dispute and controversy between the parties is whether the employee was in employment or not, that surely is an issue which is directly within the jurisdiction and competence of the <ORG>. The Advocate-General has laid great emphasis on the case of the employee that he was reinstated and on the case of <ORG> that he was re-employed, and says the Advocate-General that it is clear on these pleadings that two contracts are in the field, and that the employee is relying on the original contract under which according to him he was continued and reinstated, and <ORG> are relying on another contract under which he was re-employed at the relevant date. In our opinion, that argument is based on a misapprehension. Whether the employee was reinstated or re-employed depends upon the fact as to whether the employee continued to be employed during the relevant period. If the employee continued to be employed during the relevant period, then he was reinstated as contended by the employee. If, on the other hand, he did not continue to be employed, then the employment having come to an end there was a case of re-employment as alleged by <ORG>. It is also erroneous to suggest that there are two conflicting contracts in the field. There are not. If the employee was in the employment during the relevant period, then the only contract is the original contract, the terms of which have to be construed in order to determine what wages the employee was entitled to. It is not suggested by <ORG> that if the employee was in the employment during that period any other contract regulated the rights of parties. The second contract could only come into play provided the employee was not in employment during the relevant period. But if the employee was not in employment during the relevant period, no further question survives and it would not be necessary to determine what the terms of the subsequent contract were, because if the <ORG> holds that the employee was not in service the claim made by the employee with regard to wages must fail. Therefore, we cannot accept the contention of the Advocate-General that his case falls within the principle of <NAME>'s case (C) for the reason that no issue as to the termination of the services of the employee can arise on those pleadings. We might point out that <ORG> have not even indicated when his services were terminated. Nor does the case fall within the principle of <NAME>'s case (A) because, as just pointed out, we do not have here a case where the <ORG> has to determine which contract regulates the rights of the parties.

10. Turning to the judgment of the <ORG> under the Payment of Wages Act , the view taken by the <ORG> is that the employee should be deemed to have been suspended and having been deemed to have been suspended, under the rules in the Railway Manual he was entitled to full salary as he was reinstated and as no obloquy attached to his conduct in respect of which he was charged, he indeed having obtained an honourable discharge from the Magistrate, The <ORG> may be right or wrong on the facts, but his decision turned on this that on his construction of the rules and of the attendant circumstances he took the view that the employee was in the service of the Railway Authorities during the relevant period and he also determined the quantum of wages on a construction of the contract as full salary during the period. When the matter went to the learned District Judge, the view that he took was this -- and to quote from his judgment:

"On these pleadings one of the issues that arise for consideration is: Whether the respondent was discharged from service and re-employed as the appellant contends or was suspended from service and was reinstated. This issue involves the question whether the respondent was really discharged from service and if so whether he was legally discharged. And, in my view, this issue is beyond the competence of the <ORG> under the Payment of Wages Act ."

Now, with respect to the learned District Judge he would be quite right if the issue that was involved was the issue set out by him. But, as we have already pointed out, the question that had to be considered by him and had to be considered by the <ORG> was not whether the employee was discharged from service and if so legally discharged, but what had to be considered was whether the employee was employed by <ORG> during the relevant period.

11. The Advocate-General has drawn our attention to the relevant rules and has pointed out that even suspension from service does not automatically entitle the worker to wages unless he actually works, and he has also drawn our attention to the fact that even if there is a case of reinstatement it is for <ORG> to determine whether he should get his full wages or not. Now, these are matters affecting the merits of the case. They go to determine what the quantum of wages is to which the employee would be entitled. It may be that the learned District Judge to whom we are proposing to send the matter back may take the view that during the relevant period there was no employment and that the relationship of master and servant did not subsist between the employee and <ORG>, and even if he takes the view that the employment continued he may take the view on a consideration of the relevant rules that the employee was not entitled to the wages because he did not do any work or that he was entitled not to full wages as claimed by him but to much less. But these are all questions of determining the wages due to the employee on a construction of the terms of the contract. These are not questions which affect the jurisdiction of the <ORG> under the Payment of Wages Act .

12. Therefore, in our view, the learned District Judge was in error in holding that the <ORG> under the Payment of Wages Act had no jurisdiction to entertain the application Sled by the employee. We will, therefore, set aside the order of the learned District Judge send the matter back to him, and direct him to try the following issues:

(1) Whether the employee continued to be in the employment of <ORG> during the relevant period, viz., 25th October 1949 to 19th October 1953?

(2) If he continued to be in employment what are the wages, if any, to which the employee is entitled under the terms of the contract subsisting between the employee and <ORG>?

13. The petitioner to get the costs of the petition. No order as to costs of the hearing before us.

14. Case sent back.


PETITIONER: BABURAM Vs. RESPONDENT: C C JACOB & ORS. (WITH C.A NO.10909/96) DATE OF JUDGMENT: 18/03/1999 BENCH: <NAME>, <NAME> JUDGMENT:

SANTOSH HEGDE, J.

C.A. Nos.10658-59/96 :

These appeals arise out of the order dated 22.9.1995 made by <ORG>, <ORG>, (for short `the tribunal') in O.A. Nos.186/94, 961/95 and 1192/94. The applicants therein questioned the selection made by <ORG> and consequential promotion of the appellant to the post of Superintendent of <ORG> in a vacancy reserved for Scheduled Castes. The contention before the tribunal was that the percentage of reservation has always to be worked out in relation to the number of posts which formed the cadre strength and the said reservation is not to be made with reference to a vacancy.

Since the law in regard to the above stated position was nebulous, <ORG> of this Court in the case of <CITATION> . (1995 2 SCC 745) settled the said issue holding that such reservation is in relation to the number of posts comprising in the cadre and not in relation to vacancies. The judgment of <ORG> was delivered on 10.2.1995. This Court in the said judgment after taking into consideration the fact that the law was not clear till that date, observed thus : "We, however, direct that the interpretation given by us to the working of the roster and our findings on this point shall be operative prospectively." The question that arises for our consideration in this case is: was it open to the tribunal to apply the law laid down in <NAME> case (supra) to the facts of the case in hand. The brief facts necessary for the purpose of deciding this question are that in June, 1993, <ORG> (for short `the <ORG>') considered the suitability of candidates eligible for promotion to four vacancies which arose during 1993-94 in the cadre of Superintendent of <ORG> (Preventive) from the post of Preventive Officers in which proceedings of the <ORG> the appellant was chosen to be promoted against a reserved vacancy earmarked for the Scheduled Castes. The said decision of the <ORG> was challenged before the tribunal on 27.1.1994 wherein the applicants contended that they are entitled to be considered for promotion to the category of Superintendent of <ORG> in the concerned vacancy, treating these vacancies as unreserved. Consequently, they prayed that their case be considered for promotion on merits. During the pendency of the applications before the tribunal, the appellants herein came to be promoted on 26.6.1994 as against a reserved vacancy which arose on 1.6.1994. The tribunal on 22.9.95 following the judgment of this Court in the <NAME>'s case (supra), allowed the applications and held that there had been an erroneous application of the principle of reservation resulting in appointment of Scheduled Caste candidates in excess of the quota earmarked for them. It directed the concerned respondents to recalculate the entitlements of different categories and take further action applying the quota rule to the cadre and not to the vacancies as they arose. It further directed that till the quota is correctly maintained, no appointment will be made from the groups which have exceeded the quota reserved for them. As noted above, the finding of the tribunal is based on the ratio of the judgment laid down by this Court in <NAME>'s case (supra). The contention of the appellant in these appeals is that the judgment in <NAME>'s case was made effective prospectively, hence, the same could not have been applied to the promotion of the appellant. This contention was negatived by the tribunal on the ground that the decision of the <ORG> in selecting the appellant does not amount to an appointment and in view of the fact that the appellant's promotion was made subsequent to filing of the petition, the appellant cannot claim the benefit of the prospectivity given to the <NAME>'s judgment by this Court. We are unable to agree with this view of the tribunal. It is to be noted that the prospectivity given to <NAME>'s case was obviously on the ground that there was a doubt in regard to the position of law until the same was clarified by this Court in <NAME>'s case. The decision of the <ORG> was taken in June, 1993; much prior to the judgment in <NAME>'s case. It is only pursuant to the decision of the <ORG>, the appellant came to be promoted on 27.6.1994 which is also a date prior to the delivery of the judgment in <NAME>'s case. In our opinion, the prospectivity was given to <NAME>'s case only to see that status prevailing prior to the judgment in <NAME>'s case should not be disturbed. The prospective declaration of law is a devise innovated by the apex court to avoid reopening of settled issues and to prevent multiplicity of proceedings. It is also a devise adopted to avoid uncertainty and avoidable litigation. By the very object of prospective declaration of law, it is deemed that all actions taken contrary to the declaration of law prior to its date of declaration are validated. This is done in the larger public interest. Therefore, the subordinate forums which are legally bound to apply the declaration of law made by this Court are also duty-bound to apply such dictum to cases which would arise in future only. In matters where decisions opposed to the said principle have been taken prior to such declaration of law cannot be interfered with on the basis of such declaration of law. In the instant case, both decisions of the <ORG> as well as the appointing authority being prior to the judgment in <NAME>'s case, we are of the opinion that the tribunal was in error in applying this decision. For this reason, these appeals succeed and are hereby allowed; setting aside the orders and directions made by the tribunal in OA Nos.186/94, and 961/95.

C.A. No.10909/1996 :

In view of our judgment in CA Nos.10658-59/96, this appeal also succeeds and is hereby allowed.


<NAME>, Kt., C.J.

1. This is an appeal from a judgment of Mr. Justice <NAME> by which he dismissed a petitition to set aside an award alleged to have been made by <ORG> in an alleged dispute between the petitioners and the respondents.

2. It appears that <ORG> was incorporated on November 25, 1925, under the Indian Companies Act , but that the transactions between the parties in linseed were before that date; and further that certain hundies which were given by the petitioners to the respondents in an alleged settlement of those transactions were all payable before the date when the <ORG> was incorporated. On the other hand there was before that date an unregistered Marwari <ORG> of Commerce of which both the petitioners and the respondents were members.

3. The learned Judge took the view that the bye-laws of the old <ORG> amounted to a compulsory provision for arbitration. On the evidence before the learned Judge we are of opinion that that is not the correct view. The bye-law in question is set out at p. 14 of the paper book and runs :-

This sub-committee will decide upon the disputes between the members of this <ORG> of all kinds such as in respect of hundies, letters, seed, wheat and cotton etc.

4. That is not a compulsory provision for arbitration. It is only a permissive one. Further, even if it was a compulsory provision, the body that actually decided upon this dispute was not any sub-committee of the old <ORG>, but a <ORG> under the new limited company. Accordingly, in our judgment, it is clear that the respondents cannot rely upon the old rules in support of the award now in question.

5. Next, as regards the rules of the present <ORG>, they provide in Article 19 of the Articles of Association:

It shall be compulsory for every Member or Associate Member in the first instance to hove all disputes arising out of or in course of all dealings and transactions in seeds, wheat and hundi-chitties between himself and any other Member or Associate Member and optional in the case of disputes in gold, silver, cotton, cloth etc., settled by or before the <ORG> or such person or persons as may be nominated by the <ORG> to act as arbitrators or umpires and subject to any special rules as may be prescribed in that behalf from time to time by arbitration and without recourse to a Court of law.

6. Now under the Articles of <ORG> it is clear from Article 4 that there are two kinds of members of this <ORG>, called Members and Associate Members. The difference between them appears to depend on the amount they pay for entrance fees and annual fees. Therefore the words "Member or Associate Member" in Article 19 refer to members of the new registered company. Accordingly the argument advanced to us by the petitioners is that the disputes to be determined by the new company are only those arising out of transactions between members or associate members of the new company, and therefore cannot include transactions which took place, previously to the registration of the company, between then non-members. In my judgment that contention is correct. I think the words "between himself and any other Member or Associate Member" depend on the words "dealings and transactions"; and that the clause cannot be read as if it ran "disputes...between himself and any other Member or Associate Member in dealings and transactions in hundies, chitties, etc."

7. Further, on general principles this would seem quite a fair construction, viz., that, when a new compulsory clause of this character is introduced, it should only apply to future transactions and not to past ones. In substance it amounts to an arbitration clause inserted in every contract. But it is one thing to do this as regards future contracts, and quite another thing to insert that clause into past contracts. As my brother <NAME> has pointed out, it might be that a member would never have entered into a particular contract with a non-member if he had contemplated that that non-member might subsequently become a member of the <ORG>, and then force the first member to go to arbitration, under this clause. Other instances may be put of disputes pending at the date when this <ORG> was formed, or, again, if those disputes had already formed the subject of a pending suit in <ORG>.

8. It follows then that in my judgment the <ORG> had no jurisdiction to hear this particular dispute. Under these circumstances it is unnecessary to decide whether a mere non-payment of the hundis would amount to a "dispute" on the hundis within the meaning of this particular clause. The expression that I am accustomed to is "disputes or differences," and it would seem rather a pity that the ordinary form of expression was not used by those drafting this particular clause.

9. The real difficulty before us is as to whether we have any proper award before us within the meaning of the Indian Arbitration Act , and that even if we have a document which purports to be an award, then whether we have power to set it aside under Section 14 of the Act, seeing that it has never been filed in accordance with the provisions of the Act and our <ORG> rules (see Rule 354).

10. Now taking the first point, no doubt the letter of <ORG>, dated April 12, 1926, Ex. B to the petition, purports to set out the decision of the <ORG> on the question, and it requires the petitioners to pay by April 19, in accordance with that decision. Further, the affidavit of the respondents in no way takes up the position that this was not an award, though they say that the <ORG> cannot act because this award has not been filed.

11. In our judgment on the evidence before us this letter does not show that the provisions of the Indian Arbitration Act have been complied with. For instance, Section 11 requires that when the arbitrators have made their award, they should sign it and give notice to the parties of the making and signing of it and of the amount of the fees and charges payable to the arbitrators. Then at the request of any party to the submission and upon payment of the fees and charges due in respect of it, the arbitrators should cause the award to be filed and notice of it given to the parties. It is not even clear to us who precisely were the arbitrators in the present case, although certain names are set out in the affidavit of one of the respondents as to the persons who he thinks were the arbitrators so far as he remembers. But we have nothing to show that those persons ever signed the award, The actual award itself is not before us. And we have no evidence as to whether the arbitrators gave notice of the amount of their fees and charges. All we do know is that they have not in fact filed the award.

12. That being so, in our judgment it is not proved that there is an award within the meaning of Section 14 of the Act. Consequently, if there is no award there is nothing which we can set aside. In that view it is unnecessary to decide whether the award mentioned in Section 14 extends to an unfiled award, or whether it is confined to a filed award.

13. The next question is, what, under those circumstances, is the proper order for us to make ? In our judgment it would be misleading to dismiss the appeal, or for the matter of that, to dismiss the petition without more. We think the order we propose to make should be prefaced by stating our reasons for that order. In doing that I am following a course which has to my knowledge been frequently adopted by <ORG> in appropriate cases.

14. Accordingly the order I would propose would be to this effect, that the appeal be allowed, the decree of the lower <ORG> set aside, and that this appellate <ORG> being of opinion that on the true construction of the Articles of Association of the Marwari <ORG> of Commerce Ltd., and in the events which have happened, the <ORG> of the said <ORG> had no jurisdiction to hear and determine the alleged dispute referred to in the letter from the <ORG> dated April 12, 1926, Ex. B to the petition, but that it is not proved to the satisfaction of the <ORG> that any award within the meaning of Section 14 of the Indian Arbitration Act has been made which the <ORG> can set aside thereunder, this <ORG> makes no order on the petition except etc. Then after my learned brother has delivered his judgment and after we have heard counsel on the question of costs, the order can be completed.

<NAME>, <NAME>

15. I am of the same opinion. I desire to add a word only upon one submission that was made by Mr. <NAME>, He contended that even if Article 19 ought to be construed in the way indicated by the learned Chief Justice-and I may say I am in entire agreement with that construction-yet nevertheless there was a waiver by the petitioners of their right to contend that the <ORG> had no jurisdiction to enter upon and determine the disputes in question. Mr. <NAME> referred us to p. 13 of the appeal paper book, from which it appears that the petitioners had asked for an adjournment and requested the <ORG> to fix a meeting after April 10, to enable the petitioners to bring their solicitors. Then it appears that on April 4, 1926, a partner of the petitioners one <NAME> was present at a meeting of the <ORG>. <NAME> was asked by some of the respondents with the permission of the President of the <ORG> what the petitioners' solicitors had to say in the matter, having regard to the fact that the hundies were drawn by the petitioners on themselves and had become due. <NAME> then alleged that the hundies were never presented to the petitioners for payment. Having regard to what appears on that page of the paper book, Mr. <NAME>. contended that the petitioners had thereby submitted to the jurisdiction of the <ORG>. I do not agree with that contention, seeing that before the meeting of April 11, the petitioners had written a letter to the <ORG> protesting against the jurisdiction of the <ORG>, and declining to attend. It seems to me that if arbitrators enter upon the consideration of a matter when they have no jurisdiction to do so by the arbitration clause or submission between the parties, then they cannot be given jurisdiction under that submission by a mere appearance of the parties before them at a preliminary meeting followed by a protest against their jurisdiction before they have entered upon a consideration of the matters upon which they subsequently purport to make an award. In cases where an arbitrator enters into the consideration of matters which are not referred to him, or which he has no jurisdiction to try, <NAME> in <NAME> v. <NAME> (1864) 33 L.J.C.P. 337 said (p. 338) that "The question is not one of waiver or of estoppel, but of authority," and a party continuing to attend the reference after objection taken and protest made does not give the arbitrator authority to make an award. Even if a party under protest continues to attend before arbitrators and cross-examines witnesses, he does not thereby waive his objection, nor is he estopped from saying that the arbitrators have exceeded their authority by awarding on the matter. See <NAME> v. <NAME> (1864) 34 L.J.Q.B. 8. See also the remarks of Lord <NAME> in <NAME> v. <NAME> (1880) 6 Q.B.D. 63, where he said (p. 65) :-

In arbitrations, where a protest is made against jurisdiction, the party protesting is not bound to retire; he may go through the whole case, subject to the protest he has made.

16. In my judgment it is clear that if a party to a submission appears before an arbitrator and merely takes part in a preliminary discussion, he doss not thereby waive his right to object to the jurisdiction of the arbitrator before the arbitrator actually enters upon the consideration of the matters upon which he makes his award.

17. The learned Chief Justice reminds me that although there is an allegation in para 18 of the petition that a large number of the <ORG> had an adverse interest to that of the petitioners, that point has not been persisted in before us, and therefore we feel it unnecessary to say anything in regard to that part of the petition, <NAME>, Kt., C.J.

18. On the peculiar facts of this particular case, we think that the proper order to make is that each party do bear his own costs of this appeal and also in the <ORG> below.


JUDGMENT

1. This is a plaintiff's appeal arising out of a snit for sale brought on the basis of a mortgage deed, dated the 21st of February 1893, purporting to hare been executed by two persons, <NAME> and his mother, <NAME>, in favour of the plaintiff-appellant, <NAME>, According to the document Rs. 4,000 was the loan and it was secured on two classes of property. Firstly, pure Zemindari in <NAME> and <NAME>, Perganah Jhusi, of the Allahabad District and 13 items of property which the mortgagors of held as mortgagees from other persons. Among these 13 items were two mortgages of property in Mauza Chintemanpar and Sidhaura. Oat of the sum of Rs. 4,000, Rs. 1,400 purported to have been paid in cash prior to the registration and Rs. 2,600 purported to have been left with the creditor for payment of certain debts due from the mortgagors to other persons. They were as follows:

Rs. 1,000 due to <NAME> on account of his decree.

Rs. 700 due to <NAME> of Utraon.

Rs. 400 due to <NAME> who held a mortgage of sir land in Mauza Deoria; and Rs. 500 to <NAME>, Banker of the City of Allahabad,

2. According to the terms entered in the document the interest was to be Rs. 1 per cent. per mensem and the executants stipulated to re-pay the loan in 12 years. They further stipulated that they would pay annually a sum of Rs. 500 on account of principal and interest. The interest at Rs. 12 per cent. per mensem for one year amounted to Rs. 480, so that this sum allowed for the payment of the annual interest and a little over. They stipulated that the amount thus paid annually should be set off against the interest and the balance should be credited towards the principal. Further on in the document the mortgagors stipulated that if in any year they were unable to pay the interest, the interest might be treated as principal and would carry interest at the rate of Rs. 1 per cent. per mensem. Further on in the deed they further stipulated that if there was any default in payment of the Rs. 500 per annum, the mortgagee was to have power, without waiting for the expiry of the stipulated period, to set aside all the other stipulations embodied in the document and to bring a suit in Court to realise the entire principal together with interest and costs from the parsons of the mortgagors and from the hypotheacted property. <NAME> and <NAME> are both dead and the persons who are now sued are their heirs. They pleaded in defense that the deed had not been executed by <NAME> and <NAME>. They pleaded that no consideration had passed; and they lastly pleaded that the suit was barred by limitation. We may note here that it is an admitted fact that all the 13 items of mortgagee rights which were hypotheacted under the deed in suit have disappeared, that is, the original mortgagors have paid of the mortgages, but not to <NAME> or any of the present plaintiffs. The plaintiffs have not made the original mortgagors of these properties parties to the present suit. The Court below has held that Rs. 3,000 out of the Rs. 4.000 entered in the deed as consideration was actually paid. It has further held that the deed was duly executed by <NAME> and <NAME>. It has held that the suit is barred by limitation.

3. The plaintiffs in their appeal urge:

That the Rs. 1,000 of consideration which the <ORG> below has disallowed has been established. They further plead that the suit is not barred by limitation.

4. So far as the Rs. 1,000 of the consideration is concerned, the appeal has not been particularly strongly pressed. The learned <NAME> for the appellants states that his clients will be quite satisfied if they can get a decree for Rs. 3,000 principal together with interest thereon by sale of the hypotheacted property. With regard to this item, therefore, we need not say mush, except that we agree with the <ORG> below, that the appellants have failed to establish the payment of this item. It was a sum which they had to pay to the decree holder, <NAME>. Excepting the bare statement of the plaintiff <NAME> there is practically no evidence. No receipt has been produced, and the best evidence which was obtainable from the records of the Civil <ORG> has not been put forward. We, therefore, agree with the <ORG> below that the plaintiffs have failed to establish the payment of this Rs. 1,000.

5. We next come to the question of limitation. This may be divided into two heads. First of all it is pleaded that the plaintiffs had a period of 24 years within which to bring their suit on the basis of the bond. Next it is pleaded that even if they had not this lengthy period, still the plaintiffs have adduced evidence and have established the payment of some 10 sums of money on various dates on account of interest due under the deed and that these payments of interest have given the plaintiffs further time and the suit is, therefore, within 12 years of the last payment. The first portion of the plea is based upon the terms of the deed. The document is dated the 21st of February 1893. The period fixed for payment was 12 years, which would bring the time up to the 21st of February 1905, The suit 19 within 12 years of this date, it having been filed on the 21st of February 1917, that is, on the very last day of limitation. The <ORG> below, however, has held, relying on the Fall Bench decision of this <ORG> in <CITATION> 28 Ind. Cas. 910 : 37 A. 400 : 13 A.L.J. 510, that the suit ought to have been brought within 12 years of the 21st of February 1894,. It is an admitted fast that the sum of Rs. 500 which the mortgagors stipulated to pay annually was not paid at any time. The first sum of Rs. 500 was due on the 21st of February 1894. Admittedly it was not paid. Even the entries of the alleged payments on the back of the document do not begin before the 15th of December 1899. According to the terms of the deed the mortgagee was entitled to sue on the 21st of February 1894 by reason of the default. Article 132 of the Limitation Act clearly applies to the suit and that Article fixes a period of 12 years from the date on which the money became due. The lower <ORG> has also held that excepting the one alleged payment of the 15th of December 1899, none of the other alleged payments of interest have been proved. It has, therefore, held that the suit is out of time. It is urged before us practically that we should not apply the ruling in <CITATION> 28 Ind. Cas. 910 : 37 A. 400 : 13 A.L.J. 510, because in the case of certain other suits to which Article 132 does "not" apply, this <ORG> has in certain instances tome to a decision which in principle may clash with the principle laid down in the <ORG> ruling. We do not think that this is a good argument. The first question is, whether the circumstances of the two cases, that is of the reported case and the case before us, are identical or not, and whether the <ORG> ruling does as a matter of fact apply to the suit before us. We have compared the two cases and find it impossible to distinguish between them. In the present suit no option whatsoever was given to the mortgagee in the matter. The stipulation laid down (and the mortgagors agreed) that if they failed to pay the annual sum of Rs. 500, the mortgagee had a right to sue. On the face of this document now in suit the mortgage money became due on the 21st of February 1894 and time began to run. That time, in the absence of any payments on account of interest, came to an end at the end of 12 years and the present suit was brought, as we have already pointed out, at the end exactly of 24 years from the emotion of the document. It is true that the Madras High <ORG> has, in a recent case, differed from the decision of this <ORG> In doing so, it has had to go contrary to one of its own farmer decisions, whereas the Calcutta Might <ORG> has consistently followed the opinion of this <ORG>, or rather the decision in the <ORG> is based partly on the decisions of the Calcutta High <ORG>, and we see no reason whatsoever not to follow the decision of this <ORG>, which up to the present moment has not been upset and with which we agree. Unless, therefore, the plaintiffs are able to satisfy us that the alleged payments of interest entered on the back of the document were made, their suit is clearly barred by limitation, In regard to these payments, they are ten in number the earliest payments purport to have been endorsed on the deed in December 1899, <NAME> 1901 February 1902 and January 1903 The four sums mentioned in these four entries purport to have been paid by <NAME> and the entries on the deed to have been made by <NAME>. The next two entries are of January 1904 and December 1904 and purport to cover two sums of Rs. 700 and Rs. 300 sent by <NAME> through <NAME> one of her servants. The entries which are made in the Urdu character purport to have been made by <NAME>. The 7th item is dated the 10th of April 1906 and purports to relate to a sum of Rs. 900 paid on that date by <NAME> herself. The entry purports to have been made by <NAME> Dube. The 8th and 9th items of Rs. 1,000 each dating in 1910 and 1911 also purport to have been paid by <NAME> herself and both the entries are in the handwriting of or purport to be in the handwriting of <NAME>.

6. The last item of 11th August 1912 is a sum of Rs. 1,000 and the entry purports to have been made by one <NAME> a servant of the plaintiffs. The <ORG> below has pointed to the fact that the evidence of these payments consists only of the statements of <NAME> and <NAME>. It has in the circumstances of the case reinsert to accept their evidence as sufficient proof. The lower <ORG> clearly hesitated to believe there two men. In regard to the payment of the 15th of December 1899 the <ORG>, however, has accepted their statements because of an entry in the deed, dated 16th of January 1900. That deed purports to be a sale-deed of a half share in this document as well as other documents by <NAME> in favour of <NAME>. There had been a partition apparently in the plaintiffs' family and their rights under certain deeds were distributed among them, and then there were transfers from one to the other of their shares. In this sale-deed there is an entry of the deed now in suit showing the value of the bond itself on the 31st of December 1899. According to the calculation made therein the interest shown as then due was really less than the full amount calculated according to the bond; therefore, it was pleaded on behalf of the plaintiffs that this shows that there must have been some payment of interest prior to the 31st of December 1899 and they point to the entry dated 15th of December 1899, which shows a payment of Rs. 353-8-0, and they say this, therefore, is corroborated by the entry in the sale-deed of the 16th of January 1910. The lower <ORG> has more or less made a present of this item to the plaintiffs. We have been taken over the evidence of <NAME>, <NAME> and <NAME> and on a consideration of their evidence, we have come to the conclusion that all these entries of payments on the back of the deed are highly suspicious and that not even the entry of the 15th of December 1899 has been established to our satisfaction The appellants are people who on the face of the record have done in the past a considerable amount of money lending. Even their sale-deed of 16th January 1904 shows that. They have not produced in <ORG> any books of account whatsoever to show that any of these payments were made. They have stated in <ORG> that they kept no account books; that they every year prepared what they call a choubandi, which we presume consisted of papers stitched together and which they say they threw away and destroyed at the end of each year. Now the evidence shows that not only did they lend money but they also lent grain; they are described as Mahajans in <NAME>'s own deposition. He there gave his occupation as that of a Mahajan and Zemindar. <NAME> also described himself as a Mahajan. They are residents of Jhusi, which is a suburb of the town of Allahabad. We find it impossible to believe that they maintained no account books at all. Not a single receipt purports to have been given. No signature of any of the alleged payers has been taken. We are asked to accept the statements of <NAME> and <NAME> as being simply true, unsupported practically by any other evidence. An examination of the back of the bond will show that the entries Nos. 1, 2, 3 and 4 are not in the position on that bond where one would naturally expect to find them. Beneath the registration endorsement there was a certain amount of open space. One would have thought that a person endorsing a payment on thin document would have naturally begun the first entry at the beginning of the open space, but we find that these four earlier payments are entered in cramped spaces in between the entries made by the Registration Officer and the stamp vendor on the back of the deed.

7. The next point which is worthy of notice is this: The plaintiffs would ask ns to believe that on the 10th of April 1908, <NAME> herself paid the sum of Rs. 900 and that she made three further payments of Rs. 1,000 each on the 9th of November 1910, 20th of October 1911 and the 11th of August 1912. Now in 1906 on the plaintiffs' own showing the amount of their debt was Rs. 14,647-2-0. The value of the property could not have been more than this amount. The amount of the debt continued to swell up to Rs. 21,622 in 1910 when the <NAME> is said to have paid Rs. 1,000 more; In 1911 it had swollen to Rs. 23,094 when another sum of Rs. 1,000 is said to have been paid, and in 1912 it had swollen to Rs. 24,745 when in August of that year another Rs. 1,000 is said to have been paid. The income of this property is said to be Rs. 500 to Rs. 600 per annum. The amount of the debt in 1910,1911 and 1912 was considerably more than the value of the property. It is difficult to believe that any mortgagor would in these circumstances have thrown Rs. 1,000 into the pocket of the plaintiffs without any object what soever. It made no appreciable reduction in the amount of the debt. The latter was far greater than the value of the property, and it would have been a hopeless payment which no sane person would have made. But there is another fast which goes to show that no such payment would, however, have been made by <NAME>. On the 24th of May 1906, that is, a month and fourteen days after the alleged payment of Rs. 900 of the 10th of April 1906, the mortgagor of two portions of the mortgaged property, that is, the shared of Mauza Chintamanpur and Sidhaura, filed an application under Section 83 of the transfer of Property Act to which he made both Sadar-un-nissa and <ORG> parties. He tendered the money due under his mortgage and made <ORG> a party because, as he alleged, he had discovered the existence of the document of 21st of February 1893, under which the mortgagee purported to have sub-mortgaged her rights, and he had questioned <NAME> who had denied the mortgage of the 21st of February 1893, and, therefore, to protect himself he made both <ORG> and Sadar-un-nissa parties to his application and paid the money into <ORG>. Notice in that case was issued to <ORG>. It was not served upon him personally but was attached to the door of his house. On the 22nd of November 1906 <NAME> filed a reply in that proceeding, in which she also stated that she had denied the execution and completion of the deed of the 21st of February 1893 and she claimed the money deposited by the mortgagor, <NAME>, as belonging to herself. Apparently <ORG> took no farther steps in the matter and the money was withdrawn from <ORG> by <NAME>. It in, therefore, clear that so early as the beginning of the 10th of April 1905 <NAME> sadar-un-nissa had publicly denied execution of the deed now in suit. We have pointed out above that the mortgage debt in that year was practically equal to the value of the property, if not greater and that in subsequent years it continued to increase till the payment of the debt was a hopeless one. We have also the admitted fact that all the mortgagee rights that were hypothecated to the present plaintiffs have been redeemed and the plaintiffs have not deemed it worth their while to make these mortgagors parties to the present suit. In these circumstances, we think that it would be dangerous in the extreme to place any reliance whatsoever on the evidence of <ORG>, <NAME> or any of the plaintiffs' witnesses. We cannot and we do not believe that any of the payments endorsed on the document were ever made. They certainly have not been established to our satisfaction. In any view, it is clear that the suit was barred by limitation and was properly dismissed by the <ORG> below. The appeal fails and we dismiss it with costs, including fees on the higher scale.