PETITIONER: JOINT SECRETARY TO THE GOVT. OF INDIA AND OTHERS Vs. RESPONDENT: <ORG>. DATE OF JUDGMENT30/09/1985 BENCH: <NAME>, R.S. BENCH: <NAME>, R.S. BHAGWATI, P.N. (CJ) SEN, AMARENDRA NATH (J) CITATION: 1986 AIR 685 1985 SCR Supl. (3) 165 1985 SCC (4) 516 1985 SCALE (2)667 CITATOR INFO : F 1987 SC 61 (1) R 1989 SC 516 (3) R 1990 SC 202 (8) ACT: Central Excise & Salt Act , 1944 - Goods manufactured for and on behalf of buyer with buyer's trade mark - Goods sold to buyer at wholesale price - Determination of the value of goods for the purpose of levy of excise duty - Trade marks - Whether value of trade marks can be added to the wholesale price for such determination. HEADNOTE: The respondent used to manufacture certain goods for sale in India by Messers <ORG>'s <ORG> (for short <ORG>'s) under certain trade marks in respect of which the latter was registered as the sole registered user in India. The goods were supplied to <ORG>'s at wholesale price on rail at Moga or free on lorry at factory. The respondent disputed the value of the goods determined by the excise authorities for the purpose of the levy under the Central Excises and Salt Act , 1944 and ultimately the respondent filed writ petitions in <ORG>. <ORG> allowed the writ petitions holding that the value of the trade marks cannot form a component of the value of the goods for the purpose of assessment of excise duty. In appeal to <ORG>, the appellant contended that the value of the goods sold by the respondent to <ORG>'s should, for the purpose of levy of excise duty, include the value of the trade marks under which the goods are sold in the market and that the value of such trade marks should be added to the wholesale price for which the goods are sold by the respondent to <ORG>'s. Dismissing the appeal. ^ HELD: The value of <ORG>'s trade marks cannot be added to the wholesale price charged by the respondent to <ORG>'s for the purpose of computing the value of the goods manufactured by the respondent in the assessment to excise duty. [168 C-D] In the instant case, what are sold and supplied by the respondent are goods manufactured by it with the trade marks 166 affixed to them and it is the whole sale price of goods that must determine the value for the purpose of assessment of excise duty. It is immaterial that the trade marks belong to <ORG>'s. What is material is that <ORG>'s have authorised the respondent to affix the trade marks on the goods manufactured by it and it is the goods with the trade marks affixed to them that are so sold by the respondent to <ORG>'s. There can therefore be no doubt that the wholesale price at which the goods with the trade marks affixed to them are sold by the respondent to <ORG>'s as stipulated under the agreements would be the value of the goods for the purpose of excise duty. That is the price at which the respondent sells the goods to <ORG>'s in the course of wholesale trade. [167 H; 168 A-BI JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1723- 1736 of 1981 From, the Judgment and Order dated 31.8.1976 of <ORG> in Writ Nos. 1969, 4420, 4422 to 4424, 4429 to 4436. 4497 of 1975.

<NAME>, Attorney General of India , <NAME> and Miss <NAME> for the Appellants.

<NAME>, <NAME>, <NAME>, <NAME> and Miss <NAME> for the Respondent.

The Judgment of the Court was delivered by <NAME> This appeal by special leave is directed against the judgment and order dated August 31, 1976 of <ORG> allowing a Group of writ petitions filed by the respondent against the levy of excise duty.

The respondent, Messrs. Food Specialities Limited, <ORG> is a company registered under the Indian Companies Act , 1956. It entered into a number of agreements with Messrs. <ORG>, a subsidiary of a foreign company, Messrs. <ORG> holdings Limited, to manufacture for and on behalf of Messrs. <ORG> (hereinafter referred to as <ORG> ) sweetened condensed milk, soluble coffee, baby milk food, milk powders and infant cereal foods for sale in India by <ORG> under certain trade-marks in respect of which the latter was registered as the sole registered user in India. The agreement stipulated that the respondent would manufacture the goods and supply them to <ORG> in such quantities as <ORG> might specify from time to time subject to a prescribed minimum and maximum, and <ORG> was obliged to buy the products so manufactured by the respondent. The products were manufactured by the respondent in accordance with detailed quality specifications supplied by <ORG>, and the price of the products was determined under the agreements free on rail at <ORG> or free on lory at factory. The respondent enjoyed no interest in the trade marks and labels and undertook not to sell any of those products to any person other than <ORG>.

The products manufactured by the respondent were subject to excise duty under the said <ORG>s and Salt Act , 1944. The respondent disputed the value of the goods determined by the excise authorities for the purpose of the levy, and a number of questions were raised in that context. The controversy was processed through the statutory channels provided by the Act and ultimately the respondent filed writ petitions in <ORG>. <ORG> found in favour of the respondent and quashed the orders of the <ORG> authorities and <ORG> impugned in the writ petitions.

In these appeals the only question pressed before us by the learned Attorney General on behalf of the appellant is that the value of the goods sold by the respondent to <ORG> should, for the purpose on levy of excise duty, include the value of the trade marks under which the goods are sold in the market and that the value of such trade marks should be added to the wholesale price for which the goods are sold by the respondent to <ORG>. It is urged by the lea med Attorney General that <ORG> erred in holding that the value of the trade marks cannot form a component of the value of the goods for the purpose of assessment of excise duty. We are of opinion that <ORG> was right in the view it took and the appeal must rail.

It may be noticed that the respondent manufactures the goods according to the specifications supplied by <ORG> and affixes the trade marks of <ORG> on the goods and supplies the same to <ORG> at a wholesale price free on rail at Moga or free on lorry at factory stipulated under the agreements with <ORG>. What are sold and supplied by the respondent are goods manufactured by it with the trade marks affixed to them and it is the whole sale price of such goods that must determine the value for the purpose of assessment of excise duty. It is immaterial that the trade marks belong to <ORG>. What is material is that <ORG> have authorised the respondent to affix the trade marks on the goods manufactured by it and it is the goods with the trade marks affixed to them that are sold by the respondent to <ORG>. There can therefore be no doubt that the wholesale price at which the goods with the trade marks affixed to them are sold by the respondent to <ORG> as stipulted under the agreements would be the value of the goods for the purpose of excise duty. That is the price at which the respondent sells the goods to <ORG> in the course of wholesale trade and we fail to see how the value of the trade marks could be added to the wholesale price for the purpose of determining the value of the goods for the purpose of levy of excise duty.

We are satisfied upon the particular facts of this case that the value of <ORG>'s trade marks cannot be added to the wholesale price charged by the respondent to <ORG>'s for the purpose of computing the value of the goods manufactured by the respondent in the assessment to excise duty.

The appeals are dismissed with costs.

M.L.A. Appeals dismissed.


JUDGMENT <NAME>, J.

1. This is an appeal under Section 417(3) Cr. P. C. against an order of acquittal dated 12-2-1962, recorded by a Magistrate 1st Class, Agra, in a case under Section 7 / 16 of the Prevention of Food Adulteration Act.

2. The Medical Officer of Health, Agra Municipality, filed a complaint against the opposite party on the allegations mat on 19-6-59 he was found carrying goat's milk in his can for sale; that <NAME>, Food Inspector, (P. W. 1) purchased three-fourth seer of milk from the opposite-party for sample, that the sample was sent to the Public Analyst for his report; that the report of the Public Analyst dated 30-7-1959 shows that the sample contained about 27% of water and as such was adulterated, and that the opposite party thereby had committed an offence punishable under Section 7 / 16 of the Prevention of Food Adulteration Act.

3. In support of the allegations in the complaint. <NAME>, Food Inspector, <ORG> was examined as P. W. 1. He stated mat he had obtained the sample of milk from the accused and after dividing it into 3 portions, he gave one to the accused, kept one with him, and sent the other to the public Analyst, Lucknow for his report. He also stated that on enquiry, the opposite-party had informed him that it was goals milk which he was carrying for sale and he also gave it in writing, which was Ex. Ka-7.

4. The opposite-party pleaded not guilty and urged that he was not selling the milk but was carrying it to his village and it was not for sale. He admitted that sample of the milk was taken by the Food Inspector and a portion of the sample in another phial was given to him but he denied having received its price. He also stated that he had not mixed water in the milk but had purchased it in the market and was taking it to his home for his own consumption. He admitted to have signed the receipt paper No. A and the report paper No. B under duress.

5. From the perusal of the order-sheet of the trial court, it appears that the opposite-party took various dates for producing evidence in defence, but ultimately he led no defence evidence and the case was argued on his behalf on 12-2-1962. The order-sheet of that date appears to have been signed by the respondent.

6. The report of Sri <NAME>, Public Analyst, <ORG>, (Ex. Ka-5) is dated 30th July 1959. It was pointed out to the trial court that Sri <NAME> had been appointed Public Analyst to the Government by Gazette Notification No. 2718/XVI-(II)-722-55, dated July 27, 1959, with effect from August 3, 1959 and, therefore, his report in the case was valueless. This contention was accepted by the learned Magistrate who relied on a decision of Hon'ble <NAME>, J. in <NAME> v. State of U. P., Criminal Revn. No. 1189 of 1960 (All) and acquitted the accused, holding that as Dr. <NAME> was not a Public Analyst on 30-7-1959, his report could not bring the charge home to the accused.

7. I have heard the learned counsel for the appellant. None has appeared on behalf of the opposite-party, though the office report shows that the notice has been duly served on him.

8. Learned counsel contends that the Notification No. 2718/XVI (II)-722-55, dated 27th July 1959, as published in the Hindi Gazette shows that <NAME> was appointed as Public Analyst with affect from 3rd of April, 1959 and not from 3rd of August, 1959 as printed in the English version of the same Notification. Learned counsel contends that the date August 3, 1959 mentioned in the English version of the Gazette Notification was a clerical error which had crept in place of 3rd April, 1959, which was the correct date of appointment of <NAME> as Public Analyst

9. Notification No. 2718/XVI-(II)-722-55, of July, 27, 1959, which mentions the date of appointment of Public Analyst as 3rd August 1959 is published in <ORG> Part I dated August 1, 1959. Hindi version of the same Notification giving 3rd April 1959 as the date of appointment of the Public Analyst, is published in Hindi Gazette. Part I, dated 8th August 1959.

10. In Uttar Pradesh Gazette of January 16, 1960 Part I, a Notification No. 4846(i)XVI-II(PH)-722-55, dated January 11, 1960 has been published under the heading corrigendum. This notification reads as follows:

CORRIGENDUM.

January 11, 1960.

No. 4846(i) XVI-II(PH)-722-55--In <ORG> Notification No. 2718/XVI-II-722-55, dated July 27, 1959, published at page 925 of Part I of the English version of <ORG>, dated August 1, 1959, for the word "August" read the word "April".

By order, <NAME>, <NAME>.

11. Learned counsel contends that when the Government noticed that a mistake had crept in the English version of the Notification in regard to the date of appointment of the Public Analyst, it issued this corrigendum.

12. There is some force in the contentions raised by the learned counsel. But in a criminal case, law cannot be interpreted in a manner as to turn an innocent act into an offence. The Notification giving August 3, 1959 as the date of appointment was published in the <ORG> dated August 1, 1959 while the Corrigendum was published several months after on January 11, 1960. In the circumstances, appellant cannot take advantage of the Corrigendum for investing legality in the report of the Public Analyst, which, on the face of the original Notification is clearly illegal. Section 18(5) of the Act cannot be harnessed for reading in evidence the report of a person who was not a Public Analyst within the meaning of Section 8 of the Act. I agree with the observations of <NAME>, J. in the above noted criminal revision, that the second Notification cannot be read retrospectively to validate an act which was wholly void.

13. Learned counsel further contended that as the same notification of 27th July, 1959 published in Hindi, version of the gazette gives the 3rd of April, 1959 as the date of appointment of the Public Analyst, it should be preferred to the notification published in the English gazette because Hindi in Deonagri characters being the official language of the <ORG>, Hindi version of the gazette is more authoritative than the English version. I do not find any substance in this argument.

14. In the case of <CITATION> , AIR 1962 All 240 a Full Bench of this Court has held that:

"In case of conflict or divergence between the two versions of the official gazette the English version may reign supreme and supersede the Hindi one."

I am bound by that decision.

15. Learned counsel for the appellant invited my attention to three <ORG> notifications. <ORG> Notification No. 10656/XVI(PH)-9722-55-published in U. P. <ORG> of February 18, 1956, to show that two persons, viz., Dr. <NAME> and <NAME> were appointed as Public Analysts for the whole of Uttar Pradesh within the meaning of Section 8 of the Prevention of Food Adulteration Act. <NAME>, Public Analyst to <ORG>) was granted leave on average pay for 4 months preparatory to retirement from April 3, 1957 under <ORG> Notification No. 4177/XVI-(PH)-908-57-dated 24th May, 1957, and Dr. <NAME>, Assistant Public Analyst, was appointed under <ORG> Notification No. 4177(i)/XVI(PH)-908-57 of the same date to officiate as Public Analyst to <ORG>) vice Sri <NAME> granted leave. On the basis of these <ORG> notifications <NAME>, learned counsel, contended that Sri <NAME> was a Public Analyst to <ORG> on 30-7-1959 when he gave the report in this case. I do not find myself able to agree with this contention. <NAME> was granted leave for 4 months only and Dr. <NAME> was appointed to officiate as Public Analyst only for that period. It cannot be assumed, therefore, that he continued to act as Public Analyst even after the expiry of the four months from April, 3, 1957. This becomes clear from the fact that the <ORG> issued a notification dated July 27, 1959, appointing Sri <NAME> as Public Analyst, which would not have been necessary if Sri <NAME> had continued as Public Analyst by virtue of the notification dated May 24, 1957, referred to above.

16. In this view of the matter, I do not find any force in this appeal. The appeal is dismissed.


JUDGMENT <NAME>, J.

1. This second Civil Appeal arises out of a suit for ejectment from a house and recovery of arrears of rent. The suit was decreed by <ORG> and an appeal from the judgment and decree of <ORG> was dismissed.

2. The suit was instituted by <NAME> (respondent in this appeal) against Smt. <NAME> (appellant in this appeal) claiming that he had terminated the tenancy by notice to quit and had obtained the permission of the District Magistrate under Section 3 of the U. P. (Temporary) Control of Rent and Eviction Act , 1947 to get over the bar to the institution of the suit created under that section. Admittedly the appellant's husband <NAME> was originally the tenant of the house on a monthly rent of Rs. 35 from its former owner <NAME>. The house was sold by <NAME> to one Smt. <NAME>. The latter in turn sold it to the respondent. After the purchase of the house, which professedly was for the purpose of his own residence, the respondent obtained the District Magistrate's permission dated 8-8-1966 to sue the tenant for eviction. He had already given a notice dated 24-3-1966 to the appellant terminating the tenancy and asking for vacation of the premises. The plaintiff filed a revision before the Commissioner but the same was dismissed on 20-1-1967. The suit was instituted the same day.

3. The suit was contested by the defendant-appellant on various grounds. The notice was said to be invalid since it was not given after grant of permission, and the permission to be invalid as the purchase was with full knowledge of the tenancy. <NAME>, who had died about 10 years before suit, had left, besides his widow (appellant), three sons and daughters from her as also two sons from an earlier wife. Since permission had been obtained to file a suit against the widow and not the sons and daughters of <NAME> and the notice terminating the tenancy had also been addressed to, and served upon, the widow alone, it was pleaded that the notice was bad for that reason and the permission was also illegal and without jurisdiction. The suit was also said to be not maintainable on the ground of the State Government having passed a stay order on the filing of a revision application by the defendant under Section 7-F of the aforesaid Act.

4. As to the plea of the notice being invalid on the ground that it was not given after the grant of permission by the District Magistrate, not again after the confirmation of the District Magistrate's order by the Commissioner, the learned Additional <NAME> who tried the suit held that it was not necessary to give the notice after the grant of permission and that it could be given before that. The plea has not been pressed again at least in this Court, and for obvious reasons, as it has been held in several decisions of this Court that it is not necessary that the notice under Section 106 of the Transfer of Property Act be given only after the permission to evict has been obtained. About the additional ground (raised by an amendment of the written statement) that the notice was bad because it had been both addressed to and served upon the appellant alone though <NAME> had left other, heirs and the tenancy devolved upon those other heirs also, the learned <NAME> held that the appellant alone had been acting as, and asserting herself to be, the tenant and had for all practical purposes been recognised as the tenant and she was thus the sole tenant He was further of the opinion that even if the sons and daughters had inherited the tenancy rights they had impliedly surrendered those rights in favour of their mother. For these reasons he held the notice to have been rightly given to the appellant alone.

5. Regarding the plea of invalidity of the permission, it was conceded before the learned <NAME> on the defendant's side that permission granted against one co-tenant held good against all the co-tenants. He held that the defendant had failed to show in what respect otherwise the permission was illegal and without jurisdiction. On the plea that <ORG> had stayed the operation of the order of the lower authorities granting permission and the suit was therefore, not maintainable, the learned <NAME> found that no order of stay of <ORG> was on the record and so he rejected the plea.

6. After deciding also the minor controversies which related to the arrears of rent and damages, <ORG> decreed the suit for ejectment and for recovery of a lesser amount as arrears of rent besides damages for use and occupation.

7. In the appeal filed by the defendant Smt. <NAME> the second Additional Civil Judge who disposed the same held that it being undisputed that a tenancy is heritable in the absence of a contract to the contrary and that <NAME> had left surviving him not only the appellant but also sons and daughters, those sons and daughters also became co-tenants of the house with the widow. However, relying on the decision of <ORG> in <CITATION> , AIR 1963 SC 468 he held that the notice to the widow alone to determine the tenancy was sufficient and the suit for ejectment filed against her alone was also good at law. In regard to the permission, he too held that nothing had been shown as to how the permission was illegal or without jurisdiction and that so far as the ground that it was obtained against one of the co-tenants only was concerned, the decision in the case <CITATION> , 1958 All LJ 573 = (AIR 1959 All 33) showed that the permission obtained against one co-tenant was good against the entire body of the class designated as 'the tenant'. The plea based on an alleged stay order by <ORG> was not seriously pressed in the appeal. Reiving upon the Full Bench case <CITATION> , 1965 All LJ 58 = (AIR 1965 All 498) (FB) the learned Judge held that the proceedings under Section 7-F aforesaid could have no effect on the suit already instituted. It may be stated that this position, has since been confirmed by the decision of <ORG> in <CITATION> , AIR 1970 SC 763 = 1968 All WR (HC) 892. The appeal was accordingly dismissed.

8. In the second appeal the same legal pleas have been reiterated and argued. Learned counsel for both the sides have been heard at length. It may be noted here that another second civil appeal No. 152 of 1967 with a similar plea about invalidity of notice given to one co-tenant only was also tacked with this appeal under decision after it had been heard in part and this appeal is being decided after hearing also learned counsel for both the sides in that other second appeal.

9. On the side of the appellant it has been urged that the decisions of <ORG> in India have no doubt been that a notice served on one of the co-tenants is a good notice to the other co-tenants but that is only where the notice is addressed to all. It is said that the notice in the instant case was addressed only to the appellant and was served only on her. For that reason the notice is said to be not in accordance with law and therefore, invalid for the purpose of terminating the tenancy. In regard to the <ORG> decision aforesaid, the argument is that the same is distinguishable because it relates to a case of "joint tenants" as distinct from "tenants-in-common" which is the position of the appellant and the other heirs of <NAME> who succeeded to the tenancy by inheritance.

Now the expression "joint tenants" has very often been used in those earlier cases too which have been cited on the appellant's side and on which reliance is placed for the argument that in order to be effective under Section 106 of the Transfer of Property Act, the notice must be addressed to all the co-tenants but it has not been urged that in those decisions also the expression "joint tenants" was intended to refer to co-tenants holding as "joint tenants" as distinguished from "tenants-in-common". It has also not been disputed that the expression "joint tenants" was used in those cases as a substitute for "co-tenants" and not with a view to indicate the nature of the estate held by the co-tenants. It therefore, needs to be examined whether the <ORG> decision referred to above was peculiar to any "joint tenancy" estate held by the co-tenants in the tenancy and whether the same is not applicable to co-tenants who got the rights of a tenant in the tenancy on his death by inheritance.

10. At the outset it may be stated that there is no controversy on the proposition that even in the case of a monthly tenancy, the tenancy is inherited by the heirs of the tenant on his death. It was so held in <CITATION> , AIR 1940 Cal 89; <NAME> v. <NAME>, AIR 1966 Cal 447 and <CITATION> , AIR 1937 Nag 321. It is also not in controversy that except in the case of coparceners in a joint Hindu family under the Hindu Law, property under various inheritance laws in this country is taken by inheritance from a deceased owner by his heirs as "tenants in common" and not as "joint tenants" as between themselves. So it cannot be doubted that as between themselves the interest which the heirs of a deceased tenant inherit will itself be heritable and will not pass by survivorship and in that sense they cannot be said to hold it as "joint tenants." That is why the expression "joint tenants" used in dealing with a case of more than one person holding together the tenancy either by original lease in their favour or by inheritance from a deceased tenant is meant to convey nothing more than the idea that such persons hold the tenancy as one entity and not that they hold that kind of estate which is governed by the rule of passing by survivorship. If the <ORG> decision in AIR 1963 SC 468 can be said to be in relation to a case of joint tenants in such ordinary sense of the expression, then it would be directly relevant to the instant case, but if it laid down law of sufficiency of notice to determine lease by being given to one of the co-tenants to a case where the co-tenants were holding the tenancy by way of an estate of "joint tenancy", then the decision would be distinguishable, though the point would still require decision whether in other cases of joint tenancy also notice to one of the joint tenants will not be good and effective in law for the purpose of terminating the tenancy. This calls for an examination of the facts of <NAME> case. AIR 1963 SC 468.

11. <NAME> case, AIR 1963 SC 468 decided by <ORG> arose out of a suit filed by the Trustees of <ORG> for ejectment of <NAME> and one <NAME> from a piece of land. The land had been leased by the Trustees of <ORG> on a monthly tenancy to two persons. Those two persons later assigned their rights in the lease to <NAME> and <NAME> and the assignment appeared to have been accepted by the lessors. Some years later, the Trustees of <ORG> sent a notice to <NAME> and <NAME> requiring them to vacate the premises and deliver vacant and peaceful possession on a certain date. On non-compliance with the notice the suit was instituted against both the persons. It however, turned out that <NAME> had died much earlier to the institution of the suit and the plaintiff therefore, amended the plaint by deleting the name of <NAME>. The suit was contested, inter alia, on the ground that the notice of termination of tenancy was Invalid inasmuch as it had been served only upon one of the lessees (that is, <NAME>) and not upon the heirs and legal representatives of <NAME>, who were also said to be necessary parties to the suit. The suit was decreed by <ORG> by holding that the tenancy was a joint tenancy and notice to one of the joint tenants was sufficient and that the suit was also not bad for non-joinder of the legal representatives of <NAME>. An appeal to <ORG> was dismissed summarily. The dispute was taken to <ORG> by <NAME> upon having obtained from that Court special leave to appeal. In paragraph 7 of the judgment of <ORG> it was observed:--

"The argument about notice need not detain us long. By the deed of assignment dated February 28, 1947, the tenants took the premises as joint tenants. The exact words of the assignment were that '.....the assignors do and each of them doth hereby assign and assure that the assignee as joint tenants.....'. The deed of assignment was approved and accepted by the Trustees of <ORG>, and <NAME> and the appellant must be regarded as joint tenants. The trial Judge, therefore, rightly held them to be so. Once it is held that the tenancy was joint, a notice to one of the joint tenants was sufficient and the suit for the same reason was also good, Mr. <NAME>, in arguing the case of the appellant, did not seek to urge the opposite, In our opinion, the notice and the frame of the suit were, therefore, proper, and this argument has no merit."

12. It can very well be argued that the expression "joint tenants" used in the deed of assignment and used in the above paragraph by their Lordships of <ORG> was meant to convey no other sense than that <NAME> and <NAME> did not take separate and exclusive interests under the assignment and that they were joint tenants in the sense that they were to hold the lease jointly and not with separate Interests therein. In the Kerala High Court case <CITATION> , AIR 1968 Ker 229 a angle Judge of that Court interpreted <NAME>'s case, AIR 1963 SC 468 to be one relating to a tenancy held by two persons as "joint tenants" in the other sense. It was observed at page 229, column 2 of the report:--

"That is clear from the emphasis placed by their Lordships on the circumstance that the tenants took the premises as joint tenants, the deed of assignment by which they acquired the lease expressly providing that they were taking as joint tenants. Where joint owners are joint tenants there is unity of title, unity of interest and the right of survivorship in addition to unity of possession so that it might be said that any one of the joint tenants represents the entire estate--indeed in the <ORG> case already referred to it would appear that one of the two joint tenants had died and the lease had vested solely in the other by survivorship before notice to quit was served on the other so that there was no question of the legal representatives of the deceased joint tenant having any interest whatsoever in the lease so as to require that notice should go to them."

The learned Judge proceeded further to observe at page 230 column 1:--

"Where, however, the joint owners are only tenants in common there is only unity of possession, not of title or interest, and to determine a tenancy so held in accordance with Section 106 of the Transfer of Property Act notice must be addressed to all the tenants though proof of service on one will be prima facie proof of service on all. <CITATION> , AIR 1918 PC 102 and <CITATION> , AIR 1925 Cal 752. In the words of the section, notice must go to every party intended to be bound by it, and if it is not issued to any of the joint owners of the lease there is no determination of the lease so far as he is concerned. A lease cannot be determined piecemeal and hence it follows that there is no determination even so far as the others are concerned."

The argument in the second quotation will be discussed later on, but the observation in the latter part of the first quotation itself would indicate that their Lordships of <ORG> had not in their mind the consideration, that <NAME> and <NAME> were owners of the tenancy as "joint tenants" in the special sense, with the right of survivorship as an incident thereof, for in that case it would have been enough for their Lordships to dispose of the controversy by merely saying that upon the death of <NAME> his interest passed to <NAME> and he became the sole lessee, with no necessity in consequence of any notice going to the heirs of <NAME> or of their impleadment as defendants in the suit. On the other hand, their Lordships proceeded to lay down that a notice to one of the joint tenants was sufficient and the suit against one joint tenant was for the same reason also good. However, reference to an old well-known <ORG> case relied upon on the respondent's side may also be made. That case is AIR 1918 PC 102 in which it was laid down that in the case of joint tenants each is intended to be bound and service of a notice to quit upon one joint tenant is prima facie evidence that it has reached the other joint tenants. There was a suit by the landlords of a piece of land against the tenants and sub-tenants who were actually in possession. The set of defendants who were the tenants consisted of seven persons some of whom were members of a joint Hindu family of which the others were once such members but had ceased to be so. This fact is significant in so far as it shows that all the seven tenants were not, as between themselves, bound by any rule of passing of their interest by survivorship. It may also be stated that they had come to possess what was formerly the tenancy holding of one <NAME> and that they were being treated as tenants in place of <NAME> who was treated as dead. In that case notice was sent to all the seven persons separately but a contest was entered into as to whether some of them who had not been personally served with notice could be regarded as duly served. It was in the context of this contest that their Lordships of the <ORG> observed at page 110, column 2 of the report at the very commencement of their discussion on this controversy:--

"Next and lastly as to the service of the notice to quit. The 106th section of the Transfer of Property Act , 1882, only requires that such a notice should be tendered or delivered to the party intended to be bound by it either personally or to one of his family or servants at his residence, or if such tender or delivery be not practicable, affixed to a conspicuous part of the property. The per-sonal tender or delivery may take place anywhere; the vicarious tender or delivery must take place at the residence of the person intended to be bound by the notice. Well in the case of joint tenants, each is intended to be bound, and it has long ago been decided that service of a notice to quit upon one joint tenant is prima facie evidence that it has reached the other joint tenants. Doe d. Macartney v. <NAME>, (1805) 5 Esp 196 = 8 RR 848, Doe d. <NAME> v. <NAME>, (1806) 7 East 551 = 8 RR 670 = 3 Smith KB 517, <NAME> v. <NAME>, (1856) 6 Ir CLR 367".

13. About this case it has been argued on the appellant's side that as a matter of fact notice was issued to all the seven co-tenants and the notice was also held to have been sufficiently served on each one of them and in the circumstances the observation that in the case of joint tenants each is intended to be bound and service of a notice to quit upon one joint co-tenant (is evidence that it has reached the other joint tenants?) is prima facie an obiter dicta. In this connection reliance was placed on the <ORG> case, <CITATION> , AIR 1967 SC 997 in which it was observed that a decision made on a concession made by parties, even though principle conceded was accepted by <ORG> without discussion, cannot be given the same value as a decision given upon a careful consideration of pros and cons of the question raised. The judgment in the case no doubt did not discuss the grounds for the rule enunciated, but that appears to be because the rule was taken to be well recognised. There were three English cases cited in that connection. At any rate, the service of a notice addressed to all the co-tenants upon one of them only has been held to be sufficient service for terminating the tenancy in a number of decisions of various <ORG> following this <ORG> case. Some of these cases are Pt. <NAME> v. L. <NAME>, 1956 All LJ 650; <CITATION> , AIR 1964 All 52; <NAME> v. <NAME>, AIR 1965 All 287; <CITATION> , AIR 1929 Cal 651; <CITATION> ., AIR 1966 Cal 63; <CITATION> in Coun-cil, AIR 1945 Nag 255; <CITATION> , AIR 1935 Bom 247 and Mst. <NAME> v. <NAME>, AIR 1964 Bom 96.

In none of these cases, however, the question arose whether a notice addressed to one or some only of the joint tenants and served upon him or some was sufficient to terminate the tenancy, since the notice was addressed to all. It was in the case, AIR 1925 Cal 752 that It was specifically decided that the notice must be addressed to all and the same view has been taken in the Kerala High Court case. AIR 1968 Kerala 229. In the Calcutta case the <ORG> case cited above was distinguished on the ground that the notices were addressed to all the joint tenants by being sent to all of them. The rases (1805) 5 Esp 196 = 8 RR 848 and (1806) 7 East 551 = 8 RR 670 = 3 Smith KB 517 referred to in the <ORG> case were also considered. The first case was said to have no value because in India the matter is governed by the provisions of the Transfer of Property Act About the other case it was said that the matter was left to the Jury. It cannot be supposed that their Lordships of the <ORG> had not in mind the statutory provision in Section 106 of the Transfer of Property Act when they laid down the rule that "in the case of joint tenants each is intended to be bound, and it has long ago been decided that service of a notice to quit upon one joint tenant is prima facie evidence that it has reached the other Ioint tenants". Indeed they were specifically considering Section 106 of the Transfer of Property Act and the use of the words "each is intended to be bound" was with reference to the language of the section. The relevant part of Section 106 is in the following words:--

"Every notice under this section must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party or to one of his family or servants, at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property."

14. One requirement under the above quoted provision is about the form of the notice, namely, that it should be in writing and signed by or on behalf of the person giving it. The other is about service of the notice.

15. It has not been laid down in the: section that the notice should be addressed to all co-tenants or to every one of them. In regard to service of notice, it is required that it be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party or to one of his family or servants at his residence, or, if such tender or delivery is not practicable affixed to a conspicuous part of the property. If the words "party who is intended to be bound by it" are interpreted to mean each one of the co-tenants where the tenancy is held by more than one person jointly, then notice must be served on each one of the co-tenants and that would be in direct conflict with the rule about which there is no controversy that service of a notice on one of the co-tenants would be sufficient service in respect of all (provided it is addressed to all). The fact of its being addressed to all will be immaterial if the notice must be served on each co-tenant individually in order that all of them may be bound. The rule of sufficiency of service of notice on one co-tenant in the case of co-tenancy can be in conformity with the requirement of the section only if the co-tenants are taken to constitute one "party" so that service on any one only of them will be service on the party intended to be bound. It must be in this background that it was laid down by <ORG> in <NAME> case, AIR 1918 PC 102 that "well in the case of joint tenants, each is intended to be bound"; in other words, if a notice is given to one of the joint tenants, it means that the joint tenants as a whole are intended to, be bound by the notice. It is an incident of 'tenancy' that it is one and even though more than one person may hold it they hold it together as one. It is well recognized that a landlord cannot terminate the tenancy piecemeal, nor can some out of the several co-tenants terminate it for themselves only. Co-tenants who come to hold a tenancy by inheritance may, for the purposes of succession have an estate as "tenants in common" and not "joint tenants", but the special incidents attaching to a tenancy will not be changed upon the tenancy passing to more than one person by inheritance. In so far as their relationship with the landlord is concerned, they hold the tenancy jointly and for the landlord they constitute one unit. So even if a notice is addressed to one or some of the co-tenants, it must be effective as against all, the only limitation to this being that there is nothing to show that the tenancy is intended to be terminated piecemeal and it is clear that the intention is to terminate the tenancy as a whole. It appears that it is by way of this safeguard that while laying down the rule in the several decisions mentioned above that service of notice on one co-tenant will be sufficient service of notice for terminating the tenancy that the qualification has been added that the notice should be addressed to all the co-tenants. There does not appear to be any sanctity otherwise behind this qualification. In this connection the following passages from the report of AIR 1964 Bom 96 which, if I may say so with respect, contain also my line of thinking, may be usefully reproduced:--

"(11) In this connection it is contended by the learned counsel for the appellants that the provisions of Section 11 of Hindu Succession Act in terms lay down that, property acquired by heirs who inherit by intestate succession is acquired by them as tenants-in-common and not as joint tenants. In this context reference is also invited to paragraph 31 of Mulla's Hindu Law, page 99, 12th edition. In my judgment, the phrase "tenants-in-common" or "joint tenants" used in Section 19 of the Hindu Succession Act or in other texts, when considering the rights of owners of property inter se cannot be confused with the right to hold land as joint tenant in the sense as joint lessees or co-lessees or co-tenants of property such as the subject-matter of the suit. The word "tenant" in Section 19 is not used in the sense of lessees. That word is used in the sense of owners of property whether they are joint owners of property or holding in defined shares. It is an incident of ownership that has been referred to in Section 19 and that incident in the case of persons holding as tenants-in-common is that the devolution in the case of each of these tenants-in-common would be according to the personal law while in the case of persons holding as joint tenants it will be by survivorship. The expression is not germane in deciding whether the leasehold is held as joint tenants. That expression may have led to some confusion and it is preferable to refer to rights of more than one person holding under the leasehold vis-a-vis the landlord as co-tenants or co-lessees. If understood in that sense, there will be no difficulty in holding that all the co-lessees or co-tenants held as joint tenants in the sense that they have a single tenancy relationship with the landlord and they are not different tenants vis-a-vis the landlord.

(12) If this is the correct interpretation of the position of persons even succeeding under Section 19 to a leasehold interest of the deceased Hindu, there would be no difficulty in holding that notice to one of the joint tenants in this case should be held to be a valid and good notice provided notice is intended to be notice to all these joint tenants. It is in that sense that the decision of <ORG> in ILR 46 Cal 458 = (AIR 1918 PC 102) has been applied in several Courts."

16. In contrast, the view taken in the Kerala case, on the one hand, that the expression "party intended to be bound by it" means in the case of co-tenants, each co-tenant individually and, on the other hand, that notice can be served on one of them to bind all, would appear to be self-contradictory and also in conflict with the provisions of Section 106 about service of notice with the said interpretation of that expression.

17. I accordingly hold that both on the authority of <NAME> case, AIR 1963 SC 468 aforesaid and otherwise (i.e., if it applies only to joint tenants with right of survivorship) the notice served on the appellant was sufficient to terminate the tenancy since on the facts of this case, it must be inferred that by the notice it was intended to terminate the tenancy as a whole and not in part.

18. It may be noted that the appellant was for all practical purposes acting as the tenant. She admitted the averment in the plaint that the house was in her tenancy. It was for the first time in her written statement that she referred to the existence of her sons and daughters. The plea of those sons and daughters being also tenants was raised by an amendment of the written statement. She has deposited rent under Section 7-C of the U.P. (Temporary) Control of Rent and Eviction Act describing herself as the tenant. The notice required the vacation of the house which meant house as a whole and not in part. In the permission proceedings also personal necessity for the house as a whole and not in part was disclosed.

19. As has already been stated, it was conceded in the first appellate Court that the permission was not invalid on the ground of having been obtained against the appellant alone. Though no grounds were put forward in the courts below for the permission being invalid otherwise or without jurisdiction, it has been argued in this Court that the permission is invalid and without jurisdiction for want of considering the needs of the tenant as well as required according to the Full Bench case of this Court, <NAME> v. <NAME>, 1968 All WR (HC) 572 = (AIR 1969 All 474) (FB). It is however incorrect to suggest that in the case under consideration the District Magistrate did not consider whatever case was put up by the appellant. On her behalf it was only said that she was a poor lady and had no source of income to make her both ends meet during these hard days. That did not mean that she required the house in dispute in particular for her residence. She was only interested in refuting the case of personal needs advanced by the respondent before the District Magistrate. Accordingly the plea of invalidity on the new ground taken in this Court has also no substance.

20. In the result the appeal must fail. It is dismissed with costs and the order of stay against execution is vacated


JUDGMENT <NAME>, Kt., C.J.

1. The plaintiffs died this suit against the defendants claiming Rs. 2,925 as damages for breach of a contract dated the 10th duly 1917. By an agreement of reference, dated the 25th September 1919, the matters in dispute were referred to the sole arbitration of one <NAME> without the intervention of the <ORG>. The first meeting before the arbitrator was held on the 17th October: the next on the 29th November when only the defendants were present. The arbitrator made his award on the 30th November allowing Rs. 1750 for damages and Rs. 50 for costs to the plaintiffs. Meanwhile the plaintiffs had written, on the 25th' November, to the arbitrator that they revoked his authority as arbitrator and cancelled the submission. The plaintiffs then moved for an ex, parte decree on the ground that the defendants had not filed their written statement, but the defendants were given time to enable them to file the award. On the 21st January 1920 the defendants gave notice that they would move that the award should be recorded as an adjustment or compromise of the suit, and for a decree being passed in terms thereof. The motion was heard before <NAME> who dismissed it on the ground that the award could not be recorded as an adjustment under Order XXIII, Rule 3, while as the agreement to refer had been made without the intervention of the <ORG>, the application could not be made under the Second Schedule of the Civil Procedure Code.

2. This brings before us a question which has caused much difference of judicial opinion. We are dealing with an agreement to refer made by the parties to a suit without the intertion of the <ORG>, followed by an award. We are not concerned with what may be the rights of the parties when an agreement to refer has been made and nothing further has been done. Clearly that cannot be recorded as an adjustment. If the parties wish to make it an order of <ORG> they can do so under Part 1 of the Second Schedule. Here there has been an award, the validity of which is disputed by one of the parties. It was held in <NAME> v. <NAME> (1901) I.L.R. 20 Bom. 76, 78 : 3 Bom. L.R. 431 that such an award could be recorded as an adjustment under Section 375 of the Code of 1882, corresponding to Order XXIII, Rule 3, of the present Code. There was a conflict of decisions between the Calcutta, Madras and Bombay High <ORG>s on the one side and the Allahabad High <ORG> on the other on the question whether the <ORG> could pass a decree on an adjustment except with consent of the parties, and the addition of the words "where it is proved to the satisfaction of the <ORG>" have been added to set at rest that conflict. If, then, an award is disputed, can a party ask the <ORG> to try the question whether or not the award is valid, and if proved to be valid, to pass a decree in accordance therewith? This was doubted by <NAME> in <CITATION> (1908) I.L.R. 33 Bom. 69 : 10 Bom. L.R. 336 as the learned Judge thought that an application could only be made under Order XXIII, Rule 3 where the parties had accepted the award. <CITATION> (1916) I.L.R. 40 Bom. 836 : 18 Bom L.R. 559. I held that Section 89 excluded any such applications being made under Order XXIII, Rule 3 as that section directed that all references to arbitration whether by an order in a suit or otherwise, and all proceedings thereunder should be governed by the provisions contained in the Second Schedule save so far as it was otherwise provided by the Indian Arbitration Act , 1899, or by any other law for the time being in force. <CITATION> (1912) I.L.R. 37 Bom. 639 : 15 Bom. L.R. 340 it was held by <NAME> that Order XXIII, Rule 3, came within the definition of "any other law for the time being in force" but with all due respect for that learned Judge I cannot agree. In the first place Order XXIII, Rule 3 makes no mention whatever of references to arbitration and I do not think it was ever intended by the <ORG> that it should apply to arbitration proceedings as such. It is only by treating an agreement to refer combined with the award as an adjustment by lawful agreement or compromise that arbitration proceedings can possibly be brought within the scope of that rule. But beyond that it would be contrary to all canons, of construction of statutes that, where an Act lays down that certain proceedings should be governed by the provisions contained therein relating thereto, save where provision was made by some other law in force, the provisions of the Act itself should be considered as laying down "some other law for the time being in force". The words "except as provided for in this Act" would have to be used. If, then, references to arbitration made otherwise than by an order in a suit, as the reference in this case was and all proceedings thereunder, are to be governed by the provisions of the Second Schedule, unless the Indian Arbitration Act or some other Act applies, and no such Act applies to this case, we must look to the Second Schedule to see whether any of its provisions lays down the procedure to be followed by the parties to this reference. It has been contended that none of the provisions covers the case of an agreement to refer made by the parties to a suit without the intervention of the <ORG>. In <NAME> v. <NAME> (1879) I.L.R. 4 Bom. 1 : 15 Bom. L.R. 340 it was held that an agreement to refer by parties to a suit could be filed under Section 523 of the Code of 1882. The <ORG> was of opinion that Section 525 also contemplated arbitration without the intervention of the <ORG> by 'any person' and with respect to "any matter" and contained no express exception as to parties to a suit or to matters in litigation in a suit actually pending. It was remarked that the procedure in such cases, as provided by Sections 523 and 525 , viz. that the application should be numbered and registered as a suit was not the best adapted to a case where the matter was already before the <ORG>, and would necessitate an application for stay of proceedings in that suit. <CITATION> (1914) I.L.R. 38 Bom. 687 : 16 Bom. L.R. 653, where the application was also to stay the suit after an agreement to refer without the intervention of the <ORG> had been entered into, <NAME> considered that that decision must be looked upon as a doubtful authority since the decision of <ORG> in <CITATION> (1901) I.L.R. 29 Cal. 167, 182, 183, P.C. The facts in that case were that after a suit had been tiled the matters in dispute were referred to arbitration. When the award was made both parties objected to it. The Subordinate Judge before whom the application to set aside the award was heard overruled all objection and passed a decree in terms of the award. From this decree the defendants tiled an application for leave to appeal to the Chief <ORG> of the Punjab. The Judge who admitted the appeal being of opinion that no appeal lay allowed the application to be amended so as to make it an application for revision in case the <ORG> that heard the appeal should decide that no appeal lay The question whether or not an appeal lay or was prohibited by the last clause of Section 522 of the Civil Procedure Code of 1882 was referred to a Full Bench which decided that no appeal lay Thereafter an application for revision was entertained and the decree of the Subordinate Judge was modified. From this decision of <ORG> and the judgment of <ORG> on revision the defendants appealed to <ORG> The whole argument turned on the proper construction of Section 522 , now represented by para 16 of the Second Schedule. Their Lordships said at p. 182 ;

The Chapter in the Code of Civil Procedure on reference to Arbitration (Chapter XXX VII) deals with arbitrations under throe heads: -

1. Where the parties to a litigation desire to refer to arbitration any matter in difference between them in the suit, in that case all proceedings from first to last are under the supervision of the <ORG>.

2 Where parties without having recourse to litigation agree to refer their differences to arbitration and it is desired that the agreement of referent should have the sanction of the <ORG>. In that case all further proceedings are under the supervision of the <ORG>.

3. Where the agreement of reference is made and the arbitration itself fakes place without the intervention of the <ORG> and the assistance of the <ORG> is only sought in order to give effect to the award.

3. Then at p. 183 occurs the following passage :

In cases falling under Heads II and III the provisions relating to cases under Head I are to be observed so far as applicable. But there is this difference which does not seem to have been always kept in view in the <ORG>s in India, In cases falling under Head I the agreement to refer and the application to the <ORG> founded upon it must have the concurrence of all parties concerned and the actual reference is the order of the <ORG>. So that no question can arise as to the regularity of the proceedings up to that point. In cases falling under Heads II and III proceedings described an a suit and registered as such must be taken in order to bring the matter the agreement to refer or the award as the case may be-under the cognizance of the <ORG>. That, is or may be a litigious proceeding-cause may be shown against the application-and it would seem that the order made thereon is a decree within the meaning of that expression, as defined in the Civil Procedure Code.

4. Eventually it was held that there was no appeal from the-decree and that the application for revision was incompetent.

5. <CITATION> (1902) I.L.R. 30 Cal. 218 the parties to a suit agreed to refer the matters in dispute to arbitration. An application was made under Section 375 to record the agreement as an adjustment and the learned Chief Justice in dealing with the question remarked incidentally that the decision in <CITATION> seemed to import that Section 523 did not apply where there was a pending suit, and doubted that the decision in <NAME> v. <NAME> could stand. In <NAME> v. <NAME> (1911) I.L.R. 36 Mad. 353 it was held that an order of a <ORG> filing an agreement to arbitrate presented by the parties to a suit is a decree and in appealable. <CITATION> was referred to and the <ORG> considered that the three Heads under which arbitrations were classified in that case corresponded to arbitrations initiated by applications under Sections 506 , 523 and 525 of the old Code. That is perfectly correct, but the learned Judges were only concerned with the question whether the application be them, an agreement to refer by parties in a suit, was cover by para 17 of the Second Schedule. Clearly it was not, but the question whether para 20 covered applications such as the before us was not and could not have been considered.

6. Nor, as I have pointed out, was that the question before the Court: in <CITATION> . Still it is clear that the second Head in the judgment of <ORG> in <NAME> case covers only arbitrations by parties who have not had recourse to litigation, and that therefore an agreement to refer by parties to a suit cannot be tiled under para 17 of the Second Schedule. But it is contended that it is by no means so certain that the third Head covers only arbitrations by parties who have not had recourse to litigation. In my opinion, however, the description of the first Head of arbitrations makes it clear that the parties to a litigation, who desire to refer their disputes to arbitration, must go to the Court for an order of reference if they wish the arbitration proceedings to continue under the provisions of the Second Schedule. And there is no reason why they should proceed under para 17 when paras 1 to 16 prescribe the procedure to be followed in a most exhaustive manner.

7. The decision, therefore, in <NAME> v. <NAME> (1879) I.L.R. 4 Bom. 1 must be considered as overruled.

8. I also have come to the conclusion that my decision in <CITATION> (1916) I.L.R. Bom 386 : 18 Bom. L.R. 559 allowing the application under Order XXIII, Rule 3, to be altered to one under para 20 of the Second Schedule was wrong. But I cannot agree with <NAME> when he says that an award in a reference by parties to a suit without the intervention of the <ORG> cannot be a valid award. Nor can I agree with the dictum in <CITATION> which, with due respect, appears to be obiter, that the action of parties to a suit in withdrawing and obtaining a decision by private arrangement can be treated as a nullity, as it can form the foundation for another suit.

9. It is quite true that the Court will not take cognizance of any proceedings by the parties which in effect oust its jurisdiction. It will not stay its own proceedings merely because one party brings to its notice that there has been an agreement to refer the suit to arbitration. Nor, if there is an award, will it proceed in the manner provided by any of the provisions of the Second Schedule.

10. But there is no reason why, when the award is brought to its notice, it should not try the issue whether the award is not binding on the parties under the general principles of the law of contract by proceeding under Order XXIII, Rule 3.

11. It is not usual when the parties to a suit are agreed upon terms to formally record the agreement under Order XXIII, Rule 3 and then pass a decree in terms thereof.

12. But when parties have been negotiating for a settlement, and one party considers a settlement has been arrived at, which the other party denies, or where there has been a settlement which one party seeks to avoid on any of the grounds on which an agreement can be avoided, recourse is had to Order XXIII, Rule 3, so that the <ORG> may determine whether an adjustment has actually been made or whether an adjustment made is one which can be recorded.

13. When the terms of the adjustment have been settled by an arbitration and award out of <ORG>, the same considerations apply by analogy. The parties may agree to ask for a consent decree. In such a case the true position appears to be that the <ORG> will not look at the arbitration proceedings, but only at the consent terms, as it makes no difference whether those terms have been arrived at by agreement between the parties acting by themselves or have been settled by a third party chosen by them. There is no particular reason in either case for having recourse to Order XXIII, Rule 3.

14. But if the plaintiff ignoring the award proceeds with the suit the defendant may plead that there has been an adjustment. This is in effect what has happened in this case.

15. In <NAME> v. <NAME> (1818) 8 Taunt. 146, 147 the facts were somewhat similar. The defendant obtained a rule to stay proceedings on the ground that after issue joined and notice of trial given, the parties had agreed to refer the cause to arbitration and that an award had been made. The plaintiff said he had revoked the submission before award made. The Court said :

What we should do in ease of an undisputed award, is another question. Here, the award is disputed; and the <ORG> will not, upon motion, decide the controverted matter. The award must be pleaded, when the plaintiff may either reply or demur; but the question will most properly be disposed of by a jury.

16. So in <NAME> v. <NAME> (1796) 2 Eap. 504 at the hearing the defendant proposed to give in evidence an award made in his favour on an agreement to refer the cause after issue had been joined and Lord <NAME> held that it could not be given in evidence but must be pleaded as a plea puts darreign Continuance.

17. If the procedure prescribed by those decisions should be followed in this Court, when the plaintiff moved for an ex parte decree for want of a written statement, the defendant should have been told to file his written statement pleading the award instead of being given time to apply that the award should be tiled.

18. Then the question could be tried in the suit and not by motion, whether the award was binding on the parties.

19. Since the decision in <NAME> v. <ORG> Rule 242 has been passed, which provides that no decree in a suit save as provided in Rule 348 (decree in terms of an award filed under para 10 of the Second Schedule) shall be passed unless the suit appears on the daily trial board. As Order XXIII, Rule 3, contemplates the passing of a decree if the adjustment is recorded, the proper procedure is not by motion, but by putting Down the suit for hearing, and it is desirable that the party relying on an adjustment should plead it beforehand so that the issue can be properly tried. Leave can always be obtained for a supplementary pleading.

20. <CITATION> (1912) I.L.R. 37 Bom. 639, 643 : 15 Bom. L.R. 340 the order made was :

The suit will be set down for hearing...when the first defendant will, in the first instance, proceed to satisfy <ORG> that the adjustment has been properly and justly obtained and the plaintiff will then be entitled to urge any ground that may be open to her to show that the award which is sought to be enforced against her as an adjustment ought not to be recorded and a decree passed in terms thereof.

21. Whether the suit is set down for hearing an application to record an adjustment, or is set down for trial, an order must be passed recording or refusing to record the adjustment, as an appeal lies against such an order though not against the decree passed in terms of an adjustment. This somewhat paradoxical procedure is necessitated by the fact that the term 'consent decree' is applied to a decree passed against a party who stoutly denies he has given his consent, when as a matter of fact it is found that he has consented. The result is that if a defendant pleads an award and the <ORG> finds that the award is binding the <ORG> passes a consent decree, but must first make an order which is appealable that the award is binding.

22. In <NAME> v. <NAME> (1901) I.L.R. 26 Bom. 76 : 3 Bom. L.R. 431 the appellant contended inter alia that the award was falsely and fraudulently made by the arbitrators, purporting to make the same without holding any meetings or examining any books of account and without giving the defendant any opportunity of appearing before them in support of his case.

23. These questions do not appear even to have been considered by <ORG> or <ORG> which confirmed the decree passed in the terms of the award.

24. <NAME> said:

Several objections have been taken to the decree under appeal. First it is said that Chapter XXXVII of the Civil Procedure Code, 1882, is an exhaustive exposition of the power to refer to arbitration pending a suit. I can find nothing, however, in Chapter XXX VII which invalidates a proceeding not in accordance with its provisions beyond the result that non-compliance deprives a party of a right to claim the consequences the Chapter prescribes, and I therefore hink the objection cannot succeed.

25. It was contended from this judgment by Beaman J. in <CITATION> (1908) I.L.R. 33 Bom. 69 : 10 Bom. L.R. 366 that a party objecting to an award had to submit to a decree in terms of the award without his objections being heard, and there are grounds for such a conclusion from the bare record of the case as reported If that had really been decided I should be inclined to say it was wrong, but it does not appear whether the defendant actually persisted that his objection should be heard or merely objected to the procedure.

26. It certainly cannot be that a party to a suit submitting to arbitration would be under an implied promise to accept the award whatever its nature might be and however it had been arrived at. And this was the view taken by <NAME> in <CITATION> . It all comes to this, that a party to a suit setting up an award by arbitration out of <ORG> must satisfy the <ORG> that there has been an adjustment by lawful agreement which entitles him to ask that the suit should be stopped and a decree passed in terms thereof. The <ORG> must then decide on the general principles of the law of contract whether or not there has been such an adjustment. In the case of an arbitration and award Order XXIII, Rule 3, requires a certain amount of amplification. The suit is not adjusted by the agreement to refer, but by what is implied in that agreement, namely, that the parties agree to be bound by the terms of an award which has been properly made in accordance with the agreement. If the award is proved to have not been so made then there can be no adjustment.

27. It may be as well to summarise the procedure to be adopted by parties in a suit who enter into an agreement to refer the matter in dispute in the suit or part of it to arbitration.

28. They may make the agreement an order of <ORG> and then paras 1 to 16 of the Second Schedule apply.

29. If they do not make the agreement an order of Court,

(a) they cannot ask for the agreement to be filed under para 17;

(b) they cannot ask. for the award if made to be filed under paras 20 and 21;

(c) if an award is made and both parties accept it they can apply for a consent decree in terms thereof, and there will be no need to apply for an order recording the terms of the adjustment;

(d) if the plaintiff disputes the award for any reason and proceeds with the suit the defendant can plead the award and have the ease set down for hearing on the issue whether the award is binding as an adjustment;

(e) if the defendant disputes the award, the plaintiff can set the case down for trial on the issue whether the adjustment should be recorded;

(f) either party can file a suit to enforce the award and apply for a stay of the original suit.

30. The provisions of the Code of 1882 relating to arbitration were transferred with certain modifications to a separate Schedule in the hope that at no distant date they might be transferred into a comprehensive Arbitration Act . Unfortunately that hope has not been realised with the result that the law relating to arbitration still remains in a most undesirable condition.

31. The appeal must be allowed, but, 1 think, the order giving time to the defendant to file the award was also wrong. He should have been told to file his written statement pleading the award. I am told that he has now filed his written statement so that he can apply to have the suit set down for trial on the issue whether the award is binding.

Fawcett, J.

32. The questions for determination may be stated as follows:-

(1) Do paragraphs 20 and 21 of Schedule II of the Civil Procedure Code apply to cases where the matters referred to arbitration are already the subject-matter of a suit between the parties to the reference?

(2) If they do apply, what effect does a decree under paragraph 21 have upon the suit?

(3) If the parties to a suit agree to refer the matters in dispute to arbitration without the intervention of the <ORG>, and an award is made on such submission, prior to the decision of the suit, can the submission and award be recorded under Order XXIII, Rule 3, Civil Procedure Code, as an agreement adjusting or compromising the suit, and a decree be passed in terms of the award?

(4) If questions (1) and (3) are answered in the negative, what remedy is open to a person interested in the award to enforce it ?

33. I agree with the learned Chief Justice that the first question should be answered in the negative. The words "any matter" and "any person" used in paragraph 20 are no doubt very wide, and it contains no express exception as to parties to a suit or to matters in litigation in a suit actually pending. But the same applies to paragraph 17, with the substitution of "difference" for "matter"; and the ruling in <NAME> v. <NAME> (1879) I.L.R. 4 Bom. 1 that Section 523 of the Code of 1877 (corresponding to this paragraph 17) applied to parties between whom a suit is pending about the matters referred to arbitration, is virtually overruled by <CITATION> . <NAME> (1901) I.L.R. 29 Cal. 167, P.C. as pointed out by <NAME> in <CITATION> (1914) I.L.R 38 Bom. 687, 696 : 16 Bom. L.R. 653. I also concur with his view in the same case that paragraphs 1 to 1G are intended to prescribe the only provisions in the Schedule by which the <ORG>' jurisdiction to determine the matter in dispute after a regular hearing can be ousted by a submission to arbitration and an award thereon. This is supported by the general nature of the heading to paragraphs 1-16, viz., "Arbitration in suits", and the fact that paragraphs 17 and 20 both require that an application under them "shall be numbered and registered as a suit"-a procedure which is inappropriate, where a suit between the parties is already pending. These considerations apply as much to paragraph 20 as to paragraph 17; and in <NAME> case it seems to me their Lordships of <ORG> intended Head III of those specified in the judgment (at p. 182) to exclude (just, as much as Head II) the case dealt with in Head I, viz;: "Where the parties to a litigation desire to refer to arbitration any matter in difference between them in the suit." The words "the agreement of reference" in Head III were, I think, intended to refer to an agreement of the kind specified in Head II, viz. "where parties without having recourse to litigation agree to refer their differences to arbitration". If so, the obiter dictum in <NAME> v. <NAME> in regard to Section 525 (now Schedule II, para. 20) is also dissented from by <ORG>.

34. In view of the above answer to the first question (which agrees with the view taken in <CITATION> ), the second does not arise. But even supposing the first question is answered in the affirmative, 1 think that a decree obtained under para. 21 (2) cannot operate of itself as a decree in the suit. The proceedings under paras. 20 and 21 would not be proceedings in the suit, but entirely separate proceedings like those for filing an award under as. 11 to 15 of the Indian Arbitration Act , 1899. This has already been ruled in <CITATION> (1906) 8 Bom. L.R. 577. The decree could, it seems to me, at most, operate as rets judicata under Section 11 , Civil Procedure Code, as being a decision in a "former suit" (cf. Explanation I to Section 11 ; para. 20 (2) of Schedule II; <NAME> v. <NAME> (1881) I.L.R. 7 Cal. 727; <NAME> v. <NAME> (1896) I.L.R. 21 Bom. 465; <NAME> v. <NAME> (1891) I.L.R. 18 Cal. 414, 419 P.C.; and <CITATION> (1903) I.L.R. 27 Mad. 255, 257. Otherwise, the <ORG> would still have to decide the issues after a regular hearing, according to the procedure laid down by the Code, unless the suit is withdrawn in consequence of the decree obtained under para. 21, or a consent decree is passed.

35. On both these grounds 1 concur with the learned Chief Justice in thinking that the decision in <CITATION> (1916) I.L.R. 40 Bom. 386 : 18 Bom. L.R. 559 should be overruled.

36. The third question is one on which, in my opinion, a good deal can be said on either aide. But 1 have come to the conclusion that there is no sufficient ground for our differing from the view taken in <NAME> v. <NAME> (1901) I.L.R. 26 Bom. 76 : 3 Bom. L.R. 431, and that the question should accordingly be answered in the affirmative, at any rate until <NAME> v. <NAME>s is overruled by <ORG> or <ORG>.

37. There is certainly a very considerable weight of authority in favour of the view that an agreement to refer the matter in suit to arbitration and the award made thereon may amount to an adjustment of the suit by lawful agreement, within the meaning of Order XXIII, Rule 3, Civil Procedure Code, and the corresponding Section 375 of the Code of 1882. in the arguments reported (at p. 689) in <CITATION> (1914) I.L.R. 38 Bom. 687 : 16 Bom. L.R. 653, it was stated that all the High Courts were in agreement on this point. 1 am not sure if this is correct; but at any rate there are the following reported opinions to that effect: <NAME> v. Premji Pragji (1895) I.L.R. 20 Bom. 304 per Starling J.; <NAME> v. <NAME> (1896) I.L.R. 21 Bom. 335, 341 per Fairan C.J.; <NAME> v. <NAME> (1901) I.L.R. 26 Bom. 76 : 3 Bom. L.R. 431, per Jenkins C.J. and Starling J.; <CITATION> (1912) I.L.R. 37 Bom. 639 : 15 Bom. L R. 340, per Davar J.; <NAME> v. <NAME> and <CITATION> (1919) I.L.R. 42 Mad. 625 per <NAME> and <NAME> This view seems also supported by the remarks of <ORG> and <ORG> in <CITATION>  3 K.B. 257. The former says (at pp. 263-4), referring to a case like the present and the 11th section of the Common Law Procedure Act, 1854, allowing a stay of an action ponding arbitration proceedings:

The only effect of failing to obtain the order to stay the action was to leave the parties in the same position in which they were before the passing" of the 11th section of the Common Law Procedure Act, 1854, i.e., in the position that the jurisdiction of the <ORG> was not ousted, and that the <ORG> ignored the pendency of the arbitration, and therefore held a plea. of pendency of an arbitration in the same matter to be bad, but allowed the plea of an executed award to be good, and I think allowed it to be good even if the award was executed after action brought. It was allowed, in fact, as accord and satisfaction completed after action...It is true that, generally speaking, the obstacles in the way of the arbitrator, if one of the parties refuses to attend, are so great that it is difficult, and sometimes practically impossible, for the arbitrator to go on with the arbitration; but if the arbitrator gets over these difficulties, and goes on and makes his award, I think- his award constitutes accord and satisfaction.

38. Farwell L.J. in the same case says (at pp. 272, 278):-

It is also clear that any binding agreement between the parties settling all the disputes raised in the action made after writ is a good defence as a plea puts darreign continuance (now pleaded under Order XXIV, whether such agreement is a direct settlement between the parties themselves, or made by Means of: a third person to whom they have referred the dispute after writ, or by means of an award made after writ in an arbitration existing before writ, if both parties subsequent to writ carry on the arbitration, and agree to an award being made notwithstanding the action. But this is because it is always open to litigants to settle their differences after writ as they please.

39. <ORG> no doubt holds (p. 269) that-

There cannot be two tribunals each with the jurisdiction to insist on deciding the rights of the parties and to compel them to accept its decision....

40. But he expressly except the case where "the parties agree de now that the dispute shall be tried by arbitration, as in the case where they agree that the action itself shall be referred". His objection that the <ORG>' jurisdiction cannot be ousted applies to a case (like the one there under consideration) where there was a reference to arbitration, subsequent to the commencement of the action, without the consent of one of the parties.'

41. Order XXIII, Rule 3, Civil Procedure Code, contains provisions corresponding to the plea of "accord and satisfaction after writ'; referred to in the case just cited. The principle of treating an agreement to refer to arbitration after suit, together with the award thereon, as on the same footing as a direct settlement between the parties themselves, for the purposes of such a plea, appears to me to be one which has very high authority in its favour. After all it is only an application of the maxim certain est quod certum reddi potest. There is an agreement to settle the matters in dispute in the way decided on by the arbitrator, and as soon as he decides, the result is an ascertained settlement, as much as if the parties had settled the dispute themselves.

42. I would, however, qualify the above by predicating that the award to be effective for such a plea must be a valid one, according to the general rules of law governing the validity of awards in arbitration proceedings. This in effect would mean the English Common Law on the subject, which in turn is substantially expressed in paragraph 15 (1) ((a) and (b) of Schedule II of the Code (cf. Ganga Sahai v. Lekhraj Singh (1886) I.L.R. 9 All. 253, 264).

43. <CITATION> (1908) I.L.R. 33 Bom. 69, 74 : 10 Bom. L.R. 366, per Beaman J. Beaman J. objects that--

Under the principle) of <NAME> v. <NAME>, no sooner has a party made an irregular submission, on which an award, no matter how full of defects, has been passed than the other party can bring it in under Section 375 and, without having any objections investigated, get a final decree upon it.

44. With due respect, I submit that in <NAME> v. <NAME> the <ORG> went on the assumption that the award was a valid one. No doubt one of the grounds of appeal (No. 5) was that the award was improperly passed, but no reference is made to this in the reported arguments of the appellant s counsel (pp. 77, 78). The probability is, therefore, that this objection was not pressed. Also 1 can see no sufficient ground for saying that the <ORG> cannot go into objections to the validity of an award under Order XXIII, Rule 3. The <ORG> under that rule has to be satisfied that the suit has been adjusted by a lawful agreement or compromise; and even though there may have been a lawful agreement to refer the matters in dispute to arbitration, still there will have been no real, "adjustment", if the reference has merely resulted in an invalid award. Under general principles of justice, equity and good conscience the <ORG> is surely just lied in holding that an award improperly procured or vitiated by corruption or misconduct on the part of the arbitrator does not constitute an "adjustment1' under Order XXIII, Rule 3. Or it may be put in another way. There can of course be an express agreement in the submission that the parties will raise no objection to the award on the ground of misconduct, etc., of Halsbury's Laws of England, Vol. I, Article 990 , at p. 481; but otherwise I take it that the implied objection to perform the award of the arbitrator will not be extended beyond an obligation to perform an award which (to use the language of the Privy Council in <NAME> v. <NAME> (1891) I.L.R. 18 Cal. 414, 418, P.C.) has "ordinary legal validity," i. e., an award which is not a legal nullity or liable to be set aside for misconduct, & c. In the latter view there is no "agreement' to accept an award of the kind just mentioned, so as to bring the ease under Order XXIII, Rule 3. As an instance of a <ORG> going into such questions under Order X.XIII, Rule 3,I may cite <CITATION> (1917) I.L.R. 39 All. 401, 408.

45. With due deference, it seems to me that to make a distinction between a case where both parties accept the award (which <NAME> in <NAME> case at p. 74 says will constitute an adjustment under the rule) and a case where one of the parties dishonestly repudiates his submission (as in <NAME> case) or raises unsustainable objections to the validity of the award, is giving the latter an advantage, which is contrary to the terms of Order XXIII, Rule 3 of, <NAME> v. <NAME> (1915) 23 C.L.J. 482. It is in principle a reversion to the view that a disputed compromise did not fall under Section 375 of the Code of .1882. The <ORG> has shown its approval of the decisions that such a dispute did not prevent the application of the provisions in question by the insertion of the words "where it is proved to the satisfaction of the <ORG> that" at the commencement of the rule.

46. Another objection taken in <NAME>'" case at p. 73 is, that Chapter XXXVII of the then Civil Procedure Code (corresponding to Schedule II of the present Code) provides a special procedure for extraordinary extra-judicial methods of settling disputed claims, and it must have been the intention of the <ORG> that that procedure and no other was to be followed. But this seems to me to be opposed to the same learned Judge's opinion in <CITATION> (at p. 698) that : "Doubtless any parties litigating in <ORG> have perfect liberty to compose their differences among themselves by entering into any lawful agreement, compromise or satisfaction". The passages I have cited from <CITATION>  3 K.B. 257 show that there is the highest authority for treating a submission to arbitration made after suit, plus the award thereon, as an adjustment of the suit by lawful agreement; and it seems to me very improbable that the <ORG> intended to prevent such an adjustment being made. The view taken on this point in <NAME> v. <NAME> is, I submit, correct.

47. Then does Section 89 of the Code prevent Order XXIII, Rule 3, Civil Procedure Code, operating in such a case ? On this point I concur with the view taken by <NAME> in <CITATION> (1912) I.L.R. 37 Bom. 639 : 15 Bom. L.R. 340, which is also taken by <ORG> in <CITATION> (1919) I.L.R. 42 Mad. 625. No doubt the words "other law for the time being in force" are inappropriate for covering a provision of the Code itself, such as Order XXIII, Rule 3. But the <ORG> in enacting Section 89 probably had not that particular rule at all in their mind, and had no intention of affecting it one way or the other. The main object of s 49 clearly is to give effect to the provisions of Schedule II as if they had been enacted in the body of the Code. Section 89 was needed only because of the relegation of Chapter XXXVII of the Code of 1882 to a Schedule and no change of procedure was, in my opinion, intended. This is in accordance with the general rule that "the <ORG> must not be taken to intend any alteration in the law beyond what it explicitly declares in express terms or by unmistakeable implication." (<NAME> on Interpretation of Statutes, 3rd Edn., p. 113; In the matter of <NAME> (1886) I.L.R. 11 Bom. 138, 143 and <NAME> v. <NAME> (1900) I.L.R. 25 Bom. 202, 209 : 2 Bom. L.R. 986. It seems to me to be a case where the rule of construction laid down by <NAME> in <NAME> v. <NAME> (1859) 26 Beav. 606, 610 should be applied. He says:- -

The general rules which are applicable to particular and general enactments in statutes (if they were repugnant) are very clear, the only difficulty is in their application. The rule is, that wherever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply".

48. Here Order XXIIL, Rule 3, constitutes a particular enactment (read with Section 121 ) regarding the compromise of a suit, while Section 89 is a general enactment regarding arbitration, for the words "all references to arbitration whether by an order in a suit or otherwise, and all proceedings thereunder" are of a general nature: they could scarcely be made any wider than they are. I think, therefore, that in accordance with the rule of construction I have mentioned, Section 89 should not be read as affecting the particular enactment contained in Order XXIII, Rule 3, so far as that covers the case of an award on a reference to arbitration. In these circumstances I do not see why the words "save in so far as is otherwise provided... by any other law for the time being in force'' should not be construed as covering a law enacted by the Code itself. Taken in their literal and ordinary meaning the words are wide enough to permit of this interpretation; and the mere fact that particular provisions of the Code are not specifically excepted does not, in my opinion, suffice to exclude them from the benefit of the saving clause, if they otherwise appropriately fall under it.

49. There is no clear evidence of any intention of the <ORG> to exclude Order XXIII, Rule 3, from this benefit; and (as I have already said) there is a presumption against any alteration of the law regarding Section 375 of the Code of 1882, as laid down in <NAME> v. <NAME>.

50. I do not think that the words "other law," as used in the Code, must necessarily mean some law other than that contained in the Code. Thus in Section 96 (1) of the Code, a general right of appeal (not restricted to certain grounds as a second appeal is by Section 100 ) is given from "every decree passed by any <ORG> exercising original jurisdiction". The only saving is "where otherwise expressly provided in the body of this Code or by any other law for the time being in force." This "other law" must, I think, be read to cover the provisions in Schedule II, paras 16 (2) and 21 (2), which restrict the right of appeal from a decree under those paras to one upon the specific ground that " the decree is in excess of, or not in accordance with, the award." Otherwise there is a repugnancy between the general right conferred by Section 96 , and this specific enactment. It may be noted that the provisions of the Second Schedule are not given legislative effect "as if enacted in the body of this Code", like the provisions of the First Schedule under s 121 : so that they can only come under the saving clause in Section 96 by treating them as any "other law for the time being in force." The case is stronger with regard to Order XXIII, Rule 3, which under a 121 has effect as if enacted in the body of the Code, and is therefore on an equal footing in this respect to Section 89 . Also "other law" in a 89 is clearly a law other than the Indian Arbitration Act , 1899 whereas in Section 96 it might be argued that "other law" must mean a law other than the Code.

51. As to the fourth question, I agree with the learned Chief Justice that, if Order XXIII, Rule 3, cannot be availed of, either party, who wishes to enforce the award, can file a suit to enforce it, and apply for a stay of the original suit. Also a defendant can, under Order VIII, Rules 8 and 9, Civil Procedure Code, with the leave of the <ORG>, plead the award in bar of the action on the original demand" of. <NAME> v. <NAME>'.

52. But in view of my answer to the third question, I concur in allowing the appeal with costs throughout.

53. As to the question of the proper procedure for having the award considered by the <ORG> in the suit, it seems to me that Original Side Rule 242 only debars the <ORG> from passing a decree, unless the suit appears on the trial board. There is no. thing in it, therefore, to prevent the <ORG> from proceeding at any rate up to the stage of ordering the agreement (comprised in the agreement to refer and "the award thereon) to be recorded under Order XXIII, Rule ?>, and it can then direct the suit to be set down on the trial board for passing a decree in accordance with this order. But I understand that the procedure preferred by the learned Chief Justice will put the <ORG> in a better position to decide any questions in issue by taking evidence in the ordinary way. Also there is the precedent of the rule in England that, if an action is compromised out of <ORG>, and the compromise is not made an order of <ORG>, it cannot be enforced by motion in the action (Halsbury's Laws of England, Vol. XXIII, p. 167, foot-note (h)). I defer, therefore, to his opinion in the matter. At the same time, to prevent possible misapprehension, I may say that we are both agreed that, so far as the mofussil is concerned, the requisite proceedings can be taken on a mere application to have the alleged agreement recorded under Order XXIII, Rule 3, and that a formal pleading of the award under Order VIII, Rule 9, in unnecessary.