MUNSHI RAM versus BANWARILAL

Citation: [1962] SUPP. 2 S.C.R. 477 · Decided: 09-01-1962 · Supreme Court of India · Bench: M. HIDAYATULLAH · Disposal: Dismissed

Judgment (excerpt)

2 S.C.R. 
SUPREME COURT REPORTS 
477 
BY CoURT : In accordance with the opinion 
of the majority, these petitions are allowed with 
costs. As tne petitions have bP-en heMd together 
there will be only one hearing fee. 
MUNSHI RAM 
v 
BANWARILAL 
(M. HIDAYATULLAH and J. c. SHAH JJ.) 
Arbitration-Award .filed in Court-Application for setting 
aside award-Oompram1:ae between parties-DecreP in terms of 
award as mo·iified by compromiae-Validity of-Arbitration Act 
1940 (10 of 1940) ss., 15, 23, 30, 3! and 41-Code of Civil 
Procedure, 1908 (.5 of 1908), O. 23. 
The dispute between the parties regarding their shares 
in a firm was referred to arbitration. The arbitrator made 
his award, inter alia, awarding certain sums of moneys to be 
paid by certain instalments. There was also a provision in 
the award that the p;irties shall be liable t" pay in eq ta! 
shares theincome-tax to be assessed. 
The award was filed in 
court by the arbitrator. The appellant made an application 
for 
set~iug aside the award and the respondents filed their 
replies to the application. Thereafter, the parties came to 
ter111'> and askej for a decree to be pass~d in accorda.nce there-
with. 
The court passed a decree on the award as modified 
by the c )mpromise. 
In execution, the appellant contended 
that the decree was a nullity as the cr,urt had no jurisdiction 
to mo.iify the award by compromise. 
Held, that the decree was not a nullity and was e:<ecut-
able. In cases of compromise after an award, if the parties 
are dissatisfied with the award and wanted to substitute it by 
a co1npron1ise involvinb· matters alien t() the original dispute 
\YhL::h are inseparable, the court n1ay supersede the submhsion 
and leave the parties to \vork out their agreement in accor-
dance with the law outside the Arbitration ;\ct. 
In such 
circumstance-s the new cornpr-.1mise itself furnishes a very g<lod 
ground for superseding the reference and thus revoking the 
award. Where the parties do not throw the award overboard 
but modify it in its operation, the award, in so fa1 as it is not 
altered still remains operative and continuous to bind the 
parties and cannot be revoked. If the whole of the subject-
ll/Gl 
Maharana Shri 
Jayvantsinghji 
Ranmalsinghji etc. 
v. 
Tht State of Gu.iaral 
Ayyan.1ar J. 
January 9 
19el 
.. 
Bonuinl Lal 
478 SUPREME OOURT REPORTS [1962] SUPP. 
matter of the compromise is within the reference, the court 
may include In the operative part of the decree the award as 
modified. 
Rut if it Is not so, the court may confine the opera-
tive part of the decree to the award as far as it is accepted and 
the other terms of the compromise, if severable and within the 
reference, in a 'chedule to the decree. The portion included 
in the operative portion would he executable but that included 
in the schedule would he enforceable as a contract of which 
th~ evidt:>nce could he the decree-, but not enforceable as a 
df'crre. 
Tn th~ prc5ent case the con1promise and the decree 
di<l not altrr the amounts awarded to the r'5pondrnts by the 
av•ard, it only maric adiustments after quantifying the arnount 
of income-tax. The difference was as to the mode of payment 
by chan'?'ing the number of instalments. This \vas a n1atter 
on whirh parti~ could agree and the court could substitute 
the a!Urcment in the op"rati\le part of the decree. 
TAJ.a Khilftni Lal v. Gobind KriAhnaNarnin (191 I) L. R. 38 
I.A. 87 and Hemanfa Kumari Debi v. Midnapur Zamindari 
Co. (19JQ) L.R. 46 J.A. 24-0, applied. 
Crvn, APPELT,ATE JvRISDICTTON: Civil Appeal 
No. 178 of 19511. 
Appeal by special leave from the judgment 
and orcler dated Novt-mber 26, 1952, of the Punjab 
High Court in L.P.A. No. II of l9:i2. 
G. S. Pathak and G. C. Mathur, for the appel. 
lant. 
Nanak Chand for respondents l (a) and 1(b). 
1962. January 9.-The Judgment of the 
Court was delivered hy 
Hidayatul/ahJ. 
HIDAYATVUAH, J.-This appeal by special 
)rave has been filPd by one Munshi Ram, a .Judg-
ment-debtor, against whom a decree bascrl on a 
compromise, following an award by an arbitrator, 
is sou~ht to be executed. The respondents are the 
decree-holders. 
The appeal is rlirected agai1••t a 
common judgment and decrees of the Punjab High 
Court dated November 26, Hl52, in two appi:als 
under the Letter& Patent (Noe. 5 and II ,,f 1952) 
by which the order& of a learned single Judire of 
the High Court in Execution First Appeals Nos. iiG 
and 121 of 1951 were confirmed. 
The present 
' 
;-.-, . 

Excerpt shown. Read the full judgment & AI analysis in Lexace.