Rachpal Singh (Deceased) Through Lrs And Anothers vs Surinder Singh (Deceased) Through Lrs And Others

Deepak Gupta, J

Background : Rachpal Singh and Bhagwant Singh, two brothers (hereinaer referred to as “peoners”), have appro ached this Court assailing the concurrent orders passed by the Courts below i.e., (i) order dated 07.10.1995 passed by the learned Addional Senior Sub-Judge, Nakodar, whereby the arbitral award dated 22.04.1992 on applicaon moved by Surinder (respondent herein) was made the Rule of the Court; and (ii) judgment dated 13.12.2001 passed by the learned Addional District Judge, Jalandhar, whereby their appeal was dismissed as not maintainable under Secon 39 of the Arbitraon Act, 1940 .

Facts Leading to the Dispute : Surinder Singh (since deceased, now represented through his LRs and hereinaer refe rred to as “respondent No.1”) was a tenant under the peoners in respect of the property in dispute. Due to certain disputes relang to possess ion and rent, several proceedings, civil, revenue, and criminal, came to be filed between the pares. It was alleged by respondent Surinder Singh that he was forcibly dispossessed by peoners herein and their father A jit Singh, but his possession was restored through Court orders, though fresh proceedings for ejectment were pending before the competent authories. Amidst these ligaons, with the intervenon of common friends a nd relaves, the pares purportedly agreed to refer all disputes to a panel of Arbitrators – [respondent N: 3 to 7 before trial court] (respondents Nos.2 to 6 herein). An agreement dated 22.04.1992 was executed at Nakodar to this effect, and on the same day, the Arbitrators rendered their award.

The Arbitraon Award : The award dated 22.04.1992 directed that out of the total land measuring 31 kanals 8 marlas, land measuring 28 kanals 11 marlas be transferred to Surinder Singh upon payment of ₹1.60 lakhs, and that the sale deed was to be executed by 30.11.1992. Copies of the award were supplied to both pares.

According to Surinder Singh (peoner before trial court), he complied with the award by withdrawing pending lig aons and demanded execuon of the sale deed, but the peoners herein (respondents N: 1 & 2 before trial court) failed to perform their part. Consequently, he filed an applicaon under Secons 14 and 17 of the Arbitrao n Act, 1940 on 05.05.1992, praying that the award be made Rule of the Court.

Stand of Peoners herein : In their wrien statement, the peoners herein admied that ligaons between the pares were pending before various authories but denied having authori sed respondents Nos.3 to 7 to act as Arbitrators. They contended that the alleged agreement dated 22.04.1992 was forged and obtained under coercion in connivance with the Arbitrators, who had no authority to adjudicate upon the queson of sale of land. They also alleged that no proper procedure was followed, as the award was pronounced on the very day the alleged reference was made. An informaon regarding the alleged forgery was stated to have been lodged with the police on 08.05.1992.

Proceedings Before the Trial Court : The trial Court directed the Arbitrators to file the original award along with the proceedings, which was done on 11.05.1994 in the presence of counsel for both sides. Neither party filed objecons within the limitaon period prescrib ed under Arcle 119 of the Limitaon Act, 1963 . Subsequently, on 30.01.1995, Surinder Singh moved an applicaon for making the award as Rule of the C ourt. Instead of filing objecons or seeking condonaon of delay, the peo ners filed an applicaon on 01.04.1995 seeking amendment of their wrien statement to treat it as objecons to the award. They also sough t direcon to produce the original award. However, the applicaon under Order 6 Rule 17 CPC was withdrawn and dismissed as not pressed on 01.06.1995.

Aer considering the record, the trial Court held that since the award was filed in the presence of counsel for both sides, the pares were deemed to have noce of its filing and no formal no ce was required. Relying on Nikantha Sidramappa Ningashe vs. Kashinath Somanna Ningashe (AIR 1962 SC 666), and Indian Rayon Corporaon Ltd. Vs Raunaq and Company Pvt. Ltd. (AIR 1988 SC 2054), the trial Court concluded that the peoners had failed to file objecons within limita on and accordingly, made the award dated 22.04.1992 as the Rule of the Court vide order dated 07.10.1995.

Appeal : Aggrieved, the peoners herein preferred an appe al, which was dismissed on 13.12.2001. The Appellate Court held that the appeal itself was not maintainable under Secon 39 of the Arbitraon Act, 1940 , and even on merits, no ground was made out to interfere with the well-reasoned order of the trial Court.

Contenons in the Present Civil Revision : Learned counsel for the peoners has raised the following principal su bmissions:

i. Absence of valid reference: There was no lawful or joint reference to arbitraon, as the alleged reference dated 22.04.19 92 bears the signa-ture only of peoner No.1 (Rachpal Singh) and neit her of peoner No.2 (Bhagwant Singh) nor of Surinder Singh.

ii. Lack of authority: Even assuming Rachpal Singh was aorney of Bhag-want Singh, the power of aorney conferred no autho rity to enter into arbitraon, or to sell land.

iii. Improper procedure: The award was passed on the very day of the al-leged agreement, demonstrang lack of due process.

iv. Forgery and coercion: Signatures were allegedly obtained under police pressure when the maer was reported to the police staon.

v. Effect of subsequent ligaon: Reliance was placed on order dated 25.08.2000 passed by a Division Bench of this Court in CWP Nos. 2972 of 1998 and 11682 of 1997, wherein ejectment orders against Surinder Singh were upheld. That order, having aained finali ty, rendered the arbitraon award unenforceable.

vi. Non-consideraon of addional evidence: Despite the above order dated 25.08.2000 passed by a Division Bench of this Court in CWP Nos. 2972 of 1998 and 11682 of 1997 being placed on record as addional evidence under Order 41 Rule 27 CPC, the Appellate Court failed to ap-preciate its effect.

vii. Haste in filing proceedings: The applicaon to make the award Rule of the Court was filed merely 13 days aer the alleged award, showing collusion between Surinder Singh and the Arbitrators.

It is thus contended that the concurrent findings of the Courts below suffer from grave illegality and non-applicaon of mind.

This Court has considered submissions of learned counsel for the pares and perused the enre record carefully.

Analysis and Findings by this Court: The factual matrix indicates that the central issue revolves around the validity of the reference and the enforceability of the award dated 22.04.1992, parcularly in light of the subsequent ejectment orders affirmed by this Court on 25.08.2000. The maetter, therefore, requires appreciaon of whether t he Arbitrators were duly authorised and whether the award, allegedly executed without proper reference and signed only by one party, could legally be made as the Rule of the Court.

Upon consideraon of the submissions advanced an d the material available on record, certain undisputed facts emerge. The alleged reference and the award are both dated 22.04.1992. The award purports to decide not only the disputes between a landlord and tenant, but also directs transfer of ownership of agricultural land, a subject far beyond the limited scope of tenancy or revenue disputes then pending between the pares.

It is also apparent that the reference agreement bears the signature only of Rachpal Singh, and neither Surinder Singh (the alleged claimant) nor Bhagwant Singh (the co-owner) has signed the same. No power of aorney authorising Rachpal Singh to enter into arbitraon or agreeing to sale of immovable property has been produced on file. These facts are not disputed before this court.

However, by placing Reliance upon Ramchandra Ram Nag Ram Rice and Oil Mills Limited vs. Howrah Oil Mills Ltd AIR 1958 Calcua 620 , it is urged by Ld. counsel for the respondent that an arbitraon agreement is not required to be signed by both the pares under secon 2 (a) of the Arbitraon Act, 1940 and that acceptance of terms c an be established through conduct, Oral agreement, or wring. Further reference is made to Jugal Kishore Rameshwar Das versus Mrs. Goolbai Homusuji AIR 1955 Supreme Court 812 to contend that it is not necessary that arbitrao n agreement should be signed by the pares and that i t is sufficient if the terms are reduced to wring and the agreement to the par es thereto is established.

I’m afraid that the abovesaid contenon is devoid o f any merit. First of all, the power of aorney purported to hav e been executed by Bhagwant Singh in favour of Rachhpal Singh, having not been placed on record, it is not established that said Bhagwant Singh had agreed for the arbitraon or had authorised Rachhpal Singh to ente r into an arbitraon agreement or refer the maer to the arbitrator. Fur ther, there is nothing to establish that pares had agreed to sale of the dis puted property on any of the terms. The reference was not made for this purpose. As such, cited authories do not advance the case of respondent he rein.

Further, the Arbitrators’ own statements confirm that the award was announced on the very date of the alleged reference. Such simultaneous execuon of the reference and pronouncement of awar d casts serious doubt on the genuineness of the proceedings and violates the seled principles of arbitraon under the Indian Arbitraon Act, 1940 , which require independent applicaon of mind, deliberaon, and op portunity to both sides.

The trial Court proceeded to make the award as Rule of the Court merely on the ground that no objecons had be en filed within limitaon. However, once the very existence of a va lid reference is under challenge, the absence of objecons cannot confer j urisdicon upon the Court to treat a void award as enforceable. The bar of limitaon cannot legalize an award, which is void ab inio for want of authority or consent of the pares.

Further, the Division Bench judgment dated 25.08.2000 passed by this Court in CWP Nos.2972 of 1998 and 11682 of 1997, affirming the ejectment of Surinder Singh from the very property forming part of the alleged award, has aained finality. The findings the rein conclusively establish that the peoners herein were owners, an d that Surinder Singh had no subsisng right or interest in the property. It has not been disputed by Ld. Counsel for the contesng respondent that prope rty involved in the arbitral award was also part of these CWPs. Once such a determinaon has aained finality, the arbitraon award, which purpor ted to transfer ownership rights to Surinder Singh, becomes wholly unenforceable and contrary to the judicial pronouncements of this Court.

Conclusion : In view of the above discussion, this Court is of the considered opinion that:

i. There was no valid reference to arbitraon in the eyes of law, as the agreement dated 22.04.1992 was not executed by all the necessary pares.

ii. The Arbitrators exceeded their jurisdicon by ad judicang upon and di-recng transfer of ownership of land.

iii. The award, being passed on the same day as the reference, is viated by procedural irregularity and lack of applicaon o f mind.

iv. The subsequent Division Bench judgment upholding ejectment of Surinder Singh renders the arbitraon award unenfor ceable and con-trary to law.

v. The Courts below erred in overlooking these vital aspects and in mak-ing the award Rule of the Court solely on the ground of non-filing of objecons.

Accordingly, the impugned orders dated 07.10.1995 passed by the learned Addional Senior Sub-Judge, Nakodar, an d 13.12.2001 passed by the learned Addional District Judge, Jalandhar, ar e hereby set aside. The award dated 22.04.1992 is declared invalid and unenforceable in law. The civil revision peon is, therefore, allowed . No order as to costs.