Radha Wallabh and others vs Seth Gopaldas

Shiv Dayal, J.

In a suit for partition and separate possession, a preliminary decree was passed on 6 January 1943 (Civil suit No. 5-A of 1941, in the Court of the Additional District Judge, Khandwa). The properties were described in the schedule annexed to the decree. List ''A'' relates to houses; list ''B'' relates to agricultural lands; and list ''C'' relates to trees. By an order dated 11 April 1961, Hiralal son of Babalisha, Hiralal son of Dagdusa, and Karsandas son of Varjiwandas were, by the consent of the parties, appointed arbitrators to divide the properties by metes and bounds. The arbitrators filed their award dated 18 August 1961. The Defendant filed objections and prayed for setting aside the award. The Plaintiff resisted the objections, whereupon, evidence was recorded. The learned Additional District Judge has set aside the award, u/s 30(c) of the Arbitration Act, as invalid. The learned Judge says:

True it is that the Defendant has not challenged before me the integrity or honesty of purpose of the said arbitrators but his whole contention is that the arbitrators had not acted in a judicial manner in deciding the dispute. From the careful scrutiny of the evidence on record I am convinced that there is much force in the contention raised by the Defendant.

It is then observed by him that an award, which does not decide all matters in dispute, is invalid and that the arbitrators are bound to apply the principle of natural justice. Having said so, he found that the accounts were not inspected in the presence of both the parties face to face and that the whole enquiry was made in a superficial and fishy manner. Aggrieved by that order the plaintiff (now represented by the Appellants) filed this appeal.

Shri Seth endeavoured to support the judgment of the trial Court by advancing certain contentions which we would presently consider. Before we do so, it is useful to recapitulate the scope of enquiry and the limits of the powers of the Court in dealing with an application for setting aside an award, which do not appear to have been present to the mind of the trial Judge. His order is superficial and does not carry conviction. The position of the law is this:

(1) An award being a decision of an arbitrator, whether a lawyer or a layman, chosen by the parties and entrusted with power to decide a dispute submitted to him, is ordinarily not liable to be challenged on the ground that it is erroneous.

(2) The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement. The award is a decision of a domestic tribunal chosen by the parties, and the civil Courts which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right, the decision is binding if it be reached finally after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement.

(3) The Court should approach an award with a desire to support it, if that is reasonably possible rather than destroy it by calling it illegal.

(4) Unless the reference to arbitration specifically so requires, the arbitrator is not bound to deal with each claim or matter separately, but can deliver a consolidated award. An award need not formally express the decision of the arbitrator on each matter of difference.

(5) Unless the contrary appears, the Court will presume that the award disposes finally of all the matters in difference and that the award is complete. The silence of the award as regards a particular item must be taken to be intended as a decision rejecting the claim to that relief.

(6) An award may be set aside on the ground of an error on the face thereof.

(7) Where a specific question is submitted to the arbitrator and he answers it, the fact that the answer involves an erroneous decision on a point of law, does not make the award bad on its face so as to permit of its being set aside... If the reference is of a specific question of law, even if the award is erroneous, the decision being of arbitrators selected by the parties to adjudicate upon those questions, the award will bind the parties.

(8) The Court has no jurisdiction to override the decision of the arbitrators or to substitute its own even where the question is a mixed question of law and fact.

[See Alopi Parshad and Sons Ltd. Vs. Union of India (UOI), ; Smt. Santa Sila Devi and Another Vs. Dhirendra Nath Sen and Others, ; Union of India (UOI) Vs. A.L. Rallia Ram, ; Gobardhan Das Vs. Lachhmi Ram and Others, ; Rustomji v. Manmal 1963 MPLJ 284; Seth Thawardas Pherumal Vs. The Union of India (UOI), and Pannalal v. State of M.P. 1963 MPLJ 307].

We would now turn to Shri Seth''a objections. The first objection is that the arbitrators did not decide issues 5, 6 and 7, which had been framed by the trial Court. There is no substance in this contention. The issues are these:

5 (a) Whether the Defendant No. 1 alone had dealing with Dwarkadas Vithaldaa of Bombay and is he alone liable to pay the amount of the decree obtained by the latter in C.S. No. 485 of 1938 ?

(b) Whether Rs. 5,500 had been borrowed from Parmanand Das and Purshottam Das in that connection as alleged by the Defendant No. 2 ?

6(a) Whether the C.S. No. 584 of 1938 refers to the transactions of partnership with Purshottamdas ?

(b) Will the Defendant No. 1 be also liable if a decree is passed in that case ?

7(a) Whether the disputed items of Rs. 1,650, Rs. 4,500, Rs. 1,450 and Rs. 306-1-6 are debts due from the joint family ?

(b) Is the Defendant No. 1 also liable to account for the same ?

It is clear from the award that these issues were seen by the arbitrators. They considered and disposed of those points in their award. Secondly, the Defendant Gopaldas was exonerated as regards issues 5 (b), 6 (b) and 7 (b). In fact, the arbitrators are not bound to decide every item separately. They can deliver a consolidated award.

The second objection is that the value of the properties as given in the lists in the year 1941, considerably increased, but the arbitrators did not consider this significant feature of the case. This too does not vitiate the award.

But that apart, the objection is wholly without substance. Both the parties filed under their signatures lists of properties in respect of which partition was to be effected and they also filed lists of those properties which had already been sold by them. Arbitrator Hiralal son of Dagdusa, who was examined on commission by the trial Court (in proceedings for setting aside the award) says that both the parties requested the arbitrators that the basis of valuation of property should remain the same as shown in the schedule to the plaint. So also is the statement of Karsandas, who was examined on commission and that of Hiralal son of Babalisha. All the three arbitrators were examined by the Defendant as his witnesses. This contention is, therefore, rejected.

The third objection is that the books of account were not examined in the presence of the parties. The objection must also be rejected because all the three arbitrators, who were examined by the Defendant as his witnesses, say that the account books shown by each party were examined in the presence of the other.

The fourth objection is that the parties were examined in the absence of each other. This too is wrong. Arbitrator Hiralal eon of Babalisha (D.W. 1) says that the arbitrators gave intimation to the parties before examining the witnesses and when the Plaintiff was examined, the Defendant was present, although he went away after sometime.

The fifth objection is that some of the arbitrators stayed at the Plaintiff''s house. We are unable to appreciate the purpose of this objection when it was conceded before the trial Court that their integrity was not doubted. Arbitrator Hiralal son of Babalisha (D.W. 1) says that he had to go to Khandwa from Burhanpur for arbitration proceedings. He sometime stayed with the Plaintiff and sometimes with the Defendants, and sometimes with one Purshottam Rupchand. This objection is rejected.

The seventh objection is that the arbitrators did not take into account a sum of Rs. 1,950 for which Shankardas had sold a certain field. This objection is patently wrong because this was considered by the arbitrators. In their proceedings dated 9 June 1961, an admission of the parties is recorded. They agreed that Shankardas was not liable for that amount inasmuch as it had been spent for the treatment and obsequies of Dwarkadas.

It is then contended by Shri Seth that the reference to arbitration was itself invalid inasmuch as no application signed by the parties was filed in the Court as required by Section 21 of the Arbitration Act. This contention is too late in the day. It appears from the order-sheet dated 28-1-1961 that the parties proposed to get the accounts settled by the arbitrators. Therefore, they obtained consent of the arbitrators. At their request reference was made. See orders dated 25-2-61, 6-3-61, 9-3-61, 23-3-61 and 6-4-61. The order-sheet dated 11 April 1961 reads thus:

With the consent of the parties the following persons, viz. (1) Hiralal son of Babalisha...(2) Hiralal son of Dagdusa...and (3) Shri Karsandas son of Varjiwandas...are appointed as arbitrators for the decision of the dispute between the parties in view of their consent on record. The necessary orders of their appointments as arbitrators be issued to them. The parties to supply the copies of necessary documents to the arbitrators to enable them to decide the case. The arbitrators are directed to submit their award within 3 months from today. Case for 15-7-1961.

This order-sheet is signed by Shri Gadre and Shri Pagare both counsel for the parties. Shri K.N. Gadre was the counsel for the Defendant. In the Vakalat-nama Shri Gadre was expressly authorised to refer the case to an arbitration. So also Shri Pagare was authorised in his Vakalatnama. Now, Section 21 of the Arbitration Act does not prescribe any form of application. All that is necessary is that there should be an application in writing. Thereafter, both the parties participated in the proceedings before the arbitrators. They also filed lists of properties to be divided between them. The Defendant cannot now turn round to contend that the reference was irregular for want of an application in writing u/s 21 of the Act.

No other objection was raised before us. We hold that the trial Court was in error in setting aside the award. There is positive evidence of the arbitrators, who were the Defendant''s witnesses, that the accounts were inspected in the presence of both the parties. We further hold that the enquiry before the arbitrators was neither superficial nor fishy. There was no good ground for setting aside the award.

The appeal is allowed. The order passed by the trial Court is set aside. A decree shall be passed in terms of the award. The Appellants shall get their costs from the Respondent in both the Courts. Counsel''s fee Rs. 200 in each Court.