Raghubir Pandey and Another vs Kaulesar Pandey and Others

Manohar Lall, J.—In this appeal by the plaintiffs the question for determination is whether the award is invalid because one of the arbitrators did not sign it. The facts are these. The plaintiffs instituted a suit for setting aside certain alienations made by a widow in favour of the defendants on the ground that being the next reversioners they were not bound by those alienations even if these are found to be for consideration. After the defendants appeared, the parties, put in a petition on 6th January 1942, in which they prayed to the Court that the matter in dispute may be referred for arbitration to five punchas who were named therein with the condition that

the parties shall abide by and accept the unanimous decision of the punchas in respect of the disputed property in this case whatever it may be. Should the said'' punchas not give unanimous decision then no party shall be bound thereby.

This is a very unusual condition in a reference to arbitration and as was observed by Mathew J. in United Kingdom Mutual Steamship Assurance Association v. Houston & Co (1896) 1 Q. B. 567 it will be rarely possible to get all the arbitrators to agree in their decision, but nevertheless if this is the agreement between the parties it must be carried out before the award is accepted as valid. After the papers were received by Babu Brijbilas Rai, who is called the Surpunch in these proceedings, he issued a notice to the other punchas on 18th March 1942, informing them that they will gather on 20th March at Nagri, in the village Of the parties, where one arbitrator, Babu Basudeo Singh, was also residing. This notice is Ex. 1 and is signed by all the punchas. Apparently a similar notice was issued either orally or in writing to the parties but there is no written record to that effect.

The case of the defendants is that on the appointed day all the arbitrators assembled at the house of Babu Basudeo Singh at village Nagri and after hearing the parties and their witnesses and examining their documents which they produced the punchas after due deliberation and consideration amongst each other pronounced the decision which is embodied in the award of the same date, but unfortunately one of the punchas, Babu Basudeo Singh, did not put his signature on that award because at the time of the signature he said that he had urgent village work to look after and he went away. The award was filed in Court on 24th March 1942. The plaintiff by a petition filed on 11th April 1942 challenged the legality of the award on the ground that the punchas never called the parties to gather at village Nagri on 20th March 1942 nor did all the punchas unanimously hold any panchaiti at all that the punchas did not take any evidence or proof from the parties and that the award is not binding on this ground as well that Babu Basudeo Singh, one of the punchas, did not agree and refused to sign the award. The learned Subordinate Judge took evidence in support of the allegations Of either party. On the plaintiff''s side, the important witness is Babu Basudeo Singh himself who deposed that he was one of the punchas, that he did not attend any of the sittings and that it is not a fact that he refused to sign the award though he was of the same opinion as the other punchas. In cross-examination he admitted that he knew on 19th that the sitting was to be held because he received the notice but he says that there was no sitting at all on that date and that the witness was present all the time in the village. This evidence does not ring true and has not been accepted by the learned Subordinate Judge who had the advantage of hearing and see the witness in the witness-box. The only other witness examined on behalf of the plaintiff was the plaintiff himself who said that no panchaiti was ever held and that they received no notice of the intended panchaiti.

Against this evidence the Surpunch himself deposed very clearly that the panchaiti was held at the house of Babu Basudeo Singh, that all the punchas, the parties and their witnesses were present there and their decision was arrived at with the consent of all the parties, and after the award was given it was written out but Basudeo did not sign as he went away on collection work. In his cross-examination he stated that the sitting commenced at 10 or 11 A. M. and finished by 3 P. M. He was cross-examined as to why Basudeo Singh did not sign and replied that Basudeo said he has already given his opinion and he should be allowed to go as he had urgent work to look after. The evidence of this witness appears to me to be reliable and has been accepted by the learned Subordinate Judge. He is supported by another arbitrator, Babu Kailash Pandey, who is a zamindar. His evidence also shows that all the arbitrators consulted together after taking the statement of the parties and their witnesses and after seeing the papers produced by them. They then consulted together and all agreed that the suit should be dismissed. Further that Basudeo did not sign as he went away on collection work. The evidence of these two witnesses, in my opinion, was rightly believed by the learned Subordinate Judge. The award itself shows that all the arbitrators assembled at Nagri on 20th March 1942 along with the plaintiffs and the defendants, that oral and documentary evidence was received and the arbitrators deliberated thereon. It then gives some of the reasons which induced the arbitrators to decide in favour of the defendants. Towards the end it is written:

Hence the punchas are of opinion that the suit may be dismissed. But Basdeo singh, a punoh did not put his signature. Hence these four punohas put their signature on the award and file it. Dated 20th March 1942. Be it noted that the parties to bear their own costs.

On a consideration of the evidence, I agree with the finding of the learned Subordinate Judge that the award was the result of a joint deliberation by the punchas who assembled in a regular manner at the house of Babu Basudeo Singh, received the evidence produced by the parties and heard them, and that Babu Basudeo Singh did not sign it not because he did not agree with the decision but because after coming to an agreement with the views of the other arbitrators he represented that his signature was unnecessary and he had to go away on urgent collection work-probably by that time the award had not been reduced to writing in full. The learned advocate then argued that as the award was not signed by Basudeo it must be held to be an invalid award irrespective of the finding that all the arbitrators had come to a unanimous decision. He drew attention to Section 14, Arbitration Act. Section 14 (1) provides that when the arbitrators have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof. He argues that the direction of the statute is mandatory and if the award is not signed no notice can be given to the parties of the signing of the award and therefore the award was not complete and cannot be acted upon.

A large number of cases were cited before us in support of the contention. But most of the cases do not decide the question which arises in this case because in those cases the agreement between the parties was that the " award of the majority would be binding on the parties. It was held in those cases that, after all the arbitrators have joined in the deliberation the mere fact that one or more of them did not sign the award will not render it invalid provided the majority have signed it, but where it is proved that one or more of the arbitrators refused to take part in the deliberation and did not sign the award it was held to be not binding even though the majority have agreed to the award being put forward. It is but right having regard to the strenuousness of the arguments advanced that I should notice some of the important cases.

Patna: The earliest Patna case is Ram Narain Ram v. Pati Ram A. I. R. 1916 Pat. 156 a where it was held by a Division Bench that when the parties have agreed -to-abide by the decision of the majority of the arbitrators, an award cannot be set aside on the ground that it has not been signed by the minority. At page 92 Roe J. pointed out that, there was clear evidence that the third arbitrator was actually present throughout the proceedings and only refused to sign the award when he discovered that it would go-against the plaintiffs. In the same year another decision of this Court was given by a Division Bench reported at p. 806 of the same volume (Khudiram Mahato v. Chandicharan AIR 1916 Pat. 190) which has been taken in some cases to have taken a contrary view but in truth the only question decided in that case was that no appeal lay from a decree passed by a Court on the basis of an award unless the decree was in excess of or not in accordance with the award. Atkinson J. held that the view of the Munsif that the award was legal could not be impeached in the appeal before the High Court. It is true that in that case three out of five arbitrators alone assembled and considered the matter referred to them for arbitration and made and signed the award although one of the two arbitrators who had taken no part in the proceedings also-signed the award and the fifth arbitrator who-had also taken no part in the proceedings signed it after it had been filed in Court, but. Atkinson J. held that the legality or illegality of the award could not be questioned in the High Court and the view of the Munsif was-final. Jwala Prasad J. however, made observations at pp. 314-15 that an award which is. filed in Court without the signature of some of the arbitrators was invalid. Nevertheless he agreed in dismissing the appeal.

Ram Sahu v. Judagi Lohar A. I. R. 1928 Pat. 231 is a decision of a single Judge where it is forcefully held that there is a distinct statutory provision in Schedule 2, para.10 that the award must be signed by the persons who made it and the want of signature of some of the arbitrators from the award invalidates the award and that the writing and signing the award cannot be treated to be a ministerial act. The learned Judge also observed that even if the writing out of the award is a ministerial act, it does not become an award until it is signed by the arbitrators as it was open to them to change their mind upon further consideration when the written award was placed before them for signature and also remarked that instances were not want-ing when Judges have changed their mind when judgments dictated by them are placed before them for signature. The learned Judge distinguished the facts of l Pat. L. J. 902 on the ground that in that case the parties had agreed to abide by the decision of the majority.

Ram Narain Rai v. Lalji Rai A. I. R. 1929 Pat. 178, Fazl Ali J. (as he then was) did not give any decision on this question because he observed at p. 180:

Assuming however that the point of law was correctly decided in those cases (that is, the cases of which 1 Pat. L. J. 902 is the_type) there was. a further point which arises in lhis case that the arbitrators did not cause the award to be filed in Court as the award reached the Court under some mysterious circumstances and none of the arbitrators took the responsibility for saying as to who caused the award to be sent to Court.

The Patna view, therefore, which is binding on us, is that expressed in Ram Narain Ram v. Pati Ram A. I. R. 1916 Pat. 156, and is to the effect that the absence of the signature of an arbitrator on the award is not fatal to its validity, provided he has taken part in the deliberations.

Kazee Syud Naser Ali v. Mt. Tinoo Dossia Calcutta (66) 6 W. R. 95 takes the view that where all the arbitrators have joined in the deliberation the decision of the majority expressed in the award is binding on the parties even though it is not signed by the minority provided the parties agree to abide by the decision of the majority.

Abu .Hamid Zahir Ala v. Golam Sarwar A. I. R. 1918 Cal. 865. In this case it was held that an award even by the majority of the arbitrators is bad where all the arbitrators did not join in the deliberation.

Sricharan Bhandari v. Makhan Lal A. I. R. 1919 Cal. 42. In this case nine arbitrators were appointed to settle the dispute between the parties and the award was signed by eight out of nine arbitrators. The document itself showed that though eight only had signed the proceedings were taken in presence of all th6 nine arbitrators. It was held that the failure to sign the award by one of the arbitrators-did not vitiate it.

Ramesh Chandra Dhar v. Karunamoyi Dutt (09) 33 Cal. 498. In this case two out of three arbitrators agreed in making the award, but the third did not agree and the award was filed in Court without the signature of the dissenting arbitrator who however came into Court later on and signed it. This case is strongly relied on by the appellants. In the judgment no fact is stated from which it can be gathered whether all the arbitrators, joined in the deliberation, but at p. 499 the objection taken by the party was that one of the arbitrators did not attend an important meeting: and that although the third arbitrator did not agree he was later on induced to fix his signature in Court by the other arbitrators. Upon this question of fact the Munsif who took evidence later on found that the third arbitrator agreed when the other two arbitrators had shown him reasons and that he signed the-award because he agreed with the other arbitrators subsequently and was not influenced in any way by them. It will be noticed that there is no finding that all the arbitrators had attended the important meetings or had joined in the deliberation. It is also not a case where the parties agreed to abide by the decision of the majority. They apparently agreed to a unanimous decision by all the three arbitrators.

Abinash Chandra Mitra v. Parashuram Prasad 44 C. W. N. 866 which follows 1 Pat. L. J. 902 is a decision of a single Judge. In this case it was. distinctly provided in the agreement that the decision of the majority of the arbitrators would prevail and therefore the omission of one of the arbitrators to sign the award did, not make it invalid.

Allahabad: Dalli Vs. Emperor, . In this case it was found that the persons who were objecting to the award induced one of the arbitrators not to sign it, but it was found as a fact that the recalcitrant arbitrator had agreed to the award. It was held that

his failure to sign is undoubtedly a legal flaw, but it is a flaw which the plaintiffs cannot take advantage of, because they procured it.

points out the true manner in which the omission of signature of one arbitrator should be looked at. He says at page 91:

It appears to me that the failure of one of several arbitrators to sign an award may have a different effect in different eases, but that if one of the arbitrators withdraws from the arbitration altogether and refuses to co-operate with his colleagues, and they nevertheless proceed to give an award without his help, that must amount to misconduct.

In that case, however, it was found as a fact that all the arbitrators had arrived at a decision and merely waited to sign the award and in the interval between the decision and the signing of the award one of, them changed his mind and refused to sign it.

Bombay : The leading case is Dandekar v. Dandekars (82) 6 Bom. 663. In that case'' three out of seven arbitrators did, not sign the award. Nevertheless it was held that the omission to take the signatures of the minority of the arbitrators, to the document, which formed the record of the award, was not fatal to the award.

Madras : Appayya v. Venkataswami A. I. R. 1919 MP. 877 is a decision of a single Judge. In this case the parties agreed to abide by the decision of the majority and it was found that all the three arbitrators did not meet together and deliberate upon the matter submitted to them.

Ayyasawami Mudaliar v. Appandai A. I. R. 1920 Mad. 130. The learned Judge referred to the Queen''s Bench decision already referred to and observed that in every case of arbitration unless all the arbitrators concurred in the award, there could be no arbitration award at all and further that it could not be assumed in that case that the parties had agreed to abide by the decision of the majority. A review of all these cases satisfies me that the true principle upon which the matter is to be decided is to find in a particular case whether all the arbitrators have joined in the deliberation or have attended the important meetings in which the crucial questions for decision were deliberated. If one or more of the arbitrators have not joined in the deliberation, the award is invalid if it is not signed by an arbitrator even though he may choose to sign it later on. Again, if all the arbitrators have joined in the deliberation and there is a distinct provision in the agreement between the parties that the award of the majority will be binding, in that case the failure, deliberate or accidental, of one of the arbitrators to sign the award will not make it invalid. Lastly if the agreement between the parties is that the award must be a unanimous decision of the arbitrators, if all the arbitrators have joined in the deliberation and have agreed in a certain decision then the award is binding on the parties even though one of the arbitrators, accidentally or. inadvertently or deliberately, did not sign the award. I now come to some English decisions which support me in my view that it is the making of the award which is the crucial matter.

In Morgan v. Bolt (1863) 7 L. T. 671 an application was made to set aside the award on the ground that it was made in the absence of one of the arbitrators without any default on his part. Blackburn, J. in the course of the argument observed that

the substantial thing required in such a case is that all three should meet together and discuss the matter, and hear the arguments and reasons on the one side and on the other

and that a judicial putting of the three minds together should be shown. Cockburn, C. J. gave a short judgment:

I think it would be a dangerous precedent if we held that what was here done can support the award. I think, as was said by my brother Blackburn, that there ought to be a meeting of the three minds, with a view to come to a conclusion on the matter before them. It would be dangerous for the interests of the parties concerned that such matters should be discussed ex parte; an impression may thus be produced which would not be done if all three were together when the other arbitrator would have an opportunity of combating and correcting it. It would be giving an unfair chance, and would be unsafe and bad precedent.

Blackburn, J. observed:

I don''t wish it to be understood that any meeting of the arbitrator and the umpire in the absence of the other arbitrator would invalidate an award, but there should be a joint judgment of the three, which is not shown here.

In re Hopper (1867) 2 Q. B. 367 Cockburn C. J. drew attention to the same criterion that there must be a concurrent judgment in the decision of the arbitrators and that the Court should not be ever ready to set aside awards where the parties have agreed to abide by the decision of a tribunal of their own selection unless it was found that there was something radically wrong and vicious in the proceeding and that

the parties have not had the benefit of the judgment of the arbitrators in the appointment of a fit and proper person as umpire.

At page 376 the learned Chief Justice dealt with the question that the two arbitrators should have signed the appointment of the umpire at the same time and observed:

Signing the appointment of umpire is not a judicial act; the judicial act is the agreement as to the appointment of the particular person ,who is to be the umpire, and the signing is merely the record of that which they have already done in the judicial exeroise of their functions.

Blackburn, J. who gave a concurring judgment observed at page 377:

No case has decided that, where two arbitrators have exercised their judgment in the selection of an umpire, their not being present together at the mere formal act of afterwards recording the appointment vitiates it, and to uphold this proposition would be to adhere to the letter of the law instead of to the substance. I think there is an analogy to be found in the case of a bill of exceptions. The bill of ex ceptions must be tendered to the judge before the jury give their verdict, and it must be in writing and sealed by the Judge ; but in practice this is never strictly carried out. A note at the time is taken of the exceptions and the bill is prepared and sealed afterwards ; and.I never heard of an objection being taken to the bill of exceptions because it was sealed after the verdict was given.

Lush, J. agreed with the other two members of the Court.

United Kingdom Mutual Steamship Assurance Association v. Houston & Co (1896) 1 Q. B. 567. In that case, which I have referred to already Mathew J. first found on the facts that the arbitrators assembled, heard the evidence and discussed the matter and then two of them differed. The third arbitrator drew up an award which was signed by himself and by one of the arbitrators, but the third arbitrator refused to concur in it. The learned Judge then observed at page 570:

For a reference to three arbitrators means that all three must concur in the making of the award. In the view I take of the meaning of the rule it is true, as Mr. Walton has pointed out, that arbitration under it can seldom have any result: for it will be rarely possible to get all three to agree in the decision. But if the parties desired to have an effective arbitration they should have framed their rule differently. The question is not what the parties might reasonably be assumed to have intended, but what they have said that they intended. Here I think the principle to be applied is exactly the same as if three persons'' names had been inserted in the reference. They must all agree.

It is thus clear that it is the unanimous agreement where all the arbitrators are required to agree and the agreement of the majority to a certain decision where the parties agree to abide by the decision of the majority, which is the judicial determination of the dispute referred to the arbitrators by the parties, and that the signing of the award is not a judicial act but is merely the record of that which has already been done in the judicial exercise of the functions of the arbitrators. A decision, of their Lordships of the Judicial Committee is very apposite. In AIR 1938 292 (Privy Council) the judgment of a Division Bench of the High Court was delivered in open Court by Harrison and Agha Haider JJ. Harrison J. went on leave before signing the judgment, which was signed by Agha Haider J., the Deputy Registrar appending a note that Harrison J. had gone on leave before signing the judgment he delivered. It was argued that the judgment of the High Court appealed from was not a valid judgment because it failed to comply with Order 41, Rule 31, Civil P.C., which requires that the judgment of the appellate Court shall be in writing and shall at the time that it is pronounced be signed and dated by the Judge or by the Judges concurring therein. Lord Wright who delivered the judgment of their Lordships negatived this contention at page 21 in these words:

The rule does not say that, if its requirements are not complied with, the judgment shall be a nullity. So startling a re''sult would need clear and prepise words. Indeed, the rule does not even state any definite time in which it is to be fulfilled. The time is left to be defined by what is reasonable. The rule from its very nature is not intended to affect the right of parties to a judgment. It is intended to secure certainty in the ascertainment of what the judgment was. It is a rule which Judges are required to comply with for that object. No doubt in practice judges do so comply, as it is their duty to do. But accidents may happen. A Judge may die after giving judgment but before he has had a reasonable opportunity to sign it. The Court''must have inherent jurisdiction to supply such a defect. The case of a Judge who has gone on leave before signing the judgment may call for more comment, but, even so, the convenience of the Court and the interest of litigants must prevail. The defect is merely an irregularity.

In the result I am of the opinion that when it has been found in this case that all the arbitrators joined in the deliberation and pronounced their unanimous award to the parties, the award was made by the arbitrators and the fact that one of the arbitrators has not signed it does not make the award invalid. The result is that the appeal fails and must be dismissed with costs.

Beevor, J.

I agree.