Rameshwar Lal and Others vs Shanker Lal

Bela M. Trivedi, J.—The appellants-petitioners have filed the present appeal u/s 39 of the Arbitration Act, 1940, (hereinafter referred to as "the said Act") challenging the order dated 07.10.1999 passed by the Additional District Judge No. 2, Ajmer (hereinafter referred to as "the court below") in Civil Case No. 155/1983, whereby the court below has dismissed the objection petition filed by the appellants u/s 33 read with Section 30 of the said Act and made the award dated 05.05.1981 the Rule of the court. Heard the learned counsel Ms. Sonal Singh for the appellants. Nobody appears for the respondent though duly served.

In the instant case, it appears that the appellants and the respondent were the brothers. The respondent had raised some dispute with regard to the property bearing No. 398/9 alleging inter alia that the appellants had illegally taken over the possession of the said property, though the respondent was the sole owner of the said property. It further appears that in order to resolve the said dispute, the Panchayat Samiti, Ajmer had appointed a Committee of 5 members, headed by one Shri Dilip Singh Ji Bhatia. The said committee contesting of 6 members were directed to submit the report to the Panchayat Samiti within 15 days of their appointment. It appears that thereafter the said Committee made the award on 05.05.1981. The appellants-petitioners being aggrieved by the said award filed the objection petition before the court below, which was registered as Civil Case No. 155/1983, in which the court below passed the impugned order.

It has been sought to be submitted by the learned counsel Ms. Sonal Singh, for the appellants that the so-called award passed by the so-called Arbitrators was not in consonance with the provisions of the said Act, in as much as there was no arbitration agreement in writing for referring the dispute between the parties to the said Arbitrators, who were as such appointed by the Panchayat. According to her, apart from the manner in which the said proceedings were conducted by the committee of the Arbitrators, one of the Arbitrators i.e. Shri Tulsiramji had also expired during the pendency of the proceedings and nobody was appointed in his place. As per the proceedings recorded by the said committee, runs her submission, the dispute was with regard to the alleged illegal occupation of the property bearing No. 398/9, whereas the committee had enlarged the scope of arbitration by passing the award in respect of the other properties also. She also submitted that there was no evidence or document on record to assess the valuation of the properties, as has been done by the said committee. She further submitted that the appellants had never agreed to refer the dispute between the parties to the said committee and that it was only appellant No. 1, who had put his signature, that too in his individual capacity, and under duress. Thus, according to her, such an award made by the said committee of arbitrators could not be said to be an award or proceedings in consonance with the provisions of the said Act, and could not have been made Rule of the court by the court below.

In the instant case, it appears from the record of the arbitration proceedings and also the award dated 05.05.1981 that the respondent had raised the dispute in respect of the property bearing No. 398/9 on the ground that the appellants had occupied the said property illegally, though it belonged to him. It further appears that in order to resolve the said dispute, the Panchayat Samiti of Ajmer had appointed another Committee of 5 Members headed by one Shri Dilip Singh Ji Bhatia. Though, it is true that appellant No. 1 Rameshwar Lal had put his signature on the piece of paper for referring the said dispute to the said committee, the other two appellants had not put their respective signatures. It also appears that at the relevant time the mother of the appellants and respondent was also alive and she also was not made party to the said proceedings.

It is needless to say that as per the definition contained in Section 2(a), arbitration agreement means written agreement to submit present and future difference to arbitration, whether the arbitrator is named therein or not. In the instant case, there was no written agreement which could be said to be an arbitration agreement between the parties for submitting the present or future difference between the parties to the arbitration. Under the circumstances, the entire proceedings conducted by the Committee appointed by the Panchayat, Ajmer could not be said to be the proceedings in consonance with the provisions of the said Act.

It further appears that even if the said proceedings are presumed to be the arbitration proceedings, it appears that one of the members of the said Committee i.e. said Tulsiramji had expired on 05.04.1981, as transpiring from the record of proceedings of the said date. As rightly submitted by the learned counsel for the appellants, there was no other member appointed in his place in the said committee, and the award itself was singed by the rest of the 5 Members only. The Court, therefore finds substance in the submissions made by the learned counsel for the appellant that the entire proceedings had vitiated with the death of one of the members of the committee.

The Court also finds substance in the submissions made by the learned counsel for the appellants that though the dispute was with regard to only one property i.e. property bearing No. 398/9, the said committee had also taken into consideration the other properties belonging to the appellants and had made assessment for the valuation of the said properties without any evidence on record. Thus, the said committee had also acted arbitrarily in evaluating the properties belonging to the appellants, and in deciding the shares of each of the appellants and respondent, ignoring the share of their mother. Such a proceedings conducted by the committee of the Arbitrators could not be said to be legal, proper or in consonance with the provisions of the said Act, and therefore, could not be made the Rule of the court. In that view of the matter, the impugned order passed by the court below rejecting the objection raised by the appellants and making award Rule of the court deserves to be set-aside. The impugned award passed by the committee and the impugned order passed by the court below are hereby set-aside. The appeal stands allowed accordingly.