Bijendra
Nath Srivastava Vs. Mayank Srivastava [1994] INSC 422 (10 August 1994)
Agrawal, S.C. (J) Agrawal, S.C. (J) Jeevan Reddy, B.P. (J)
CITATION:
1994 AIR 2562 1994 SCC (6) 117 JT 1994 (5) 195 1994 SCALE (3)739
ACT:
HEAD NOTE:
The
Judgment of the Court was delivered by S.C. AGRAWAL, J.- The question for
consideration in this appeal is whether the award made by the arbitrator
dividing the movable as well as immovable properties of joint family amongst
the six branches of the family is liable to be set aside. The award was
accepted by the Civil
Court (Vth Additional
District & Sessions Judge, Lucknow) and a
direction was given for making it the rule of the court and for drawing a
decree in terms of the award. The High Court, in appeal, has set aside the
award on the view that the award suffers from mistakes apparent on its face and
that arbitrator had committed judicial misconduct in recording the proceedings
before him.
2.
Late Shri Bisheshwar Nath Srivastava, ex-Chief Judge of the Oudh Chief Court, who
died on 18-7-1938, had six sons, namely, Bhagwati Nath, Bhupendra Nath, Bishwa Nath,
Brij Nath, Bijendra Nath and Birendra Nath. Smt B.N. Srivastava died on 22-9-1957. Bhagwati Nath died on 8-2-1942 and Bishwa Nath died on 27-10-1946. After the death of Shri Bisheshwar Nath Srivastava, his
eldest son, Bhagwati Nath was looking after the joint family properties as the karta
of the joint Hindu family and after his death, Bhupendra Nath, the second son
of Shri Bisheshwar Nath Srivastava, was doing so. On 3-1-1966, an agreement was
entered into between the six branches of the family headed by the six sons of Shri
Bisheshwar Nath Srivastava whereby Shri Tribeni Prasad, a retired District
Judge, who was the son-in-law of Shri Bisheshwar Nath Srivastava, was appointed
as the sole arbitrator to divide the movable as well as immovable properties of
late Shri Bisheshwar Nath Srivastava and Smt B.N. Srivastava into six shares
according to his best judgment and allot one such share to each of the six
parties. By this agreement it was also agreed that money that was needed from
time to time by any of the parties to the said agreement and was 122 advanced
to him or to her by Bhupendra Nath out of the joint family money was out of his
or her share in the joint family property and will be deducted from his or her
share at the time of partition. It was also stated in the said agreement that
all the parties to the agreement have taken certain amounts out of their shares
in the joint family property from Bhupendra Nath or otherwise and that these
amounts will be deducted from the shares of the parties to the said agreement
at the time of partition. Party No. 1 to the said agreement was Bhupendra Nath
who signed it for himself and his sons Paresh Kumar (minor), Prabhakar Kumar (minor),
Prabhat Kumar and Pankaj Kumar; Party No. 2 were Smt Savitri Devi wife of Bhagwati
Nath (deceased) and Dr Bireshwar Nath son of Bhagwati Nath (deceased) who
signed for himself and his minor son Amitabh; Party No. 3 were Smt Chandrawati Devi
wife of Bishwa Nath (deceased) and Bhuwaneshwar Nath son of Bishwa Nath
(deceased); Party No. 4 was Brij Nath who signed for himself and his minor son Ravi;
Party No. 5 was Bijendra Nath who signed for himself and his minor son Brijeshwar
Nath; and Party No. 6 was Birendra Nath who signed for himself and his minor
son, Mayank Srivastava (Respondent 1 herein).
3.
Before the arbitrator a paper bearing No. 104/37-Kha was filed on 21-7-1966, giving the list of 17 immovable properties as well
as the annual rent, municipal assessment and valuation of the same. The said
paper contains the signatures of the heads of all the six branches. The
arbitrator heard all the parties and afforded them opportunity to produce
evidence and made an award where under he divided the immovable as well as
movable properties in six shares for each of six parties to the arbitration. By
the said award the joint family properties were divided as follows:
Party
No. 1 Immovable property Rs53,600 Movable property Rs29,692 Total Rs83,292
Party No. 2 Immovable property Rs90,100 Movable property Rs32,669 Total
Rs1,22,769 Party No. 3 Immovable property Rs69,480 Movable property Rs28,307
Total Rs97,787 Party No. 4 Immovable property Rs19,200 Movable property
Rs38,729 Total Rs57,929 Party No. 5 Immovable property Rs26,400 123 Movable
property Rs17,786 Total Rs44,186 Party No. 6 Immovable property Rs38,000
Movable property Rs64,553 Total Rs1,02,553 The said award was submitted for
registration before the Registrar of Documents on 21-11-1966. On the same day,
the arbitrator moved the Court of Civil Judge, Lucknow, for condonation of delay and for extension of time to file
the award. The said application was allowed by the Civil Judge and time for
filing the award was extended to 31-12-1966.
Before
the expiry of the said period the award was registered and it was filed in the
Court of Civil Judge, Lucknow, on 6-12-1966. The Civil Judge issued notices to the parties and in
response thereto objections to the award were filed by the Parties No. 1, 3 and
6. Party No. 1 subsequently did not press the objections and the objections
were pressed only by Parties No. 3 and 6. In the said objections it was
submitted that the award was liable to be set aside for the reason that the
arbitrator was guilty of misconduct and acted in excess of his powers. In the
objections that were filed by Party No. 6 the factum of the agreement of
arbitration was also disputed. It was asserted that Shri Tribeni Prasad was not
appointed as the arbitrator. The arbitrator died on 14-12-1970. Mayank Srivastava
(Respondent 1), who was minor at the time when the objections were filed on
behalf of Party No. 6, attained majority on 12-2-1973. On 24-3-1975, Mayank Srivastava filed an application under Section 151
and Order 6 Rule 17 CPC for implement and for amendment of the objections filed
on behalf of Party No. 6. The said application was allowed by the Civil Judge
by his order dated 8-5-1976. The objections were tried by the
Civil Judge on the basis of affidavits.
4. The
case was finally disposed of by the Vth Additional District & Sessions
Judge, Lucknow, by his judgment dated 14-9-1977, whereby the objections were
rejected and it was directed that the award dated 21-11-1966, given by the
arbitrator, be made rule of the court and decree be drawn in the light of the
said award. The Additional District & Sessions Judge held that the order
dated 8-5-1976 whereby the amendment was allowed
has become final and binding on the parties on the basis of principles of
constructive res judicata and Party No. 5 could not challenge the correctness
or legality of the said order. The Additional District & Sessions Judge
found that the agreement dated 3-7-1966 is an
arbitration agreement whereby the parties agreed to refer the matter to the
arbitration of Shri Tribeni Prasad. As regards the objections raised by Party
No. 6 regarding division of immovable properties, the Additional District &
Sessions Judge held that it was within the exclusive jurisdiction of the
arbitrator to fix the method and ways to determine the valuation of the
properties and from the proceedings it is apparent that the method and
procedure which he fixed was with the consent of the parties and no party
raised any objection to this method and procedure 124 before the arbitrator
filed the award in the court to be made rule of the court and further that the
paper (bearing No. 104/37-Kha) which was filed before the arbitrator, wherein
the valuation of the properties was given, was signed by all the parties and
that the arbitrator could fix the value of immovable properties on the basis of
the valuation given in the said paper and the court could not go into the
question whether the method adopted by the arbitrator for the valuation of the
immovable properties was legally erroneous. As regards the valuation of the
movable properties, the Additional District & Sessions Judge held that from
the proceedings recorded by the arbitrator it was apparent that the parties
were asked to furnish valuation of each movable property yet none of the
parties furnished the required prices and in view of para No. 9 of the
arbitration agreement the arbitrator could divide the properties according to
his discretion as no direction was given in the said agreement regarding
valuation of the properties and mode of determination of such valuation. The
Additional District & Sessions Judge also found that in the award valuation
of movables allotted to each share has been given in lump sum figure or
category-wise. As regards the objection in giving proprietary rights over the
family deity to Party No. 2, the Additional District & Sessions Judge held
that under the award the family deity had not been given to Party No. 2 and
that since the property under which the Mandir is situated was allotted to the
share of Party No. 2, the said party was entrusted with the care of the temple.
It was also observed that in the affidavit dated 5- 1-1972, Party No. 2 has specifically admitted that the right to
worship is available to all the parties. The Additional District & Sessions
Judge has also mentioned that the award is a non-speaking award since the
arbitrator was not enjoined to give a finding on each and every item
specifically along with reasoning and he could award particular sum or
particular share in a single word and the award had to be seen in this light.
As regards objection that the shares had not been equally divided amongst the
parties, the Additional District & Sessions Judge observed that under the
agreement the division of the properties was to be made into six shares and at
the time of division the arbitrator was to reduce the shares of the parties by
the amount which was taken by the parties as advance from the joint family and
the arbitrator was also to add any amount that he found due to that party from
the joint family on account of claims of that party and that the arbitrator was
not required to mention in the award the actual amount of advance which the
arbitrator found out on the basis of evidence to be due to the joint family
from any particular party. According to the Additional District & Sessions
Judge the shares allotted were unequal because the amount of advance to the
parties and claims of the parties were unequal which were taken by the
arbitrator into consideration at the time of the partition.
5.
Feeling aggrieved by the said decision of the Additional District &
Sessions Judge, Mayank Srivastava, (Respondent 1 herein) as Party No. 6, and Bhuwaneshwar
Nath Srivastava and Smt Chandrawati Devi Srivastava (Respondents 2 and 3) as
Party No. 3 filed First Appeal No. 8 of 1978 in the 125 Allahabad High Court. A
revision, Civil Revision No. 399 of 1978, was also filed against the decree
passed by the Additional District & Sessions Judge in terms of the award.
The
appeal and the revision were disposed of by the High Court by judgment dated
11-7-1983 whereby the appeal was allowed and the judgment and order of the
Additional District & Sessions Judge were set aside and the objections of
Respondents 1 to 3 and 14 against the award were allowed to the extent as
indicated in the judgment of the High Court and the award dated 21-11-1966 was
set aside. As a result Civil Revision No. 399 of 1978 was dismissed as infructuous.
6. The
High Court rejected the submission of the appellants herein that the
applications for amendment of the objections filed by Parties No. 3 and 6 were
wrongly allowed by the trial court. The High Court also did not accept the
contention urged on behalf of Respondents 1 and 3 herein (appellants in the
High Court) assailing the validity of the agreement dated 3-1-1966 and held
that the joinder of Smt Chandrawati in the agreement and giving of a share to
her along with Bhuwaneshwar Nath did not vitiate the agreement inasmuch as
there never had arisen any conflict between Bhuwaneshwar Nath and his mother at
any stage of the application. As regards non-joinder of the three daughters of Smt
B.N. Srivastava, the High Court held that it is not open to any of the parties
to the agreement to raise the said plea since they have benefited from the non-joinder
of the aforesaid female heirs of Smt B.N. Srivastava in the agreement and the
non-allotment of the shares to these female heirs has correspondingly enlarged
the shares of all the parties. The High Court negatived the contention urged by
Respondents 1 to 3 that the agreement dated 3-1-1966 was not an arbitration agreement
and held that the said agreement is to be construed as arbitration agreement.
The High Court also negatived the contention urged on behalf of Respondents 1
to 3 that the decree was bad for want of an application under Section 17 of the
Arbitration Act, 1940 (hereinafter referred to as 'the Act') by any party. The
High Court rejected the contention that as the arbitrator had already given an
interim award on 5-2-1966 in respect of utensils it was not
open to the arbitrator to make a second award with regard to utensils. The High
Court has, however, found that in recording the proceedings before him the
arbitrator has incorrectly shown the presence of Party No. 6 from 9-10-1966 onwards though that party was actually absent on
those dates and that it constitutes judicial misconduct.
The
High Court has also found that the arbitrator has deviated from the judicial
standard expected of him as an arbitrator in returning the documents mentioned
in paper No. 103/347-Kha of the arbitration record to Bhupendra Nath, Party No.
1, on 1-12-1966, after the arbitrator has already
made the award and a few days before filing it in court along with an
application under Section 14 of the Arbitration Act. The High Court has held
that the award was not totally non-speaking award insofar as mode of valuation
of the immovable properties is concerned. The High Court has further held that
the award suffers from several mistakes apparent on its face. The High Court
has also held that the management of the family deity and control over movables
attached thereto had been illegally allotted to the 126 share of one party
alone. It was also held that the arbitrator has failed to decide the disputes
about the amount of advances taken from the joint family funds by the parties
respectively and to make adjustments in respect thereof in the award as
required to do by the arbitration agreement and has transgressed the limits
within which the arbitrator was required to act in making the award.
7.
Aggrieved by the judgment of the High Court the appellants have filed this
appeal after obtaining special leave. During the pendency of the appeal some of
the parties have alienated some of the properties which have been assigned to
them under the impugned award. Bijendra Nath, Appellant 1, has filed an
additional affidavit to say that Birendra Nath (Respondent 14) Party No. 6 has
executed
(i) a
sale deed on 15-11-1984 in respect of southern-half portion of the double storeyed
premises situated at No. 178/157 (old number) 178/159 (new number), Badri Nath
Road, Golaganj, Lucknow for Rs 75,000 wherein the vendor has claimed to be the
owner of the property by virtue of the impugned arbitration award;
(ii) a
sale deed on 25-2-1988 in respect of a portion of Narain House No. 195/44, Jagat
Narain Road, Lucknow, for Rs 1,10,000, wherein the vendor has claimed to be the
absolute owner of the property by virtue of impugned award;
(iii)
a sale deed dated 25-2-1988 in respect of another portion of Narain House No.
195/44, Jagat Narain Road, Lucknow, for a sum of Rs 30,000, wherein also the
vendor has claimed to be the owner of the said property by virtue of the
impugned award; and
(iv)
an agreement to sell dated 25-8-1989 in respect of Badri Batika, bearing Khasra
No. 178 (old), 199/1 (new), situated at Village Fatehpur, Pargana Tehsil and
District Lucknow and the construction Shivala Dalen, pukka well, etc. for a sum
of Rs 3,75,000 wherein the vendor has claimed to be the owner of the said
property by virtue of the impugned award.
Similarly
Smt Chandrawati Devi, Respondent 2, is said to have executed a sale deed on 29-12-1993 in respect of her 50% share in the land with
building bearing Corporation No. 178/158 situated at Badri Nath Road, Golaganj,
Lucknow for Rs 50,00,000 and Bhuwaneshwar Nath, Respondent 3, is said to have
executed a sale deed dated 31-12-1993 in respect of his half share in the said
property for Rs 5,00,000. Mayank Srivastava, Respondent 1 herein, has filed an
additional affidavit dated 30-3-1994 in
which he has not disputed the aforesaid transfers but has alleged that
immovable properties allotted to the share of Brijendra Nath, Appellant 1
herein, under the impugned award have also been sold under
(i) five
sale deeds executed on 20-8-1975 and five sale deeds executed on 2-2-1976 in respect of portions of bhumidhari plot Nos. 3 and
4 of Village Qasimpur Pakri;
(ii)
sale deed executed on 1-2-1985 in respect of 30,025 sq. ft. of
land of plot No. 238 for Rs 3,06,245;
(iii)
sale deed executed on 12-7-1988 in respect of 2000 sq. ft. of land out of plot
No. 4 for Rs 40,000;
(iv) sale
deed executed on 18-1-1990 in respect of 800. sq. ft. of land
out of plot No. 140/1 for Rs 16,000; and
(v)
sale deed executed on 28-2-1990 in respect of 2340 sq. ft. of land out of plot
No. 140/1 for Rs 70,200 and that Brijeshwar Nath son of Bijendra Nath,
Appellant
1 herein, has sold 1361 sq. ft. of land out of plot No. 140/1/114 for 127 Rs
27,000 by a sale deed registered on 12-4-1993. It has been further stated in
the said additional affidavit that Ravi Srivastava, Appellant 2, has executed
(i) an
agreement for sale of 5422 sq. ft. of land which agreement was registered by
Sub-Registrar at Lucknow on 8-3-1983;
(ii) agreement
for sale executed on 27-1-1988 in respect of plot No. F out of the
open land at Outram
Road in Lucknow allotted to his share under the
impugned award;
(iii)
agreement to sell executed on 1-2-1991 in respect of 400 sq. ft. of land of Chaulakhi Kothi
allotted to his share under the award for Rs 8,50,000; and
(iv) agreement
of sale executed on 26-3-1993 along with Respondents 13, 17 and 18, in respect
of 8000 sq. ft. of Chaulakhi Kothi for Rs 6,00,000. It has been further alleged
that Respondents 9, 1 0 and II have sold away stable land and Khandhal allotted
to them under the impugned award by a registered sale deed executed on
2-5-1991, and that on 22-4-1991 they have also executed an agreement for sale
of 'Glenroy' at Mussoorie which was allotted to them under the impugned award.
It would thus appear that during the pendency of the proceedings the parties,
including Parties No. 3 and 6, have executed several documents of transfer in
respect of properties which were allotted to them under the impugned award.
8. In
this appeal Shri Kailash Vasudev, the learned counsel appearing for Respondent
8, representing Party No. 1, has supported the appellants and the parties who
have contested the appeal are Party No. 3 (Respondents 2 and 3) and Party No. 6
(Respondents 1 and 14).
9. Shri
S.B. Sanyal, the learned Senior Counsel appearing for the appellants, has urged
that the application filed by Respondent 1 for amending the objection petition
was wrongly allowed by the trial court and the High Court was not right in
rejecting the submissions urged by the appellants to assail the said order. The
learned counsel has also urged that it is permissible in law for the arbitrator
to make a non-speaking award and that the impugned award is such an award and
that the High Court was not justified in setting it aside on the view that it
suffers from several mistakes apparent on its face. The learned counsel has
contended that the High Court was in error in holding that the paper bearing
No. 104/37-Kha of the arbitrator's award was not an agreed statement of valuation
of immovable properties and that the immovable properties could not be properly
divided by the arbitrator on that basis. Shri Sanyal has submitted that the
High Court was not justified in holding that the arbitrator has committed
judicial misconduct in incorrectly recording the presence of Party No. 6 from 9-10-1966 onwards in the proceedings before him although the
said party was actually absent on those days.
10. Shri
G.L. Sanghi, the learned Senior Counsel appearing for Respondents 1 and 14, has
supported the judgment of the High Court and has urged that the High Court has
rightly upheld the order passed by the trial court allowing the amendment in
the objection petition filed by Respondent 14 and further that the High Court
was right in setting aside the award on the ground that the arbitrator had misconducted
the proceedings and that the 128 award being not a non-speaking award suffers
from several mistakes apparent on its face.
11. We
will first take up for consideration the question regarding amendment of the
objection petition. In this regard it may be mentioned that amendment was
allowed in the objection petition filed by Respondents 2 and 3 (Party No. 3) by
order dated 9-10-1969 and in the objection petition filed by Respondent 14
(Party No. 6) by order dated 8-5- 1976. The correctness of the latter order
dated 8-5-1976 has been assailed by the appellants before us and we will
confine ourselves to the same. In this context it may be stated that after the
award was filed by the arbitrator in the court on 6-12-1966, notice was issued
to the parties and the said notice was served on Respondent 14 on 21-5-1967.
The
period of limitation for filing the objections was to expire on 3-7-1967 and Respondent 14 filed the objections under
Sections 30 and 33 of the Arbitration Act on 3-7-1967 on behalf of himself and Respondent 1, Mayank Srivastava,
who was a minor at that time. The said objections were 45 in number and in a
number of objections it was alleged that the arbitrator had mis conducted
himself. None of the said objections contains an allegation that the arbitrator
had misconducted by incorrectly recording in the proceedings before him the
presence of Respondent 14 on certain dates although he was actually absent on
those dates. Mayank Srivastava, Respondent 1, attained majority on 14-2-1973.
He did
not file any fresh objection within 30 days of his attaining majority as
provided under Section 6 read with Article 119 of the Limitation Act, 1963.
During the course of the proceedings before the trial court Respondent 14
wanted to adduce evidence to which objection was raised by the appellants on
the ground that it was not covered by the original objections. Thereupon on
24-3-1975 Mayank Srivastava, Respondent 1, filed an application for impleadment
as a party in the proceedings and for raising additional objections. The said
application of Respondent 1 was allowed by the Civil Judge by order dated
8-5-1976 which reads as follows:
"Heard
learned counsel for the parties at length and gone through the objections
already made and the earlier amendment proposed to be made therein. The
objector by the proposed amendment wants to clarify certain points and even to
add fresh particulars of alleged misconduct having been committed by the
arbitrator in giving the award. The proposed amendment does not amount to
depriving the opposite party from any right accrued to them.
Further
the amendment is necessary in order to decide the matter in controversy
involved between the parties. Thus in order to decide the question finally and
effectively the amendment proposed is necessary and essential.
Further,
the opposite party is not prejudiced and can very well be compensated in terms
of money. Thus for the aforesaid reasons the amendment is to be allowed on Rs
50 as costs."
12.
Before the High Court it was urged on behalf of the appellants that new pleas
taken by Respondent 1 in the amendment application were wrongly entertained
inasmuch as an objection to the award could not be 129 raised after the expiry
of 30 days from the date of service of notice under Section 14. It was
submitted that even prior to his attaining majority Respondent 1 was aware of
the arbitration proceedings inasmuch as on 13-1-1972 his presence is noted in
proceedings taken by the Commissioner appointed by the court and that
Respondent 1 had also received copy of paper No. Kha-23/24 on 21-5-1967. The
High Court has found that Respondent 1 did have knowledge of the proceedings
even during minority and also had constructive notice of the filing of the award
after the same was filed and that if no objection had been filed by Respondent
14 within 30 days Respondent 1 could have been precluded from filing new
objections on 24-3-1975 due to bar of limitation.
The
High Court has however observed that the appellants are estopped from
challenging the amendments after having accepted costs allowed to them. The
High Court has also held that all the pleas that were canvassed on behalf of
Respondents 1 to 3 herein were basically taken in the objections that were filed
by Respondent 14 and that paragraphs 46 to 60 which were added by Respondent 1
by way of amendment application contain merely better particulars of what had
already been pleaded in the original objections.
13. In
view of the finding recorded by the High Court that Respondent 1 would have
been precluded from filing a new objection petition on 24-3-1975 due to the bar
of limitation we find it difficult to agree with the view of the High Court
that the trial court did not act on any wrong principle while allowing the
amendments. Since the grievance of the appellants relates to paragraphs 52 and
53 which have been added by way of amendment we have examined the averments
contained therein with reference to the original objections and we are of the
opinion that the High Court was in error in treating the said amendments as
merely better particulars of what had already been pleaded in the original
objections. The High Court appears to have lost sight of the well recognised
distinction between statement of material facts which is required under Order 6
Rule 2 CPC and particulars which are required to be stated under Order 6 Rule 4
CPC. In the context of Section 83(1)(a) and (b) of the Representation of the
People Act, 1951, which contains provisions similar to Order 6 Rules 2 and 4
CPC, this Court, after posing the question, what is the difference between
material facts and particulars, has observed': (SCC pp. 250- 5 1, para 29)
"The word 'material' shows that the facts necessary to formulate a
complete cause of action must be stated. Omission of a single material fact
leads to an incomplete cause of action and the statement of claim becomes bad.
The
function of particulars is to present as full a picture of the cause of action
with such further information in detail as to make the opposite party
understand the case he will have to meet. There may be some overlapping between
material facts and particulars but the two are quite distinct.
1 Samant
N. Balkrishna v. George Fernandez, (1969) 3 SCC 238, 250-51 : (1969) 3 SCR 603,
622 and 623 130 The material facts thus will show the ground of corrupt
practice and the complete cause of action and the particulars will give the
necessary information to present a full picture of the cause of action. In
stating the material facts it will not do merely to quote the words of the
section because then the efficiency of the words 'material facts' will be lost.
The fact which constitutes the corrupt practice must be stated and the fact
must be correlated to one of the heads of corrupt practice. Just as a plaint
without disclosing a proper cause of action cannot be said to be a good plaint,
so also an election petition without the material facts relating to a corrupt
practice is no election petition at all.
If a
petitioner has omitted to allege a corrupt practice, he cannot be permitted to
give particulars of the corrupt practice.
One
cannot under the cover of particulars of a corrupt practice give particulars of
a new corrupt practice. They constitute different causes of action." This
is in consonance with the rule that a charge of fraud must be substantially
proved as laid and that when one kind of fraud is charged, another kind of
fraud cannot, upon the failure of proof, be substituted for it. (See : Abdool Hoosein
Zenail Abadin v. Charles Agnew Turner2.) The same is true for the charge of
misconduct. This means under Order 6 Rule 4 CPC particulars have to be
furnished of the plea of fraud or misconduct raised in accordance with Order 6
Rule 2 CPC and it is not permissible to introduce by way of particulars a plea
of fraud or misconduct other than that raised in the pleadings.
14. In
paragraph 52 which has been introduced by way of amendment it has been alleged
that the arbitrator had misconducted the proceedings by returning the papers
and documents specified in sub-paragraphs (i) to (iii) to the parties who had
submitted the said papers and documents during the course of the proceedings.
In paragraph 53 it has been alleged that the arbitrator had misconducted the
proceedings in falsely showing the presence of Birendra Nath Srivastava,
Respondent 14, in the proceedings dated 18-10- 1966, 20-10-1966, 25-10-1966 and
4-11-1966 and 10-11-1966 in spite of the fact that he fully knew that
Respondent 14 was absent from these proceedings from 10-10-1966 till the close
of the proceedings on 10-11-1966. We have carefully perused the averments
contained in the original objections filed by Respondent 14 on 3-7-1967.
Although in the said objections various acts of misconduct have been imputed to
the arbitrator in several paragraphs, we have been unable to find an averment
in any of the paragraphs imputing misconducts of the nature mentioned in
paragraphs 52 and 53 which were sought to be inserted by way of amendment. The
High 2 (1887) 14 1 A 11 1, 125: ILR (1887) 11 Bom 620 (PC) 131 Court has,
however, referred to paragraph numbers 41 and 45 of the original objection
petition, which read as under:
"41.
That it is apparent on the face of the record filed by the arbitrator that
between the dates fixed for hearing of case, the arbitrator met and heard
individual members in the absence of others. The enquiries made by the
arbitrator behind the back of others have been kept secret and undisclosed.
This procedure of the arbitrator amounts to legal misconduct in the
proceedings.
45.
That in conducting the proceedings the arbitrator has failed to follow the
principle of natural justice and the objector was not given equal opportunity
with others."
15.
The objection in paragraph 41 was to the effect that during the course of the
arbitration proceedings the arbitrator had met and heard individual members in
the absence of others and the enquiries made by the arbitrator behind the back
of others had been kept secret and disclosed. The said objection does not refer
to any misconduct arising on account of recording the presence of a party in
the proceedings even though the said party was not present on the date to which
the proceedings relate. The grievance in paragraph 41 relates to proceedings
before the arbitrator dated 10-2-1966, 14-2-1966, 20-2-1966 and 19-4- 1966 and
27-7-1966, 28-7-1966, 31-7-1966 and 10-8-1966, 14-8-1966 and 4-9-1966 and
5-9-1966 and has been considered separately by the High Court. The High Court
has pointed out that as regards proceedings up to 25-7-1966 all the parties in
their application for extension of time dated 25- 7-1966 have recorded that the
arbitrator had "been extremely fair so far during the conduct of the
proceedings". In view of the said statement the High Court felt that it was
required to scrutinise the conduct of arbitrator only after 25-7-1966. The High
Court has observed that even though on different dates some of the parties were
not present before the arbitrator but the said conduct had been waived and
acquiesced by the parties and could not be complained of in the proceedings.
This would clearly demonstrate that the misconduct which has been alleged in
paragraph number 41 of the original objection petition was a misconduct of a
different nature and not the misconducts referred to in paragraphs 52 and 53.
16.
Insofar as the objection in paragraph 45 of the original objection petition is
concerned we find that it is a general objection regarding failure to follow
the principles of natural justice by the arbitrator and denial of equal
opportunity to the objector. The misconducts referred to in paragraphs 52 and
53 are of different nature and are not covered by the objection in paragraph
45.
17.
Another reason given by the High Court for holding that the order dated 8-5-1976
allowing the amendment could not be assailed was that the said order was
subject to payment of costs and since cost has already been accepted by the
appellants they are estopped from challenging the 132 amendment. As indicated
earlier there were two orders whereby amendments were allowed. One was order
dated 9-10- 1969 whereby the amendments sought by Respondents 2 and 3 in the
objection petition filed by them were allowed and the other was order dated
8-5-1976 whereby the amendments in objection petition filed by Respondent 14
were allowed. The contention based on estoppel arising from acceptance of costs
awarded under the order allowing the amendment was raised by Shri Dhasmana, the
learned counsel for Bhuwaneshwar Nath, Respondent 3, with regard to order dated
9-101969. No such contention was urged by the learned counsel for Respondents 1
and 14 herein as regards order dated 8-5-1976. The acceptance of the contention
urged by Shri Dhasmana, on behalf of Respondent 2, by the High Court can only
mean that the order dated 9-10-1969 has been upheld on that basis. Since no
such contention was advanced by the learned counsel for Respondents 1 and 14 in
support of the order dated 8-5-1976 the said order cannot be said to have been
upheld on that basis.
18.
That apart the principle of estoppel which precludes a party from assailing an
order allowing a petition subject to payment of costs where the other party has
accepted the costs in pursuance of the said order applies only in those cases
where the order is in the nature of a conditional order and payment of costs is
a condition precedent to the petition being allowed. In such a case it is open
to the party not to accept the benefit of cost and thus avoid the consequence
of being deprived of the right to challenge the order on merits. The said
principle would not apply to a case where the direction for payment of costs is
not a condition on which the petition is allowed and costs have been awarded
independently in exercise of the discretionary power of the court to award
costs because in such a case the party who has been awarded costs has no
opportunity to waive his right to question the validity or correctness of the
order. The decision of the Andhra Pradesh High Court in Metal Press Works Ltd.
v. Guntur Merchants Cotton Press Co. Ltd. 3 on which reliance has been placed
by the High Court, proceeds on the basis that awarding of costs was, in fact
and substance, a part of the entire order allowing amendment in written
statement and the said order was a conditional one. The decision of the Madras
High Court in Sree Mahant Prayag Dossjee Varu v. Raja Venkata Perumal4 and the
decisions of the Patna High Court in Ramcharan Mahto v. Custodian of Evacuee
Property5 and Kapura Kuer v. Narain Singh6 on which reliance has been placed in
the said judgment of the Andhra Pradesh High Court also emphasise that the
orders under challenge were conditional orders and payment of costs was a
condition precedent to allowing the petition. In J. Devaiah v. Nagappa7, the
order allowing amendment of the election petition contained a direction
regarding payment of costs. It was held that the application was allowed 3 AIR
1976 AP 205 : (1975) 1 APLJ (HC) 283 4 AIR 1933 Mad 410: 1932 MWN 11 18: 142 IC
903 5 AIR 1964 Pat 275 1964 BUR 291 6 AIR 1949 Pat 491 27 Pat 187 7 AIR 1965 Mys
102 133 without any condition and that the order was not a conditional order
and principle of estoppel was held inapplicable.
19. A
perusal of order dated 8-5-1976 shows that the said order is not a conditional
order. The Civil Judge, after considering the merits has allowed the proposed
amendments.
The
costs were awarded not as a condition precedent to allowing the amendment but
by way of exercise of the discretionary power of the court to award costs to
the opposite party. It may also be mentioned that the appellants did not accept
the said order dated 8-5-1976.
They
assailed the validity of the same at the stage of final hearing before the
trial court but the said contention was rejected by the Additional District &
Sessions Judge on the view that the said order had become final as regards the
proceedings before him and the same could not be recalled or reviewed.
Thereafter, the appellants assailed the correctness of the order dated 8-5-1976
in the appeal filed by Respondents 1 and 3 in the High Court. The principle of estoppel
arising from acceptance of costs so to preclude the appellants from challenging
the validity of the order dated 8-5-1976 cannot, therefore, be invoked in the
facts and circumstances of the present case. Since the grounds given by the
High Court for upholding the order dated 5-5-1976 cannot be affirmed the
amendments allowed by the said order insofar as they relate to insertion of
paragraphs 52 and 53 in the objection petition filed by Respondent 14 are set
aside.
20. We
would now proceed to deal with the question as to whether the High Court was
right in setting aside the award made by the arbitrator. As regards an award
made by an arbitrator under the Act the law is well settled that the arbitrator's
award is generally considered binding between the parties since he is the
tribunal selected by the parties. The power of the court to set aside an award
is restricted to the grounds set out in Section 30 of the Act, namely, (a)
where the arbitrator has misconducted himself or the proceedings; (b) where the
award has been made after the issue of an order by the court superseding the
arbitration or after arbitration proceedings have become invalid under Section
35; and (c) where the award has been improperly procured or is otherwise
invalid. The court can set aside the award under clause (c) of Section 30 if it
suffers from an error on the face of the award. An award might be set aside on
the ground of an error on the face of it when the reasons given by the
decision, either in the award or in any document incorporated with it, are
based upon a legal proposition which is erroneous. In the absence of any
reasons for making the award, it is not open to the court to interfere with the
award. The court cannot probe the mental process of the arbitrator and
speculate, where no reasons are given by the arbitrator, as to what impelled
the arbitrator to arrive at his conclusion. An award is not invalid merely
because by a process of inference and argument it may be demonstrated that the
arbitrator has committed grave mistake in arriving at his conclusion. The
arbitrator is under no obligation to give reasons in support of the decision
reached by him unless under the arbitration agreement or deed of settlement he
is required to give such reasons. If the arbitrator or umpire chooses to give
reasons in support of his 134 decision it would be open to the court to set
aside the award if it finds that an error of law has been committed by the
arbitrator or umpire on the basis of the recording of such reasons. The
reasonableness of the reasons given by the arbitrator cannot, however, be
challenged. The arbitrator is the sole judge of the quality as well as the
quantity of the evidence and it will not be for the court to take upon itself
the task of being a judge of the evidence before the arbitrator. The court
should approach an award with a desire to support it, if that is reasonably
possible, rather than to destroy it by calling it illegal. (See: Champsey Bhara
and Co. v. Jivraj Balloo Spg. and Wvg. Co. Ltd.8; Jivarajbhai Ujamshi Sheth v. Chintamanrao
Balaji9; Sudarsan Trading Co. v. Govt. of
Kerala10; Raipur Development Authority v. Chokhamal
Contractors 11 and Santa Sila Devi v. Dhirendra Nath Sen 12.)
21. In
the present case the High Court has set aside the award of the arbitrator
primarily on two grounds, viz., (i) the arbitrator had misconducted the
proceedings by incorrectly recording the presence of Party No. 6 (Respondent 14
herein) from 9-10-1966 onwards in the proceedings before him although that
party was actually absent on those days; and (ii) the award suffers from
several mistakes apparent on its face.
22. We
would first examine whether the arbitrator can be said to have misconducted the
proceedings by incorrectly recording the presence of Respondent 14 on certain
dates even though the said respondent was actually absent on those dates. In
this regard it may be mentioned that on behalf of Respondent 1 it was contended
before the trial court as well as the High Court that the arbitrator was
partial and the award had been improperly procured from him by the parties who
stand favoured thereby. The trial court rejected the said contention with the
observation:
"Nothing
was shown how the arbitrator has tried to favour Party Nos. 4 and 5." The
High Court has also rejected the contention and has held:
"No
evidence has been pointed out to us which may show that the arbitrator was
partially disposed towards or against any of the parties.
Nor
has any evidence of corruption or dishonesty been given." The allegation
of misconduct which has been found established by the High Court is contained
in paragraph 53 which was introduced by way of amendment allowed by the trial
court under order dated 8-5-1976. The said order insofar as it
relates to the said amendment has been found to be unsustainable by us.
23.
Even though we are of the view that paragraph 53 was wrongly allowed to be
included in the objection petition by way of amendment, we 8 LR 50IA324,331
?AIR 1923PC66 9 (1964) 5 SCR 480, 494-95 : AIR 1965 SC 214 10 (1989) 2 SCC 38,
53-54 :(1989) 1 SCR 665, 683-84 11 (1989) 2 SCC 721 : (1989) 3 SCR 144 12
(1964) 3 SCR 410, 421 : AIR 1963 SC 1677 135 propose to deal with the finding
recorded by the High Court in respect of this objection. In this context it
would be relevant to note that on 6-12-1966 the arbitrator had filed in the
court the award as well as the record of proceedings before him. The objection
petition was filed by Respondent 14 after more than six months on 3-7-1967. He had sufficient time to inspect the said record
before filing the objection petition. He did not, however, raise any objection
in the objection petition to the effect that he had not been taking part in the
proceedings before the arbitrator from 9-10-1966 onwards and that even though he was
absent the arbitrator had incorrectly recorded his presence in the proceedings
since then. This plea was raised for the first time by Respondent 14 in
paragraph 5 8 of his affidavit dated 1-1- 1972, after the arbitrator had died
on 14-12-1970. The said plea was repeated in
paragraph 15 of the affidavit of Respondent 14 dated 4-7-1973 filed by way of evidence. Bijendra Nath, Appellant
1, in his counter-affidavit dated 20-1-1975 raised an objection that the contents
of paragraph 15 of the said affidavit of Respondent 14 are beyond the pleadings
of Party No. 6.
Thereupon
Respondent 1 filed an application for impleadment and amendment so as to
incorporate paragraph No. 53 in the objection petition. It would thus appear
that during the lifetime of the arbitrator Respondent 14 remained silent about
this allegation of misconduct and raised it only in 1972 after the death of the
arbitrator. The High Court was conscious of the fact that this plea was taken
only through an amendment and it could be criticised as an afterthought.
The
only reason that has weighed with the High Court in accepting the version of
Respondent 14 is that the signatures of Respondent 14 are not contained in the
order sheets of the proceedings for the period subsequent to 9-10- 1966 till
the conclusion of the arbitration proceedings although the signatures of other
parties are found in the said proceedings and that the practice followed by the
arbitrator was to obtain the signatures of all the parties under the
proceedings of a particular date irrespective of the fact whether that party
was present or not on that date.
The
charge of misconduct levelled by Respondent 14 against the arbitrator was a
very serious charge. The arbitrator was a retired District Judge who was
closely related to the parties and who (as found by the High Court) until
sometime before 9-10-1966 enjoyed the respect and confidence
of all parties. The High Court has not given any reason why the arbitrator
should have falsely recorded the presence of Respondent 14 at the concluding
stages of the arbitral proceedings. In the absence of corroboration by other
contemporaneous evidence the High Court, in our opinion, should not have
disbelieved the record of the arbitrator merely on the ground that signatures
of Respondent 14 are not found in the record of proceedings. No evidence has
been produced to show that when the matter was pending before the arbitrator
Respondent 14 had expressed his desire to withdraw from the proceedings or his having
raised any objection before the arbitrator about his presence being wrongly
recorded in the proceedings subsequent to 9-10-1976.
The
fact that other parties have appended their signatures to the proceedings which
recorded the presence of Party No. 6 (Respondent 14) without raising any 136
objection about the correctness of the said record lends support to the
correctness of the said record. As regards the absence of an affidavit by Party
No. 1 to rebut the assertion in the affidavits filed by Respondent 14 it may be
stated that the affidavits of Respondent 14 dated 1-1-1972 and 4-7-1973 were
filed before the amendment of the objection petition wherein no such objection
had been taken and this fact was pointed out by Appellant 1 in his counter-
affidavit dated 20-1-1975 filed in reply to the affidavits of Respondent 14
dated 1-1-1972 and 4-7-1973. No further affidavit was filed by Respondent 14 or
Respondent 1 after the order dated 8-5-1976 allowing the amendment. There was,
therefore, no occasion for filing a rebuttal to any such allegation.
24. It
is also pertinent to mention that Respondent 14 had come forward with the case
that he had made an offer of Rs 2,50,000 for Chaulakhi Kothi before the
arbitrator and in this regard the trial court has observed that after the death
of the arbitrator on 14-12-1970 Respondent 14 had filed paper No. 137/Ga on
16-8-1971 containing offer of Rs 2,50,000 for Chaulakhi Kothi and he also took
aid of the brother-in-law of Bhupendra Nath, Party 1, who had filed an affidavit
saying such an offer was made. The trial court has found that while in paper
No. 137/Ga the date of the alleged offer is mentioned to be 18-4-1966 the
brother-in- law in his affidavit (paper No. 241/Kha) has deposed that the offer
was typed and handed over to the arbitrator on 19- 4-1966. The trial court has
also found that there was tampering of paper No. 137/Ga in the court and has
observed:
"Actually
it appears that no offer was made by Party No. 6 and he has tried to make out a
case of offer after the death of the arbitrator." The said finding of the
Additional District & Sessions Judge has not been upset by the High Court.
25.
Having regard to the aforesaid facts and circumstances we are of the opinion
that it would be unsafe to place reliance on the uncorroborated assertion of
Respondent 14, as contained in the affidavits filed by him, the truth of which
has not been tested in cross-examination. The High Court, in our view, was not
justified in recording a finding against the arbitrator on the basis of such
evidence and in setting aside the award on this ground.
26.
The other finding of misconduct relates to the return of documents including
municipal assessment list by the arbitrator to Party No. 1. In this regard it
may be mentioned that in the proceedings of the arbitrator dated 27-7-1966 it is stated:
"Party
No. 1 has brought his written statement, accounts and Municipal Assessment
Statements. They have been explained. Party No. 1 read over his written
statement and accounts.
Party
No.1 has taken back his written statement and some accounts with my permission
to get them typed and arranged within a few days.
Assessment
Statements and some accounts have been left for my examination." In the
order sheet dated 28-7-1966 the arbitrator has recorded:
137
"Party No. 1 has taken back Municipal Assessment Statements and some
accounts to get them typed.
Party
No. 1 will file his written statement account on 30-7-1966." 30-7-1966 order
records:
"Party
No. 1 says that his written statement has not been typed. He requires a few
days' time to file them. Party No. 1 read over his written statement and
accounts. Party No. 1 will file his written statement and accounts on 2-8-1966." Order dated 14-8-1966 shows:
"The
parties have scrutinised and considered the accounts of each other."
27.
From the aforesaid orders it would appear that the Municipal Assessment
Statements had earlier been filed by Party No. 1 before the arbitrator on 27-7-1966 but they were taken back by him on 28-7-1966 to get them typed. But thereafter the same could not
be filed. There is nothing to show that the said Municipal Assessment
Statements had been taken on record as part of evidence or reliance has been
placed on them. If any of the parties wanted to rely on them it was open to them
to produce them as a part of their evidence. They did not, however, choose to
do so. In these circumstances, the fact that the Municipal Assessment
Statements were allowed to be taken back by Party No. 1 for typing and the same
were not produced again by Party No. 1 before the arbitrator could not be
construed to mean that the arbitrator had committed a misconduct.
28. It
has also been observed by the High Court that large number of documents were
filed by Party No. 1 before the arbitrator vide paper bearing No.
103/347-348/Kha and that out of 50 serial numbers in the list all the documents
except those mentioned at serial numbers 20 and 50, were returned by the
arbitrator on 1-12-1966, after he had already made the award and a few days
before filing it in the court. The High Court has referred to the provisions of
Section 14 of the Act which lays down that the "arbitrator shall cause the
award, together with any depositions and documents which may have been taken
and proved before them, to be filed in court" and has held that in view of
the said statutory duty it was not correct on the part of the arbitrator to
return the documents mentioned in the list (paper No. 103/347-348/Kha) after
making the award.
According
to the High Court the arbitrator deviated from the judicial standard expected
of him as an arbitrator in returning these documents. The High Court has not
indicated the nature of these documents and it is not clear whether they were
part of the evidence produced before the arbitrator. The explanation offered
for the return of the documents was that Bhupendra Nath being the karta of the
family often needs the documents in connection with the management of the
family property, was rejected by the High Court on the view that Bhupendra Nath
had ceased to be the karta as soon as the agreement dated 3-1-1966 was entered
between the parties and it was not for him to manage joint property but for the
respective parties to manage the properties falling to the share of 138 each in
accordance with the decision of the arbitrator if and when confirmed by the
court. In the absence of any material to show that the documents which were
returned by the arbitrator to Party No. 1 were part of the evidence produced
before the arbitrator it cannot be said that the arbitrator was at fault in
returning the said documents to Party No. 1 after making the award. Moreover
the said conduct of the arbitrator cannot be regarded as a misconduct in the
conduct of the proceedings or an error in making the award so as to justify the
setting aside of the award. We are, therefore, unable to uphold the findings
recorded by the High Court in setting aside award on ground of misconduct.
29.
The High Court has found that the award suffers from mistakes apparent on its
face for the reason that
(i) the
arbitrator committed error in applying wrong basis for valuation of immovable
properties;
(ii) considerable
items of valuable movables have been omitted from the division and thereby the
parties who were respectively in actual possession or enjoyment thereof have
been allowed to retain undue advantage inasmuch as no adjustment has been made
in respect thereof from their shares while making the allotments;
(iii) the
management of the family deity and control over movables attached thereto have
been illegally allotted to the share of one party alone;
(iv)
the arbitrator has failed to decide the disputes about the amounts of advances
taken from the joint family funds by the parties respectively, and to make
adjustments in respect thereof in his award, as he was required to do by the
arbitration agreement; and
(v) the
value of the shares even according to the valuation made by the arbitrator, is
unequal.
30. We
would first examine the matter of valuation of immovable properties by the
arbitrator. This raises the question whether the award is a speaking award
containing reasons or a non-speaking one. If it is a nonspeaking award it is
not open to challenge on the ground of error apparent on the face of the award.
The High Court has proceeded on basis that the award is not totally
non-speaking and insofar as the mode of valuation of these properties is
concerned, it very much speaks to the extent that the arbitrator discloses two
things, namely- (i) his factual assertion that such and such is the annual
letting value of the property as assessed by the Municipal Corporation; and
(ii) his view that the market value should be 20 times the assessed annual
letting value.
31. We
find it difficult to agree with the said view of the High Court. There is nothing
in the award to indicate the process of reasoning adopted by the arbitrator to
arrive at the market value of immovable properties. Merely because the
arbitrator has mentioned the municipal annual rental value of the property
before indicating the market value of the same does not mean that the value is
fixed on the basis of the rental value and the award is a reasoned award
justifying the court to examine whether the award suffers from an error. It is
settled law that it is not open to the court to deduce reasons in the award or
in the record accompanying the award and proceed to examine 139 whether those
reasons were right or erroneous. This is what appears to have been done by the
High Court in the present case. This was impermissible. We are, therefore, of
the opinion that the High Court was in error in going into the question of
valuation of immovable properties by the arbitrator in the award.
32.
Though it is not necessary, but since the High Court has dealt with the
question of valuation of immovable properties at some length, we have examined
the matter. We must express our inability to endorse the view of the High Court
that the valuation as fixed by the arbitration cannot be sustained. For this
purpose we will proceed on the basis that the valuation in the award has been
fixed on the basis of the valuation given in paper No. 104/37-Kha filed by
Party No. 2 before the arbitrator on 21-7-1966. As noticed earlier the trial
court has held that the said paper contained the valuation of properties as
agreed by all the six parties who had appended their signatures to it and that
the arbitrator could accept the same as the valuation of the properties. The
High Court has, however, disagreed with the said view and has held that the
said paper did not contain the valuation of properties as agreed by all the
parties and that the said paper was filed by Party No. 2 and other parties had
put their initials only in token of having noted the contents of the said
paper. The High Court has also held that the valuation as fixed in the said
paper was not correct.
33.
With regard to filing of paper No. 104/37-Kha it may be stated that on 16-5-1966 the arbitrator had passed the following order:
"The
parties are requested to furnish by 21-5- 1966 Municipal Assessment of all the
immovable properties of the joint family and value of all the articles kept in
Safe Almirah." On 16-7-1966 the arbitrator has recorded:
"Municipal
assessment and valuation of all the joint family properties for the purpose of
stamp duty discussed."
34. On
21-7-1966 Party No. 2 filed one application
and one statement of annual assessment valuation of all the 17 properties. The
said statement of annual assessment valuation (marked paper No. 104/37-Kha)
bears the signatures of all the six parties including Respondents 2 and 14. On 21-7-1966 the arbitrator has recorded:
"Party
No. 2 filed one application and one statement of annual assessment valuation of
all the 17 properties.
All
the above applications and statement will be considered on 30-7-1966 date already fixed for evidence.
The
application dated 16-7-1966 of Party No. 1 shows that House
Property Assessment Statements were filed but this is not a fact.
No
statement was handed over."
35. In
the award the arbitrator has divided the immovable properties in six lots for
each of the six parties and against each property he has indicated the market
value of the same which is the same as stated in paper No. 140 104/37-Kha filed
before the arbitrator on 21-7-1966. The trial court was of the view that the
parties did not produce any evidence regarding the valuation of the properties
except paper No. 104/37-Kha signed by all the parties which showed that the
parties themselves had fixed their own valuation. The trial court has also
observed that the arbitrator decided the market value of the various properties
as given in the award after thorough discussion in the presence of the parties
including Party No. 6 and that the parties did not raise any objection about
valuation before the arbitrator till the date of award or before the
Sub-Registrar at the time of registration of the award and that in the
objection also Party No. 6 did not say that the principle of 20 times annual
municipal assessment has not resulted in arriving at the correct market value
of the properties. The High Court has, however, held that paper No. 104/37-Kha
was not an agreed valuation list submitted by the parties to the arbitrator
inasmuch as the paper does not mention anything about the valuation being
agreed and the arbitrator also has not used the word 'agreed' anywhere in the
award. With regard to the initials of all the parties at the bottom of the said
paper the High Court has observed that the said initials can only be treated as
having been made in token of the parties other than Party No. 2 having noted
the contents of the paper. The High Court also made a reference to the
application submitted in the trial court by Party No. 5 on 5-1-1972 for a direction that the said paper be placed in a
sealed cover and the reply filed by Party No.
2 on
6-1-1972 to the said application wherein it was stated that the said paper was
filed by him (Party No. 2) on behalf of all the parties after thorough
discussion between all of them, as well as the application moved by Party No. 6
on 1-2-1972 saying that Party No. 2 should file an affidavit in support of
allegations contained in his application dated 6- 1-1972 and the subsequent
application dated 12-2-1972 submitted by Party No. 2 that since the application
of Party No. 5 was only for sealing of the document Party No. 2 has no
objection to the document being sealed and, therefore, Party No. 2 was under no
warrant of law to file an affidavit about it. The High Court has observed that
not only the arbitrator's record does not bear that the contention that paper
No. 104/37-Kha was on agreed valuation list but even Party No. 2 which gave
this list to the arbitrator on 21-7- 1966 does not affirm the assertion on
affidavit in spite of a square challenge thrown by Party No. 6.
36. In
our opinion the question as to whether paper No. 103/37-Kha was filed by Party
No. 2 at the request of all the parties is not significant. What is material is
that the said paper which gives a valuation of all the 17 immovable properties
bears the signatures of all the six parties. The signatures on a statement
filed during the course of proceedings before the arbitrator have a different
significance than signatures below the record of proceedings before the
arbitrator. It has not been shown that there were other documents filed 'before
the arbitrator by a party which contained the signatures of other parties in
token of their having noted the contents thereof. We, therefore, find it
difficult to construe the signatures of the other parties at the bottom of
paper No. 104/37-Kha as being appended in token of their 141 having noted the
contents thereof. Furthermore none of the parties produced any evidence before
the arbitrator to prove the valuation of the properties. In the circumstances
the arbitrator could treat the valuation given in the said paper as the agreed
valuation given by all the parties. The controversy which arose subsequently
before the trial court between Party No. 2 and Party No. 6 regarding paper No.
104/37-Kha, to which reference has been made by the High Court, can have no
bearing on the question whether the arbitrator has committed an error in
proceeding on the basis that paper No. 104/37-Kha submitted before him bearing
the signatures of all the six parties is an agreed valuation of the properties.
The said paper was filed on 21-7-1966 and prior to that on 16-7-1966 the
arbitrator bid discussed with all the parties the municipal assessment and
valuation of all the joint family properties for the purpose of stamp duty. The
arbitrator could, therefore, assume that paper No. 104/37-Kha was being filed
in pursuance of the said discussion. Moreover, there is nothing on the record
to show that any of the parties had raised any objection that the valuation
fixed in respect of the properties in the said paper was not correct. The
arbitrator could, in the circumstances, proceed on the basis that the valuation
of the properties was as indicated in paper No. 104/37-Kha.
37.
The High Court has held that the valuation given by in paper No. 104/37-Kha is
not correct for the reasons that
(i) several
immovable properties which were not subject to municipal assessment are shown
as having municipal assessment or annual letting value;
(ii) the
municipal assessment in respect of some of the properties which were subject to
municipal assessment was incorrectly specified and the valuation was based on
that incorrect specification; and
(iii) a
uniform principle of valuation has been applied for tenanted buildings subject
to rent control as well as self occupied buildings and even open lands.
38. In
support of the first reason given by the High Court, Shri Sanghi has pointed
out that certain properties, namely, Stable with land and Khandhal situated in Lucknow,
Matadin House in Lucknow, and Badri Batika, though not assessable to municipal
taxes have been valued by the arbitrator in the award on the basis of Lucknow
Corporation rental value. We find that the valuation that has been placed by
the arbitrator for the aforementioned properties is the same as is set out in
paper No. 104/37-Kha and the arbitrator appears to have notionally fixed the
corporation rental value by dividing the market value of the property as stated
in the said paper by 20 because in respect of other properties the valuation
had been fixed by multiplying the annual rental value by 20 to arrive at the
market value.
The
fixation of the notional rental value in respect of these three properties is
of little consequence because the market value that has been assessed by the
arbitrator for these properties is the same as indicated in paper No.
104/37Kha.
39. As
regards certain other properties, viz., the Mill Area Property at 7 Lucknow, Singharewali
Kothi at Lucknow and Glenroy at Mussoorie it has been pointed out that in paper
No. 104/37-Kha the valuation has been fixed 142 on the basis of incorrect
municipal assessments and to prove the correct assessments for these properties
certified copies of the assessment list were filed before the trial court as
Exhibits 11, 10 and 12. The High Court has held that these certified copies of
the assessment list could be produced before the trial court because the
municipal assessment statements which were submitted by Party No. 1 before the
arbitrator on 27-7-1966 had been taken away by the said party on 28-7-1966 for
getting them typed and the same were not filed again before the arbitrator. In
adopting this course the High Court has assumed, without any evidence on
record, that the certified copies of the assessment list which have been filed
as Exhibits 11, 10 and 12 before the trial court are the copies of the
documents which had been filed by Party No. 1 before the arbitrator on
27-7-1966 and which were taken back by him on 28-7-1966.
Moreover
if any party had any grievance against Party No. 1 having taken back the municipal
assessment statements which were produced by him on 27-7-1966 before the arbitrator, the said party could have either
moved the arbitrator for directing Party No. 1 to produce the same or could
have filed the said statements itself before the arbitrator.
None
of the parties chose to adopt such a course. The only evidence that was adduced
before the arbitrator regarding the municipal assessment of the properties was
that stated in paper No. 104/37-Kha. The award based on the said evidence
cannot be assailed on the basis of additional evidence in the form of certified
copies of the municipal assessment statements produced before the trial court,
which evidence was not produced before the arbitrator.
40. As
regards the application of the same principle of capitalisation of annual
profits to all the properties irrespective of the fact that some are tenanted
buildings subject to rent control and others are self-occupied buildings and
even open land we find that the said principle was adopted in arriving at the
valuation of properties in paper No. 104/37-Kha. In applying the said principle
the arbitrator appears to have proceeded on the basis that the said principle
was acceptable to the parties in respect of all the properties.
41. We
are, therefore, unable to hold that in the matter of immovable properties the
award suffers from an error on the face of it.
42.
The High Court has held that the considerable items of movables on the face of
the award have been omitted from division and as a result the parties who were
respectively in actual possession or enjoyment thereof have been allowed to
retain undue advantage inasmuch as no adjustment has been made in respect
thereof from their shares while making the allotments. In this regard, it may
be stated that the law is well settled that unless so specifically required an
award need not formally express the decision of the arbitrator on each matter
of difference and unless the contrary appears the court will presume that the
award disposes finally of all matters of difference. (See : Santa Sila Devi v. Dhirendra
Nath Sen 12.) In the award the arbitrator has stated:
143
"I
have heard the parties and considered all the points raised by them, the rights
and claims of the parties involved, and the accounts and evidence produced by
them." The arbitrator has also made the following provision in the share
of the movable properties allotted to each of the parties:
"Subject
to the terms of the award Party No. ... will get 1/6 share in all the joint
family property which may be recovered or traced or available for partition
subsequently and it will be distributed after the award." This would show
that in respect of the movable properties referred to in the award the
arbitrator has made the allotment amongst all the six parties in respect of
properties which may be recovered or traced or become available for partition
subsequently and the arbitrator has directed that each party shall get 1/6
share in the same.
This
would show that the arbitrator has fully considered all the claims of the
parties in respect of all the properties available for partition and it cannot
be said that any property has been left out by the arbitrator.
43.
The High Court has also observed that the arbitrator has failed to decide the
disputes about advances taken from the joint family funds by the parties
respectively and to make adjustments in respect thereof in the award as
required to do by the arbitration agreement. It is no doubt true that in clause
9 of the arbitration agreement it is provided that if there be any disagreement
on any figure of the advance between Bhupendra Nath Srivastava and the party
concerned, the same shall be decided by the arbitrator and his decision will be
binding and final on the parties concerned. From the proceedings of the
arbitrator it does appear that the matter of advances has been considered by
the arbitrator. The fact that the arbitrator has not separately indicated in
the award the amount of advance in respect of each of the parties does not mean
that he did not determine the dispute relating to advances. The arbitrator,
after considering the amount of advances, has fixed the shares of each of the
parties in the award. In other wards, the arbitrator has made a lump sum award
for each of the parties. It was permissible for the arbitrator to deliver a
consolidated award on the whole case. (See: Santa Sila Devi v. Dhirendra Nath Sen
12.)
44.
The High Court also found fault with the award on the ground that the value of
the shares allotted to the parties is unequal. But this was bound to happen on
account of difference in the amounts of advance to each of the parties which
had to be adjusted against the shares allotted. It cannot, therefore, be said
that the value of the share allotted to each of the parties under the award is
unequal.
Moreover,
the award cannot be set aside on the ground that the shares allotted are
unequal. In B. Subbarama Naidu v. B. Siddamma Naidu13, this Court has rejected
the contention that the arbitrator 13 (1962) 1 SCR 784 : AIR 1962 SC 671 144
erred in allotting less than half the share in the properties in suit and has
observed:
"Plainly
this objection would not fall either under clause (a) or under clause (b) nor
under the first part of clause (c). The question is whether it could possibly
fall within the second part of clause (c), that is, whether the award is
'otherwise invalid'. In order to bring the objection within this clause learned
counsel contended that the award was bad on its face. It is difficult for us to
appreciate how the award could be said to be bad on its face. When a dispute is
referred to arbitration, the arbitrator has to decide it to the best of his
judgment, of course acting honestly."
45.
Another infirmity in the impugned award, according to the High Court, was that the
worship of the family deity and control over immovables attached thereto have
been illegally allotted to the share of one party alone. Under the award family
Deviji with that and other articles is to be maintained by Party No. 2. The
High Court has held that as the arbitration agreement did not make any mention
of the family deity, the assets attached to same should have been kept under
joint control or been left out of the partition scheme altogether. We find it
difficult to appreciate as to how the award can be faulted on this score. Since
the family deity is kept in one of the immovable properties which had to be
allotted to one of the parties, the maintenance of the family deity had to be
entrusted to the party who was allotted that particular property. The
arbitrator thought it proper to allot the said property to Party No. 2
representing the branch of Bhagwati Nath, the eldest son of late Shri B.N. Srivastava,
and thereby Smt Savitri Devi, wife of Bhagwati Nath, the eldest daughter-in-
law of late B.N. Srivastava has been entrusted with the maintenance of the
family deity. Moreover, as mentioned by the trial court, in the affidavit dated
5-1-1972, Party No.
2 had
specifically admitted that right of worship is available to all the parties.
46.
Before we conclude we may mention that the award has been acted upon by the
parties to a considerable extent in the sense that during the pendency of the
proceedings in court the objectors (Parties No. 3 and 6) as well as other
parties have alienated a number of properties which have been allotted to their
share under the award. Some of the sale deeds or agreements for sale were
executed by Respondent 14 claiming full ownership on the basis of the impugned
award. This is an additional circumstance which persuades us to hold that the
award made by the arbitrator should be maintained and should not be upset.
47.
The appeal is, therefore, allowed. The judgment of the High Court is set aside
and the judgment of the Additional District & Sessions Judge for making the
award the rule of the court is restored. The parties are left to bear their own
costs..
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