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Sheo NaraIn Vs. Bala Rao - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtAllahabad
Decided On
Reported inAIR1932All348; 137Ind.Cas.198
AppellantSheo Narain
RespondentBala Rao
Excerpt:
.....lab ic 1858 overruled]. - is not open to a party to an agreement of reference to revoke the submission to arbitration except for good cause and that a mere arbitrary revocation of the authority is not permitted :pestonjee nussurwanjee v. 7,00p in cash and on the failure of the latter to make the payment, the former will be entitled to recover it legally through court and no objection of sheo-narain against it will be maintainable. the debts formed part of the divisible assets and were clearly capable of partition. 9. for the reasons stated by us, we are distinctly of opinion that the arbitrators, in not dividing the debts, have not acted according to the scope of the reference and that in view of the circumstances of this case and the terms of the reference they had no authority to..........one sheo narain defendant in suit no. 21 of 1929 of the court of the subordinate judge of jhansi. sheo narain and bala rao respondents were sons of one ganesh. ganesh died leaving considerable property. there was a dispute between his two sons as regards their share in the said property. mt. dulari is the widowed aunt of ganesh. she claimed a right of maintenance.2. the dispute between bala rao and sheo narain reached such an acute stage that the police sent up a complaint against them in the court of the magistrate recommending that they should be bound over under section 107, criminal p.c. during the pendency of the proceedings against them under section 107, criminal p.c. two agreements were entered into between bala rao and sheo narain on 13th september 1928, under which they agreed.....
Judgment:

Sen, J.

1. This is an appeal by one Sheo Narain defendant in Suit No. 21 of 1929 of the Court of the Subordinate Judge of Jhansi. Sheo Narain and Bala Rao respondents were sons of one Ganesh. Ganesh died leaving considerable property. There was a dispute between his two sons as regards their share in the said property. Mt. Dulari is the widowed aunt of Ganesh. She claimed a right of maintenance.

2. The dispute between Bala Rao and Sheo Narain reached such an acute stage that the police sent up a complaint against them in the Court of the Magistrate recommending that they should be bound over under Section 107, Criminal P.C. During the pendency of the proceedings against them under Section 107, Criminal P.C. two agreements were entered into between Bala Rao and Sheo Narain on 13th September 1928, under which they agreed that their disputes should be referred to the arbitration of a board of arbitrators consisting of seven persons. Mt. Dulari joined in one of these agreements. On 17th October 1928, Sheo Narain gave a registered notice to each one of the seven arbitrators intimating that he had revoked the agreement of reference and that the arbitrators therefore should not proceed to make an award. On 23rd January 1929, Bala Rao, by way of a counter move applied in the Court of the Subordinate Judge of Jhansi under Schedule 2, para. 17, Civil P.C. that the agreements, dated 13th September 1928, be filed in Court. On 6th April 1929, the arbitrators delivered an award. Thereupon Bala Rao withdrew his application dated 23rd January 1929 and presented an application on 27th June 1929 under Schedule 2, para. 20, Civil P.C. that the award be filed in Court. This application was numbered and registered as Suit No. 21 of 1929 in the Court of the Subordinate Judge of Jhansi. Notice of this application was served upon Sheo Narain, who contested the application upon various grounds which are to be found in his petitions dated 50th July 1929 and the 8th August 1929. Only some of his objections are material for the purpose of the appeal before us. The learned Subordinate Judge dismissed the objections of Sheo Narain, upheld the award and directed that a decree be framed in terms of the award. This order of the Subordinate Judge has been challenged in appeal before us by Sheo Narain, and three points have been argued.

3. It has been contended that Sheo Narain had revoked the reference by registered notices, dated 17th October 1928 and that as the result of the said revocation, the arbitrators were functus officio on 6th April 1929 when they delivered the award. It is a settled rule of law that if; is not open to a party to an agreement of reference to revoke the submission to arbitration except for good cause and that a mere arbitrary revocation of the authority is not permitted :' Pestonjee Nussurwanjee v. Manokhjee & Co. [1868] 12 M.I.A. 112, Bansi Dhar v. Sital Pershad [1906] 29 All. 13 and Bam Chandra Pal v. Krishan Lal Pal [1912] 17 I.C. 600. The ground on which the agreements were sought to be revoked was that one of the arbitrators, namely Gayadin, had figured as a witness for the prosecution in the case under Section 107, Criminal P.C. This was no ground at all for reasiling from the agreements. Where parties have once agreed to a submission to arbitration, the agreement is binding and enforceable and cannot be annulled except for some such reason as that the agreement had been obtained by fraud, coercion or undue influence. It is opposed to all legal principles to allow a party to the agreement to revoke it at his sweet will and pleasure. We hold that the plea put forward by Sheo Narain did not put an end to the agreement of reference and that the award was properly made.

4. It is next urged that the legal effect of Bala Rao's application, dated 23rd January 1929 that the agreement of reference be filed in Court was to oust the jurisdiction of the arbitrators. No authority has been cited in support of this contention and we are aware of none. The scope of para. 17, Schedule 2, is no more than this : that where an agreement of reference to arbitration has been entered into by the parties but the arbitrators have not so far functioned, the Court has power to enforce the agreement against the parties where the arbitrators are ready and willing to act in terms of the reference. Para. 17, Schedule 2, far from implying an ouster of jurisdiction, predicates that the arbitrators have the jurisdiction to act on the reference and that the Court should step in and ask them to exercise their powers as arbitrators if they are agreeable to do so. We overrule the contention of the appellant and hold that the application of Bala Rao, dated 23rd January 1929, did not take away the jurisdiction of the arbitrators to make an award.

5. Lastly, it has been urged that the arbitrators have not partitioned the property in dispute according to the terms of the reference and that therefore the award should not be filed under para. 20, Schedule 2, Civil P.C. The material portion of the agreement of reference is as follows:

Where as a dispute has arisen, between us the executants as regards the claim of maintenance of Mt. Dulari and as regards the partition of the assets of Upadhya Ganosh deceased which consisted of bonds, promissory notes, money-lending business, bahikhata account, grain, cash, houses, miscellaneous articles, business, ornaments in hand and in the possession of Mt. Dulari, widow of Sheo Bakhan Lal and whereas this dispute cannot be settled without arbitration, we therefore agree to appoint the following persons as arbitrators and umpire.... Whatever decision is given by the majority of the arbitrators and umpire in respect of the abovenamed properties and in respect of the points in controversy between the parties and their respective rights shall be binding on us.

6. The estate of Ganesh Upadhia consisted inter alia of certain amounts due to him on bonds, promissory notes, money-lending business and bahikhata accounts, the total of which amounted to Rs. 14,000. The arbitrators have not divided these debts half and half between Sheo Narain and Bala Rao. They have treated the entire debts as realizable assets belonging to Ganesh and have allotted them en bloc to the share of Sheo Narain and have directed Sheo Narain to pay in cash Rs. 7,000 to Bala Rao as being the cash equivalent of his share in these assets. They have made the following remark in their award:

That whatever be the genuine valuation of the aforesaid assets of the deceased Sheo Ganesh in possession of Ganesh comprising of bonds, promissory notes, bahikhata account, shall continue as before in possession of Sheo Narain because of convenience in realization, and as Bala Rao is entitled to half its value, in lieu of it, Sheo Narain will pay him Rs. 7,00p in cash and on the failure of the latter to make the payment, the former will be entitled to recover it legally through Court and no objection of Sheo-Narain against it will be maintainable.

7. It has been contended on behalf of the-appellant that having regard to the terms-of the reference, the arbitrators were bound to divide the debts aforesaid half and half between Sheo Narain and Bala Rao, that they were not competent to-allot the whole debt to Sheo Narain and to direct him to pay Bala Rao Rs. 7,000 in cash as the value of his share and that this constitutes a serious legality which, invalidates the entire award. The learned Subordinate Judge was of opinion that the method adopted by the arbitrators-was 'very unreasonable' and that 'the more discreet arbitrators would have-divided the debts themselves.' The Court however held that the scope of the reference was wide enough to enable the arbitrators to deal with the matter in the way in which they had done. The Court observes:

No restriction whatsoever has been placed on the powers of the arbitrators. In dividing a. property between two parties, the arbitrators would have certainly the power to give the property or a larger part to one and to award compensation to the other. The present case is similar to this.

8. We are of opinion that where arbitrators are appointed to make a partition of; certain property, in the absence of express directions, they have an unfettered discretion as to the mode of partition and the consequent allotment of shares. Where the property is of such a nature and character as not to admit of partition, or where the division of the property is calculated to seriously impair its enjoyment, the arbitrators can properly refrain from dividing the property into small portions and allotting them to the several claimants. In such a case the proper course is to allot the property to a particular party and with a view to equalize the share to make the said party pay the money equivalent of the share to the other party or parties who may have a claim therein. The governing idea in the agreement of reference was that the arbitrators were appointed to partition the entire property which descended from Ganesh. The debts formed part of the divisible assets and were clearly capable of partition. The agreement of reference is that the dispute between the two principal claimants was with reference to the partition of that property and the executants asked for a decision from the arbitrators in respect of the abovenamed property and in respect of the points of controversy between the parties and their respective rights thereto. Wide and expensive as these powers are, they did not authorize the arbitrators to refrain from dividing such of the assets as were capable of division. The arbitrators were certainly not justified in directing Sheo Narain to pay Rs. 7,000 to Bala Rao as the cash equivalent of his share. We do 'not see any real difference between the facts of this case and those of Mustafa Khan v. Phulja Bibi [1905] 27 All. 526. In this case, it was the duty of the arbitrators to divide a number of debts outstanding in connexion with a timber trade. The arbitrators did not divide the debts but directed that one of the appellants and he only should collect these debts and account to the other parties in respect of them. It was held that the arbitrators had travelled outside the provisions of the submission and that the award could not be filed.

9. For the reasons stated by us, we are distinctly of opinion that the arbitrators, in not dividing the debts, have not acted according to the scope of the reference and that in view of the circumstances of this case and the terms of the reference they had no authority to allot the debts en bloc to Sheo Narain and to direct that Sheo Narain should pay Rs. 7,000 to Bala Rao. We hold therefore that the award in question was not a valid award and that the Court was not competent to enforce it on an application under para. 20, Schedule 2, Civil P.C. We therefore allow the appeal, set aside the order of the Subordinate Judge, dated 10th July 1930, and direct that the petition, dated 27th June 1929, be dismissed. As Sheo Narain has not succeeded in all his pleas and in view of the way in which he conducted his case in the Court below, we make no order as to costs.


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