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Mehar Chand and anr. Vs. Magan and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtPunjab and Haryana High Court
Decided On
Case NumberFirst Appeal from Order No. 70 of 1950
Judge
Reported inAIR1952P& H364
ActsArbitration Act, 1940 - Sections 30
AppellantMehar Chand and anr.
RespondentMagan and anr.
Appellant Advocate P.C. Pandit, Adv.
Respondent Advocate C.L. Aggarwala, Adv.
DispositionAppeal dismissed
Cases ReferredOmanhene Kobina Foli v. Chief Obeng Akessee
Excerpt:
.....of the joint hindu family of the parties. the trend of the application shows that he was not satisfied with the award. that may be a good reason for not including it in the property which is in possession of the parties......ram, a very close relative, was appointed an arbitrator by mehr chand, the father, dina nath and magan nath sons of mehr chand and sham devi, widow of a pre-deceased son, jagan nath, to arbitrate on the disputes which had arisen between the parties in regard to urban property in the district of hoshiarpur which was the joint family property of the parties. it was there provided that kanshi ram had been appointed the arbitrator and he was given the power to decide in any manner that he liked in regard to the sakni or urban property of the joint hindu family of the parties. the parties also undertook that the decision so given will be binding on them and that from the date of the agreement the joint hindu family will be considered to have been disrupted. on the 8th of december 1948 an.....
Judgment:

Kapur, J.

1. This is an appeal against an order of Mr. Ram Lal, Subordinate Judge, 1st Class, Hoshiarpur, dated the 2nd of May 1950, setting aside the award made by Kanshi Ram, the arbitrator.

2. By an agreement dated the 13th of September 1948, Exhibit P. 1, Kanshi Ram, a very close relative, was appointed an arbitrator by Mehr Chand, the father, Dina Nath and Magan Nath sons of Mehr Chand and Sham Devi, widow of a pre-deceased son, Jagan Nath, to arbitrate on the disputes which had arisen between the parties in regard to urban property in the District of Hoshiarpur which was the joint family property of the parties. It was there provided that Kanshi Ram had been appointed the arbitrator and he was given the power to decide in any manner that he liked in regard to the sakni or urban property of the joint Hindu family of the parties. The parties also undertook that the decision so given will be binding on them and that from the date of the agreement the joint Hindu family will be considered to have been disrupted. On the 8th of December 1948 an award was given by Kanshi Ram which was registered on the 9th of December 1948. It appears that no notice in writing was given to the parties of the making of the award. On the 26th of May 1949, Magan Nath applied for the filing of the award. The trend of the application shows that he was not satisfied with the award. On the 21st of June 1949, the award was filed in Court and on the 12th of July 1949, Magan Nath filed several objections to the validity of the award, the objections being that the arbitrator had omitted to decide the question of alienations made by the father, Mehr Chand, that the arbitrator had not afforded opportunities to the parties to adduce evidence and he had made enquiries behind their back, that the arbitrator was under the influence of Mehr Chand and his son Dina Nath and had not partitioned the whole of the property in dispute, that the partition was unequal and that the arbitrator had not the power to give a direction that the property allotted to Sham Devi would, in the event of her death, go to Mehr Chand. The respondents filed their written statement denying the allegations contained in the objection petition. The learned Judge held in favour of the applicant objector on all the points.

3. In appeal it has been submitted in the first instance that there was no misconduct on the part of the arbitrator, and the counsel for the appellant has taken me through the evidence of Kanshi Ram. It has been stated by Kanshi Ram as P. W. 4 that he had been appointed to decide the question of alienations made by Mehr Chand but he did not decide them, that he recorded no evidence and did not give the parties any opportunity to adduce evidence and that he had never issued any notice to the parties because the value of the properties had been mentioned to him by the parties and he had consulted them with regard to it but he had never gone to see the property himself. He has also stated as follows :--

''In Jandiala I had taken advice in regard to my award. I consulted Lala Ganda Mal and this was in the absence of the parties. I told Lala Ganda Mal as to how the partition should be done and he agreed with my opinion. This was a few days, that is, five or ten days before I had written the award. When I got the award written by Amrit-sarya I came to Hoshiarpur and stayed there seven-eight days. I cannot remember as to when during this stay of mine I made up my mind as to the lots to be drawn.'

Further on he stated as follows :--

'I never went to the house of Magan Nath for the proceedings. When I used to take proceedings, it was not necessary that all the four parties should have been present. Mostly Mehr Chand and Dina Nath used to be present and if it was necessary I used to send for Magan Nath also. I did not think it necessary that the parties should be present before me for the proceedings. Mehr Chand used to be present all the time; others used to be there sometimes.'

In cross-examination, Kanshi Ram has stated that he had only made the award with regard to the urban (sakni) property. He also said that when he drew up the lots he told the parties and they gave their consent and it was after their consent that he got the award written, that he had also asked the objector, Magan Nath, as to the property, that he consulted the other respondents, that is, Mehr Chand and Dina Nath, and that when the award was written by Amritsarya, Magan Nath was present and the award was read out to them and they accepted the award. It is significant that the award was not signed in token of acceptance by the parties. The reason given by Mehr Chand is that Amritsarya had told him that it was not necessary. I am unable to accept the testimony of this witness on this point. He had drawn up the lots of. agricultural land as also applications for mutation of agricultural land. Both the lots and the applications were signed by the parties. The applications of course had to be signed, but if Kanshi Ram thought it necessary to get the different lots signed, there is no reason why he should have relied on the dubious advice of Amritsarya that it was not necessary to get the consent of the parties to the award by getting their signatures.

4. Two points arise for determination in regard to the award. The first is whether there was the consent of the parties. (After discussing the evidence the Judgment proceeded:) After going through the whole evidence, I am in agreement with the finding of the learned trial Judge that consent has not been proved.

5. Coming now to the question of misconduct, there is no doubt that Kanshi Ram did not give any notice to the parties to produce any evidence that they wished to and that he was making enquiries from respondents Nos. 2 and3 in the absence of Magan Nath. This is quite clear from his own evidence. Magan Nath has also stated that he did want to produce evidence but he was not given an opportunity to do so. Counsel submits that as no application was made to him by Magan Nath that he wanted to produce evidence, it was not necessary for the arbitrator to give any opportunity. With this submission I am unable to agree. It is the duty of the arbitrator to call upon the parties to produce such evidence as they think necessary and in this case this was not done. On the other hand, enquiries were being made by the arbitrator in the absence of the parties. I am also unable to believe the statement of Kanshi Ram that he had made any enquiries from Magan Nath as to the value of the properties. He has no record of proceedings and his evidence on the whole is very unsatisfactory and the estimate which has been made of his statement by the trial Judge seems to be absolutely justified. It is also clear from his statement that he was consulting Lala Ganria Mal in the absence of the parties. In justification of what the arbitrator did, counsel has referred to me Exhibit P. 1, the arbitration agreement, in which it is stated that the arbitrator will have the power to make any decision he likes in regard to the joint Hindu family of the parties. This does not give him an overriding power of making enquiries in the absence of the parties, to receive evidence from one party in the absence of another or to consult others in regard to what award he should make. As a matter of fact it has been held by Indian Courts that even where there is an express agreement that no objection would be taken to an award on any ground whatsoever the parties are not deprived of the right of raising objections as to the validity of the award on the ground of misconduct or otherwise. See 'Gopi Nath v. Manohar Lal', F. A. O. 132 Of 1941 and 'Ram Jawaya Mat. v. Devi Ditta Mal', 117 Pun Re 1916 and 'Ranga v. Sithaya', 6 Mad 368. The law has been stated by Sir N. N. Sircar in his Law of Arbitration in British India in the following words:

'Whatever the latitude permitted to them as already set out, the first principles of justice must be applied by the arbitrators, be the arbitration commercial or of any other kind. Though intending no injustice they must observe the fundamental rules which govern judicial proceedings: 'In Re Gregson and Armstrong', (1894) 70 LT 106......'

6. It has been laid down by their Lordships of the Privy Council in 'Omanhene Kobina Foli v. Chief Obeng Akessee', AIR 1934 PC 185. as follows:

'The idea that the arbitrator, untrammelled by rules of procedure, evidence and fundamental principles of law and justice, can settle disputes in a manner which appears to him to be fair is an erroneous idea as has already been stated.'

7. Among the fundamental rules the following has been laid down: 'The arbitrator must proceed in the presence of both parties'. It is not necessary to quote the rulings which are given at page 174 of his book by Sir N. N. Sircar:

'He cannot hold consultation with parties andreceive information from a party without theknowledge of the other.'

See p. 172 of Sircar's book.

8. Consultation with outsiders has also been held to be a material point which vitiates an award. On this point also I am in agreement with the finding of the learned Judge that the arbitrator was guilty of misconduct.

9. Both counsel have urged on me the necessity of my deciding as to whether the dispute about alienations had been referred to the arbitrator or not. In view of what is said above, it does not seem necessary, but as far as I can see what was referred to the arbitrator was to decide disputes between the parties in regard to urban property in Hoshiarpur District which was possessed by the joint Hindu family. Any property which had gone out does not seem to be within the ambit of the arbitration agreement, but the arbitrator has stated it was and if it was, it was his duty to decide the matter.

10. The next question which has been raised is that there was only a partial partition. The trial Court has found in favour of the objector on this point; and after going through the evidence it appears to me that this finding is not justified. Counsel for the appellant submits that the property which was not included in the partition had been washed away by 'cho' action. That may be a good reason for not including it in the property which is in possession of the parties. But as I have said above, this is not a very material point and to my mind it does not affect the validity or otherwise of the award.

11. A point was urged by the counsel for the appellant that the application for filing of the award was made beyond 90 days allowed by Article 178, Limitation Act. I am unable to agree with this submission. I have already held that the award was not made with the consent of Magan Nath, nor is there any evidence to show that he knew as to when the award was given. At any rate, Section 14 of the Arbitration Act requires that a notice in writing should be given by the arbitrator as to the signing etc. of the award. No such notice was given. In the absence of that, there is no material on which I can hold that Magan Nath has come to Court beyond 90 days from the date of the making of the award.

12. In the result, this appeal fails and isdismissed and the respondent will have his costsin this Court.


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