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Raja Ram and anr. Vs. Bhim SaIn and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberCivil Revision Appeal No. 374 of 1975
Judge
Reported in15(1979)DLT336
ActsArbitration Act, 1940 - Sections 2 and 30
AppellantRaja Ram and anr.
RespondentBhim SaIn and ors.
Cases ReferredWaverly Jute Mills Co. Ltd. v. Raymon and Co.
Excerpt:
.....learned sub-judge that jia lal, prithvi raj and bhim sen were not parties to the alleged agreement and yet the arbitrator gave an award in respect of their claims as well. 33 under which validity and existence both can be challenged by any party in respect of an award and an agreement as well. all that clearly shows that they had by their conduct agreed to the arbitration of krishnachandra in respect of the dispute between the two brothers in so far as they affected their interests as well......gave an award in respect of their claims as well. bhim sen and prithvi raj did not challenge the award. bhim sen even made an application on march 6, 1974, that the objections were barred by time. the learned sub-judge by his judgment dated march 14, 1975, held that there was no evidence of misconduct on the part of the arbitrator. he further held that there was no fraud or misrepresentation, an j that both the brothers had signed the arbitration agreement on january 29, 1970. besides the two brothers, jia lal, prithvi raj and bhim sen also appeared before the arbitrator and proceedings were signed by them. the learned sub-judge held that there existed an arbitration agreement between the parties. after rejecting the applications under secs. 30 and 33, he directed that the award be.....
Judgment:

M.L. Jain, J.

(1) This revision concerns a dispute between the parties regarding a shop No. 25, Lal Sai Market, and a house No. 4/6, Double Storey, both in Lajpat Nagar, New Delhi. The short facts with which we are immediately concerned seem to be that one Jia Lal had two sons Bansi Lal and Raja Ram and a daughter. They were all living without payment of rent in the said house which belonged to one Bhim Sen who was a brother-in-law of Jia Lal, but who on account of relations having meanwhile strained? had begun demanding rent for the accomodation for the last three years. The shop was allotted to Bansi Lal who was a lessee thereof. He started business in that shop in the partnership of one Jewat Ram. They fell foul with each other and Jewat Ram excluded Bansi Lal both from the business and the shop. After certain negotiations, Jewat Ram agreed to quit the shop and dissolve the partnership if he was paid Rs. 4,400.00 . Bansi Lal could not raise this amount and approached Bhim Sen for help. Bhim Sen by mortgaging the house to one Prithvi RaJ raised an amount of Rs. 4,400.00 repayable in monthly Installments of Rs. 150.00 p.m. Another sum ofRs.1,500.00 had also been borrowed by them from Bhim Sen. After satisfaction of his demand, Jewat Ram vacated the shop. It was then agreed between the parties that the shop and the business shall be transferred to, and run as a sole owner by. Raja Ram provided he repaid the loan in the aforesaid Installments of Rs. 150.00 p.m., the lease money and other taxes to the Municipal Corporation. For the same consideration, he also agreed to pay Rs. 100.00 p.m. towards family expenses to his father Jia Lal and Rs. 50.00 p.m. to Bhim Sen as the rent of the accommo dation in which they were already living. Later on) it appears Raja Ram could not carry out his undertaking and disputes arose between the two brothers. They agreed to refer by a written agreement dated January 29, 1970, their mutual dispute and the dispute about the property of Bhirn Sen for arbitration by Krishna Chandra. The arbitrator examined all the parties concerned in the disputes. Bhim Sen, Prithvi Raj and Jia Lal appeared before the arbitrator and took part in all the proceedings before him. The arbitrator gave his award on April 28, 1970, purporting to be between the aforesaid five persons. The terms of the award are --

(1) The aforesaid shop and its business shall remain in possession of Raja Ram who will pay Rs. 100.00 p.m. to Prithvi Raj who agreed to a reduced amount of Installment if he was paid Rs. 4,700.00 (that is Rs. 300.00 more in view of the delayed repayment). (2) Raja Ram will pay Rs. 100.00 p.m. to his parents as subsistence allowance for their life time. (3) Rs. 50.00 p.m. will be paid by him as monthly rent to Bhim Sen with effect from June 1, 1970. (4) Raja Ram shall also repay Rs. 1,500.00 to Bhim Sen in Installments of Rs. 100.00 p.m. (5) Raja Ram and Bansi Lal will contribute a reasonable amount on the occassion of the marriage of their sister.

(2) The arbitrator, Krishnachandra then, filed his award in the courtof the Sub-Judge) Delhi? on May 3, 1972, under sub-sec. (2) of sec. 14 of the Arbitration Act (hereinafter called the Act). The preface to the award shows that it is between all the said five persons. Raja Ram, Bansi Lal and their father Jia Lal filed applications under sec. 30 for setting aside of the award on the ground of misconduct on the part of the arbitrator. They also moved applications under sec. 33 challenging the validity of the award on the ground of fraud, misrepresentation and excess of powers by the arbitrator. They also stated there was no valid and legal agreement of reference. And, thereforee, the award was void ab initio ineffective and inoperative. It was also urged before the learned Sub-Judge that Jia Lal, Prithvi Raj and Bhim Sen were not parties to the alleged agreement and yet the arbitrator gave an award in respect of their claims as well. Bhim Sen and Prithvi Raj did not challenge the award. Bhim Sen even made an application on March 6, 1974, that the objections were barred by time. The learned Sub-Judge by his judgment dated March 14, 1975, held that there was no evidence of misconduct on the part of the arbitrator. He further held that there was no fraud or misrepresentation, an J that both the brothers had signed the arbitration agreement on January 29, 1970. Besides the two brothers, Jia Lal, Prithvi Raj and Bhim Sen also appeared before the arbitrator and proceedings were signed by them. The learned Sub-Judge held that there existed an arbitration agreement between the parties. After rejecting the applications under secs. 30 and 33, he directed that the award be made a rule of the court, and a decree in terms thereof be drawn up.

(3) This revision has been filed on June 20, 1975, by Raja Ram and Jia Lal against the part of the judgment and decree by which application under sec. 33 was dismissed. Respondent Bhim Sen died on October 5, 1976, and his widow Mst. Kesar Bai also expired on April 29, 1977. One Bagi Bai filed an application for substitution as an heir of Mst. Kesar Bli, widow of Bairn Sen on the basis of a will. One Inder Kumar, who is a nephew of the deceased Bhim Sen, too claimed substitution on the basis of a will nude in his favor by Bhim Sen. This court by its order dated April 26, 1978, asked the trial court to record evidence and report its findings. The lower court reported that the will propounded by Bagi Bai was not proved, but the will propounded by Inder Kumar was. These findings were not challenged, and this court by an order dated September 19, 1978, substituted Inder Kumar in place of Bhim Sen, who too does not challenge the award of the decree. I am told that Inder Kumar had filed an eviction petition against Jia Lal and his sons, which they are contesting on the basis of adverse possession. Prithvi Raj, Bhim Sen and his successor Inder Kumar have not challenged the award. Some portion of the award has been acted upon and money appearspears to have been paid to Prithvi Raj and Bhim Sen in pursuance thereof.

(4) The learned counsel for the respondent submitted at the threshold that the impugned order being appealable under sees. 17 and 39 of the Act no ' revision can be maintained separately against an order rejecting the application under sec. 33. Rulings were also cited on either side but from a bare glance of the various sections of the Act, it appears to me quite obvious that sec. 33 contemplates independent proceedings for a determination that the arbitration agreement or the award did not exist or either of them was not valid. The scope of appeal under sec. 17 is very limited and sec. 39 which provides for appeals against orders does not make a mention of an order under sec. 33. Clause (vi) of sec. 39 provides for appeal against an order setting aside an award. Sec. 30, cl. (b) lays down that an award shall not be set aside except on the grounds, inter alia, that the award has been improperly procured or is otherwise invalid. There appears certain amount of overlapping in secs. 30 and 33 in so far as under both the sections an award can be challenged as invalid, but that does not derogate from the wide and independent scope of sec. 33 under which validity and existence both can be challenged by any party in respect of an award and an agreement as well. thereforee, rejection of an application under sec. 33 cannot be treated as an order refusing to set aside an award. I, thereforee, hold that there being no provision of appeal against the determination under sec. 33, a revision appears to be competent. The preliminary objection is, thereforee, rejected.

(5) The main attack that is made against the award is that while the arbitration agreement was between only two persons, namely, Bansi Lal and Raja Ram, the award decides disputes not only between Raja Ram and Bansi Lal but also between Jia Lal, Bhim Sen and Prithvi Raj. It was urged that there being no agreement of arbitration among all the five persons, the award is without jurisdiction and thereforee invalid. Reliance in this connection was placed on Shri Patanjal and another v. M/s. Rawalpindi Theatres Private Ltd. Delhi, : AIR1970Delhi19 , Waverly Jute Mills Co. Ltd. v. Raymon and Co. (India) Pvt. Ltd., : [1963]3SCR209 , and Jagannath Kapoor and another v. Premier Credit and Installment Corporation (P) Ltd., : AIR1973All49 .

(6) I have considered this objection, and it appears to me that it has no force. The matter can be viewed from two angles, firstly whether the other three persons had agreed to the arbitration; and secondly even if they did not, who can challenge the award and on what grounds Now it appears settled that it is necessary that an arbitration agreement should be in writing but need not be signed by the parties to it. It is sufficient if the terms of the agreement are reduced to writing and the parties have accepted those terms either orally or by conduct, say by adopting or acting upon it. On the agreement dated January 29, 1970, no doubt, there appear only the signatures of Raja Ram and Bansi Lal, but there was nothing to prevent their father, their creditor Prithvi Raj and Bhim Sen, their closs relative? who was all this while helping them not only by providing reside ntial accommodation by permitting them to live with him, but also trying to iron out their financial and commercial difficulties, to agree by conduct to join the arbitration agreement. They appeared and took part in all the proceedings before the arbitrator. Indeed, there is a letter Ex. AW-1/4 written by Bhim Sen to the arbitrator to decide the matter. All that clearly shows that they had by their conduct agreed to the arbitration of Krishnachandra in respect of the dispute between the two brothers in so far as they affected their interests as well. Prithvi Raj and Bhim Sen did not challenge the award and thereforee, there is every reason to believe the statement of the arbitrator that Jia Lal, Bhim Sen and Prithvi Raj had also accepted the written agreement of arbitration though signed by the two brothers only.

(7) Secondly, if all the disputes between Bansi Lal and Raja Ram were to be decided upon, then the matters in so far as they concerned the other three persons had to be decided upon in order to finally settle the problems of the two brothers which as a matter of fact consisted nothing but of (1) the maintenance of their parents, (2) repayment of loan to Prithvi Raj and Bhim Sen and running the business of the shop, and (3) payment of rent to Bhim Sen for living in his house. The award does nothing more than to apportion the assets and liabilities of the two brothers. The substance of the award is that Bansi Lal was to give up his claim to the shop in favor of Raja Ram in consideration of the latter agreeing to repay the loans, run the househld expenditure and also pay rent to Bhim Sen. It is true that a person to an arbitration agreement is not bound by the award even if he appears in the arbitration proceedings without protest and an award will be a nullity where the party has not entered into an agreement but has merely taken steps in the conduct of the proceedings assumed or believed to be true, vide Waverly Jute Mills Co. Ltd. (supra). There is here no doubt that Raja Ram and Bansi Lal who signed the arbitration agreement are bound by the award and cannot challenge it as invalid on the ground that it deals with matters which concern third parties. It thereforee, appears to me that the strangers, if the other three are so treated by reason of their having not signed the agreement, may agree or refuse to be bound by the dispensation which binds the signatories to the arbitration agreement. But, that cannot invalidate the award.

(8) I, thereforee, see no reason to interfere with the impugned order. There appears no lack of jurisdiction in the learned Sub-Judge. He had complete jurisdiction to hold what he did, and appears to have committed no illegality or material irregularity in the exercise of that jurisdiction. In the result, I dismiss this revision petition, but make no order as to costs.


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