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Roshan Lal Anand and anr. Vs. Bachittek Singh and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberFirst Appeal No. 75D of 1958
Judge
Reported in4(1968)DLT524
ActsArbitration Act, 1940 - Sections 30
AppellantRoshan Lal Anand and anr.
RespondentBachittek Singh and anr.
Advocates: M.L. Madhok and; G.S. Vohra, Advs
Cases ReferredFirm Madan Lal Roshanlal Mahajan v. Hukamchand Mills Ltd. An
Excerpt:
.....of the car to respondent no. (7) the learned subordinate judge held that as the plea that the reference to arbitration was invalid as there was no dispute between the parties and the reference bad been made unilaterally by respondent no. 2 had committed default in the payment of hirepurchase money and bad nto returned the car, disputes had arisen between the parties, the subordinate judge was, further, of the view that as the appellants had submitted to the jurisdiction of the arbitrator, they were estopped from challpuging the validity of the reference. the learned judge had observed :frankly speaking, i am nto at all happy with the bench decision of the punjab high court reported as 1986 d. in the circcumstances, the appellants could nto be permitted to question the validity of..........in the present case the award is nto accompanied by any document embodying reasons for the award. the award simply embodies the final conclusion of the arbitrator. the award does nto suffer from any illegality apparent on the face of the award. (17) the result is that the appeal fails and is dismissed with costs. (18) before concluding, it may be pointed out that respondent no, 2 had filed cross-objections in the appeal reiterating the plea which be had taken before the subordinate judge, namely, that the entire hire money was to be paid by roshan lal appellant and respondent no. 2 was nto liable to pay any amount. respondent no. 2 had nto led any evidence in support of the plea in the trial court. he had absented himself and was proceeded against ex parte. there is no force in.....
Judgment:

Om Parkash, J.

(1) This appeal is directed against an order of the learned Commercial Subordinate Judge whereby he rejec- ted the objections of the appellats filed against the award and made the award rule of the Courts

(2) Roshan Lal, appellant, and Harbans Singh, respondent No. 2, as hirers, and Kuldip Singh, appellant, as guarantor, had taken on hire a car No. Dlc 6058 from respondent No. 1 on the basis of the bire.pur. chase agreement. Ex. P./IA, dated the 28th August, 1954. The hirers defaulted in the payment of the Installments of the hire money They also failed to return the car to respondent No. 1, Thus, disputes had arisen between the parties in connection with the hire-purchase agree- ment. In accordance with clause l5(b) of the hire-purchase agreement. respondent No. 1 referred the disputes to the sole arbitration of Shri Sardar Bahadur, Advocate, by its letter dated the 10th August, 1956. The arbitrator issaed ntoices to the parties for the 2Bth August, 19 ?. Respondent No. 1 and the appellants appeared before the arbitrator on that date. Respondent No. 2 had relused to accept ntoice and had nto appeared before the arbitrator. Ha was proceeded against ex parte The proceedings were adjourned to the 23rd September, 1956. On that date, btoh the appellants absented themselves. They were proceeded against ex parte. After recording ex parts evidence the arbitrator made his award on the 6th November, 1956. The arbitrator ordered that the appellants and respondent No. 2 should pay a sum of Rs. 4,496.00 on account of the hire money and interest due and that they should return the car and the case of failure to return, should pay a sum of Rs, 5,000.00 on account of the price of the car to respondent No. 1.

(3) The arbitrator made an application under section 14, Indian Arbitration Act for filing the award and making it rule of the Court. Ntoice of the application was issued to the parties. Respondent No. 1 did nto file any objections against the award. The appellants and respondent No 2 filed objections. Respondent No. 2 pleaded that Roshan Lal appellant, had undertaken to pay the entire balance to respondent No. 1, and that he (respondent No. 2) was nto liable to pay any amount. Respondent No. 2. absented himself after filing the objections. He was proceeded against ex parte.

(4) The objections, taken up, by the appellants, were that the arbitrator had conducted the entire proceedings without giving any opportunity to the appellants to show-cause against the claims of respondent No. 1, that respondent No. 1 had deliberately withheld the production of account books with the result that it had nto disclosed to the arbitrator the fact that it had received a sum of Rs. 7,500.00, that there was no proper reference inasmuch as the agreement to refer the dispate to arbitration was vitiated by the fact that the arbitrator was very intimately connected with respondent No. 1 and this intimacy was nto disclosed to the appellants at the time they had agreed to the nomina of Shri Sardar Bahadur as an arbitrator and that the agreement was unconscionable and was nto binding on the appellants.

(5) Respondent No. 1 contested the above objections. It was pleaded that the arbitrator had issued ntoices to the appellants and that the appellants had appeared before the arbitrator on the 28th August, 1956, but had absented themselves subsequently and the arbitrator had no option but to proceed exparte. It was denied that the arbitrator had nto given opportunity to the appellants to show cause against the claim of respondent No. 1. It was asserted that respondent No. 1 had produced documentary evidence to prove that a sum of Rs. 5,000.00 as the arrears of hire money and antoher sum of Rs. 5.000.00 as the price of the car, were due from the appellants and respondent No. 2. It was denied that the arbitrator was intimately connected with respondent No. 1. It was pleaded that the arbitrator was an independent person and that the appellants had signed the hire-purchase agreement with their free consent. It was denied that the hire-parchase agreement was unconscionable and was nto binding on the appellants.

(6) To the reply filed by respondent No. 1, the appellants filed a rejoinder. In that rejoinder, a plea was taken that there was no dispute or difference between the parties and that the reference to arbitration was, thereforee, incompetent. It was, farther, pleaded that the reference was invalid as it was made by respondent No. 1 alone without the previous concurrence or refusal of the appellants.

(7) The learned Subordinate Judge held that as the plea that the reference to arbitration was invalid as there was no dispute between the parties and the reference bad been made unilaterally by respondent No. 1, was nto taken up in the original objections, the plea could nto be taken up in the rejoinder. Even if the plea could be taken up in the rejoinder, it was nto, according to the Subordinate Judge, established. The Subordinate Judge was of the view that as the. appellants and respondent No. 2 had committed default in the payment of hirepurchase money and bad nto returned the car, disputes had arisen between the parties, the Subordinate Judge was, further, of the view that as the appellants had submitted to the jurisdiction of the arbitrator, they were estopped from challpuging the validity of the reference. The learned Subordinate Judge rejected the objection of the appellants that they had nto been afforded any opportunity to represent their case or that the arbitrator had misconducted himself. As a result of his findings, the Subordinate Judge made the award the rule of the Court.

(8) The appellants have come up in appeal against the order of the learned Subordinate Judge.

(9) It was vehemently contended by the learned counsel for the appellants that referece to the arbitrator had been made unilaterally respondent No 1 and the appellants were nto a consenting party to the reference which was, thereforee, nto valid and the award was liable to be set aside on this ground alone. The learned counsel cited Madhusudan Limited v. Ram Parkash In that case, it was held that a reference to arbitration when there is an agreement between the parties to do so mast be with the consent of btoh the parties and in the absence of such consent, only a court's order under the Arbitration Act can give jurisdiction to the arbitrator. This authority was ntoiced by Hardy J. In Suit No. 5 of 1966, Madhusudan Limited v. Darshan Singh and Harnam Singh. The learned Judge had observed :

'FRANKLY speaking, I am nto at all happy with the Bench decision of the Punjab High Court reported as 1986 D.L.T. 123, as the judgment, in my hamble opinion, proceeds on a mis-apprehension of what was laid down by their Lordships of the Supreme Court in Thawardas Pherumal and antoher v. Union of India.'

(10) However, the principle laid down in 1966 D.L.T. 123 does nto apply to the present case. It has been ntoed in that authority that the principle enunciated, therein, will apply only if the party questioning the unilateral reference has nto submitted to the jurisdiction of the arbitrator. In the present case, the appellants had appeared on the 28th August. 1956 before the arbitrator and afterwards, they had absented themselves. Roshan Lal appellants had been writing letters to the arbitrator seeking adjournments. None of the appellants had ever questioned, before the arbitrator, the validity of the reference or the jurisdiction of the arbitrator to proceed with the arbitration proceedings. In the circcumstances, the appellants could nto be permitted to question the validity of the reference to arbitration,

(11) It was, next, contended,on behalf of the appellants, that the arbitrator had mis-conducted the, proceedings in as much as he bad nto afforded adequate opportunity to the appellants to represent their case. This contention is nto well founded. As already stated, the arbitrator bad issued ntoices to the parties. Respondent no. 2 bad refused to accept ntoice. He had nto appeared. before the arbitrator. the appellants had appeared before the arbitrator on the 28th August, 1956. On that date, the appellants had requested for time for filing the reply to the claim. The proceedings were adjourned to the 23rd September, 1956 for filing the reply. On that date, btoh that appellants had absented themselves. Roshan Lal, appellant, had written a letter, Exh. P/2 to the arbitrator statirg that he had gone to the office of the arbitrator but could nto find him and that he may be informed about the next date of hearing. The arbitrator bad informed Roshan Lal that the next date of hearing was 13th October, 1956. In the next letter, Exh. P/2. Roshan Lal, appellant, had requested the arbitrator to adjourn the case. The arbitrator had adjourned the case to the 28th October, 1956 and had informed Roshan Lal, appellant, of the date. On that date, Rosban Lal, did nto appear. He had addressed antoher letter Exh. P/4 to the arbitrator that he had come to his office on the 28th October, but that the arbitrator was nto there. This letter was received by the arbitrator on the 10th November, while he had made the award on the 6th November, 1956.

(12) The appellants produced two witnesses, Kartar Singh, D.W.2 and Balbir Singh, D.W. 3, who had stated that they had accompanied Roshan Lal appellant to the office of the arbitrator on various dates and that the arbitrator was nto to be found there. The evidence of these witnesses stand contradicted by the evidence of the arbitrator, who had appeared as Public Witness 3 and the evidence of Ram Murti. Public Witness 1 and Gurnam Singh Public Witness 2. The arbitrator. Shri Sardar Bahadur, P.W. 3, an advocate, had stated that the appellants had appeared before him only on the 28th August 1956 and after that, they had absented themselves. Shri Ram Murti, Public Witness 1, Accountant of respondent 14 and Shri Gurnam Singb, Managing Director of Respondent No, 1, stated that they had appeared before the arbitrator on various dates but the appellants had nto appeared except on the 28th August, 1958. The appellants were given adequate opportunity to represent their case but they had failed to avail of that opportunity.

(13) It was next contended, on .behalf of the appellants, that the arbitrator was guilty of misconduct. The first ground taken in that connection was that the arbitrator was intimately interested in respondent no. I and this fact was nto disclosed to the appellants at the time of the execution of the hire-purchase agreement. The appellants did nto produce any evidence about the interest the arbitrator had in respondent no. 1. In the cross-examination of Shri Sardar Bahadur, R.W. 3, the arbitrator, it was admitted, that he..had made.toher awards also in connection with the hire-purchase agreement in favor of respondent no. 1. The number of the awards.made and made, and the amounts involved in the awards were nto brought out in cross examination. From the mere fact that the arbitrator.had given toher awards in favor of respondent No. 1, it cannto be inferred that.he was biased in favor of rcspondent No. 1.

(14) The second ground taken up, in connection with the misconduct of the arbitrator was that .he had accepted .fees from respondent No.1 It was held in Union of India v. Bakhshi Ram, that there is ntohing objectionable if the Umpire endeavors to realize, his fees from a party.

(15) THE.APPELLANTS had failed to prove that the arbitrator had comitted any misconduct.

(16) Finally, it was contended on behalf of the appellants, that the arbitrator had failed to take ntoe of certain payments and that the award was nto supported by any evidence. Shri Sardar Babadur, P. W. 3, the arbitrator, had stated that he had perused the account book of respondent No. 1 with respect to the hire purchase agrement in dispute and that his award was based on the accounts, submitted by respoadent No. 1. So, there was evidence in support of the award. The appraisement of evidence by the Arbitrator is ordinarily never a mitter which the Court questions and considers. The arbitrator is the only judge of the quality of the quantity of evidence and it will nto be for the Court to take upon itself the task of being a fudge of the evidence before the Arbitrator, see Haji Ebrahim Kassam Cochinwaslla v. Northern Indian Oil Inaustries Ltd., It is well settled that an arbitrator's award is final btoh on fact and law and a Court cannto review the award and correct any mistake in his adjudication unless objection to legality of award is apparent on the face of it, vide Firm Madan Lal Roshanlal Mahajan v. Hukamchand Mills Ltd. An error of law. on the face of the award, means that one can find in the award or a document actually incorporated thereto, as for instance, a ntoe appended by the arbitrator slating the reasons for his judgment, some legal proposition which is the basis of the award and which one can say is erroneous. In the present case the award is nto accompanied by any document embodying reasons for the award. The award simply embodies the final conclusion of the arbitrator. The award does nto suffer from any illegality apparent on the face of the award.

(17) The result is that the appeal fails and is dismissed with costs.

(18) Before concluding, it may be pointed out that respondent No, 2 had filed cross-objections in the appeal reiterating the plea which be had taken before the Subordinate Judge, namely, that the entire hire money was to be paid by Roshan Lal appellant and respondent No. 2 was nto liable to pay any amount. Respondent No. 2 had nto led any evidence in support of the plea in the trial Court. He had absented himself and was proceeded against ex parte. There is no force in the cross-objections which will stand dismissed.


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