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Kovur Parvathamma Vs. Kovur Subbamma and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtChennai
Decided On
Reported inAIR1935Mad349; 157Ind.Cas.607; (1935)68MLJ537
AppellantKovur Parvathamma
RespondentKovur Subbamma and anr.
Cases ReferredLachman Machhua v. Moghal Mian
Excerpt:
- - 1. i must hold that it has been clearly proved that when the arbitrator was chosen, the plaintiff was aware: i take it also as established beyond doubts that her pleader acted in her best interests and perfectly bona fide. there are two principles well settled: 238: they (the parties) knew well that he possibly or probably must be committed to a prior view of his own and that he might not be impartial in the ordinary sense of the word it is no part of our duty to approach such curiously coloured contracts with a desire to upset them. that being so, there can be no doubt that the arbitrator has an interest so connected with his duties as to render it unjust that the plaintiff (granting that she bad no knowledge of the fact) should be held bound by the agreement......desiring to uphold the reference, to show that not only was the plaintiff dimly conscious of the fact that the arbitrator had an interest but that she thoroughly comprehended the transaction and was made aware of the implications and the consequences of her act. that onus, it is not pretended, has been discharged; indeed to this aspect of the case no one seems to have drawn the lower court's attention.5. i must therefore set aside the lower court's order and revoke the reference.6. mr. subramania sastri for the respondents contends that the plaintiff has misconceived her remedy, there being no provision in the civil procedure code, enabling her to make an application of this kind. i am not prepared to agree that her only remedy is to attack the award after it is made. the court has in.....
Judgment:

Venkatasubba Rao, J.

1. I must hold that it has been clearly proved that when the arbitrator was chosen, the plaintiff was aware: that he had such an interest as would ordinarily disqualify him' from acting as such. I take it also as established beyond doubts that her pleader acted in her best interests and perfectly bona fide. The question is, can the reference in these circumstances-be revoked? There are two principles well settled:

1. An arbitrator, who has an interest dependent upon his decision, will be disqualified if that fact has not been disclosed at the time of his appointment.

2. If the parties with full knowledge of the facts, select an arbitrator who has to perform other duties which will not permit of his being an impartial person in the ordinary sense of the words, the Court will not release them from the bargain upon which they have agreed.

2. Russel on Arbitration, 12th Edn., pages 40 and 41.

3. The reason for the second rule is thus stated by Bowen, L.J., in Jackson v. Barry Railway Co. (1893) 1 Ch. 238:

They (the parties) knew well that he possibly or probably must be committed to a prior view of his own and that he might not be impartial in the ordinary sense of the word It is no part of our duty to approach such curiously coloured contracts with a desire to upset them... To do so would be to attempt to dictate to the commercial world the conditions under which it should carry on its business.

4. In the present case the facts are these. The suit, which has been referred to arbitration, relates to the partition of an estate. A material issue in the case seems to be, are certain debts binding upon the plaintiff and is her share in the estate liable for them? Now it transpires that the arbitrator, who is a pleader, had been retained by some creditors of the estate who contend that the plaintiff's share is liable for their debts and that some suits had been filed by him on their behalf inter alia against the plaintiff. That being so, there can be no doubt that the arbitrator has an interest so connected with his duties as to render it unjust that the plaintiff (granting that she bad no knowledge of the fact) should be held bound by the agreement. But I have just said that I accept the lower Court's finding that the plaintiff was on the date of the arbitrator's appointment, aware of this fact. I should have therefore, if no other principle was involved, dismissed the plaintiff's application; but the plaintiff is an illiterate woman unable to sign even her name and in my opinion something more must be shown than that she had bare knowledge of the fact. The law throws around such persons (to adopt the language used in a Privy Council case) a special cloak for their protection: Kali Bakhsh Singh v. Ram Gopal Singh (1913) L.R. 41 IndAp 23 : I.L.R. 36 All. 81 : 26 M.L.J. 121 . It is incumbent upon the party desiring to uphold the reference, to show that not only was the plaintiff dimly conscious of the fact that the arbitrator had an interest but that she thoroughly comprehended the transaction and was made aware of the implications and the consequences of her act. That onus, it is not pretended, has been discharged; indeed to this aspect of the case no one seems to have drawn the lower Court's attention.

5. I must therefore set aside the lower Court's order and revoke the reference.

6. Mr. Subramania Sastri for the respondents contends that the plaintiff has misconceived her remedy, there being no provision in the Civil Procedure Code, enabling her to make an application of this kind. I am not prepared to agree that her only remedy is to attack the award after it is made. The Court has in my opinion inherent jurisdiction and it can in the exercise of its inherent powers revoke such a reference. It would be futile to proceed with an arbitration which is grossly irregular and defective. ' My view receives support from Lachman Machhua v. Moghal Mian : AIR1925Pat720 . Some cases taking the opposite view have been cited, but I must express my respectful dissent from them.

7. In the result, the lower Court's decision is set aside; but I direct that the parties shall bear their respective costs in this and in the Court below.

8. As regards the fees received by the arbitrator, my decision is that no party shall be entitled to claim a refund of them.


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