1. These two appeals arise respectively out of the order made by Edgley J., on March 1941 dismissing the appellant's application for setting aside the award made by Sir Manmatha Natb Mukherjee as the sole arbitrator appointed in Suit No. 1840 of 1930 and the judgment and decree pronounced by the same learned Judge on 10th March 1941 upon that award. The suit, the award and these two appeals concern the affairs of a family named Chamria whose genealogical table is the following:
NANDRAM (died long ago)
Gorakhram Hardatrai m. Anardeyi
(died long ago) (died 2-2-1916) (plaintiff died 17-7-1941)
| | | | |
Ramprotap (died 1937) Amolokchand m. Surji Durga Radha Moti
(originally defendant 1) (died 1911)(defendant 6) |
| | Keshardeo (given in adoption)
(died 1918) (adopted by Soorji)
| (defendant 3)
Ratanlal (defendant 1
after the death of Bamprotap).
2. During many years prior to 1916 Hardatrai and his nephew Ramprotap carried on a large and profitable business in partnership as banias, merchants and landholders. Before his death in 1911 Amolokchand had a two annas share in some part3 of that business. After deducting Amolokchand's share, the balance, considered as 16 annas, were divided between Hardatrai and Ramprotap in proportion of 11 annas and 5 annas respectively. By a deed of partnership (hereinafter called 'the partnership deed') made between Hardatrai and Ramprotap on 1st October 1916 it was agreed that they should carry on the said business in partnership for 20 years under the name and style of Hardatrai Chamria & Co., their shares being 11 annas for Hardatrai and 5 annas for Ramprotap. Clauses 9 and 10 of the partnership deed were in the following terms:
9. In case any partner shall die before the expiration of the partnership his share in the capital of the partnership shall be retained in the said business during the residue of the term of the partnership and the said business shall be carried on during the residue of the said term as from the death of the deceased partner as nearly as may be according to the provisions of these presents but so that the representatives of the deceased partner shall succeed to his share in the firm and be substituted for him as junior partners only and the representatives of the deceased partner shall not have any power to interfere in or have any control over the conduct and management of the said business except under the direction of the surviving partner nor shall they have any right whatever during the residue of the said term of partnership to draw out the share of the deceased partner in the capital of the said partnership nor shall they institute any proceedings whatsoever for the withdrawal of such capital or any portion thereof or for the appointment of any Receiver of the said partnership asset and all proper instruments for carrying the provisions of this clause into effect shall be executed between him and the representatives of the deceased partner.
10. Either of the partners may during his lifetime or by will introduce any son or sons who shall have attained the age of 14 years as a partner or partners into the said firm during the residue of the said term for any part of the whole of his share In the partnership it being intended that the share of profits of such son or sons shall be wholly divided from the share of his father and may transfer to such son or sons all or such part as the partners introducing him may think fit of the capital of such partner in the said business.
3. This partnership deed was registered under the Registration Act. About this time trouble was brewing in the family and disputes had arisen as regards the rights of Hardatrai's adopted son Durga vis a vis the two natural sons of Hardatrai, namely, Radha and Moti both of whom had been born after the adoption of Durga. Apparently, to settle these disputes and to prevent litigation, two documents came to be executed on 16th November 1916. Neither of these documents was, however, registered under the Registration Act. By document called 'memorandum of the terms of arrangement by way of family settlement between the members of the family of Rai Hardatrai Chamria Bahadur of Howrah' (hereinafter referred to as 'the family deed') it was provided inter alia, as follows:
1. The members of the family of the said Rai Hurdutroy Chamria Bahadur are at present (1) his wife Mt. Anardeyi Sethani (2) his adopted son Durga Prosad and (3) and (4) his two minor sons by his said wife, viz., Radha Kissen and Motilal (the last named is proposed to be given in his adoption to the widow of Amluekehand).
2. That all property of the said Hurdotroy Chamaria Bahadur are in fact his self-acquired property and the members of his family agree to deal with it as such.
3. The said Hurdotroy Chamaria Bahadur is solely entitled to the remaining share in the firm of Hurdutroy Chamaria carried on upto 30th September 1916 after deducting Ramprotap Amuluckohand's share as entered in the books of the firm and the assets and investment thereof and a like share in the firm of Hurdutroy Chamaria & Co., carried on since 1st October 1916 and the assets and investments thereof. The said business of Hurdutroy Chamaria & Co., will be carried on upto 31-12-1916.
4. Rs. 4,07,970-6-6(inclusiveof interestupto 30-9-1916) standing to the credit of Mt. Anardeyi Sethani in the books of the said firm as also the landed properties standing in her name as per list here to annexed (cost price whereof is Rs. 3,57,200) and the ornaments jewellery and clothing in the possession of the said Mt. Anardeyi Sethani and the policies on the life of Hurdotroy Chamaria. Bahadur with profit which are about rupees two lacs are and agreed to be treated as her absolute Stridhone property which she holds with full power to deal with the same in any way she thinks fit.
5. All her other property not referred to above whether standing in her own name or benami for her or any of her sons as also all property of the said Rai Hurdotroy Chamaria Bahadur whether standing in his own name or benami in the name of others including the whole of his interest in the firms of above-named belongs to and shall be divisible among the members of his family in the manner following namely:
(a) One quarter or four annas to be taken by his said wife Mt. Anardeyi Sethani with power to dispose of the same only in favour of the sons of Rai Hurdotroy Chamaria Bahadur or any of them and in default of such disposition by her during her life her said quarter share to belong to her son Radhakissen and his heirs absolutely after her death.
(b) Like share to be taken by Durgaprosad absolutely.
(c) Like share to be taken by Radhakissen absolutely, the mother acting as his guardian daring his minority with full power to represent him in the business of the said firm.
(d) Like share to be taken by Motilal absolutely his natural mother Mt. Anardeji Sethani acting as his guardian until the completion of his proposed adoption by the widow of Amulckchand but the said adoption, if it should take place shall not affect the share to be taken by him under the provisions as herein mentioned.
6. As soon as practicable all deeds shall be executed all entries made and all accounts kept to give full effect to the terms set forth above.
7. If necessary the said Durga Prasad shall institute a suit in the High Court at Calcutta in which the other parties shall consent to a decree embodying the terms set forth above with effect from the date hereof.
8. That the deed of adoption executed by the said Rai Hurdutrai Chamaria Bahadur in favour of Hurdhan Dass Chamaria is deemed operative and valid so far as the adoption witnessed thereby is concerned but as to the remaining provisions thereof the same shall remain valid until the terms hereof are carried into effect not thereafter.
9. These terms shall not be affected in case any of the present members of the family of the said Bai Hurdotroy Chamaria Bahadur predeceased him.
10. All disputes regarding the construction of these terms and carrying out hereof and the adjustment of accounts in terms thereof will be referred to the arbitration of Rai Sewprosad Jhunjhunwalla Bahadur whose decision shall be final and binding upon all the parties.
4. This family arrangement is stated to have been made with the approval of Hardatroi and the family deed evidencing the family arrangement was executed by (i) Anardeyi, (ii) Durga and (iii) Hardatroi as the father and guardian of Radha and Moti. It does not appear to have been executed by Hardatroi for himself. Ramprotap was one of the attesting witnesses to the deed but was not made a party thereto. By the other document called Memorandum of the terms of arrangement between the members of the firm of Hardatroi Chamria & Co., made with their approval' (hereinafter referred to as 'the business deed') it was agreed as follows:
O and from 1-1-1917 the following parties shall be interested in the said firm and entitled to the shares mentioned against their respective names:
1. Ramprotap Maturmull (predeceased son of Ramprotap)... ... ... ... 3 1/2 annas2. Amulkchand's widow and his adopted son (soleproprietor of which will be such adopted son)... ... ... ... 3 1/3 annas3. Hardutrai Durgaprosad (sole proprietor of whichis Durgaprosad) ... ... ... ... 3 annas4. Hardatrai Radhakissen (sole proprietor of whichis Radhakissen) ... ... ... ... 3 annas 5. Motilal ... ... ... ... 3 annas If Motilal should be taken in adoption by Amolockchand's widow then the shares numbered 3, 4 and 5 above will stand as follows:
3. Hardatrai Durgaprosad (sole proprietor of whichis Durgaprosad) ... ... ... ... 4 1/24. Hardatrai Radhakissen (sole proprietor of whichis Radhakissen) ... ... ... ... 4 1/2 Annas5. Motilal ... ... ... ... Nil.None of the parties will be entitled to carry on separate business nor withdraw from the business their respective shares of the capital, assets and investments. The drawings of the parties shall be restricted to their actual necessary expenses.
Neither Rai Hardatrai Chamria Bahadur nor his estate will have any interest in the said business of Hardutrai Chamria & Co.
The said firm Durga Prosad cannot be compelled to retire from the said firm of Hardutrai Chamria & Co., except with the consent and approval of Rai Shew Prosad Jhoonjhoonwalla Bahadur. But the said Durgaprosad shall be at liberty to retire from the said business and the said Durgaprosad shall be at liberty to carry on business under the style of Hardutrai Durgaprosad.
5. This business deed was executed by (i) Ramprotap 'for self and Mt. Surjee', (ii) Durga and (iii) Hardatrai as father and guardian of Radha and Moti. It does not appear to have been executed by Hardutrai for himself or by Anardeyi. Hardutrai died on 2-12-1916. Contrary to expectations Surjee, the widow of Amolokchand, did not adopt Moti but in 1920 adopted Keshardeo the natural born son of Durga. The result was that Moti retained the 3 annas share in the business that had been given to him by the business deed and Keshardeo became entitled to 3 1/2 annas share provided therein for 'Amolokchand's widow and his adopted son.' Since Moti was not adopted by Surji the allotment of shares in favour of Durga, Eadha and Moti remained unchanged, namely 0-3-0 for each. Apparently the adoption of Keshardeo by Surji in 1920 precipitated matters and Ramprotap filed Suit No. 120 of 1922 against Durga, Radha, Moti and Keshardeo for dissolution of partnership and other reliefs. Anardeyi was not made a party to that suit. Eventually the disputes in that suit and those between the parties thereto and Anardeyi were all referred to arbitration of certain prominent persons of the community. The award made by the arbitrators was, however, eventually set aside by a judgment of the Judicial Committee reported in Ram Protap v. Durga Prasad . In the meantime in 1924 Motilal filed Suit No. 367 of 1924 against Durga, Anardeyi and Eadha for the partition of the estate of Hardatrai. In that suit the Official Receiver was appointed receiver of the properties in suit which included Hardatrai's share in immovable properties as well as in the business.
6. After the Judicial Committee set aside the award made by the arbitrators appointed in Eamprotap's Suit No. 120 of 1922, Ramprotap in 1928. withdrew his suit. Keshardeo, thereupon, filed Suit No. 2472 of 1928 against Ramprotap, Radha, Moti, Durga and Surji for dissolution of partnership and other reliefs. Anardeyi was not made a party to that suit just as she bad not been made a party to Eamprotap's Suit No. 120 of 1922. A preliminary decree was? passed by consent in Suit No. 2472 of 1928 on 23rd May 1930 declaring that Keshardeo was the duly adopted son of Amolokchand and declaring the shares of the parties in the firm. This suit is still pending. On 29th August 1930 the Official Receiver, as receiver in Motilal's Suit No. 367 of 1924, filed Suit No. 1840 of 1930 against Ramprotap. It is with this suit that these appeals are primarily concerned, for the award was made by the arbitrator appointed in this suit.
7. In paragraph 1 of the plaint, as originally framed, was pleaded the partnership between Hardatrai and Ramprotap and their respective shares. The partnership deed dated 1st October 1916 was specifically referred to in paragraph 2. Paragraph 3 pleaded that on 16th November 1916, Hardatrai and his wife Anardeyi and his sons Durga, Radh and Moti had agreed by way of family settlement to divide Hardatrai's interest in the firm in certain proportions. There was no express mention of the family deed nor was there any reference to the business deed. In paragraph i were set out the facts of the death of Hardatrai, the disputes resulting in the institution of suit No. 367 of 1924, the appointment of the Official Receiver as receiver in that suit and his having obtained to leave of the Court to file this suit. In paragraph 5 it was pleaded that owing to disputes it had become impossible to carry on the business at a profit and that all parties desired that the business should be wound up. An alternative claim to partition and division of the assets as co-owner was put forward in paragraph 6. The fact that some of the properties belonging to the partnership were within and some of them were outside the jurisdiction of the Court was mentioned in paragraph 7. The reliefs claimed were (a) declaration of shares, (b) dissolution, (c) alternatively partition, (d) accounts and enquiries and (e) discovery.
8. By consent an order was made in this suit (No. 1840 of 1930) on 10th September 1930, amending the plaint in the following particulars : (i) Anardeyi was substitued as plaintiff in the place of the Official Receiver, (ii) Keshardeo, Durga, Radha and Moti were added as defendants, (iii) The following paragraph was added as paragraph 6-A to the plaint : 'Further or in the alternative the defendants as agents managed the assets and as such are liable to render accounts.'
9. Written statements were filed by all the defendants in 1931 after this amendment. By another order made on 21st March 1933 Surji was added as a defendant. Again by an order made on 3rd January 1935 the following paragraph was added as paragraph 6-B to the plaint:
That all the parties including Ramprotap Chamria (who at all material times acted as Karta of his joint family including the branch of Amolokchand whose adopted son the defendant Keshardeo Chamria olaims to be) from time to time orally and in writing and by conduct accepted the said agreement of the 16th November 1916 and the rights of the plaintiff to and in the said partnership and as a partner therein and/or her rights in the said assets and properties and led the plaintiff to change her position by reason of such acceptance and all parties are estopped from challenging the plaintiff's rights by reason thereof and also by reason of the decisions in Land Acquisition proceedings.
10. Keshardeo filed an additional written statement but none of the defendants filed any additional written statement pleading to the above paragraph. The suit eventually came up before Panckridge J. on an application for settlement of issues and by an order made by hi3 Lordship on 11-3-1935 the following issues were settled:
1. (a) Was there an agreement by way of family settlement on 16-11-1916 as alleged in para. 3 of the plaint? (b) Is the agreement dated 16-11-1916 relating to the alleged family settlement valid or admissible in evidence? (c) Is the alleged family settlement binding upon the defendants or any of them?
2. Was there any agreement as alleged in para. 3 of Keshardeo Chamria's Written Statement or para, 4 of Durga Prosad Chamria's Written Statement?
3. Had the plaintiff any share or interest in the business referred to in paras. 1 and 2 of the plaint or in the business carried on under the name and style of Hurdatrai Chamria & Co., from 1-1-1917?
4. Is the plaintiff entitled to claim partition or division of assets as alleged in para. 6 of the plaint?
5. Did the defendants or any of them manage that assets as agents as alleged in para. 6 (a) of the plaint?
6. Are the defendants or any of them liable to render any accounts?
7. Did the parties or any of them accept the agreement of 6-11-1916 or any rights of the plaintiff as alleged in para. 6(b) of the plaint and is any of the parties estopped from challenging the rights of the plaintiff as alleged in the said paragraph? Is the matter res judicata as indicated in the said paragraph or in para. 2 of the additional written statement of the defendant Keshardeo Chamria?
8. What are the shares or rights of the parties in the business or businesses or in the assets mentioned in the plaint?
9. Is the plaintiff's claim or any portion thereof barred by limitation?
10. To what reliefs, if any, is the plaintiff entitled?
11. Did the defendant Ramprotap act as Karta as alleged in para. 6 (b) of the plaint or at all for the defendant Keshardeo Chamria?
12. Is the defendant Keshardeo Chamria bound by the acts or omissions of any of the other defendants including Ramprotap; if so, what is the extent of his liability?
11. In January 1937 Ramprotap died and by an order made in this Suit (No. 1840 of 1930) on 27-2-1937 Ratanlal, his grandson by his predeceased son Matrumull, was substituted in his place. At this stage the parties agreed 'to refer the outstanding matters in this suit to the joint arbitration of' three named arbitrators upon certain terms giving very large and unusual powers N to the arbitrators in the conduct of the arbitration proceedings. The relevant terms were as follows:
(c) The arbitrators shall be at liberty if they so desire to proceed in a summary way and in their discretion may take or refuse to take any evidence.
(d) The arbitrators shall not be bound to accept any evidence other than the evidence of the parties themselves and may refer to any books of accounts, papers or documents at their discretion and engage the services of any Assistant or Gomastha or Accountant or Lawyer without reference to the parties.
(e) The arbitrators shall be at liberty to see any party in the absence of the other party and proceed ex parte if upon notice any party fails to attend without any cause as may appear to be reasonable to the arbitrators.
(f) The parties shall not be entitled to appear with Lawyers before the arbitrators.
12. It was further agreed that in case the arbitrators should fail to make their unanimous award for any reason whatsoever within the time specified or in case there should be any disagreement between the arbitrators on any point or in case any of the arbitrators should refuse or neglect to act as such then and in such case the reference to arbitration of the aforesaid arbitrators should stand superseded and the matters in dispute should be decided by Sir M.N. Mukherjee Kt., lately a Judge of this Court as sole arbitrator who should have all the powers mentioned above. Accordingly an order of reference to arbitration was made on 29-6-1937 upon the aforesaid terms. The three named arbitrators having failed to make their award Sir M.N. Mukherjee, on being called upon so to do, entered upon the reference as the sole arbitrator. By an order made on 28-11-1940 the time for making the final award was extended till 31-1-1941 and liberty was given to the arbitrator to make interim award or awards as and when he should think fit to do so. It is conceded that this order was made with the consent of all parties, although the order as drawn up does not purport to have been passed by consent. On 10-1-1940 Sir M.N. Mukherjee made an interim award in the following terms:
(1) I find that by the Deed of Family Settlement dated 16-11-1916 the plaintiff became co-owner in respect of all properties which belonged to Rai Bahadur Harduttroy Chamaria on that date and also that she became a partner in the firm of Hurduttroy Chamria & Co., wherein upto that date, leaving out such shares outsiders may have had in particular transactions, Harduttroy had 11 as. and Earn Protap 5 as. share as specified in the Deed of Partnership dated 6-10-1910 and 1-10-1916.
(2) I find that the share of the plaintiff as such partner and co-owner as aforesaid was one quarter or a 4 as. share, taking Harduttroy's 11 as. share as 16 as. in other words as 11/64th or 2 as. 9 p. share in the whole.
(3) I find that under the Deed of Family Settlement dated 16-11-1916 the business of the firm was to be carried on as before upto 31-12-1916 but under the Memorandum of Terms of Arrangement dated 16-11-1916 the partners of the said firm of Hardutt Boy Chamria & Co., with the exception of the plaintiff, together with Borne other persons were to carry on as from 1-1-1917 the business of the said firm under the firm's name and with certain shares for themselves as specified in the said Memorandum. I am unable to hold either of these documents invalid on any of the grounds on which their validity has been questioned. (The two documents, in my opinion, have to be read together).
4. I find that the arrangement last mentioned was binding as amongst the parties thereto but did not purport to disturb the plaintiff's status as a partner in the firm, and that the assets which belonged to her as such partner were utilised for carrying on the business thereafter.
5. I find that there has been no dissolution of the firm as it existed in 1916 nor any exclusion of the plaintiff, so as to bar the plaintiff's claim on the ground of limitation.
6. I hold that in order to award reliefs to the plaintiff accounts should be taken;
(a) To ascertain the value of the assets which the plaintiff came to have by the Deed of Family Settlement dated 16-11-1916;
(b) To ascertain what profits were earned by the said assets (i) upto 31-12-1916 and (ii) from 1-1-1917 till the business was closed.
7. I hold also that for ascertaining the assets as mentioned in para. 6 (a) above, a 2 annas share of profits should be deducted as belonging to Amolakchand in respect of such business in which he had that share but in respect of such transactions only whereof the origin may be attributed to a point of time when he was alive.
8. I hold that the interests of the parties in the firm of Hardutt Roy Chamria & Co. were the following;
(a) From 1-10-1916 to 31-12-1916.Ramprotap's branch ... 5 as.Sm. Anardei Sethani, ) ... Each 4 as. ofDurga Prosad, ) ... 11 as. Radhakissen Motilal ) ... 11/64 each2 as. 9 pies each.(b) From 1-1-1917,
Sm. Anardei Sethani - Returns attributable to her 2 as. 9 pies share in the assets as on 31-12-1916.
Others - as per Memorandum of 16-11-1916 after deducting the amount due as aforesaid to Sm. Anardei Sethani.
Other questions arising in the suit will be dealt with hereafter.
13. On 29-1-1941 the defendant Durga applied for an order that the' said award be set aside or remitted or modified. The application came on for hearing before Edgley J., who on 7-3-1941 dismissed the same. On 10-3-1941 the same learned Judge pronounced judgment upon the award and upon such judgment a decree has been drawn up. The present two appeals have been filed by the defendant Durga against the said order and the decree. On 17-7-1941 Anardeyi died after having made and published her will whereby she appointed Shewkissen Bhatter as her executor. Shewkissen Bhattar after having obtained probate was brought on record in the suit upon his own application made on 20-8-1941. No formal application, however, was made at the time in the two appeals for bringing Shewkissen Bhatter on the records thereof. On 10-11-1941 the two appeals were called on for hearing before the appellate Court (Derbyshire C.J. and Nasim Ali J.) and were dismissed for non-appearance of the appellant. On 15-12-1941, however, the same appellate Court set aside the dismissal of the appeals and directed them to be restored and to be reheard. The appellant was directed to pay to all the respondents in the said two appeals their respective costs thrown away on 10-11-1941 and the costs of all parties appearing on the application for restoration. The costs were duly paid by the appellant Durga.
14. On 7-3-1946 the two appeals came up for hearing before my learned brother and Ormond J. when objection was taken on behalf of Radha and Moti against the maintainability of the appeals on the ground that Shewkissen Bhattar, the executor of Anardeyi, not having been brought on the record in the appeals as her legal representative the appeals had abated as against her and that as the time for setting aside the abatement had gone past, the appeals, by reason of the nature of the claim made in the suit had abated as a whole against all the respondents. For reasons given in their judgments the appellate Court did not accede to the contention that the appeals should be dismissed but adjourned the same to enable the appellant to take such steps as he might be advised to effect substitution. The appellant thereafter applied for setting aside the abatement and for substitution of Shewkissen Bhattar as the legal representative of Anardeyi in the records of these appeals. Those applications were granted by my learned brother and Ormond J., on 3-4-1946. The appeals have now come up for final disposal before us. The appellant is supported by the respondents Ratanlal, Keshardeo and Suraji, but is opposed by Shewkissen Bhattar, Radha and Moti.
15. The award has been impugned before us on the same grounds as had been unsuccessfully urged before Edgley J. The grounds of attack may be conveniently classified as follows: (1) That the award is vitiated by error of law on the face of it in that, (a) the arbitrator has acted upon inadmissible evidence, (b) the arbitrator has proceeded on a wrong construction of certain documents. (2) That the award is inconsistent and vague in its terms. (3) That the arbitrator has gone beyond the scope of the reference. (4) That the arbitrator had no jurisdiction to deal with matters which were the subject-matter of certain pending suits. (5) That the arbitrator had no jurisdiction to make an interim award. All the above points are controverted by the contesting respondents.
16. Be. Point No. 1 : The contesting respondents maintain that there is no error as alleged and that even if there be any error the same cannot vitiate the award, for the parties must accept the decision, good, bad or indifferent, of the tribunal of their own choice to whose decision the matters, in respect of which error of law is alleged to exist, were specifically referred.
17. In submissions to arbitration the rule is that as the parties choose their own arbitrator to be the judge in the disputes between them they cannot, when the award is good on its face, object to his decision either upon the law or the facts. In this respect the Courts do not recognise any distinction between the awards of legal and of lay arbitrators. Where however, an error, whether of fact or of law, appears on the face of. the award or upon some paper accompanying and forming part of the award, the award will be set aside unless the error is immaterial to the decision. It is not usually permissible to refer to anything else to show that the award is erroneous. This doctrine has been well established as a general rule ever since the decision in the case of Hodgkinson v. Ferniel (1857) 3 C.B. (N.S.) 189. An exception has, however, been engrafted on this doctrine to the effect that when a specific point of law is referred to arbitration the award cannot be set aside if the arbitrator wrongly decides the point of law. The decisions in the cases of British Westing House etc. & Co. v. Underground etc., Co. of London (1912) 1912 A.C. 673. In re King and Duveen (1913) 2 K.B. 32 Attorney General for Manitoba v. Kelly (1922) 1 A.C. 268 Government of Kelantan v. Duff Development Co. (1923) 1 A.C. 268 Absalon Ltd. v. Great Western (London) Garden Village Society Ltd. (1933) 1933 A.C. 592, Barton v. Blackburn (1934) 150 L.T. 327 and Gopinath v. Salil Kumar : AIR1938Cal705 clearly recognise this exception. This is the state of the law. In each case of an application for setting aside an award on the ground of error of law apparent on the face of the award the Court has to decide whether the reference was one in which the question of law arose incidentally as being material in. the decision of the matter which had been referred to arbitration, or it was one in which a specific question of law had been referred to the decision of the arbitrator as the sole tribunal. If the reference was of the former class the case falls within the general rule and the award may be set aside if an error is apparent on the face of it. If, on the other hand, the reference was of the latter kind it falls within the exception and the award cannot be set aside even if it is erroneous. In coming to a decision that the case falls within the exception the Court insists on being clearly satisfied 'that the parties intended to give up their rights to resort to the King's Courts and in lieu thereof to submit that question to the decision of a tribunal of their own' Per Lord Trevethin in (1923) 1923 A.C. 395 at p. 421.
18. These principles of law were clearly-recognised by the learned Judge in the Court below and no exception can be or has been taken to his judgment in so far as he lays down the principles. The only grievance of the appellant is that the learned Judge has erred in the application of these principles to this case and that instead of holding that the reference was within the exception he should have held that it came within the general rule and that he should have held that there were manifest errors on the face of the award vitiating the whole award. Whether a reference falls within the general rule or within the exception is at all times a difficult problem and Judges may take different views regarding one and the same reference as was the case in (1923) 1923 A.C. 395 where Lord Cave thought that a specific question of law had been submitted and Lord Trevethin thought otherwise and Lord Parmoor thought it unnecessary to decide the point. There is no particular form for referring a question of law to an arbitrator. As pointed out by Lord Parmoor in Kelantan case (1923) 1923 A.C. 395 at p. 418 'whether, however, a question of law has been specifically submitted to arbitration, falls in each case to be determined on the terms of the particular submission.'
19. Ordinarily in reference to arbitration with, out the intervention of the Court people usually refer their whole disputes in general terms and it is in exceptional cases that specific questions of law and/or facts are referred to arbitration. Even when the arbitration agreement is initially in general terms, as was Clause 21 of the agreement in the case of In re King and Duveen (1913) 2 K.B. 32 the actual Reference, after disputes arise, may comprise only specific questions of facts and/or of law, as did the terms of reference in that very case. Again, even if the arbitration clause is initially in general terms the arbitrator may call for pleadings, as was done in the Kelantan case (1923) 1923 A.C. 395 and in the Absalom case (1933) 1933 A.C. 592. The preponderance of views of learned Judges appears to be that the terms of reference or even those pleadings may be looked at for ascertaining whether specific questions of law were as such referred to the arbitrator or such questions of law arose incidentally as material in the decision of the disputes referred to arbitration in general terms.
20. When matters in dispute in a pending suit are, however, referred to arbitration by or under an order of Court one may legitimately be inclined to infer that the parties intend to refer specifically each and every one of, the disputes arising on the pleadings. Even if this inference may not be laid down as a broad general proposition, I have no doubt whatever, when the order of reference is made in a pending suit after the issues arising on the pleadings have been settled, that by referring 'all outstanding matters in the suit' at that stage the parties do intend to refer those specific issues which are then the only 'outstanding matters in the suit,' so as to bring the reference within the exception rather than the general rule, and that the award made by the arbitrator appointed in the suit under such circumstances cannot be challenged even if the decision is manifestly wrong. Such a reference appears to me to be covered by the decision of the Judicial Committee in the case of Ghulam Jilani v. Muhammad Hassan ('02) 29 Cal. 167 In that case after the issues had been settled by the Court the parties referred the case to two arbitrators, one named by each party. The reference to arbitration stated:
The arbitrators will have the power to decide the points at issue framed in the ease. Should the arbitrators not agree they will have the power to themselves to appoint an umpire. In that ease the decision will rest with the majority. The parties will have no objection to the award of the arbitrators. The decision of the whole of the case is left in the hands of the arbitrators; any one particular point is not referred to them for decision.
21. Thereupon the Subordinate Judge made the following order:
As per agreement between the parties the decision of the whole case is referred to the arbitrators, and not any particular point. The arbitrators will be informed that the whole of the evidence has been recorded. They can send for the records of the case whenever they like. For the present only the points at issue will be sent for their perusal. They will not, however, be bound to give an award on each point. They have to give their award on the whole case : their award to come on 2nd April 1892.
22. Both the agreement and the order expressly stated that the decision of the whole case was referred to the arbitrators and not a particular point. On an application for setting aside the award made on such a reference, one of the points taken was that the question of jurisdiction could not be referred to the arbitrators and that their decision was wrong. In delivering the judgment of the Board Lord Macnaghten at p. 58 of ('02) 29 Cal. 167 observed:
The principle of finality which finds expression in the Code is quite in accordance with the tendency of modern decisions in this country. The time has long gone by since the Courts of this country showed any disposition to sit as a Court of appeal on awards in respect of matters of fact or in respect of matters of law : See W.T. Adams v. Great North of Scotland Ry. Co. (1891) 1891 A.C. 31.
23. Further clown at p. 60 his Lordship stated:
The question whether the suit was competent was one of the issues in the suit and as such referred to the arbitrators. They were not, indeed, bound to give an award on each point. They bad to give their award on the whole case. In point of fact, however, they did decide the question. They may have erred in law; but arbitrators may be judges of law as well as judges of fact and an error in law certainly doe3 not vitiate an award.
24. The last sentence in the passage quoted above must be read in the light of the first sentence of that passage, for otherwise it may, in the light of modern decisions, be somewhat too wide. It is clear that his Lordship construed the order of the Subordinate Judge as a reference of specific questions raised in the issues. In my judgment the ease now before us is governed by the principle deducible from the above Privy Council case. In this view of the matter the errors complained of cannot be any ground for setting aside the award and the learned Judge in the Court below was right in his conclusion on this point.
25. Re. Point No. 1(a) - With regard to the alleged error of admitting the unregistered family deed in evidence and its binding effect on the parties there was a specific issue raised in the suit which formed one of the 'outstanding matters in the suit' and as such referred to the decision of the arbitrator. The arbitrator has obviously admitted the document in evidence and has decided the issue of its admissibility and binding effect and the parties must accept his decision. Further, under Clauses (c) and (d) of the terms of reference, quoted above, the arbitrator was expressly given liberty 'to take or refuse to take any evidence' and to 'refer to any paper or document.' Although the word 'any' in Clause (c) may have a quantitative meaning with reference to the words 'refuse to take' it cannot have any such limitation in conjunction with the further preceding word 'take' in (c) or in conjunction with the word 'refer' in Clause (d). It has also to be pointed out that by the consent decree made on 26-4-1926 in Suit No. 367 of 1928 to which the appellant is a party, the parties thereto agreed to abide by the family deed a copy of which was annexed to the terms of settlement embodied in the decree. There can be no doubt as to the admissibility of the decree as between the parties thereto. On a consideration of matters discussed above I am bound to hold that the parties to this suit cannot challenge the decision of the arbitrator on this point. In this view of the matter, it is unnecessary to consider the scope and effect of Sections 17 and 49, Registration Act, with reference to the family deed in so far as it purports to deal with the partnership.
26. Re. Point No. 1(b). - As regards the allegation that the arbitrator has proceeded on a wrong construction of the family deed and the business deed the respondents strongly rely on the decision of the Judicial Committee in Champsey Bhare & Co. v. Jivraj Balloo Spinning & Weaving Co. ('23) 10 A.I.R. 1923 P.C. 66 and in particular on the following passages in the judgment of Lord Dunedin at p. 331:
In that case referring to Landauer v. Asser (1905) 2 K.B. 184 the legal proposition was stated in terms on which the award proceeded. In the present case, no legal proposition is at all stated as a ground of the award. The reference to the letters is only in the narrative, and even when the letters are looked at they contain the view of one party....
An error in law on the face of the award means, in their Lordships' view, that you can find in the award or a document actually incorporated thereto, as for instance a note appended by the Arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous. It does not mean that if in a narrative a reference is made to a contention of one party, that opens the door to seeing first what that contention is, and then going to the contract on which the parties' rights depend to see if that contention is sound. Here it is impossible to say, from what is shown on the face of the award, what mistake the arbitrators made.
27. Reliance was also placed on the judgment of Mitter J., in Nanibala Saha v. Ramgopal Saha ('45) 32 A.I.R. 1945 at p. 726 where the necessity of an erroneous proposition of law, as distinct from a wrong conclusion on a question of fact, being stated in the award is emphasised by the learned Judge. In Absalom's case (1933) 1933 A.C. 592 at p. 612, Lord Wright, however, observed as follows:
As the motion is to set aside the award for matter appearing on its face the Court is debarred from considering any matter which does not appear in the award itself or in documents incorporated in it. The award recited the contract between the parties and referred in terms to certain conditions of the contract - namely, Clause 26, 30 and 32; though these clauses are not set out in full, they must, I think, be taken to be incorporated; the award is expressly based on the provisions of Clause 26 and 30, and hence the position here is quite different from that in Champsey Bhara & Co. v. Jivraj Balloo Spinning & Weaving Co. ('23) 10 A.I.R. 1923 P.C. 66 where the terms of the contract were held not to be incorporated.
28. In the light of the above observations of Lord Wright and on a construction of the award as a whole I am unable to accept the contention of learned Counsel for some of the contesting respondents that the family deed and the business deed were not incorporated in the award. Learned Counsel for the appellant contends that Ramprotap, the predecessor in interest of Ratanlal, was not a party to the family deed. Hardatrai was not a party to the family deed on his own behalf. They were the two partners in the firm. Nobody could become partner in the firm without their consent. Therefore, concludes learned counsel, the finding in Clause 1 of the award that 'by' the family deed the plaintiff became a partner in the firm is manifestly erroneous. It is sought to be explained by learned Counsel for some of the contesting respondents that the latter part of Clause 1 beginning with the words 'and also that she became a partner in the firm' was a separate and independent sentence and represented a conclusion independently arrived at. I am unable to accept this construction. In my opinion, the words 'by the deed of family settlement' govern both parts of Clause 1. I am at the same time not of opinion that there is any error as alleged by the appellant. The parties to the family deed could become partners with the consent of Hardatrai and Ramprotap. The family deed, in terms, states that it had been made with the approval of Hardatrai. In fact Hardatrai executed the family deed in his capacity as father and guardian of his sons Radha and Moti. His consent may, therefore, be legitimately inferred. Ramprotap was an attesting witness to the family deed. Although the fact of attestation does not by itself import knowledge of or consent to the terms of the deed on the part of the attesting witness, his knowledge and consent may be proved aliunde. Ramprotap was a party to the business deed. That deed was executed on the same day. It recognised that Durga, Radha and Moti had become partners in the firm. They could only have become so by the family deed. In para. 6B of the amended plaint it was categorically alleged that Ramprotap as karta of his branch of the family from time to time orally and in writing and by conduct accepted the family deed and the status of the plaintiff as a partner in the firm. No additional written statement was filed by Ramprotap denying this added paragraph and 'an issue was expressly raised as to whether the family deed was binding on the parties. The arbitrator has decided this specific issue, for such a finding is clearly involved in the award. Further the two deeds appear to me to be parts of the same transaction and, as held by the arbitrator, have to be read together. If the family deed is binding on Ramprotap and if the family deed and the business deed are to be read together then I am not of opinion that the statement that 'by the family deed the plaintiff became a partner' was in any way erroneous. The award must be read and construed as a whole in the light of the issues referred to the arbitrator and so read and construed there is No. such error as is alleged by the appellant. In my opinion there is, in the circumstances, no error and even if there be any error the question of the validity and effect of the deed having been specifically referred to the arbitrator his decision, however erroneous, cannot be challenged.
29. Re Point No. 2 : The next point urged in support of these appeals is that the learned Judge should have set aside or at least remitted the award on the ground that it is inconsistent and vague in its terms. The plea of inconsistency and vagueness in founded on Clause 3, 4 and 5 of the award. The finding in Clause 3 is that under the family deed the business of the firm was to be carried on as before up to 31-12-1916 and that under the business deed the members of the firm, with the exception of the plaintiff, together with some other persons were to carry on as from 1-1-1917 the business of the firm under the firm's name and with certain shares for themselves as specified in the business deed. In Clause i it is found that the business deed did not affect the plaintiff's status as a partner in the firm. The question is asked as to whether the arbitrator is referring to one and the same firm or to two firms. The answer obviously is that in part 1 of Clause 3 the arbitrator refers to the firm as constituted under the partnership deed dated 1-10-1916 and re-constituted under the family deed the business of which was to be carried on up to 31-12-1916 and in the latter part of the clause to the firm constituted by the business deed, the business of which was to carry on the business of the first mentioned firm on and from 1-1-1917. The constitution of the last mentioned firm did not affect the plaintiff's status in the first mentioned firm. There does not appear to be any inconsistency or vagueness in this behalf. But, it is asked, if the business of the first mentioned firm came to an end on 31-12-1916 how is it then that the arbitrator in Clause 5 finds that there had been no dissolution of the firm as it existed in 1916. The two findings, it is urged, are inconsistent and there is an obvious error on the face of the award. This criticism overlooks the principle enunciated by the Judicial Committee in the case of Sathappa Chetty v. S.N. Subramanian Chetty namely, that cessation of active business does not ipso facto constitute dissolution of the firm. The true meaning and effect of the findings in Clauses 3, 4 and 5 appear to me to be this: that the firm reconstituted under the family deed of which the plaintiff became a partner was to carry on active business up to 31-12-1916; that the firm constituted under the business deed did not affect the plaintiff's status in the first mentioned firm; that the second mentioned firm was to carry on the business of the first mentioned firm under that firm's name but that in law and in fact there was no actual dissolution of the first mentioned firm. The idea sought to be expressed seems to be that the second mentioned firm acted as the managing agent of the first mentioned firm. So read and construed the 3 clauses are perfectly consistent and clear. Indeed the final findings in Clause 8 makes the meaning still clearer.
30. The next point on which the plea of inconsistency and vagueness is sought to be founded has reference to Clause 7. It is said that it is difficult to ascertain what precisely the arbitrator means when he refers to the transactions the origin whereof may be attributed to a point of time when Amolokchand was alive. Does he mean transactions which were concluded or in respect of which the contract had been concluded or in respect of which negotiations had taken place, during the lifetime of Amolokchand or fresh business received from customers as a result of their satisfaction with a former transaction. Very few awards will pass the test of consistency and clarity if such ingenuity of interpretation as has been brought to bear on this award were the criterion. In my opinion the meaning of the words in question is quite simple and the arbitrator was plainly referring to the transactions which had been concluded or the contracts in respect of which had been effected during the lifetime of Amolokchand. The true principle of construction is to give to the ordinary English words their ordinary and plain meaning. The Court, I apprehend, will lean rather towards upholding the award than towards vitiating it.
31. Re. Point No. 3. - The third ground of attack on the award is that it is beyond the scope of the suit and the reference. It is pointed out that Motilal's suit No. 367 of 1924 was a suit for partition of the properties of Hardatrai. One of the properties which were the subject-matter of that suit was Hardatrai's share in the firm. The Official Receiver as receiver in that suit filed Suit No. 1840 of 1930 to get in and collect that share. Anardeyi was substituted in the place of the Official Receiver as plaintiff. The Suit No. 1840 of 1930, however, remained what it was, namely a partnership action. In Clauses 1 and 2 of the award the arbitrator has not only declared the plaintiff's share in the firm but has also declared her share as co-owner in the other properties of Hardatrai and her interest in the firm constituted under deed. This view, it is said, is strengthened by the provisions of Clauses 6(a) and 8 of the award. The arbitrator, it is said, has thus gone beyond the scope of the suit. First of all in the petition for setting aside the award no such point was specifically taken. Even in the grounds of appeal the objection formulated (Clause 18) is that the award has gone beyond the reference. It is futile to say, in view of the issues raised in the suit and in particular issues 3 and 8 mentioned above, that the arbitrator has come beyond the reference. I entirely agree with the learned Judge in the Court below that the statement in Clause 1 as to plaintiff becoming a co-owner in the properties of Hardatrai is merely introductory to what is stated subsequently. Clause 2 makes it clear that the arbitrator was concerned with declaring the plaintiff's shares in the firm. The expression 'co-owner' in Clause 2 was perhaps thought appropriate in view of the fact that partnership assets included immovable properties and in view of the alternative claim for partition of the assets as between co-owners pleaded in para. 6 of the plaint and covered by issue 4. Clause 4 refers clearly to partnership assets. I do not accept the argument that the word 'assets' in Clause 6(a) includes properties outside the partnership. Clause 7 certainly shows this, for Amolokchand had no share in the private and separate immovable properties of Hardatrai. In my opinion the word 'assets' in Clauses 4, 6, 7 and 8 refers to the business assets and the award has not gone beyond the scope of the suit and certainly not beyond the scope of the reference in view of the specific issues to which I have referred. Her 'interest' in the firm constituted under the business deed was necessary to be declared to give her relief as claimed in para. 6A of the plaint.
32. Re. Point No. 4 - The fourth objection to the award is that it has dealt with the subject-matter of certain pending suits and the principle of the case of Doleman v. Ossett Corporation (1912) 3 K.B. 257 has been invoked. Three suits are referred to in para. 26 of the petition, namely Ramprotap's suit No. 120 of 1922, Motilal's suit No. 367 of 1924 and Keshardeo's suit No. 2472 of 1928. Ramprotap's suit No. 120 of 1922 to which Anardeyi was not a party had been withdrawn in 1928 and was not pending at the time the order of reference was made in suit No. 1840 of 1930. Anardeyi the plaintiff in suit No. 1840 of 1930 is not a party to Keshardeo's suit No. 2472 of 1928 and, therefore, the disputes between her and the other parties cannot be said to be the subject-matter of that suit. Likewise Ramprotap was not and Ratanlal his representative is not a party to Motilal's suit No. 367 of 1924 and therefore the disputes between Ratanlal and Anardeyi cannot be the subject-matter of that suit. In these circumstances I fail to see how the rule in (1912) 3 K.B. 257 can be invoked at all. The award is a decision on the rights of all those who are parties to suit No. 1840 of 1930 and only in respect of the firm. It has not been shown how the award militates against any decree passed in any of the pending suit. In my opinion there is no substance in this objection.
33. Re. Point No. 5 The last ground urged in support of these appeals is that the arbitrator had no jurisdiction to make an interim award. It is contended, and rightly so, that this reference is governed by the provisions of Schedule II, Civil P.C., and not by the Arbitration Act of 1940. It is said that Schedule II contemplates one complete award. The provisions of Para. 14. Clause (a), Schedule II are relied upon as being consistent only with the idea of a single award. If it were permissible for the arbitrator to make several awards from time to time none of them will be open to the objection that it has left undetermined any question, and the objection, if raised, will be met at once by saying that the matters left undetermined in that particular award will be dealt with by subsequent awards. It is conceded that by consent of parties an order was subsequently made empowering the arbitrator to make interim award or awards but it is contended that after the order of reference the Court could not even by consent, under Para. 3(2) of Schedule II, make any order save in the manner and to the extent provided in that schedule. In my judgment there is no substance in these arguments. That the idea of interim award is not inconsistent with the provision contained in para. 14, Clause (a) of Schedule II, to the Civil P.C., is amply proved by the present Arbitration Act, 1940, for while, by Section 27, it authorises the arbitrator to make an interim award, the present Act reproduces in Section 16 the same provision as is contained in para. 14 Clause (a) of Schedule II. Paragraph 3(2) of Schedule II bars the Court from dealing with 'such matter' which, by reference, means 'the matter in difference' referred to arbitration. The question whether the arbitrator will make one or more awards was not a matter in difference in the suit and was not referred to arbitration and I do not see how the Court is precluded from making an order giving certain powers to the arbitrator in the conduct of the arbitration proceedings. Further, the order empowering the arbitrator to make interim award or awards was made by consent of all parties and the appellant can i hardly be heard to complain against it. In my judgment the principle laid down by the Judicial Committee in Makund Ram Sukul v. Saliq Ram Sukul ('02) 21 Cal. 590 is applicable to the case now before us. I find nothing in schedule 2 which prevents the parties from waiving the implied condition, if any exists, that all matters in dispute referred to arbitration must be determined by one single award. Under para, 1 of Schedule II 'any matter in difference' may by agreement of all parties, be referred to arbitration by an order of Court. The parties may refer all disputes or some of them. They can, I apprehend, make successive references of several disputes separately. If parties can make as many separate and successive references to as many arbitrators in respect of as many disputes as there are between them and if there may be as many separate awards as there may be as many references, I do not see why, in principle, the parties cannot refer all matters in dispute to the arbitration of one individual and authorise him to make as many awards as he thinks necessary, provided he complies with the other provisions of the schedule. In a suit for partition, for instance, where the properties in suit are situate in different districts it may be particularly convenient for the parties that the arbitrator should make separate awards in respect of properties in different districts so that the parties may get their separate allotments as soon as separate awards are made without having to wait for a long time until the final partition is made. In the case before us there was an alternative claim for partition. Further even in a partnership action it is usual to pass a preliminary decree and then a final decree. The interim award is in its terms and nature, nothing more than a preliminary decree declaring the shares and rights of the parties. I am not persuaded to hold that the learned Judge's decision rejecting this plea was not well-founded.
34. In my opinion, for reasons stated above,, the decision of the Court below must be upheld and both these appeals must be dismissed. The appellant must pay the costs of and incidental to both the appeals to each of the contesting respondents Sewkissen Bhattar, and Radha and Moti. Certified for 2 counsel for each set of contesting respondents.
35. I have had previously the advantage of reading the judgment which my learned brother has just delivered. I agree with the conclusions and the reasons for the conclusions which are expressed; and there is nothing which usefully I can add.