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Lal Chand Roshan Lal Vs. Ghulam Mohd. Nazir Ahmed - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtJammu and Kashmir High Court
Decided On
Case NumberCivil Misc. Petn. No. 212 of 1980
Judge
Reported inAIR1986J& K53
ActsJammu and Kashmir Code of Civil Procedure (CPC) , 1977 Svt. - Order 2, Rule 3; ;Jammu and Kashmir Arbitration Act, 2002 Svt. - Sections 14, 17, 21, 29, 30 and 37(3) - Schedule - Rule 3; ;Partnership Act
AppellantLal Chand Roshan Lal
RespondentGhulam Mohd. Nazir Ahmed
Appellant Advocate V.K. Gupta, Adv.
Respondent Advocate Joginder Singh, Adv.
Excerpt:
- .....to be made by the respondents to the petitioners and as such in terms of clause 10 of the supply orders, the matter in dispute was referred to the arbitration of shri i. d. grover, advocate, who entered upon the reference and made ex parte award on 16-6-1980.2. the petitioner-firm filed application before this court for directing the arbitrator to file the award made by him in this court and to pass decree in accordance with the same.3. on receipt of notice from this court, ghuiam moh'd respondent filed objections to the award and also made application under section 33 of the arbitration act for setting aside the award. it is averred by him in the said application that the firm m/s. ghuiam mohd nazir ahmed does not exist at all and he has been served in the case in his personal.....
Judgment:
ORDER

K.K. Gupta, J.

1. The petitioner-firm deals in the supply of Hans brand sarson oil. It is alleged that the petitioner-firm supplied the said sarson oil to the respondents in accordance with the orders placed by the respondents. A dispute arose between the parties in regard to the payment allegedly to be made by the respondents to the petitioners and as such in terms of Clause 10 of the supply orders, the matter in dispute was referred to the arbitration of Shri I. D. Grover, advocate, who entered upon the reference and made ex parte award on 16-6-1980.

2. The petitioner-firm filed application before this Court for directing the arbitrator to file the award made by him in this Court and to pass decree in accordance with the same.

3. On receipt of notice from this Court, Ghuiam Moh'd respondent filed objections to the award and also made application under Section 33 of the Arbitration Act for setting aside the award. It is averred by him in the said application that the firm M/s. Ghuiam Mohd Nazir Ahmed does not exist at all and he has been served in the case in his personal capacity.

He has never dealt with the petitioner-firm and had never entered into any agreement with the same. He has challenged the validity of the agreements of arbitration and also validity of the award on various grounds. According to him, the petitioner referred the matter to Shri I. D. Grover, advocate, for arbitration of which he had no knowledge. The award is invalid and illegal because there were number of transactions alleged for which not a single award could be said to be competent. The award is also illegal as the arbitrator entered into arbitration before the month of February, 1980 and passed award on 16-6-1980. As such the award was not passed within the statutory period of four months after entering into reference. The award has also been filed in violation of the principles of natural justice and the same is thus invalid. The respondent has also challenged the award on the ground of misconduct of the arbitrator. He has further submitted that he instructed his counsel Shri F. A. Goni, not to appear before Shri I. D. Grover, the arbitrator, as he had no faith in his impartiality because the said arbitrator and counsel for the petitioner-firm were father and son respectively. The arbitrator proceeded ex parte against him without giving him further opportunity to appear as his own witness. The arbitrator has further misconducted himself by entering upon the reference without issuing any show cause notice to him or to the respondent-firm. He had never consented to the referring of any dispute between the parties to Shri I. D. Grover, advocate as sole arbitrator. He has also taken plea that the petitioner-firm is not registered under the provisions of the Partnership Act and as such the present proceedings are in violation of the Partnership Act and no relief can be granted to the petitioner-firm.

4. This Court on 4-2-1982 framed the following Issues in the case :

1. Is the petitioner-firm M/s. Lal Chand Roshan Lal duly registered under the Partnership Act and has Wazir Chand been shown as one of its partners in the Register maintained by the Registrar of Firms :

O. P. P.

2. In case issue No. 1 is not proved, what isits effect on the award as also the applicationmade by the petitioner under Sections 14 and 17 ofthe Arbitration Act?

O. P. P.

3. Was there any agreement between the parties to refer the disputes to the Arbitrator?

O. P. P.

4. Did the respondents join the petitioner in making a reference of the disputes to the Arbitrator? If not, is the award still valid?

O. P. P.

5. Is the award bad because a single reference was made to the Arbitrator in respect of several disputes arising put of more than one distinct transaction between the parties.?

O. P. R.

6. Is the award bad because it was given by the Arbitrator beyond the statutory period?

O. P. R.

7. Has the arbitrator misconducted himself in making the award? If so, in what manner?

O. P. R.

8. Is the award opposed to principles ofnatural justice? If so, how?

O. P. R.

9. Relief?

The petitioners have examined Shri Dwarka Nath, Shri F. A. Goni, advocate and Wazir Chand as witnesses while the respondent has produced himself as his own witness.

5. I have heard learned counsel for the parties and perused the record before me. The issues framed in the case are discussed separately below :

Issues Nos. 1 & 2 :

6. These two issues are inter-connected. The present proceedings are under Sections 14 and 17 of the Arbitration Act and pertain to the stage when the award had already been made by arbitrator. The provision contained in the Partnership Act regarding the registration of the firm before filing any matter in the Court refers to suit and the present proceedings cannot be treated as suit. Such objections could have been relevant in a matter under Section 20 of the Arbitration Act which is considered suit in the eye of law. As such it hardly matters whether the petitioner-firm is registered under the Partnership Act and also as to whether Wazir Chand has been shown as one of the partners in the register maintained by the Registrar of Firms. Moreover, these issues have also not been pressed by learned counsel appearing for the respondent. These issues are decided accordingly.

Issues Nos. 3 & 4 :

7. There are, on record, the supply orders containing terms and conditions. Clause 10 of such conditions provides that all disputes arising out of the said terms of the orders shall be referred to and decided by Shri I. D. Graver, advocate, 267-A Gandhi Nagar, Jammu, whose decision shall be final and binding on both the parties. These supply orders have been signed by the buyer and also the representative of the suppliers even though such signatures have been denied by the respondent. It has been pointed out by learned counsel appearing for the respondent that the signatures of the customer and representative of the supplier are on front portion of the supply order and there are no signatures on the back side of such supply order containing the terms and conditions and under such circumstances the above referred clause cannot bind the respondent. I, however, do not find any substance in such argument. There are words mentioned over the signatures of the customers which are : --

'The terms printed over leaf have been explained to us and agree to abide by these conditions.'

It shows that the customer while putting his signatures had undertaken to abide by the terms and condition as mentioned overleaf. The terms and conditions on the back page of the supply order are also printed and have not been inserted later on. Considering all these facts and circumstances it can easily be said that there was agreement between the parties to refer the dispute to the arbitration of the above-named arbitrator, there was no question of joining anyone of the parties in making a reference of the dispute to the arbitrator. Both the issues are, therefore, decided in favour of the petitioner,

Issue No. 5 :

8. There is no dispute that a single reference was made, to the arbitrator in respect of various transactions allegedly having taken place in regard to various supply orders. Order 2, Rule 3, C. P. C. provides that a plaintiff may unite in the same suit several causes of action against the same defendant and any plaintiffs having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite such causes of action in the same suit. This provision in law is a clear answer to this issue and there is no bar for making a single reference in regard to different transactions. The issue is therefore, decided against the respondent.

Issue No. 6 :

9. Learned counsel for the respondent has pleaded that the dispute was referred to the arbitration of the named arbitrator on 21-1-1980, who made the award on 16-6-1980 and under such circumstances, the award has been made after the statutory period of four months permissible under law which has to be treated as invalid one. In this respect the records show that the petitioner-firm applied to the arbitrator on 21-1-1980, that a dispute has arisen between the parties in regard to the agreement and refer the same to him for arbitration. The arbitrator issued registered notice to the respondent on 23-1-1980 intimating him that as per Clause 10 of the terms of the supply orders, the disputes have been referred to him and required them to make it convenient to appear before him on 18-2-1980. The arbitrator received telegram from Ghulam Mohd respondent that he could not attend as the road was closed. The arbitrator then sent telegram to the respondents informing them that the next date has been fixed as 2nd March. Shri F. A. Goni, advocate, appeared for the respondent, filed Vakalatnama and sought opportunity for filing the written statement on 1-6-1980. It all shows that the arbitrator first of all entered upon the reference on 18-2-1980 for which date the notice had been issued to the respondents for their appearance. In AIR 1962 SC 78 their Lordships have held as under : --

'The legal position may be formulated thus : (a) a notice to act may be given before or after the arbitrators enter upon the reference, (b) If notice to act is given before they entered upon the reference, (c) if a party gives notice to act within four months after the arbitrators enter upon the reference, the arbitrators can make an award within four months from the date of such notice, and (d) in that event after the expiry of the said four months, the arbitrators become functus officio unless the period is extended by the Court under Section 28 of the Act: such period may also be extended by the Court though the award has been factually made.'

10. As pointed out above, the arbitrator issued notice to the respondents to appear before him on 18-2-1980 and in accordance with the principle laid down in the abovesaid authority, the arbitrator, in fact, entered upon the reference on that date i.e. 18-2-1980. The arbitrator has made the award on 16-6-1980. The award has thus been made within a period of four months and as such is within the statutory period. This issue is, therefore, decided against the respondents.

Issue Nos. 7 & 8 :

11. Learned counsel for the respondent has taken various pleas to make out that the arbitrator has misconducted himself in making the award and the same is also against the principle of natural justice. The first such plea is that Shri Satish Grover, son of the arbitrator was acting as a counsel for the petitioner-firm which, according to him, is a misconduct on the part of the arbitrator. This fact has been denied by Wazir Chand partner of the petitioner-firm in his statement. The record shows that Shri Satish Grover, never appeared before the arbitrator on behalf of the petitioner-firm. He has only filed application before the Court for directing the arbitrator to file the award. He has not proceeded beyond that. There is no evidence on record to come to the conclusion that Shri Satish Grover, ever appeared before the arbitrator at any time or conducted the proceedings on behalf of the petitioner-firm before the arbitrator. This plea of the respondents thus fails.

12. The next contention raised by learned counsel for the respondent is that the supply orders have not been signed by the respondent and this fact has been ignored by the arbitrator while making the award. In this respect the statement of Ghulam Moh'd, respondent reveals that he had not signed such supply orders. According to him, he had no dealings with the petitioner-firm. He came to know at Srinagar that Shri I. D. Grover was acting as arbitrator who had not afforded him any opportunity. In cross-examination, he has, however, admitted that he came to know about such proceedings being conducted and that was the reason he informed Shri F. A. Goni, Advocate, to appear before the arbitrator. He has further stated that he did not remember whether he sent any vakalatnama and has also denied his signatures on the vakalatnama Ex. PFA/1. He only informed Mr. Goni to enquire about the proceedings and did not ask him to appear before the arbitrator. His statement is full of contradictions. Mr. F. A. Goni, advocate, appeared as a witness for the petitioners in this case and he has clearly stated that he was engaged by Ghulam Moh'd to appear before Shri I. D. Grover, arbitrator and he also produced vakalatnama Ex. PFA/1. He appeared before the arbitrator. The arbitrator afterwards on 21-5-1980 addressed a letter to him which he received on 23-5-1980. He then filed application before the arbitrator for setting aside the ex part proceedings.

13. Ghulam Moh'd, respondent in his objections, has stated that he engaged Shri F. A. Goni, advocate, but asked him not to appear before the arbitrator. In his statement he has contradicted this version and only stated that he asked Mr. Gori to watch the proceedings but did not give any vakalatnama for it. This aversion of Ghulam Moh'd has been falsified by the statement of Shri F. A. Goni advocate, and also by the documents placed on record. So far the signatures of this respondent on the supply orders are concerned, this Court cannot go into it at this stage but by comparison from different documents on record, I feel that the signatures on the supply order Ex. DN/4, were of this respondent. Shri Dwarka Nath who is representative of the petitioner-firn. posted at Srinagar, in his statement has given version that all these supply orders EX. DN/1 to EX. DN/4 were signed by Ghulam Moh'd respondent in his presence. These supply orders contain the signatures of this witness. Excepting the solitary statement of Ghulam Moh'd respondent, which too is contradictory, there is no evidence to show that such supply orders were not signed by him. Moreover, this Court is not an appellate Court so far the award is concerned. The law on the point is well settled. Arbitrator's award on both fact and law is final and there is no appeal from his verdict. The Court cannot review his award and correct any misconduct in his adjudication unless objection to the legality of award is apparent on the fact of it. I am fortified in this view by an authority of the Supreme Court reported as AIR 1967 SC 1030 in which their Lordships have further observed that when the arbitrator has given no reason for award, nor is there any legal proposition as basis of award, the contention that there are errors of law on the face of award, must be rejected. It cannot be disputed that Shri I. D. Grover, arbitrator in this case was an eminent jurist of this place and to make any insinuation against him, in any manner, would be to spit on moon. From the proceedings conducted by him, I could not find any illegality which is apparent on the face of award so as to come to a different conclusion. Shri F. A. Goni, appeared before him for the respondent and took opportunities for filing objections and despite the fact that the arbitrator addressed a letter to him to appear before him again no action was taken on behalf of the respondents compelling the arbitrator to make an award ex parte. The award is also in accordance with the documents placed on record. Both these issues are, therefore, decided against the respondents.

Issue No. 9 :

14. In view of the above discussion, it is held that the arbitrator has not misconducted himself, neither the award opposed to the principle of natural justice nor is there any illegality apparent on the face of it and as such the same is made rule of the Court. Let a decree in terms of the award follow.

15. Learned counsel for the petitioner has urged that the arbitrator has not awarded interest and in view of the fact that the amount has been withheld by the respondents, interest be allowed. It cannot be disputed that the Court has power to grant such interest. Keeping in view the facts of the case interest at the rate of 12 per cent per annum is allowed to the petitioner on the awarded amount with effect from the making of the award till the realisation of the amount.


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