TMI Blog1994 (8) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... in recording the proceedings before him. 2. Late Shri Bisheshwar Nath Srivastava, ex-Chief Judge of the Oudh Chief Court, who died on July 18, 1938, had six sons, namely, Bhagwati Nath, Bhupendra Nath, Bishwa Nath, Brij Nath, Bijendra Nath and Birendra Nath. Smt. B.N. Srivastava died on September 22,1957. Bhagwati Nath died on February 8,1942 and Bishwa Nath died on October 27, 1946. After the death of Shri Bisheshwar Nath Srivastava, his eldest son, Bhagwati Nath was looking after the joint family properties as the karta of the joint Hindu family and after his death, Bhupendra Nath, the second son of Shri Bisheshwar Nath Srivastava, was doing so. On January 3, 1966, an agreement was entered into between the six branches of the family headed by the six sons of shri Bisheshwar Nath Srivastava whereby Shri Triveni Prasad, a retired District Judge, who was the son-in- law of Shri Bisheshwar Nath Srivastava, was appointed as the sole arbitrator to divide the movable as well as immovable properties of late Shri Bisheshwar Nath Srivastava and Smt. B.N. Srivastava into six shares according to his best judgment and allot one such share to each of the six parties. By this agreement it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed in the Court of civil Judge, Lucknow, on December 6, 1966. The civil Judge issued notices to the parties and in response thereto objections to the award were filed by the parties Nos. 1, 3 and 6. Party No. 1 subsequently did not press the objections and the objections were pressed only by parties Nos. 3 and 6. In the said objections it was submitted that the award was liable to be set aside for the reason that the arbitrator was guilty of misconduct and acted in excess of his powers. In the objections that were filed by party No. 6 the factum of the agreement of arbitration was also disputed. It was asserted that Sri Triveni Prasad was not appointed as the arbitrator. The arbitrator died on December 14, 1970. Mayanak Srivastava (respondent No. 1), who was minor at the time when the objections were filed on behalf of party No. 6, attained majority on February 12, 1973. On March 24, 1975, Mayank Srivastava filed an application under Section 151 and Order 6 Rule 17 C.P.C. for impediment and for amendment of the objections filed on behalf of party No. 6. The said application was allowed by the civil Judge by his order dated May 8, 1976. The objections were tried by the civil Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation. The Addition District Sessions Judge also found that in the award valuation of movables allotted to each share has been given in lump-sum figure or category wise. As regards the objection in giving proprietary rights over the family deity to party? No. 2, the Additional District Sessions Judge held that under the award the family deity had not been given to party No. 2 and that since the property under which the Mandir is situated was allotted to the share of party No. 2, the said party was entrusted with the care of the temple. It was also observed that in the affidavit dated January 5, 1972, party No. 2 has specifically admitted that the right to worship is available to all the parties. The Additional District Sessions Judge has also mentioned that the award is a non-speaking award since the arbitrator was not enjoined to give a finding on each and every item specifically alongwith reasoning and he could award particular sum or particular share in a single word and the award had to be seen in this light. As regards objection that the shares had not been equally divided amongst the parties. The Additional District Sessions Judge observed that under the agreement th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any stage of the application. As regards non-joinder of the three daughter of Smt. B.N. Srivastava, the High Court held the it is not open to any of the parties to the agreement to raise the said plea since they have benefited from the non-joinder of the aforesaid female herein of Smt. B.N. Srivastava in the agreement and the non- allotment of the shares to these female heirs has correspondingly enlarged the shares of all the parties. The High Court negatived the contention urged by respondents Nos. 1 to 3 that the agreement dated January 3, 1966 was not an arbitration agreement and held that the said agreement is to be construed as arbitration agreement. The High Court also negatived the contention urged on behalf of respondents Nos. 1 to 3 that the decree was bad for want of an application under Section 17 of the Arbitration Act, 1940 (hereinafter referred to as 'the Act') by any party. The High Court rejected the contention that as the arbitrator had already given an interim award on February 5,1966 in respect of utensils it was not open to the arbitrator to make a second award with regard to utensils. The High Court has, however, found that in recording the proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed dated February 25, 1988 in respect of another portion of Narain House No. 195/44, Jagat Narain Road, Lucknow, for a sum of ₹ 30,000, wherein also the vendor has claimed to be the owner of the said property by virtue of the impugned award; and (iv) an agreement to sell dated August 25, 1989 in respect of Badri Batika, bearing khasra No. 178 (old), 199/1 (new), situated at village Fatehpur, Pargana Tehsil and District Lucknow and the construction Shivala Dalen, Pacca Well, etc for a sum of ₹ 3,75,000 wherein the vendor has claimed to be the owner of the said property by virtue of the impugned award. Similarly Smt. Chandrawati Devi, respondent No. 2 is said to have executed a sale deed on December 29, 1993 in respect of her 50% Share in the land with building bearing Corporation No. 178/158 situated at Badri Nath Road, Golaganj Lucknow for ₹ 5,00,0000 and Bhuwaneshwar Nath, respondent No. 3, is said to have executed a sale deed dated December 31, 193 in respect of his half share in the said property for ₹ 5,00,000. Mayank Srivastava, respondent No. 1 herein, has filed an additional affidavit dated March 30,1994 in which he has not disputed the aforesaid tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing for respondent No. 8, representing party No. 1, has supported the appellants and the parties who have contested the appeal are party No. 3 (respondents Nos. 2 and 3) and party Nos. 6 (respondents Nos. 1 and 14). 10. Shri S.B. Sanyal, the learned senior counsel appearing for the appellants, has urged that the application filed by respondent No. 1 for amending the objection petition was wrongly allowed by the trial court and the High Court was not right in rejecting the submissions urged by the appellants to assail the said order. The learned Counsel had also urged that it is permissible in law for the arbitrator to make a non- speaking award and that the impugned award is such an award and that High Court was not justified in setting it aside on the view that it suffers from several mistakes apparent on its face. The learned Counsel has contended that the High Court was in error in holding that the paper bearing No. 104/37-Kha of the arbitrator's award was not an agreed statement of valuation of immovable properties and that the immovable properties could not be properly divided by the arbitrator on that basis. Shri Sanyal has submitted that the High Court was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the course of the proceedings before the trial court respondent No. 14 wanted to adduce evidence to which objection was raised by the appellants on the ground that it was not covered by the original objections. Thereupon on March 24, 1975 Mayank Srivastava, respondent No. 1, filed an application for impleadment as a party in the proceedings and for raising additional objections. The said application of respondent No. 1 was allowed by the civil Judge by order dated May 8, 1976 which reads as follows : Heard learned Counsel for the parties at length and gone through the objections already made and the earlier amendment proposed to be made therein. The Objector by the proposed amendment wants to clarify certain points and even to add fresh particular of alleged misconduct having been committed by the arbitrator in giving the award. The proposed amendment does not amount to depriving the opposite party from any right accrued to them. Further the amendment is necessary in order to decide the matter in controversy involved between the parties. Thus in order to decide the question finally and effectively the amendment proposed is necessary and essential. Further, the opposite p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal objections. The High Court appears to have lost sight of the well recognized distinction between statement of material facts which is required under Order 6 Rule 2 C.P.C. and particulars which are required to be stated under Order 6 Rule 4 C.P.C. In the context of Section 83(a) and (b) of the Representation of People Act, 1951, which contains provisions similar to Order 6 Rules 2 and 4 C.P.C., this Court, after posing the question, what is the difference between material facts and particulars, has observed: The word 'material' shows that the facts necessary to formulate a complete cause of action must be stated. Omission of a single material fact leads to an incomplete cause of action and the statement of claim becomes bad. The function of particulars is to present as full a picture of the cause of action with such further information in detail as to make the opposite party understand the case he will have to meet. There may be some overlapping between material facts and particulars but the two are quite distinct. The material facts thus will show the ground of corrupt practice and the complete cause of action and the particulars will give the necessary informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections various acts of misconduct have been imputed to the arbitrator in several paragraphs, we have been unable to find an averment in any of the paragraphs imputing misconducts of the nature mentioned in paragraphs 52 and 53 which were sought to be inserted by way of amendment. The High Court has, however, referred to paragraph numbers 41 and 45 of the original objection petition, which read as under : 41. That it is apparent on the face of the record filed by the arbitrator that between the date fixed for hearing of case, the arbitrator met and heard individual members in the absence of others. The enquiries made by the arbitrator behind the back of others have been kept secret and undisclosed. This procedure of the arbitrator amounts to legal misconduct in the proceedings. 45. That in conducting the proceedings the Arbitrator has failed to follow the principle of natural justice and the objector was not given equal opportunity with others. 17. The objection in paragraph 41 was to the effect that during the course of the arbitration proceedings the arbitrator had met and head individual members in the absence of others and the enquiries made by the arbitrator behind th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent No. 14 were allowed. The contained based on estoppel arising from acceptance of costs awarded under the order allowing the amendment was raised by Shri Dhasmana, the learned Counsel for Bhuwaneshwar Nath, respondent No. 3, with regard to order dated October 9, 1969. No such contention was urged by the learned Counsel for respondents Nos. 1 and 14 herein as regards order dated May 8, 1976. The acceptance of the contention urged by Shri Dhasmana, on behalf of respondent No. 2, by the High Court can only mean that the order dated October 9, 1969 has been upheld on that basis. Since no such contention was advanced by the learned Counsel for respondents Nos. 1 and 14 in support of the order dated May 8, 1976 the said order cannot be said to have been upheld on that basis. 20. That apart the principle of estoppel which precludes a party from assailing an order allowing a petition subject to payment of costs where the other party has accepted the costs in pursuance of the said order applies only in those cases where the order is in the nature of a conditional order and payment of costs is a condition precedent to the petition being allowed. In such a case it is open to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be recalled or reviewed. Thereafter, the appellants assailed the correctness of the order dated May 8, 1976 in the appeal filed by respondent Nos. 1 3 in the High Court. The principle of estoppel arising from acceptance of costs so to preclude the appellants from challenging the validity of the order dated May 8, 1976 cannot, therefore, be invoked in the facts and circumstances of the present case. Since the grounds given by the High Court for upholding the order dated May 5, 1976 cannot be affirmed the amendments allowed by the said order in so far as they relate to insertion of paragraphs 52 and 53 in the objection petition filed by respondent No. 14 are set aside. 22. We would now proceed to deal with the question as to whether the High Court was right in setting aside the award made by the arbitrator. As regards an award made by an arbitrator under the Act the law is well settled that the arbitrator's award is generally considered binding between the parties since he is the tribunal selected by the parties. The power of the court to set aside an award is restricted to the grounds set out in Section 30 of the Act, namely, (a) where the arbitrator has misconduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Anr. v. Dhirendra Nath Sen and Ors. [1964]3SCR410 at p. 421. 23. In the present case the High Court has set aside the award of the arbitrator primarily on two grounds, viz., (i) the arbitrator had misconducted the proceedings by incorrectly recording the presence of party No. 6 (respondent No. 14 herein) from October 9, 1966 onwards in the proceedings before him although that party was actually absent on those days; and (ii) the award suffers from several mistakes apparent on its face. 24. We would first examine whether the arbitrator can be said to have misconducted the proceedings by incorrectly recording the presence of respondent No. 14 on certain dated even though the said respondent was actually absent on those dates. In this regard it may be mentioned that on behalf of respondent No. 1 it was contended before the trial court as well as the High Court that the arbitrator was partial and the award had been improperly procured from him by the parties who stand favoured thereby. The trial court rejected the said contention with the observation: Nothing was shown how the arbitrator has tried to favour party Nos. 4 and 5. The High Court has also rejected the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The only reason that has weighed with the High Court in accepting the version of respondent No. 14 is that the signatures of respondent No. 14 are not contained in the order sheets of the proceedings for the period subsequent to October 9, 1966 till the conclusion of the arbitration proceedings although the signatures of other parties are found in the said proceedings and that the practice followed by the arbitrator was to obtain the signatures of all the parties under the proceedings of a particular date irrespective of the fact whether that party was present or not on that date. The charge of misconduct levelled by respondent No. 14 against the arbitrator was a very serious charge. The arbitrator was a retired District Judge who was closely related to the parties and who (as found by the High Court) until sometime before October 9, 1966 enjoyed the respect and confidence of all parties. The High Court has not given any reason why the arbitrator should have falsely recorded the presence of respondent No. 14 at the concluding stages of the arbitral proceedings. In the absence of corroboration by other contemporaneous evidence the High Court, in our opinion, should not have disbeli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by party No. 6 and he has tried to make out a case of offer after the death of the arbitrator. The said finding of the Additional District Sessions Judge has not upset by the High Court. 27. Having regard to the aforesaid facts and circumstances we are of the opinion that it would be unsafe to place reliance on the uncorroborated assertion of respondent No. 14, as contained in the affidavits filed by him, the truth of which has not been tested in cross-examination. The High Court, in our view, was not justified in recording a finding against the arbitrator on this basis of such evidence and in setting aside the award on the ground. 28. The other finding of misconduct relates to the return of documents including municipal assessment list by the arbitrator to party No. 1. In this regard it may be mentioned that in the proceedings of the arbitrator dated July 27, 1966 it is stated : Party No. 1 has brought his written statement, accounts and Municipal Assessment Statements. They have been explained. Party No.1 read over his written statement and accounts. Party No. 1 has taken back his written statement and some accounts with my permission to get them typed and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03/347- 348/Kha) after making the award. According to the High Court the arbitrator deviated from the judicial standard expected of him as an arbitrator in returning these documents. The High Court has not indicated the nature of these document and it is not clear whether they were part of the evidence produced before the arbitrator. The explanation offered for the return of the documents was that Bhupendra Nath being the karta of the family often needs the documents in connection with the management of the family property, was rejected by the High Court on the view that Bhupendra Nath had ceased to be the karta as soon as the agreement dated January 3, 1966 was entered between the parties and it was not for him to manage joint property but for the respective parties to manage the properties falling to the share of each in accordance with the decision of the arbitrator if and when confirmed by the court. In the absence of any material to show that the documents which were returned by the arbitrator to party No. 1 were part of the evidence produced before the arbitrator it cannot be said that the arbitrator was at fault in returning the said document to party No. 1 after making the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or has mentioned the municipal annual rental value of the property before indicating the market value of the same does not mean that the value is fixed on the basis of the rental value and the value is fixed on the basis of the rental value and the award is a reasoned suffers from an error. It is settled law that it is not open to the court to deduce reasons in the award or in the record accompanying the award and proceed to examine whether those reasons were right or erroneous. This is what appears to have been done by the High Court in the present case. This was impermissible. We are, therefore, of the opinion that the High Court was in error in going into the question of valuation of immovable properties by the arbitrator in the award. 35. Though it is not necessary, but since the High Court has dealt with the question of valuation of immovable properties at some length, we have examined the matter. We must express our inability to endorse the view of the High Court that the valuation as fixed by the arbitration cannot be sustained. For this purpose we will proceed on the basis that the valuation in the award had been fixed on the basis of the valuation given in paper No. 104 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed that the parties themselves had fixed their own valuation. The Trial Court has also observed that the arbitrator decided the market value of the various properties as given in the award after thorough discussion in the presence of the parties including Party No. 6 and that the parties did not raise any objection about valuation before the arbitrator till the date of award or before the Sub-Registrar at the time of registration of the award and that in the objection also party No. 6 did not say that the principle of 20 times annual municipal assessment has not result in arriving at the correct market value of the properties. The High Court has, however, held that paper No. 104/37-Kha was not an agreed valuation list submitted by the parties to the arbitrator inasmuch as the paper does not mention anything about the valuation being agreed and the arbitrator also has not used the word agreed anywhere in the award. With regard to the initials of all the parties at the bottom of the said paper the High Court has observed that the said initials can only be treated as having been made token of the parties other than Party No. 2 having noted the contents of the paper. The High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper No. 104/37-kha, to which reference has been made by High Court can have no bearing on the question whether the arbitrator has committed an error in proceeding on the basis that paper No. 104/37-kha submitted before him bearing the signature of all the six parties is an agreed valuation of the properties. The said paper was filed on July 21, 1966 and prior to that on July 16, 1966 the arbitrator had discussed with all the parties the municipal assessment and valuation of all the joint family properties for the purpose of stamp duty. The arbitrator could, therefore, assume that paper No. 104/37-Kha was being filed in pursuance of the said discussion. Moreover, there is nothing on the record to show that any of the parties had raised any objection that the valuation fixed in respect of the properties in the said paper was not correct. The arbitrator could, in the circumstances, proceed on the basis that the valuation of the properties was as indicated in paper No. 104/37-Kha. 40. The High Court has held that the valuation given by in paper No. 104/37-Kha is not correct for the reasons that (i) several immovable properties which were not subject to municipal assessment are sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st which have been filed as Exhibits 11, 10 and 12 before the trial court are the copies of the documents which had been filed by party No. 1 before the arbitrator on July 27, 1966 and which were taken back by him on July 28, 1966. Moreover if any party had any grievance against party No. 1 having taken back the municipal assessment statements which were produced by him on July 27, 1966 before the arbitrator, the said party could have either moved the arbitrator for directing party No. 1 to produce the same or could have filed the said statements itself before the arbitrator. None of the parties chose to adopt such a course. The only evidence that was adduced before the arbitrator regarding municipal assessment of the properties was that stated in paper No. 4 104/37-kha. The award based on the said evidence cannot be assailed on the basis of additional evidence in the form of certified copies of the municipal assessment statements produced before the trial court, which evidence was not produced before the arbitrator. 43. As regards the application of the same principle of capitalisation of annual profits to all the properties irrespective of the fact that some are tenanted build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disputes about advances taken from the joint family funds by the parties respectively and to make adjustments in respect thereof in the award as required to do by the arbitration agreement It is no doubt true that in Clause 9 of the arbitration agreement it is provided that if there be any disagreement on any figure of the advance between Bhupendra Nath Srivastava and the party concerned, the same shall be decided by the arbitrator and his decision will be binding and final on the parties concerned. From the proceedings of the arbitrator it does appear that the matter of advances has been considered by the arbitrator. The fact that the arbitrator has not separately indicated in the award the amount of advance in respect of each of the parties does not mean that he did not determine the dispute relating to advances. The arbitrator, after considering the amount of advances, has fixed the shares of each of the parties in the award. In other words, the arbitrator has made a lump-sum award for each of the parties. It was permissible for the arbitrator to deliver a consolidated award on the whole case. See : Smt. Santa Sila Devi and Anr. v. Dhirendra Nath Sen and Ors., (supra). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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