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1960 DIGILAW 86 (MP)

Jivraj Bhai v. Chintaman Rao

1960-03-30

K.L.PANDEY

body1960
ORDER K.L. Pandey, J. 1. The applicants seek to revise an order dated 11 September 1958 which the First Additional District Judge, Saugar, passed in certain proceedings initiated under the provisions of the Arbitration Act. 2. By a deed dated 16 February 1956, the applicants and the non-applicants constituted a partnership called 'Vrajlal Manilal & Co., Saugar and Delhi'. On or about 13 April 1958, the applicants 1 to 3 offered to retire from the partnership. The parties appointed three arbitrators, Chaturbhuj Jasani, Ambalalbhai and Becharbhai, to determine inter-alia the amount due to the outgoing partners The agreement of reference was, it appears, signed by the parties on 16 April 1958. After the arbitrators entered on the refernce, the non- applicant No 1 made an application date 21 June 1958 requesting the arbitrators to treat the retirement of the applicants as elective from 15 April 1958. The arbitaters stated in their order dated 22 June 1958 that they would give their decision on the question of retirement in the award itself. 3. Being aggrieved by the view taken by the arbitrators, the non-applicants made an application under Sections 5, 11 (2) and 12 of the Arbitration Act to revoke the authority of the arbitrators or, in the alternative, to give to them a direction to treat 15 April 1958 as the date of retirement of the applicants. On 11 September 1958, the lower Court removed two of the arbitrators and directed the third arbitrator, Chaturbhuj Jasani, to proceed with the reference and submit, his award within four months The lower Court further held that 15 April 1958 was the date of retirement of the applicants and directed the sole arbitrator to proceed on that basis; Being aggrieved by the view taken by the lower Court about the date of retirement of the applicants and direction given by him, they have come up in revision. 4. The question for consideration is whether, on an application under Section 11 (2) of the Arbitration Act, the lower Court was competent to adjudicate upon any question relating to the merits of the dispute or to give a direction in relation thereto. Section 11 (2) empowers the Court to remove an arbitrator who has misconducted himself or the proceedings. In my opinion, it gives no power to the Court to give any direction regarding the scope of the reference. Section 11 (2) empowers the Court to remove an arbitrator who has misconducted himself or the proceedings. In my opinion, it gives no power to the Court to give any direction regarding the scope of the reference. This is in keeping with the well established principle that, subject to any limitation contained in the instrument of his appointment and to any statutory provisions as to the manner in which he is to discharge his duties, an arbitrator may act as he thinks fit so long as he does so in accordance with the principles of equity, justice and good conscience. If the arbitrators were going beyond, the terms of reference from corrupt motives, they could have been removed. But that did not give to Court at that stage jurisdiction to define the limits of the reference or to direct the remaining arbitrator to adhere to the limits so defined. 5. It is true that it is open to the Court to modify an award on the ground that a part of it is on a matter not referred to arbitration But that is a subsequent stage when the Court has the benefit of the opinion of the arbitrator on the jurisdiction he has exercised. Further; the present case is not covered even by Section 13 (b) of the Arbitration Act-In the first place, unlike the English law, the arbitrator cannot be compelled to refer any question to the Court. Secondly, the arbitrator is not bound by the opinion of the Court. In the instant case, the lower Court expressed its opinion and gave a direction without any reference under Section 13 (b) ibid. For all these reasons, I am of the view that that the impugned order, so far as it relates to the date of retirement of the applicants cannot be sustained. 6. The applicants also prayed for an order requiring the arbitrator to proceed with the arbitration as if the lower Court had not expressed any opinion regarding the date of retirement of the applicants. The arbitrator has already given his award on 9 January 1959. Fortunately, the arbitrator himself treated the direction given by the Additional District Judge, Sagar, as unauthorised and did not follow it. That being so, an order in the sense suggested by the applicants is not now necessary. The arbitrator has already given his award on 9 January 1959. Fortunately, the arbitrator himself treated the direction given by the Additional District Judge, Sagar, as unauthorised and did not follow it. That being so, an order in the sense suggested by the applicants is not now necessary. It will however be open to the parties to the proceedings under Section 14 of the Arbitration Act now pending in the lower Court to urge that the arbitrator has left undetermined any matter referred to him or that the award is in part on a matter not referred to him. 7. The revision succeeds and is allowed. The lower Court's order dated 11 September 1958 so far as it expresses an opinion about the date of retirement of the applicants and gives a direction to the arbitrator to regard 15 April 1958 as the date of such retirement is set aside. The non applicants shall bear their own costs and pay these of the applicants. Counsel's fee Rs. 50/-. Petition allowed