SUSHIL KUMAR GUPTA v. ANIL KUMAR — 1990 DIGILAW 300 (DEL)

P. K. BHARI, J. ( 1 ) VIDE letter dated 12/06/1988, thesola arbitrator, Mr. Justice Jaswant Singh (retired Judge,supreme Court) had sent the award dated 8/06/1988 alongwith the proceedings to this Court. Notice of filing of the awardwas issued to all the partics and all the parties have filed objectionpetitions which are now being disposed of by this judgment. ( 2 ) A partnership firm known as M/s. Deoki Nandan andsons owned various immovable properties and other assets. This firm was in existence since 1967 but on death of Hanuman Prasad, the head of the family on 8/12/1972, apartnership deed dated 25/12/1972 was executed inbetween his sons viz. , Atul Kumar Gupta (predecssor-in-interest of respondents 2 to 5 ). Anil Kumar Gupta (respondentno. 1), Sushil Kumar Gupta (petitioner) and Smt. Sudhagupta (respondent No. 6), widow of pro-deceased son Shrikrishan Kumar Gupta, the said partnership deed is Ex. PW. 1/1 (existing at pages 174-177 of the Arbitration file ). Clauses 13 and 14 of the partnership deed which are reproduced in the award were to the following effect, as they arevery material for deciding the various points arising in theobjection petitions. "13. That the partnership shall not be dissolved onaccount of retirement or death of any party. Incase of retirement of a party, he/she shall cease tohave any title to or right in the firm s name andgoodwill of the business, including tenancy rightquota rights and licences which thereupon shallbelong exclusively to the remaining parties. Incase of death of a party, his/her legal heirs wouldbe entitled to the share of the deceased party andmay be admitted to the partnership by the con-sent of all the remaining parties hereto to the extent of the share of the deceased party. " "14. That all disputes and differences arising in between the parties as well as the determination ofshare accruing to the retting or deceased partyand the manner in which such share is to be reimbursed to the said retiring partner or the legalheirs of the deceased party shall be referred toarbitration and settled according to the provisionsof the Arbitration Act. "atul Kumar Gupta had died on 14/09/1983. Theremaining partners viz. , Sushil Kumar Gupta and Smt. Sudhagupta refused to admit respondents 2 to 5, heirs of Atul tothe partnership. It was evident from clause 13 above thatthey could be admitted into partnership only with the consent of all the remaining partners. "atul Kumar Gupta had died on 14/09/1983. Theremaining partners viz. , Sushil Kumar Gupta and Smt. Sudhagupta refused to admit respondents 2 to 5, heirs of Atul tothe partnership. It was evident from clause 13 above thatthey could be admitted into partnership only with the consent of all the remaining partners. , On or about 7/11/1983, an application under Section 20 of the Arbitration Actwas given by; respondents 2 to 5. Initially the parties agreedto refer their disputes and differences to Mr. Justice Shiv Narainshankar a retired Judge of this Court vide Court s order dated 5/12/1983. But thereafter the arbitrator returned thereference expressing his inability to continue with the proceedings. The parties then made a joint application to this Courton 14/11/1985 praying that the disputes be, referredto a retired Judge of the Supreme Court for arbitration. Therelevant clauses of the aforesaid agreement are as fellows asthey have been referred to during the course of argumentsrepeatedly : "l. The matter regarding the ascertainment of theassets and liabilities as on 14-9-83 and again onthe date of the execution of this agreement andthe mode and manner of distribution of theassets and liabilities of DNS and 1. Tughlaklane, New Delhi be referred to an Arbitrator;2. The parties have agreed amongst themselves, thatthe property 1, Tuglak Lane, New Delhi (whether forming part of assets of DNS or not) bedivided equally amongst the four parties physicallywith separate titles, with power to the Arbitratorto direct the sale of the property if the physicaldivision is not possible/equitable. " ( 3 ) THE High Court thus referred the aforesaid disputes forarbitration to the present arbitrator and it was agreed by allthe parties that the proceedings already carried out by theprevious arbitrator shall also be taken into consideration. Theparties also were co-owners of property, 1, Tughlak Lane,new Delhi. The dispute with regard to that property was alsoreferred to the arbitrator. After the pleadings were filed beforethe arbitrator, the arbitrator framed the following eight issues : "1. What wee the assets and liabilities of the firm, M/s. Deoki Naridan and Sons on 14-9-83 and 11-11-1985 ? (O. P. on parties ). 2. Is Section 37 of the Partnership Act applicable tothe instant case; if so, what is its effect on thecase (O. P. on respondents 2 to 5)?3. What wee the assets and liabilities of the firm, M/s. Deoki Naridan and Sons on 14-9-83 and 11-11-1985 ? (O. P. on parties ). 2. Is Section 37 of the Partnership Act applicable tothe instant case; if so, what is its effect on thecase (O. P. on respondents 2 to 5)?3. In case it is held that Section 37 of the Partnershipact is applicable to the instant case, can t theelection of the option exercisable under the Section be deferred till the accounts are taken (O. P. petitioner and respondent No. 6)?4. Are the legal representatives of Shri Atul Kumargupta only entitled to re-imbrushment for the shareof Shri Atui Kumar Gupta in the firm M/s. Deokinandan and Sons as on 14-9-1983 and notthereafter? (0. P. on the petitioner and Respondentno. 6 ). 5. Which of the stocks and shares of the firm M/s. Deoki Nandan and Sons are held by which party? (O. P. on the parties ). 6. How much expenditure has been incurred by Shrisushil Kumar Gupta (Petitioner) and Smt. Sudhagupta (respondent No. 6) on electric charges,water charges, property tat etc. and to whichaccount is same debitable ?7. Whether equal physical division of the propertynamely 1, Tughlak Lane, New Delhi amongstfour parties with separate titles in possible/equatable ? If not, in what manner it can bebest sold/disposed of ? (Onus on parties ). 8. To what relief, if any, are the parties entitled ? (O. P. on the parties ). ( 4 ) IN the award, the arbitrator then reproduced the arguments advanced before him by the counsel for the parties andthereafter he proceeded to record his findings on the aforesaidissues Pages 13 to 20 of the award pertain to the said findingsto which I shall make reference while dealing with theobjection petitions. I will at first deal with the objections filedby respondents 2 to 5. IAs 1987 and 3802 of 1989 ( 5 ) IA 1987/89 are the objections filed by respondents 2, 4and 5 and IA 3802/89 are the similar objections filedbyrespondent No. 3 separately. I will at first deal with the objections filedby respondents 2 to 5. IAs 1987 and 3802 of 1989 ( 5 ) IA 1987/89 are the objections filed by respondents 2, 4and 5 and IA 3802/89 are the similar objections filedbyrespondent No. 3 separately. At first the learned counsel forrespondents 2 to 5 has contended that the arbitrator committederrors of law apparent on the face of the award in giving thefinding that respondents 2 to 5 were entitled to have their sharefrom the partnership assets in the share of money and not inspecie and that they were entitled only to the value of theassets of the partnership as it existed on 14/09/1983the day on which their predecessor-in-interest had died. Thelearned counsel has urged that in law in view of Section ,48of the Partnership Act, all the assets of the partnership oughtto have been converted into money by selling those assets bypublic auction and then the said money. should have been distributed amongst the parties according to their share. He haaalso contended that if the arbitrator was of the opinion thatimmovable property could be divided in specie and as he hasdone in respect of the remaining parties, he had no right notto give immovable property in specie to respondents 2 to 5according to their share and thus the arbitrator has committedgross errors of law in giving the money only to respondents 2to 5 and also only on the value of the assests as they existed on 14/09/1983 and not at the time he proceeded todivide the assets. He has argued that any appreciation in thevalue of the assets due to passage of time till they were divided,should have been accrued for the benefit of all the parties andnot for the benefit of other parties to the exclusion of respondents 2 to 5. The counsel has also cited a number of judgments in support of his contention to which I will make reference in the later part of the judgement. The counsel has also cited a number of judgments in support of his contention to which I will make reference in the later part of the judgement. ( 6 ) THE learned counsel appearing for the petitioner andrespondent No. 6 have on the other hand controverted thesearguments by urging that the terms of the partnership deed andthe terms of reference made to the arbitrator clearly visualisethat the respondents 2 to 5 were to be given their share inmoney as it existed on the date of death of their predecessor,i. e. , 14/09/1983 and the (discretion was given tothe arbitrator to devise the mode and manner of distributionof the assets and the discretion exercised by the arbitrator ingiving the money as share of repondents 2 to 5 cannot bequestioned. They have urged that in law, it was not incumbent upon the arbitrator to have given in specie the immovableproperty to respondents 2 to 5 and more-over the terms ofthe partnership deed reproduced in the award itself clearlyshow that the partnership was not to be considered dissolvedon the death of one of the partners and heirs of the deceasedpartner if not admitted as partners were to be reimbursedtheir share and the partneship was to continue to be in existence, to be carried on by the other partners. They have alsoreferred to a number of judgments in support of the contentions. ( 7 ) BEFORE I deal with the aforesaid contentions, I may referto the judgments which laid down the scope of the court forinterfering with the award of the arbitrator. ( 8 ) ONE of the earliest judgments on the subject was givenby House of Lords in 1923 Appeal Cases 480 (Champsey Bharaand Company Vs. Jivraj Balloo Spinning and Weaving Companylimited, (1) it was laid down that an award of arbitrationcan be set aside on the ground of error of law on the face of theaward only when in the award or in a document incorporatedin it, as for instance a note appended by the arbitrator stalingthe reasons for his decision, there is found some legal proposition which is the basis of the award and which is erroneous. The statement of law given in the case of Hodgkinzon v. Fernie was reproduced in this judgment which stated to thefollowing effect: "the law has for many years been settled and remains so at this day, that, where a cause ormatters in difference are referred to an arbitrator,whether a lawyer or a layman, he is constitutedthe sole and final judge of all questions both oflaw and of fact. . . The only exception to thatrule, are, cases whore the award is the result ofcorruption or fraud and one other, which though itis to be regretted, its now, Ithink ,firmly establishedviz. , where the question of law necessarily arises onthe face of the award, or upon some paperaccompanying and forming part of the award. Though the propriety of this letter may very wellbe doubted, I think it may be considered as established. " ( 9 ) THE Supereme Court in the case of Union of India v. Bungo Steel Furniture Private Limited, AIR 1967 SC 1032 (2)has reiterated the same principls of law. In Alien Berry andco. v. Union of India, 1971 SC 686, (3) it was laid downthat as the parties themselves choose their own arbitrator, theycannot, when the sward is good on the face of it, object tothe decision either upon the law orthe facts. Therefore, evenwhen the arbitrator commits a mistake either in law or in factin determining the matter referred to him but such mistakedocs not appear on the face. of the award or in a documentappended to or, incorported in ii so as to form part of it, theaward will neither be remitted nor set aside nothwithstandingthe mistake. ( 10 ) REFERENCE was made to N. Chellapan v. Secretarykerala State Electricity Board, 1975 (1) SCC 289 (4) wherein itwas observed that "umpire as sole arbitrator was not bound togive a reasoned award and if in passing the award he makesa mistake of law or of fact, that is no ground for challengingthe validity of the award. it is only when a proposition of lawis stated in award and which is the basis of the award and thatis erroneous, that the award can be set aside or remitted on theground of error of law apparent on the face of record. it is only when a proposition of lawis stated in award and which is the basis of the award and thatis erroneous, that the award can be set aside or remitted on theground of error of law apparent on the face of record. An error of law on the face of the award moans thatyou can find in the award or a document actually incorporated thereto, as for instance, a note appended by thearbitrator stating the reasons for his judgments some legalproposition hich is ths basis of the; award and which youcan then say is erroneous. The court has nojurisdiction toinvestigate into the merits of the case and to examine the documentary and oral evidence on the record for the parpose offinding out whether or not the arbitrator has committed anerror of of law. " ( 11 ) RELIANCE was also placed on the ratio laid down inmunicipal Corporation of Delhi v. M/s Jagaii Math Ashokkumar 1987 (4) SCC 497 (5) to be effect that such reasonablenes of the reasons given by an arbitrator in making hisaward cannot be challenged. In was opined that appraisementof evidence by the arbitrator is ordinarily never a matter whichthe court questions and considers. The parties have selectedtheir own forum and the deciding forum must be concededthe power of appraisement of the evidence. It was held thatthe arbitrator is the. sole judge of the quality as well as quantity of evidence and it will not be for the court to takeupon itself the task of being a judge of the evident before thearbitrator. It may be possible that on the same evidence, thecourt might have arrived at. a different conclusion than the onearrived at by arbitrator but that by itself is no ground in ourview for setting aside the award of an arbitrator. ( 12 ) IN M/s Sudarsan Trad mg Co. v. Government of Kerala, air 1989 SC 890 , (6) it was observed that once there) is nodispute as to the contract, then what is the interpretation ofthe contract is a matter for the arbitrator and on which thecourt cannot substitute its own decision. It was held that it isnot open to the court to probe the mental process of the arbitrator and speculate where no reasons are given by the arbitrator as to what impelled the arbitrator to arrive at his conclusion. It was held that it isnot open to the court to probe the mental process of the arbitrator and speculate where no reasons are given by the arbitrator as to what impelled the arbitrator to arrive at his conclusion. This judgment also reproduced the same principles oflaw as have been laid down in the earlier judgments notedabove. ( 13 ) IN a recent judgment the five Judges Bench of thesupreme Court in Raipur Development Authority v. M/s Chokhamal Contractors, AIR 1990 SC 1426 (7) has held that it isnot the requirement of law that the arbitrator must give reasonsin support, of his findings and the award isi not liable to beremitted or set aside on the ground that the aribtrator has notgiven reasons in support of this findings. Giving of reasons isnot a principle of any rule of natural justices which has to becomplied with by the arbitrator. In M/s Hind Builders v. Union of India, AIR 1990 SC. 1340 . (8) the Supreme Courthas again reiterated the law that in case there are two viewspossible in respect of certain clauses of the contract and thatthe arbitrator acting upon a particular interpretation, the courthas no jurisdiction to interfere with the view of the arbitrator. As laid down in Dandaai Sahu v. State of Orissa, AIR 1990sc 1128. (9) the arbitrator is only required to mention in theaward that he has referred to and considered all the documents and evidence before him, no matter whether he relies onthem or ultimately discards them from consideration. ( 14 ) COUNSEL for Anil Kumar Gupta has cited Jivarajbhaiuiamshi Sheth v. Chintamanrao Balaji and others, AIR 1965sc 214 (10) which laid down that it is not open to the courtto sepculate where no reasons are given by the arbitrator asto what impelled the arbitrator to arrive at his conclusion. Itwas held that on the assumption that the arbitrator must havearrived at his conclusion by a certain process of reasoning, thecourt cannot proceed to determine whether the conclusion iswrong or right as it is not open to the court to attempt to probethe mental process by which the arbitrator has reached his conclusion where it is not disclosed by the terms of the award. ( 15 ) IN answering issue No. 4, the arbitrator has recorded his finding as below : "on a fair and reasonable construction of the aforementioned instrument of partnership (Exhibitpw1/1) dated 25/12/1972 and in view ofthe observations of the Hon ble Supreme Courtof India in Addanki Narayanappa and Anr. Vs. Bhaskara Krishtappa and 13 ors. (1966) 3 SCR 400 ,khushal Khenigar Shah and Ors v. Mrs. Khorshedbanu Dadiba Boatwala and Anr. AIR 1970 SUPREME COURT 1147 and Lindley on Partnership (12th Edition) and what is contained in para10 of the statement of claim filed before me byrespondents 2 to 5,1 hold that on refusal ofsushil Kumar Gupta and Smt. Sudha Gupta toadmit Atul s legal representatives to the partnership, the latter i. e. , Atul s legal representativesbecame entitled to be reimbursed for Atul s 1thshare in terms of money representing the value ofthe immovable and moveable properties belongingto the firm, as they existed on 14/09/1983after satisfying the liability as provided in therelevant provisions of Section 48 of Partnershipact and deduction of the amount already paid tothem from time to time pursuant to my directiondated April 1986. The amount thus payable to. the legal representatives of Atul together with interest at 6% perannum in view of the written option exercised bythem through their learned counsel, Shri Ishwarsahai,on 8/03/1988, would be quantified by mehereinafter. " ( 16 ) MR. Ishwar Sahai, learned counsel for respondents 2 to5 has taken me through the two judgments of the Supremecourt referred to above and has vehemently argued that nosuch legal proposition has been laid down in the said twojudgments that respondents 2 to 5 could have been giventheir share only in the share of money and not in specie. Hehas also argued that the observations given in the hook, lindley on Partnership also do not lay down the propostionthat only share in money could have been given in a case ofthe type presented before the Arbitrator ( 17 ) ON the other hand, learned counsel for the, petitionerand respondent No. 6 have contended that it was within thediscretion of the arbitrator to decide as to in what mode andmanner, he was to distribure the assets and liabilities andkeeping in view particularly the clause of the partnership deedalready enumerated above, the arbitrator could come to theconclusion that respondents 2 to 5 who are legal heirs of Atulkumar. deceased partner, should be given their shares inmoney than in specie and that finding of the arbitrator is notopen to questioning by the Court as the court is not to gointo the mental process of the arbitrator by which he reachedthe said finding. It is pointed out by them that ,the reasonsgiven in support of this finding by the arbitrator are notdetailed one. The arbitrator after referring to the aforesaidjudgments and Lindley on Partnership and also after referringto para 10 of the statement of claims and the provisions ofpartnership Deed had come to the conclusion that they shouldbe reimburesed their share in the shape of money. So it cannotbe said that the arbitrator lias based his conclusion on anyparticular judgment of. the Supreme Court exclusively oranything said particularly in the book, lindley on Partnership. They have pointed out that even in law where it isprovided in the partnership deed that the partnership was notto be dissolved on the death of a partner, the legal heirs ofshe deceased partner could be only given their share in moneyafter evaluating the share of the deceased at the time of hisdeath. They have further pointed out that even the architectof respondents 2 to 5 had given the report evaluating theestate of the deceased on the date of death of Atui Kumar. ( 18 ) NOW coming to the provisions of the Partnership Act,at first under Section 42 of the Partnership Act it is providedthat "subject to contract between the partners, a firm isdissloved- (c) by death of a partner. " It is evident that thisparticular provision is. subject to the contract between the partners. Where the contract between the partners contemplatesexpressely or impliedly that the death of a partner would notresult in dissolution of the partnership firm, the said term inthe contract is to be given effect to superseding the provision contained in Section 42 (c ). in the present case, it is clearlyprovided ill the partnership deed that the death of a partner wouldnot result in dissolution of the partner, hip firm. in the present case, it is clearlyprovided ill the partnership deed that the death of a partner wouldnot result in dissolution of the partner, hip firm. If that is soit cannot be urged that the arbitrator should have treated thefirm as dissolved on the death of one of She partners, if thefirm was to be continued by the remaining partners, it is notunderstood how the arbitrator could have given directions forselling all the assets of the partnership in open auction anddistributed the money to the parties according to their share. The only fair and reasonable view which could be taken by thearbitrator and which the arbitrator has taken in the. presentcase was that the value of the assets should be ascertained inorder to reimburse the heirs of the deceased partner in theshape of money. It is evident that for settling the accounts ofthe respondents 2 to 5 and to determine as to what share inmoney they are entitled the provisions of Section 48 of thepartnership A,ct have to be followed which prescribe at firstfor calculating the losses, defficiencies of capital and other liabilities and that is why it is almost a settled law that for makingdistribution of the assets between ths partners of the dissolvedfirm or otherwise, the provisions of Section 48 mustbe followed. Section 46 of the Partnership Act. lays downthat on tile dissolution of a firm every partner or his representative is entitled as against alia other partners or their representativesto have the property of the firm applied in payment of the debts and liabilities of the firm and to have the surplus distributed among the partners or their representatives accordingto their rights. This provision has to be strictly followed whenthe firm is dissolved but the principle lying under this provision has also to be followed where the firm is not to be dissolved and share of the outgoing partner is to be determ,ined. Butit does not lead to any inference that for separating the shareof the heirs of the deceased partner in a situation where thefirm is not to be considered dissolved, the immovable propertiesof the partnership have to be put to auction. If this inferenceis drawn, it would give go by to the terms of the partnershipagreed upon by the parties that on. If this inferenceis drawn, it would give go by to the terms of the partnershipagreed upon by the parties that on. the death of a particularpartner, the firm would not be deemed to ie dissolved meaningthereby that the partnership firm has to remain in existence andcarry on the business of the partnership despite the fact thata particular partner has died and that may be possible onlyif assets of the firm remain intact and are not disposed of byholding public auction or by effecting sale of those assets. ( 19 ) LINDIEY on Partnersnip (12th Edition) as well as 15thedition, in Chapter 26 dealt with the consequences as regardsthe surviving partners on the death of a partner. It also laiddown at page 739 of the 15th Edition that subject to any agreement between the partners, every partnership is dissolved asregards all the partners on the death of any partner and unlessall the partners have agreed to the contrary when one of themdies, his executors have no right to become partners with thesurviving partners nor to interfere with the partnership business,the executors of the deceased represent him for all purposes of account, and, unless restrained by special agreement, they havethe power of bringing an action, to have the affairs of thepartnership wound up in a manner which is generally ruinousto the other partners. ( 20 ) SO, it is clear that if there is an agreement t the contrary, the death of a partner will result in the dissolution of firm. but as already noticed above, in the present case, thers is anagreement to the conrary between the partners recorded in thepartneship deed itself that the partnership shall not stand disssolved on the death of a parnter. At page 741, it is observed inthis book: that : "in the absence of an express agreement to that effect,the surviving partners have no right to take theshare of the deceased partner at a valuation, or tohave it ascertain in any other manner than by aconversion of the partnership assets into money bya sale. And if the partnership assets have increased in value between the date of death and the dateof sale, the surviving partners cannot claim the increase as their own to the exclusion of the deceased partner s estate. And if the partnership assets have increased in value between the date of death and the dateof sale, the surviving partners cannot claim the increase as their own to the exclusion of the deceased partner s estate. " ( 21 ) SO the legal position is quite clear that unless there isan express agreement to the contrary, on ths death of a partner, the partnership stands dissolved and the assets of the partnership have to be sold and money so realised is to be distributedamongst the parties according to their share but theposition would be different If there is our agreement to the contrary as in the present case. The counsel for respondents 2to 5 has placed reliance on 1981 (3) All England Law Reports232, Barclays Bank Trust Co. v. Bluff (11 ). The facts of thesaid case in brief were that the father carried on a fanning business with his son on terms that they were to share the profits equally under a partnership at will. The father died in 72 and accordingly the partnership was dissolved at the date of his death But the son continued to carry on the farming business andentered into negotiations with the father s executor for the purchase of the father s share of the partnership business but nosettlement as reached. The aggregate net value of the partnershipassets at the date of the father s death was, 41,500bat had since increased to in excess of 1,00,000. The executorissued a summons seeking, inter aha, a declaration thatin the event of the executor electing under Section 42 (1) ofthe Partnership Act, 1890 (Section 37 of the Indian Partnershipact is similarly worded) for payment of interest, the executorwould not thereby deprive the estate of the right to receivethat part of the proeeds of a sale of partnership assets, whichwas attributable to the increase in the value of the assets betweenthe father s death and the sale of the assets. Under Section 42 of the English Partnership Act, if a member of a partnershipdied and the surviving partners carried on the partnership business with its capital or assets pending final settlement of accounts, then in the absence of any agreement to thecontrary the estate had the option of receiving either that shareof the profits made since the dissolution which the court foundto be attributable to the use of the deceased, partner s share ofthe assets or interest at the rate of 5% per annum on thatshare of the assets. It was contended by the son that the profitsmade by the partnership since it was dissolved by the father sdeath included the increase in the value of the partnership assetsoccurrng since the dissolution and that the executor had by certain letters duing the negotiations made an election under Section42 of the Act to take interest at 5% per annum in lieuof share of profits made since the dissolution and that as a consequenceof such election, the father s assets was no longer entitled to claim share of the profits made since the dissolutionincluding the increase in the value of the assets. It was held thaton the construction of Section 42 of the Act, the term profits referred to profits accruing in the ordinary course of carrying onthe partnership business pending realisation. Accordingly for thepurpose of Section 42, the profits of the farming business carriedon by the son using the partnership assets following thedissolution caused by the fathers death consisting of the earnings of the business derived from the disposal in the ordinarycourse of trade of live stock and produce and did. not includeany incease in value of the partnership assets occuring afterthe father s death. Thus even if the father s executor badmade an election under Section 42 to take 5% interest insteadof share of the profits, such an election would not have affectedthe estate s night to the share of the increase in the value of theassets. It was further held that until realisation of the partnership business and assets, the son was trustee of the businessfor the deceased s estate and himself. Accordingly the increasein the value of the assets was held by him. for the benefit ofboth, the estate and himself. It was further held that until realisation of the partnership business and assets, the son was trustee of the businessfor the deceased s estate and himself. Accordingly the increasein the value of the assets was held by him. for the benefit ofboth, the estate and himself. On facts it was found that theexecutor had not as vet given an option as contemplated bysection 42 and till such option is exercised, the estate wouldnot be deprived of the right to receive 112 of the net proceedsof the sale of the assets of partnership business after making aproper allowance to the son for the management of the partnership business since the death of the deceased. This judgment isdistinguishable on facts because in the present case the firm didnot stand dissolved on the death of the partner whereas in theaforesaid case; the firm stood dissolved on the death of the partner. In respect of this judgement, a note has been recorded bythe author at the bottom of page 741, lindley on Partnership that : "the position might be different if the assets constitutetrading stock. In such circumstances, the increasein the value would generally amount to profits within the meaning of Section 42 of the Partnershipact. 1890. "at any rate it cannot be said on the basis of this authoritythat the legal position was clear that even if the firm didnot stand dissolved, ever. then the increase in the value of theassets after the death of the partner has to be given benefitof to the heirs of the deceased partner. ( 22 ) THE counsel for the petitioner has brought to my notice1961 Irish Reports at page 96. Emma Emelda Meagher V. Patrickmeagher. (12) A photo-copy of the judgment has been placedon record for my perusal. ( 23 ) THE facts of the said case, in brief, were that T, E andp carried on business in partnership. There was no deed andail partics agreed that the partnership was at will. T died ande and P carried on the business. After the date of death oft and before realisation, the value of the assets rose. ( 23 ) THE facts of the said case, in brief, were that T, E andp carried on business in partnership. There was no deed andail partics agreed that the partnership was at will. T died ande and P carried on the business. After the date of death oft and before realisation, the value of the assets rose. Onlhe question of valuation of T s share, it was held by the courtthat the time for ascertaining the value of the deceased partner sshare was the date of realisation and not the date of death andfurther where the partnership assets increase in value after thedeath of a partner and before realisation such increase in profitsand the deceased partner s personal representatives are entitledto an appropriate share thereof. However, it was clarified thatif the personal representative of the deceased partner choosesunder Section. 42 of the Partnership Act. to accept interest@5% per annum on the deceased partner s. share from thedate of death to the date of realisation in lieu of a share ofthe profits for the same period, such share must, in thse circumstances be calculated as of the date of death. ( 24 ) THE counsel for the petitioner has drawn my alienlion to the offer given by respondents 2 to 5 under Section 37of the Indian Partnership Act which is similar to Section 42of the English Partnership Act wherein it ha? been mentionedthat in case the arbitrator was to give money as share of respondents 2 to 5, then they prefer to have, interest @ 6 per centper annum rather than share in he profits. In the presentcase thus it is urged that the arbitrator did not. commit anyerror of Jaw apparent on the face of the record when he keeping in view the option so exercised, had evaluated the shareof the deceased partner as it existed on the date of death andhad given interest @ 6% per annum over the money founddue to respondents 2 to 5. I may also clarify at this stage thatin both these cases, there was no provision made in the partnership deed that the partnership was to continue even on thedeath of a partner. These cases were of dissolution of partnership on death of a partner and thus are not strictly speakingon all fours on the point arising before this court. I may also clarify at this stage thatin both these cases, there was no provision made in the partnership deed that the partnership was to continue even on thedeath of a partner. These cases were of dissolution of partnership on death of a partner and thus are not strictly speakingon all fours on the point arising before this court. But onefiling which is significant is that this judgment, inthe case ofemma Imelda (supra) even in the case of dissolution takingplace on the death of a partner, has held that where the optionhas been exercised to take interest, then the share of thedeceased partner has to be evaluated as it existed on the date. of death of the partner and no benefit of the increase in thevalue of the assets from the date of death onwards is to begiven to the legal representatives of the deceased pirtner. Inlaw of Partnership by Charles D. Drake at pages 248 and249 (Third Edition), these two cases were commented uponby the author by mentioning that "in the Meaegher s case, thecourt went on to say that where an election is made undersection 42 (1), the right to claim a share of profits is necessarily forgone and involves a valuation of the assets as at thetime of death. It. was on this last conclusion that an Englishcourt disagreed in Barclays Bank Trust Co. Ltd v. Bluff. Asin the Meagher Case, a partnership at will had been dissolvedby the death of one of the partners and some time had elapsedwithout a. settlement of accounts. The assets in the Englishcase had appreciated from a value of 4,500 at death to over 1,00,000, a gain for which the continuing partner wastrustee for the estate of the deceased partner. Clearly it wouldbe wrong to allow the former to pocket a profit which bearsnot relationship to his own activity, as in the case of a risingmarket price or the granting of planning permission. It wasfound, despite some rather desultory correspoadence. Thatno election under Section 4. 2 (1) had in fact been made andthat it was still open to make the election between interest orprofits. " The author opined that the enhanced value of thefarm was not profits in the sense and stood quite apart fromelection as between interest and profits in Section 42 (1 ). Thatno election under Section 4. 2 (1) had in fact been made andthat it was still open to make the election between interest orprofits. " The author opined that the enhanced value of thefarm was not profits in the sense and stood quite apart fromelection as between interest and profits in Section 42 (1 ). Itwas further observed by the author that presumably, the Englishcourt would agree with the Irish example, in which followingthe death of a partner in a wholesale whisky business, the surviving partner locks away a stock of whisky until such time asa heavy rise in whisky prices occurs, when he realises in whichevent the rise would be properly termed "profits" since "use"in these circumstances would not be incompatible with passivity. It was observed by the author that the narrow test of "profits"for the purposes of the section produces results which unlikethe Iris'ii approach, are fair and equitable. The author hasreferred to some other case of Yate. " v. Finn, where A and Bwere partners sharing profits equally but contributing capitalrespectively in the ratio' 3:1. The court felt unable to applythe equal profits rule to profits made after a partnership ansuch had ceased to exist, saying that it was ordinarily just andright that the profits made by the business should be apportioned according to the capital employed in it. However, thereis no discuussion made in this book with regard to the positionwhere the partnership business is to continue even though apartner has died and whether the legal representatives of thedeceased partner would be entitled to have the benefit ofincrease in the value accruing after the death of the partner. ( 25 ) IN 68 Corpus Juris Secundum 285, it has been laiddown that in determining the value of the firms' assets, thesurvivor is not entitled to take over such assets at an appraisedvalue without the consent of the representative of the estate of the deceased partner and the pertinent date in determining thesbare of the deceased partner's estate is that of the death ofsuch partner. Likewise the share is properly payable in itsentirety as of aich date. The judgment of the Supreme Courtin Addanki Narayanappa and another v. Bhaskara Krishsappa, air 1966 SC 1300 (13) which is referred by the Arbitrato in3 his award has on'iy broadly enunciated the principles governingthe partnership property. Likewise the share is properly payable in itsentirety as of aich date. The judgment of the Supreme Courtin Addanki Narayanappa and another v. Bhaskara Krishsappa, air 1966 SC 1300 (13) which is referred by the Arbitrato in3 his award has on'iy broadly enunciated the principles governingthe partnership property. It has held that the provisions ofsections 14, 15, 29, 32, 37, 38 and 48 make it clear that what. ever may be the character of the property which is brought inby the partners when the partneship is formed or which may beacquired in the course of the business of the partnership itbecomes the property of the firm and what a partner is entitledto is his share of profits, if any, accruing to the partnershipfrom the realisation of this property and upon disoolutionof the Firm to a share in the money representing the value ofthe property. It was mentioned that upon the dissolution of thefirm. the parnter is entitled to a share in the assets of the firmwhich remained after satisfying the liabilities set out inclause (a) and sub-clauses- (i), (ii) and (ii) of clause (b) ofsection 48. There is no dispute that in the case of dissolutionof partnership, all the assets of the partnership have to beconverted into money and then that. money has to be distributed to the partners in accordance with their share. Nothingsaid in the judgment helps the contention of the learned counselfor respondents 2 to 5 that where in accordance with the termsof the partnership deed, the partnership is not to be dissolvedon the death Jf a partner, in that situation, whether it is inoumbento direct for the sale of the assets of the partnership firmand as to whether the representatives of the deceased parnter areentitled to have benefit of the increase taking place in the valueof the property since the date of death of t'"e partner. Thesecond judgment of the Supreme Court referred to by the arbitratoris Khushal Khemgar Shah and others v. Mrs. Khorshedbami Dadiba Boatwala, AIR 1970 SC 1147 (14 ). What hasbeen held in this judgment is that Section 55 does not providethat goodwill may be taken into account only when there isa general dissolution of the firm. and not when the representativesof a deceased partner claim his share in the firm. Khorshedbami Dadiba Boatwala, AIR 1970 SC 1147 (14 ). What hasbeen held in this judgment is that Section 55 does not providethat goodwill may be taken into account only when there isa general dissolution of the firm. and not when the representativesof a deceased partner claim his share in the firm. whichby express stipulation is to continue notwithstanding the deathof a partner, It has also been held in this judgment that Sections 39. 42 and 46 deal with the concept and consequencesof dissolution of the firm, they do not abrogate the terms ofthe contract between the partners. The Partnership Act does notoperate to extinguish the right in the assets of the firm of apartner who dies, when the partnership agreement providesthat on death, the partnership is to continue. It has been heldthat in interpreting the deed of partnership, the court willinsist upon some indication that the right to a share in, theassets, is by virtue of the agreement that the surviing partnersare entitled to carry on the business on the death of the partner, to be extinguished. In the absence of a provision expresslymade or clearly implied, the normal rule that the share of apartner in the assets devolves upon his legal representatives willapply to the goodwill as well as to other assets. ( 26 ) APART from the fact that this was also a case wherethe partnership deed provided that on the death of a partnet,the dissolution will take place, nothing said in this judgmentis of any help to the respondents 2 to 5 in showing that as towhether the share of the deceased partner is to be given inmoney or not. The learned arbitrator has only made referenceto these two judgments but has not called out any specific proposition of law from these judgments. Rather these judgmentsdid not throw any light on the specific points arising for decision before the arbitrator as to whether the respondents 2 to 5were to be given their share in the shape of money and whetherthey were to be given benefit of increase accruing in the valueof the assets after the death of the partner. The mere fact thatthese two judgments do not throw any light on these two pointsand have been referred by the arbitrator in his award, wouldnot mean that the arbitrator has committed any error of lawapparent on the face of the award. The mere fact thatthese two judgments do not throw any light on these two pointsand have been referred by the arbitrator in his award, wouldnot mean that the arbitrator has committed any error of lawapparent on the face of the award. The arbitrator has not givenany reasons for leaching his finding that legal heirs have to begiven their share in money. He has only referred to these twojudgments and then to Lindley on Partnership and then to para10 of the Statement of Claims filed by respondents 2 to 5 andthen to Section 48 of the Partnership Act and had given thefinding that it is fair and reasonable construction of the instrument of partnership that the respondents 2 to 5 should be giventheir share in money andthe value of tha share of the deceasedis to be assessed as' on 14/09/1983. The Court cannotembark upon independently to enquire into the process of themind of the arbitrator to know as to how the arbitrator hasgiven his findings. Even if this court may be inclined toexercise this discretion differently, even then the court is debarred from going into this question. Apparently how a particularpartnership deed may be interpreted, was within the exclusiveforum of the arbitrator which cannot be transgressed by thecourt. ( 27 ) MR. Sahsl, counsel for defendants 2 to 5 has placedreliance on Ajudhia Pershad Ram Pershad v. Sham Sunder andors. , AIR (34) 1947 LAHORE 13 (15 ). This was a case of aretiring partner and it was held that the Partnership Act makes no provision for separation of the share of a retiring partner andthe intention may be that this shall be determined by agreementbetween the partners. A partner who is not a minor and has not. obtained the agreement of the other partners to severance ofhis share, can only secure separate possession of his share byseeking dissolution and in such a case the rules laid down insections 46, 48 and 49 become applicable. I do not understandkow anything laid down in this judgment can support the contention of the learned counsel for the objectors that the arbitrator had commited an error apparent on the face of the awardby directing that these objectors have to be paid their share inthe shape of money. After all this case before the Lahore Highcourt pertained to the effect of a retiring partner which resultedin dissolution of the partnership. After all this case before the Lahore Highcourt pertained to the effect of a retiring partner which resultedin dissolution of the partnership. If that is so, obviously theprovisions of Sections 46, 48 and 49 in strict sense would become applicable. In the present case, there is a contract to thecontrary as contained in the partnership deed that the partnership was not to be dissolved on the death of a partner. If thatis so, it is not wrong on the part of the arbitrator to come tothe conclusion that the only equitable and fair manner of givingthe share to the heirs of the deceased partner is bway of money. It cannot be said that the arbitrator has come to this conclusionon any illegal proposition of law. ( 28 ) REFERENCE is then made to Shiam Sunder v. Pratapchandra, AIR (39) 1952 Allahabad 330 (16), inwhich case it was laid down that where at the time of thedissolution of a partnership, it is found that some of the partnership stocks are mixed up with the goods or one of thepartners and are held by him, and not distributed or evaluatedby him in his hands, the goods of the dissolved partnership must,of necessity, be deemed to have been held under fiduciary relationship and under Section 66 of the Trusts Act, the result ofwrongful intermingling of trust property with the private property of the trustee, entitles the beneficiary only to have acharge on the entire property for the recovery of the trust fundand since Section 51 of the Act prohibits a trustee fromusing the trust property for his own profit, it isobvious that the property plus the profits derived therefrommust be made available for distribution amongst the partners ofthe dissolved firm. It was observed that the parties' rights andliabilities should bedetermined in accordance with the accountwith reference to the prices actually realised, by the defendantor those which he should be deemed to have realised when thesale was made. This case is based on different facts. It wasthe case of dissolution of partnership. Obviously once partnership is dissolved, in terms of Section 46 of the Parinership Act,the assets of the partnership have to be sold by pulic auctionand the money so realised is to be distributed amongst thepartners. This case is based on different facts. It wasthe case of dissolution of partnership. Obviously once partnership is dissolved, in terms of Section 46 of the Parinership Act,the assets of the partnership have to be sold by pulic auctionand the money so realised is to be distributed amongst thepartners. ( 29 ) SECTION 37 of the Partnership Act contemplates the position where after dissolution, the assets remain in possession ofone of the partners and some profits are earned then an optionis given to the other partner either to ask for profits so earnedby the other partner by utilising the assets after the dissolution ofthe partnership or claim interest @6% per annum on the amountwhich may be found due to the said partner on taking accounts. In the present case the heirs of deceased partner had given anunequivocal option under Section 37 of, the Act that in casethey were to be paid their share in the shape of money, thenthey should be paid interest @6% per annum. The arbitratorhad kept in view this option of these objectors while giving thefinding that the share of the said objector has to be evaluatedon the value of the assets as on the date of death of the deceasedpartner. No legal proposition which is applicable to the factsof the present case, has been enunciated in this judgment of theallahabad High Court. It is true that in case the arbitratorflouts the provisions of Section 48 of the Partnership Act, thesame amounts to legal misconduct (See Sherbanubai Jafferbhoyv. Hooseinbhoy Abdoolabhoy and another, AIR 1948 Bombay (292) (17 ). Such is not the case here. ( 30 ) COUNSEL for the objectors also sought some support fromthe judgment given in Vidya Devi v. Mani Ram, 1974 (Vol. X)DLT 311. (18) This case was also of a situation where a partnerretires and it was mentioned that such a retiring partner canclaim dissolution of the partnership if there is no provision tothe contrary made in the partnership deed. It was observedby the Single Judge of this Court that the Partnership Act makesno provision for the separation of the share of a retiring partnerand the intention may be that this shall be determined byagreement between the parties. It was also mentioned thatwhere a retiring partner does not seek dissolution, he can withdraw from the firm arid let the remaining partners continue tocarry on the business of the firm without dissolution. It was also mentioned thatwhere a retiring partner does not seek dissolution, he can withdraw from the firm arid let the remaining partners continue tocarry on the business of the firm without dissolution. It wasalso observed that a partner who has not obtained the agreementof other parties to the severance of his share, can only secureseparate possession of his share by seeking dissolution and insuch a case, the rules laid down in Section's 46, 48 and 49become applicable and in that situation the assets of the firmmust be collected and converted into cash and be applied tothe payment of debts and liabilities of the firm and the surplusdistributed among the partners according to their shares. Thereis no dispute about the proposition of law laid down in thisjudgment. However, in the present case, there is a term agreedupon between the partners as incorporated in the partnershipdeed that the partnership shall not stand dissolved with thedeath of a partner and in that situation the share of the deceasedpartner has to be separated as it existed on the date of his deathbecause if the contention of the objectors is accepted that thepartnership is to be deemed to be dissolved on the death of apartner, then that would amount to violating the specific termagreed upon in the partnership deed. ( 31 ) THE counsel for the objectors has contended that eventhough the partnership deed contemplated continuance of thepartnership even on the death of a partner, even then the onlymode available for separating the share of the deceased partnerwas to convert all the assets of the partnership into money anddistribute the same among the partners and the heirs of thedeceased partner in accordance with their share. There is fallacy in this contention. If the partnership is to continue, itis not understandable how it can continue when all the assetshave been converted into money which is usually done on thedissolution of a partnership. ( 32 ) THE counsel for the petitioner has brought to my noticepannalal Paul and others v. Padmabati Paul and others, AIR1960Calcutta 693 (19) wherein' a Division Bench of the saidcourt held that in a suit for dissolution of a firm, sale of theassets of the dissolved firm is the general rule but the courthas the power to mould the relief in accordance with the circumstances of the case. If the equities of the case so require, thecourt has the power to direct that the properties be allotted tothe partner who is willing to take them at a valuation fixedby the court and tha he proceeds be applied for he purposeof Section 46. Similarly on a reference of disputes in a suitfor dissolution of a firm, the arbitrator has full power to makeallotment of the assets and properties of the dissolved firm toone of the partners at a valuation fixed by the arbitrator. Soit is not an absolute principle of law that even in case of dissolution, the assets of the partnership must be converted intomoney. The court has the discretion and so also the arbitrator. ( 33 ) MR. Sahai has made reference to Kasi v. Ramanathanchettiar, AIR (36) 1949 Madras 693 (20) wherein it has beenlaid down that after the dissolution of partnership by the deathof a partner, the obligations of surviving partners to the representatives of the deceased partner, are not more onerous thanthose of a partner to his other partners in a running partnership. and the legal representatives of the deceased partner have theoption to claim profits or interest under Section 37 of thepartnership Act and they can exercise such option only afterascertainment of profits. It is true that option under Section 37normally should be exercised after accounts have been goneinto and the position becomes clear but there is no legal barlaid down under Section 37 that such an option cannot beexercised at all even prior to taking up accounts. " In. thepresent case, the objectors legal heirs of the deceased partnerhad exercised the option under Section 37 and in writing, inwhich they had mentioned that if they were to be given theirshare in specie, then they exercise the option to have the profitsbut if they were to be given their share in money, then theyclaim interest @ 6 per cent per annum. The arbitrator in hiswisdom thought it fit to give the share to these objectors in theshape of money and thus he had to give interest on-the amountso found due in accordance with the option exersed by theseobjectors. The case before the Madras High Court was alsoa case of dissolution on the death of a partner and not a casewhere it was provided ,in the partnership deed that death ofa partner, would not result in dissolution of partnership. The case before the Madras High Court was alsoa case of dissolution on the death of a partner and not a casewhere it was provided ,in the partnership deed that death ofa partner, would not result in dissolution of partnership. ( 34 ) REFERENCE was also made to Morris Robert Syers Vs. Daniel Backhouse Syers and Edward Louis Paraire, 1875-6 (1),appeal Cases at page 174 (21) but that case related to a partner ship at will and the question was when the same came to bedetermined and dissolved and it was held that the accoutsmust include the principle, the 8th share of the profits and alsothe eighth share of the assets upto the date of finding the answer. The facts are totally distinguishable and nothing said in thisjudgement is of any help in deciding the issues arising beforeme. ( 35 ) THE counsel for the objectors has strongly argued thatas ultimately the partnership was dissolved in 1985 and bythat date the share of the objectors was not evaluated, itwould have been more fair and equitable if the arbitrator haddivided the immovable property in four separate shares andalloted the share of the objectors in specie as was done in respect of other three partners. As already held by me above, thearbitrator has not committed any error of law apparent fromthe face of the award in awarding money as the share of theobjectors and also he was not wrong in evaluating the share ofthe objectors as on the date of death of the partner. The courtcannot examine the award as if it is sitting in appeal and cometo a different ending. It was well within the jurisdiction of thearbitrator to exercise his discretion on the point whether shareof the objectors is to be given in the share of money or specie. it is true that the law did not put any restraint on the use ofsuch discretion by the arbitrator. He could in equity or justice,give to the objectors their share in specie but unfortunately forthe objectors, the arbitraor has exercised the discretion keepingin view various factors mentioned in the award itself and suchdecision of the arbitrator, in my opinion is not open to judicialreview unless and until it is shown that the arbitrator has committed any error of law on the face of the record. In my opinion, the arbitrator has not committed any such error of law,which could vitiate his finding on these points. As alreadynoticed above, the Irish Judgment brought to my notice clearlycontemplated evaluatton of the estate of the deceased on the datecontemplated evaluation of the estate of the deceased on the dateto have the interest instead of profits. So the arbitrator hadkeeping in view the option exercised by the legal heirs of thedeceased partner under Section 37 of the Partnership Actevaluated the share of the deceased as on the date of his death. Even the reference made to the arbitrator contemplated givingsuch discretion to the arbitrator. So examined from any angle,i am of the view that the award of the arbitrator cannot be set. aside on such an objection. I negative the objections on thisscore. ( 36 ) THE next objection raised is with regard to evaluationof the land located at Gur Mandi. This land is admittedly inpossession of Seema Builders with which the partnership had'entered into an agreement and there had arisen some disputesbetween the builder and the partners which are still to bs resolved. As the said land was not vacant, the arbitrator took themarket value of the said land at Rs. 400 per sq. yard although ifthe land had been vacant, the market value of the same wouldhave been Rs. 800. 00 per sq. yards. The contention raised, before me by learned counsel for the objectors is that it cannotbe said that the said land was in possession of some trespasserand thus the market value had to be reduced to half and theirwas every possibility that the agreement with the builder couldbe renewed and the potentiality of the land could be increasedby such an agreement being made later on and there was noreason for the arbitrator to have reduced the market value ofthe said land from Rs 800 per sq. yards to Rs. 400 per sq. yards. It is not disputed before me that even the valuer appointed by the objectors has given the report that market value ofthe land which is in unauthorised possession, should be takenat half. It cannot be said that the report that market value oferror of law in determining the market value of the aforesaidland. As a matter of fact such error of law is not apparentfrom the award and the documents incorporated in theaward. It cannot be said that the report that market value oferror of law in determining the market value of the aforesaidland. As a matter of fact such error of law is not apparentfrom the award and the documents incorporated in theaward. The arbitrator has not given any reasons while assessing thevalue of each and every immovable property which is incorporated in Annexure "f' to the award. So the court cannot lookto the evidence led before the Arbitrator to give a finding thatthe valuation so arrived at by the arbitrator is incorrect. Noreasons have been given by the arbitrator in Annexure 'f" orin the award. So on this aspect of the matter, the award hasbeen given without giving reasons as held by the Supreme, Courtin the case of Raipur Development Authority's case (supra), theaward cannot be set aside on the ground that the reasona havenot been given. Where no reasons have been given in supportof a particular finding, the court cannot hold that any error oflaw has been committed by the arbitrator on the face of therecord. If thus find no merit in this objection and negative thesame. ( 37 ) IT is then pointed out by the learned counsel for theobjectors that the arbitrator has committed certain clerical mistakes or errors arising from accidental slips or omissions whichneed to be rectified by this court. It is pointed out by the learned counsel for the objectors that the arbitrator has valued theshares held by the partnership firm as on 14/09/1983at Rs. 1,48,847 in Annexure 'b' to the award but in Annexure'c', this amount has been omitted by inadvertent mistake whilecalculating the amount payable to the objectors. Counsel forthe other parties also admit that this clerical mistake has beenmade by the arbitrator and the objectors have 114th share inthe said amount as well. The award is liable to be modified tothat extent. I hold accordingly. ( 38 ) THE arbitrator while allowing interest at the rate of 6per cent per annum on the amount found due to the objectorsas on Septemper 14, 1983 had deducted a sum of Rs. 82,900paid to the objectors by instalments from 198 4/06/1988and also deducted an amount of Rs. 45,134 on account of14th share of expenditure incurred on the joint property viz. , 1,tughlak Lane, New Delhi upto 7/06/1988 from the principalamount payable to the objectors' on September 14, 19'83. 82,900paid to the objectors by instalments from 198 4/06/1988and also deducted an amount of Rs. 45,134 on account of14th share of expenditure incurred on the joint property viz. , 1,tughlak Lane, New Delhi upto 7/06/1988 from the principalamount payable to the objectors' on September 14, 19'83. It isa settled law that any payment received has to be first adjustedtowards the interest and after clearing the interest, the paymentis to be adjusted towards the principal amount. The arbitratorappears to have committed this illegality on the face of theaward which needs to be corrected. I order that. the paymentsreceived by the objectors and the expenditure incurred according to their share on I, Tughlak Lane, New Delhi would beadjusted towards interest at first and thereafter towards principal. The award is to be modified to that extent ( 39 ) THE third mistake committed by the arbitrator pertainsto the dividends received by the petitioner and respondent No. 6which are to the tune of Rs. 7312. The arbitrator appearsto have committed a misfake in not giving 14th share to theobjectors in this dividend, as mentioned in Annexure 'c' to theaward. The award is modified to that extent. The objectorare entitled to have 114th share in the said amount as well. ( 40 ) IT is then pointed out by learned counsel for the obiectors that the balance sheet of the firm ending 14/09/1983 showed an amount of Rs. 9972. 73 bying to the credit ofthe firm under Section 194a of the Income-Tax Act and asum of Rs. 40,687. 56 was lying to its credit regarding deductions at source in dividends in Income-tax account but no herefit of the said amount has been given to the obiectors. I thinkthat the arbitrator has committed a mistake in not giving benefitof these amounts to the objectors and the award is liable to bemodified to that extent and I direct accordingly ( 41 ) THEN it has been pointed out by learned counsel for theobjectors that there were 101 silver corns and 4 gold soverignsof the partnership firm which were being used by the partnership firm for performing Pooja and were in possession of thepetitioner and respondent No. 6, but no benefit of the same hasbeen given. The counsel for the petitioner wanted me to referto the cross-examination of Anil Gupta at page 749 of the arbitrator's file where some suggestions have been given by thecounsel for the petitioner and respondent No. 6 to Anil Guptaregarding these items. I an afraid that this court cannot appraise the evidence led before the arbitrator to come to theconclusion that the said items were assets of the partnership business. Hence I negative this objection. ( 42 ) THE learned counsel for the objectors has then pointedoutthat the arbitrator has arbitrarily fixed Rs. 30,000 as gratuity liability of the two employees of the partnership firm inannexure 'd' but the same amount would not have exceededrs. 13,950. The arbitrator has not given any reason for fixing this liability, it is not possible for this court to look to thedocuments or evidence which are not incorporated in the awardto give a different finding. So this objection is- also negativel ( 43 ) THEN the counsel for the objectors has referred to theamounts due from the partnership firm to another firm of theparties and has contended that in fact that amount was to cometo the partners and no such liability should have been imposed. It is not possible to go into this objection in view of the fact thatno reasons have been given by the arbitrator for imposing thislability of Rs. 38,4361- payable to M/s Hanuman Pershad Srinath and also an amount of Rs. 1494. 25 to the same effecthence I negative this objection as well. ( 44 ) THE counsel for the objectors has lastly pointed' out thatthe arbitrator was wrong in treating the property No. 2199,dharam Pura, Delhi as residential when admittedly the groundfloor was being used by the said partnership firm for commercial purposes. The counsel for the petitioner wanted me torefer to the evidence to show that this ground floor was beingused for commercial purpose and he cited Prem Nath Vs. Unionof India, 1981 RLR Note 37 (22) wherein it has been held thatif the arbitrator ignores the admissions, then he is guilty of legaland judicial misconduct. The nature of the property is residential but the case of the objectors appears to be that the partnership firm has used the ground floor as its godown. The arbitrator has not given any reasons while assessing the said property. The nature of the property is residential but the case of the objectors appears to be that the partnership firm has used the ground floor as its godown. The arbitrator has not given any reasons while assessing the said property. So it cannot be said that any error of law apparenton the face of the record has been committed by the arbitratorin evaluating the said property. Hence I negative this objectionas well. ( 45 ) SO, the objectors comprised in above applications are partly allowed and the award is modified to the extent mentioned above. IA 7558/88( 46 ) ANIL Kumar Gupta, respondent No. 1 has filed this objection petition. The main objection raised by learned counselfor respondent No. 1 is that the arbitrator committed error oflaw in ignoring the plea of the objector that property No. 1,tuglak Lane, New Delhi was capable of actual physical division and the arbitrator was wrong in directing sale of the saidproperty, It has been contended before me by learned counselfor respondent No. 1 that the same was a very valuable andprecious property of the family wherein parties are already living inseparate portions as was indicated in a plan placed beforethe arbitrator which amounted to division of different sharesof the parties of that property by metes and bounds and thearbitrator should have divided the property in that manner instead of directing the sale of this valuable property of the family. The land underneath the said property is leasehold and the arbitrator appears to have sent a letter to Land and Development Officer in order to find out whether the land could be dividedinto four equal shares by giving title to each of the parties. A. letter was received (appearing at page 644 of the arbitrator'sfile) from the Land and Development Officer mentioning. thatthe construction to be raised on the aforesaid land has to besingle structured and sub-division for the purpose raisingany construction in the aforesaid land is not possible. Shri V. K. Gupta, Architect, whose report appears at page 511 of the arbitrator's file, also gave the same report. The arbitrator in hisaward has mentioned about these two pieces of evidence andgiven the finding that equal physical division of the said property among the four parties with separate titles is not possibleequitable. Shri V. K. Gupta, Architect, whose report appears at page 511 of the arbitrator's file, also gave the same report. The arbitrator in hisaward has mentioned about these two pieces of evidence andgiven the finding that equal physical division of the said property among the four parties with separate titles is not possibleequitable. The only reference made to the arbitrator was tothe effect, whether equal physical division of the prooertyamong four parties with separate titles is possible/equitable ? Itnot, in what manner, it can be best sold/disposed of. It wasquite clear that the Land and Development Officer would nothave permitted separate titles to each of the parties in that landand no separate construction could be raised by each of thepartics and keeping in view these difficulties, the arbitratorthought it fit to give the finding that it was not possible or equitable to divide the building in four equal physical parts amongfour parties. It is a settled law that the reasonableness of thereasons given by the arbitrator cannot be gone into by thiscourt, it may be that the court in similar facts may be inclinedto give a different finding. If the Land and Development Officerwas not to permit separate constructions on the said plot, thepotential of the said property could not have been utilised toits maximum by the owners. So it cannot be said that any errorof law on the face of the record has been committed by the arbitrator ill giving this finding and directing that the propertybe sold by public auction as it would fetch the best price. Isee no way to interfere with the award given by the arbitratorin this respect. . This court has not jurisdiction to look intothe evidence led before the arbitrator other than what has beenincorporated in the award. The alleged plan showing thephysical division of the property has not been incorporated inthe award. So the same cannot be looked into. I negativethis objection. ( 47 ) THE next contention raised by learned counsel for respondent No. 1 is that the arbitrator had no jurisdiction to placeany charge on the share of respondent No. 1 with regard toproperty No. 1, Tughlak Lane, New Delhi for payment of theamount to respondents 2 to 5. It was the liability of the remaining partners to reimburse the share of the deceased partnerto his legal heirs. It was the liability of the remaining partners to reimburse the share of the deceased partnerto his legal heirs. The Tughlak Lane property is admittedly theproperty of the same partners whose assets were being divided. Hence it cannot be said that the arbitrator was wrong puttinga charge on the share of the remaining partners with regardto' property No. 1, Tughlak Lane, New Delhi for reimbursementof the share of the legal heirs of the deceased partners. I findno merit in this particular objection of respondent No. 1 andhereby negative the same. ( 48 ) RESPONDENT No. 1 has also taken similar objection asto the arbitrator not granting share to respondent No. 1 withregard to income-tax as has been raised by respondents 2 to 5. This respondent No. 1 will also get benefit of the said amountof income-tax etc. as indicated while deciding the objectionsof respondents 2 to 5. The award will stand modified to thatextent. ( 49 ) A contention has been raised that respondent No. 1 hasnot been given any benefit of a sum of Rs. 25,000 which wasgiven by M/s. Seema Builders, with which agreement was maderegarding the land of Our Mandi. This property has beenawarded to respondent No. 1 and the agreement with Seemabuilders is in dispute. So there was no question of givingany benefit to respondent No. 1 with regard to amount receivedfrom M/s. Seema Builders. At any rate, the award or thedocuments incorporated in the award do not show any sucherror apparent on the record which could be modified by thiscourt. ( 50 ) A similar objection regarding silver coins and gold sovereigns has been raised by respondent No. 1, which has been negatived while deciding the objections of respondents 2 to 5. Forthe same reason, this objection is negatived. This objectionpetition is dismissed with the slight modification in the awardin the light of the order indicated above. IAs 7559/88 and 2326/89 . ( 51 ) THE petitioner and respondent No. 6 are accepting theaward but have only prayed for some clarifications to be givenwith regard to certain facts missing in the award due to someinadvertent omissions by the arbitrator. It appears that atpage 20 of the award, the arbitrator with his hand has written"the amounts found due to respondents 2 to 5 and to Anil shallbe first charge on the share of Sushil and Sudha Gupta of thesale proceeds of I, Tughlak Lane, New Delhi. It appears that atpage 20 of the award, the arbitrator with his hand has written"the amounts found due to respondents 2 to 5 and to Anil shallbe first charge on the share of Sushil and Sudha Gupta of thesale proceeds of I, Tughlak Lane, New Delhi. " However, widelatter dated 12/06/1988, the arbitrator while forwarding theaward and the proceedings, realised his mistake and mentionedthat instead of that hand written note at page 20 of the award,'the same should read as follows :"the amount found due to respondents 2 to 5, the principal and the interest @6% per annum from thedate of death of Shri Atul Kumar shall be the firstcharge on the entire net proceeds of the sale of I,tughlak Lane, New Delhi. So far as the amountfound due to Shri Anil Kumar Gupta is concerned,that mil be first charge on the share of Shri Sushilgupta and Smt. Sudha Gupta of their share of saleproceeds of I, Tughlak Lane, New Delhi. " ( 52 ) COUNSEL for the petitioner and respondent No. 6 prayedthat the award as modified by the arbitrator himself shouldbe made rule of the court in this respect, whereas counsel for Anil Kumar Gupta has argued that the arbitrator has becomefunctus offcio after giving the award and thus the modificationssuggested by the arbitrator in his subsequent letter should not begiven any importance by this court. Legally the amount due torespondents 2 to 5 was the responsibility and liability of remainingpartners, including respondent No. 1 and thus the arbitratorwas right in saying in his letter dated 12/06/1988 that Anilkumar Gupta's share also has to be charged in the same manneras the share of petitioner and respondent No. 6. ( 53 ) COUNSEL for the petitioner and respondent No. 6 havedrawn my attention to Section 13 of the Arbitration Actwhich lays down that the Arbitrator has the power to correct inany award any clerical mistake or error arising from any accidental slip or omission. It appears that the arbitrator while recording a hand note at page 20 of the award, made a clerical mistakein excluding Anil Kumar while imposing the liability on petitionerand respondent No. 6 with regard to the amount found due torespondents 2 to 5 and he realised his mistake and corrected thesame by sending the letter dated 12/06/1988 alongwith theaward and the proceedings. Under Section 15 of the Arbitration Act, the court has also power to modify or correct the awardwhere the award contains any obvious error which can be amended without affecting such decision or where the award containsclerical misfake or an error arising from accidental slip or omission. So I find force in the contention of petitioner and respondent No. 6 and hold that the award is to be made rule of thecourt as modified by letter dated 12/06/1988 of the arbitratorin this respect. ( 54 ) IT has been then pointed out that the arbitrator, had calculated the amounts which are payable to the petitioner, respondent No 1 and respondent No. 6 as on the date of the awardand the said three partners have to realise the said amount fromthe assets of the firm such as stocks and shares and bank balanceetc. and it is made clear in the award at page 20 that the threepartners are entitled to receive the said amount found payablerespectively to them as per Annexure 'h' mentioning that anamount of Rs. 73. 531. 00 is liable to be paid to Anil Kumar Guptaequally by the petitioner and respondent No. 6 and in arrivingat the amount, payable to Anil Kumar Guota as per Annexure'h', the arbitrator has already taken into account the valuation ofthe stocks and shares, dividenrs and bank/cash balance and othercurrent assets of the firm but the arbitrator due to inadvertentmistake at page 20 of the award, had observed that the shares areto be equally divided between, the surviving partners as far aspossible. It is argued that once the shares have been accountedfor while determning the share of Anil Kumargupta, there wasno occasion for the shares to be divided and giver to Anil Guptaas well. It appears that the arbitrator has committed a mistake, ingiving double benefit to Anil Kumar. In Annexure 'h', the valueof the shares has been taken into consideration and Anil Kumarhas, been given benefit of the same while calculating his amountand obviously he cannot be given the shares as well once he hasbeen given the value of the shares. This clerical mistake appearsin the award and is liable to be corrected with the direction thatshares are only to be divided now between petitioner and respondent No. 6 and Anil Kumar Gupta is not to get any shares. This clerical mistake appearsin the award and is liable to be corrected with the direction thatshares are only to be divided now between petitioner and respondent No. 6 and Anil Kumar Gupta is not to get any shares. ( 55 ) ANOTHER contention raised before me by learned counselfor the petitioner and respondent No. 6 is that the arbitrator haswrongly mentioned at page 20 of the award that Anil withuot beliable for payment of property tax. It is contended that Anilcontinued to be partr of the firm and has been allotted propertyaccording to his share and thus he is liable to pay proper taxproportionately till the award is made rule of the court. Thereappears to be much force in this contention. The learned counsel for Anil Kumar Gupta tried to contend that the Arbitratorin his wisdom' has relieved A'nil Kumar Gupta from the responsibility of paying any property-tax as Anil Kumar Gupta did notget as valuable property as have been given to pditionef and respondent No. 6. The contents of the award and the documents incorporated in the award do not bear cut any such contention ofthe learned counsel for Anil Kumar Gupta. it is 'not possible tolook into the evidence to see whether the contentions raised onbehalf of Anil Kumar Gupta in that respect, have any foroe ornot. On the face of the award, it is evident that Anil Kumargupta could not escape the payment of property-tax proportionately according to his share, till the award is made rule of the court. ( 56 ) THE award is liable to be modified to that extent. ( 57 ) IN view of the findings given above, I direct that theaward modified TO the extent mentioned above be made rule ofthe court. Respondents 2 to 5 shall have interest at the rate of6% per annum on the amount found due to them from the dateof the award till realisation.