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1996 DIGILAW 342 (ALL)

SUDARSHAN CHAND v. ADDL DISTT AND SESSIONS JUDGE BIJNOR

1996-03-22

D.K.SETH

body1996
D. K. SETH, J. Lala Sumer Chandra Jain, since deceased had instituted Original Suit No. 28 of 1967 before the Civil Judge, Bijnor. The respondents No. 3 to 7 have been substitute in place of Lala Sumer Chandra Jain. In the said Suit parti tion was asked for in respect of ancestral properties prescribed in the Schedule to the plaint. In the written statement, the petitioner, who was defendant in the suit con tended that the said properties have already been partitioned and that in the event it is held that there is no partition, in that event two other properties which are not included in the suit should also be included. At this stage when the plaintiff was being examined the parties had agreed to refer the dispute for Arbitration to Lala Pyare Lal. Thereupon appropriate orders were passed in the said suit on the basis of Arbitration agreement to which I would be referring shortly, hereinafter. The said Lala Pyare Lal had given an award on 20th November, 1969. The plaintiff applied for setting aside the said award which was registered as Misc. Case No. 30 of 1971. The defendant objected to the same. However, by an order dated 30-7-1983 passed by the learned Civil Judge the Award was set aside. Against the said order an Appeal being Appeal No. 225 of 1983 was preferred. By an order dated 26-7-1995 the said appeal was dismissed. It is against these orders dated 26-7-1995 and 30-7-1983 the present writ petition has been preferred. 2. English translation of both the impugned orders and the agreement for ar bitration have been furnished and have been taken on record. 3. Sri R. K. Jain, learned Counsel appearing on behalf of respondents, however, dispute the correctness of the translation of the agreement for arbitration. He has furnished his translation of the agreement, which is also taken on record. Sri S. N. Verma learned Counsel for the petitioner contends referring to the Arbitration agreement that the reason of the terms of the agreement it is no more open to the plaintiff to challenge the said Award. According to him both the learned courts below have misdirected themselves in dealing with the merit of the case to which the Court cannot go into in view of the said arbitration agreement. 4. According to him both the learned courts below have misdirected themselves in dealing with the merit of the case to which the Court cannot go into in view of the said arbitration agreement. 4. Sri R. K. Jain, learned Counsel for the plaintiff-respondent on the other hand contends that both the courts below have found on facts that the award was liable to be set aside. According to him the said finding of facts have assumed concurrent finding of facts. In exercise of writ jurisdiction, according to him, this Court is not empowered to interfere with the concurrent findings of fact. He further contends that the courts below have come to a finding that the Arbitrator was biased against the plaintiff because of his relations with the defendant. This Court, therefore, should not enter into the disputed questions of fact. Both the learned Counsel for the parties have referred to certain decisions to which I shall be referring shortly, hereinafter. In order to appreciate the situation it is necessary to refer to the arbitration agreement as translated by Sri Verma, is quoted below: "it is submitted that the parties have agreed for arbitration. Sh. Pyare Lal S/o Sh. . Munshi Lal caste Vaish resident of Nagina (Bijnor) is being appointed as an arbitrator. The said S. Pyare Lal is real brother-in-law (Sale) of the defendant Sh. Shikhar Chand Jain and has appeared a witness on behalf of defendant. Inspite of relationship and his having ap peared as witness both the parties have appointed him as an arbitrator. The said arbitrator is authorized to give his award on the basis of secret or open inquiry or on the basis of his personal knowledge he is further authorised either to take or not to take any evidence. In any event the award of the arbitrator shall be final and binding on the parties and the parties shall have no right to file objections against the award. The arbitrator has agreed to give his award. The paper may kindly be handed over to the arbitrator. " 5. Sri R. K. Jain has disputed the English translation and has furnished his version, which is quoted below: "it is submitted that the parties have agreed for arbitration. They appoint Sri Pyare Lal son of Sri Munshi Lal, caste Vaishya, resident of Nagina, district Bijnor to be an arbitrator. " 5. Sri R. K. Jain has disputed the English translation and has furnished his version, which is quoted below: "it is submitted that the parties have agreed for arbitration. They appoint Sri Pyare Lal son of Sri Munshi Lal, caste Vaishya, resident of Nagina, district Bijnor to be an arbitrator. The said Sri Pyare Lal is the real brother-in-law (Sale) of the defendant Sri Shikhar Chand Jain and has also appeared as witness on behalf of the defendant. Inspite of relationship and his having appeared as witness both the parties appoint him as an arbitrator. Whatever award the aforesaid arbitrator will give will be binding and acceptable to the parties and they will have no objection to the said award even if it is given on secret or open information or personal knowledge or with or without evidence. The Arbitrator has also agreed to give his decision. The papers may kindly be handed over to the Arbitrator. " 6. A reading of these two translations, shows that there was a clause in the agreement as translation by Sri Verma "in any event the Award of the Arbitrator shall be final and binding on the parties and the parties shall have no right to file objection against the award. " Whereas Sri R. K. Jain, has translated the said clause to the effect, "whatever award the aforesaid arbitrator will give will be binding and acceptable to the parties and they will have no objection to the said award even if it is given on secret or open information or personal knowledge or with or without evidence. " Though much stress has been laid by both the learned Counsel for the parties on the said terms of the agreement but there seems to be no material difference in the two translation. Erudite arguments and counter arguments have been made by both the learned Counsels for the parties and many points have been raised. In my view it is not necessary to refer to such erudite exchanges of the learned Counsels for the parties for our present purpose. Admittedly more erudite, Counsels arguments are more confusing. 7. The award could be challenged under Section 30 of the Arbitration Act. This is a right provided under the Statute. In my view it is not necessary to refer to such erudite exchanges of the learned Counsels for the parties for our present purpose. Admittedly more erudite, Counsels arguments are more confusing. 7. The award could be challenged under Section 30 of the Arbitration Act. This is a right provided under the Statute. As soon an arbitration is entered into the same is governed by the Arbitration Act, 1940 and the rules and procedure provided by reasons of the provisions contained therein. Admittedly any agreement contrary to the statute would amount to contracting out of the Statute. Contracting out of the statute unless specifically provided as permitted is not permissible. Any agreement which creates estoppel on the part of one of the party to a contract against the statutory provisions of law cannot be sustained on the principle that there cannot be any estoppel against the Statute. In any event the interpretation of the agreement in any view leads us to a reasonable interpretation that offending Section 30 of the Arbitration Act, inasmuch as the said agreement is to be re-conciled and interpreted to the extent that the parties shall have no objections to the award even if the same is not accurate or perfect in all respect and on the question of merit thereof. If Mr. Jains translation is to be accepted in that event the parties cannot object even if the award is given on secret or open information or personal knowledge or with or without evidence and the same would be binding and acceptable to the parties. Where as Mr. Vermas translation postulate that neither of the parties shall have any right to file objection to the award and that the Arbitrator is authorised to give his award on the basis of secret or open inquiry or on the basis of his personal knowledge and to take or not to take any evidence. Be that as it may, even if such a conditions are not laid down even then the award can only be challenged only on the ground specified in Section 30 of the Arbitration Act and not beyond that. 8. Section 30 of the Arbitration Act, 1940, lays down as under: "30. Be that as it may, even if such a conditions are not laid down even then the award can only be challenged only on the ground specified in Section 30 of the Arbitration Act and not beyond that. 8. Section 30 of the Arbitration Act, 1940, lays down as under: "30. Grounds for setting aside award.- An award shall not be set aside except on one or more of the following grounds, namely: (a) that an arbitrator or umpire has misconducted himself or the proceedings; (b) that an award has been made after the issue of an order by the court superseding the arbitration or after arbitration proceedings have become invalid under Section 35 ; (c) that an award has been improperly procured or is otherwise invalid. " Therefore, the award can only be set aside in any of the three grounds as provided in the said section. Here in the present facts and circumstances of the case the clauses (b) and (c) are not attracted. The said agreement, in my mind, does not appear to have intended to exclude the application of clause (a) to Section 30. Even then it is a question as to whether there can be any contracting out of the Statute namely where the parlies would agree that even when the Arbitrator misconducted himself or the proceeding, still then the award would be accepted. Such a contract would be against public policy. By reason of Section 28 of the Contract Act such an agreement is prohibited. 9. Now, therefore, from the translation of the impugned orders it is necessary to find out as to whether the finding of fact on the basis whereof the award has been set aside comes within the ambit of clause (a) to S. 30 of the Arbitration Act. Admitted ly, the finding of fact, as arrived at by the learned courts below has assumed the character of concurrent finding of fact, with which writ court is extremely slow to interfere, unless perversity is writs large. In the present case Mr. Verma has not been able to point out any perversity so far as the findings are concerned. On the other hand Mr. Verma has proceeded on the footing that in view of the agreement between the parties the award cannot be challenged or objected to. In the present case Mr. Verma has not been able to point out any perversity so far as the findings are concerned. On the other hand Mr. Verma has proceeded on the footing that in view of the agreement between the parties the award cannot be challenged or objected to. He relies on the judgment in the case of Chandrika Datt Ram Pandey v. Shyam Lal, AIR 1926 Oudh 383, wherein it has been held: "these decisions, it appears to me, can be reconciled only by holding the an arbitrator must not take evidence behind the back of the parties unless the term of the reference. to him, construed in the light of the circumstances of the case, give him authority to do so. In this case, the written statement of the defendant sets forth what may be called conspiracy or. forgery. Reading the words that the arbitrator might make any decision in any way he wishes along with the written statement, the conclusion that I think anyone would come to is that the parties wanted the Arbitrator to come to a decision by any method that he thought fit. The Arbitrator has explained that the statements made before him in the presence of the parties were not sufficient to convince him I consider that the terms of the reference justified him in making private enquires. " He also refers to the decision in the case of Madhusudan Saran v. Mahmod Khan, ILR 1955 (2) Alld. 149, where in it has been held: "the parties hereby agree to refer their entire dispute involved in the case to the sole arbitration of Ft. Ganga Ram of Paraurj, Tahsil Khurja, and the said arbitrator is authorised to decide the dispute by taking evidence or without taking evidence, or by making public or private inquiry or on his own personal knowledge, or in any other manner he considers proper. Whatever decision the Arbitrator may give in the case will be binding upon the parties and they will have no right to object to or question his decision in any way. " According to Mr. Whatever decision the Arbitrator may give in the case will be binding upon the parties and they will have no right to object to or question his decision in any way. " According to Mr. Verma the term of the agreement in the case of Madhusudan Saran (supra) is almost identical, which is quoted below : "it is not necessary to determine the question whether the Arbitrator had misconducted himself, but if any determination is necessary it would be obvious that if the reference to Arbitration were a valid reference, the terms of that reference allowed the arbitrator to base his award even upon a secret enquiry. Therefore, if the reference were otherwise valid the award would not have been invalid merely because the Arbitrator made some secret enquiry as he confessed that he did, in the present case. " Relying on the said two judgments Mr. Verma contends that in the present case also the question of misconduct cannot be gone into and has not been gone into. 10. It seems that there is a usage in the submissions of Mr. Verma inasmuch as in the above two decisions the question was as to whether holding of secret enquiry or private inquiry amounts to misconduct when there was in the terms of the agree ment secret/private enquiry was permitted. In the present case also secret/private inquiry is permitted. Therefore, holding private/secret inquiry cannot be a ground for coming to the conclusion that the Arbitrator had misconducted himself or the proceeding has been misconducted by the Arbitrator. From the translation as given by Sri Verma of the order passed by the trial court it appears that the properties 1 to 4 were the joint property in which both the parties have made construction by having invested money and it has been said that this property in partition came in the share of the defendant only. This decision is also contrary to the evidence and circumstan ces. In para No. 3 a shop has been shown in mohalla Haftuk Chhota Bazar which the plaintiff has said that he purchased it himself. This shop has been included in the disputed property in the plaint. The arbitrator has not taken any knowledge regard ing this shop also. A written deed dated 20-10-1952 was told, regarding which the plaintiff disownered his signatures. This shop has been included in the disputed property in the plaint. The arbitrator has not taken any knowledge regard ing this shop also. A written deed dated 20-10-1952 was told, regarding which the plaintiff disownered his signatures. To prove it the defendant has filed report of the hand writing expert and evidence, which was recorded. The arbitrator has relied upon this written deed without Vivek, conscious inspite of the fact that the plaintiff has fully disowned it. In this connection it was essential that the Arbitrator should have taken evidence before giving decision on it. In his decision in para No. 5 that shop has been given to the plaintiff which has been shown as property No. 2 in the plaint. Regarding this shop the Arbitrator has stated that this shop is of defendant but the plaintiff is doing his business on it since long. Therefore, instead of evicting him this shop be given to him in partition, to that extent his decision could be acceptable but he has imposed such a condition and ban due to which it has become impossible to use this shop. Regarding this shop there had been negotiation of Rs. 6000/- to be given by the plaintiff to the defendant and these damages were to be paid within one month. If this amount of Rs. 6000/- is not paid within a month then this shop will remain with the defendant. This plaintiff has not been given any right over this shops" roof but instead of this, this right has been given to the defendant that on its roof the defendant could construct to any extent, and in this construction the plaintiff will have no objection. With this, this ban was also imposed that the plaintiff will not use his shop and house due to which there occurs any kind of obstruction in the use of the defendant. This ban was also imposed that the plaintiff cannot transfer this shop. Plaintiff or his heirs will only do business. If the plaintiff will transfer it be will transfer it to the defendant only. This ban was also imposed that no Bhatti machine Chakki etc. , would be installed in the shop. This ban is also against law. Instead of this a rent of Rs. 30/- is also imposed. Plaintiff or his heirs will only do business. If the plaintiff will transfer it be will transfer it to the defendant only. This ban was also imposed that no Bhatti machine Chakki etc. , would be installed in the shop. This ban is also against law. Instead of this a rent of Rs. 30/- is also imposed. It is clear from it that the shop has not been given to the plaintiff but he has only been given this shop only to do business some time. All the ownership has been given to the defendant. Such impositions in arbitration are against law and justice. If he has given any decision regarding partition of any property he should not have imposed any ban and he should have obtained full knowledge from the parties before partition. 11. The learned Counsel for the plaintiff has pleaded that the plaintiff has filed some documents in support of his suit which have not been looked by the Arbitrator. A property was purchased in the name of both the parties on 3-10-1928 and its purchase deed Ex. Ka. 17 has been filed. This property, in the plaint was purchased Shikhar Chand from Mst. Har Piary. Its sale deed dated 27-1-51 paper No. Ka. 26 has been filed. This property was not included in the partition because it was purchased by the defendant in his name separately. On 7-7-1938 plaintiff Sumer Chands wife Smt. Chameli Devi purchased a Haveli separately from Behari Singh which was not property of the joint family. It was not self-owned property for which the plaintiff has mentioned that the partition of this property cannot be made in the joint property. Chameli Devi is alone owner of this property. This property has also been included in partition without enquiry by the arbitrator. On 10-8-25 the plaintiff Sumer Chand also purchased a shop from Sri Jhabrey Lal, and its sale deed Ka-42 has been filed. This property was also self acquired property of the plaintiff. It had no relation with the property of the joint family. The arbitrator has also included this in arbitration. Afterwards this shop continued in the occupation of the tenant and its tenant-deed was exeecuted in favour of the plaintiff. Tenancy deed has been filed vide paper No. K. a- 43, Ka-44, Ka-46 and Ka-47, which all have been written in favour of the plaintiff. The arbitrator has also included this in arbitration. Afterwards this shop continued in the occupation of the tenant and its tenant-deed was exeecuted in favour of the plaintiff. Tenancy deed has been filed vide paper No. K. a- 43, Ka-44, Ka-46 and Ka-47, which all have been written in favour of the plaintiff. It is clear from this that this shop always remained in possession of the plaintiff and the tenants also remained of the plaintiff. The Arbitrator has also not considered these papers. " 12. While affirming the order the appellate court had found that the award given is completely biased. It has further found that the arbitrator has not perused the relevant records. He has accepted the entire story of the defendant who is his real relation rejecting the claim of the plaintiff altogether. He accepted the contention of one party. While giving shop to the plaintiff (as mentioned in para 5 of the award) he has put unreasonable restrictions. Again he accepted that there has already been an oral partition. These are such facts which indicates that the Arbitrator comes within the purview of Section 30 (a) of the Arbitration Act. From the above facts it is fully proved that Sri Piarey Lal has behaved partially in giving the above award and he has shown personal interest in the disputed case. Having not looking into such valid document according to the agreement, has committed procedural mistake also. In addition he has not given equal opportunity of hearing to the parties. 13. In the above circumstances I am not inclined to interfere with the concur rent finding of facts. In the facts and circumstances of the above case in my view it amounts to misconduct of the arbitrator within the meaning of Section 30 (a) of the Arbitration Act. My attention has not been drawn to any violation of fundamental principles of law in the impugned orders, as enuntiated in the case of Ganga Saran v. Civil Judge, Hapur. 14. In that view of the matter I am not inclined to interfere with the order impugned. The writ petition is dismissed accordingly. There will, however, no order as to costs. Petition dismissed. .