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2000 DIGILAW 657 (CAL)

Shree Krishna Maheswari v. Suresh Kumar Sharma

2000-12-21

ASHOK KUMAR MATHUR, RONOJIT KUMAR MITRA

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Judgment Mitra, J.: 1. This appeal arises out of an order dated August 13, 1987, made by Pratibha Bennerjee, J., in an application under Sections 30 and 33 of the Arbitration Act, 1940 for setting aside the award dated June 10, 1985. The judgment has been annexed in the cyclostiled paper book, and extends between pages 41 to 89. The finding of the Court was concluded at page 49 of the paper book. The deliberation in the other 40 pages of the judgment was because, and I quote .: "In view of my finding that arbitrator had no jurisdiction and the reference was invalid, it was not necessary for me to decide other question raised in this application. But, the points raised are so interesting that I am tempted to record my findings on these points as well." 2. It was not quite clear to me as to what exactly were the "points" referred to in the judgment, and the trial Court succumbed to the temptation. The Jaw as it stands today was, however, more stern and the Court was not empowered to sit in appeal over the findings of the arbitrator. I am afraid "interesting points" in an award does not warrant, nor entitle the Court, hearing an application for setting aside the award, to reopen questions which had been referred to the arbitrator by the parties, and had been decided by the arbitrator in the award. The judgment was clearly, therefore, defective to that extent. 3. It would also appear to me that the Court bad proceeded on the basis that the Deed of Dissolution dated March 16, 1975, did not contain any arbitration agreement, nor was there any provision which could attract the arbitration clause contained in the Deed of Partnership dated March 16, 1974. It has been recorded that :- "I am convinced that the said reference was absolutely invalid as there was no agreement between the parties for resolving the disputes raised in connection with the Deed of Dissolution by arbitration." I am afraid such finding in the impugned judgment, was quite perverse and wholly untenable in law. It has been recorded that :- "I am convinced that the said reference was absolutely invalid as there was no agreement between the parties for resolving the disputes raised in connection with the Deed of Dissolution by arbitration." I am afraid such finding in the impugned judgment, was quite perverse and wholly untenable in law. Clause 12 which was the arbitration clause in the Decd of Partnership, dated March 16, 1974, is set out below :- "(12) That all disputes arising out of this deed between the partners shall be decided in accordance with the Indian Arbitration Act, 1940." The significance of the two phrases, "all disputes" and "between the partners" in the clause, quoted above, was not quite appreciated by Bonnerjea. J. Until the partnership had been lawfully and validly dissolved, the parties to the Deed of Partnership surely continued to be partners, and all the terms and conditions of the Deed of Partnership were binding on them. A dispute at the dissolution stage, arising between the partners, must necessarily attract the arbitration clause, and "all disputes" would of course include a dispute in dissolution. His Lordship, the Hon'ble Mr. Justice 'Sabyasachi Mukharji, in his order dated March 12, 1977 had appointed joint arbitrators, and in particular directed, that they "shall also take into consideration the Deed of Dissolution and effect thereof". By a further order dated January 9, 1979. The Hon'ble Judge removed the joint arbitrators and, by consent of the parties, appointed the sole arbitrator, whose order was being sought to be set aside. Parties were represented in Court at the time' of making both the orders. There were more than 30 meetings held in the reference before the joint arbitrators, and some 84 meetings before the sale arbitrator. It appeared that Bonnerjea, J., had quite missed the, point and misdirected herself to record in the impugned judgment :"But, instead of that purported reference being declared invalid, the disputes were purported to be referred to two arbitrators by order dated 2.3.1977. Unfortunately, none of the parties invited the attention of the Court to the fact that the Deed of Dissolution dated 6.3.1975, did not contain any arbitration clause nor there was any other provision in the deed dated 6.3.1975, for which the arbitration clause of the partnership dated 16.3.1975, could be invoked by the parties for deciding the disputes arising out of the. Deed of Dissolution." Surely, the order dated March 2,1977, made by Mukharji, J., was not under appeal nor was Bonnerjea, J., sitting in appeal over the order, I am constrained to observe, that the comment, quoted above, had no relation to the facts of the case or any law and if anything it amounted to judicial impropriety. 4. In those circumstances, the appeal succeeds. The respondent shall pay costs of this application and the appeal, assessed at Rs. 25,000/-. Such costs shall be paid by the respondent to the Advocates for the appellant within 2 weeks after the Christmas Vacation. Parties shall be entitled to certified xerox copies of this order on usual undertakings. Mathur, C.J.: I agree. S.K.G.