Bombay High Court
Jaimal Shah vs Ila Pandya on 7 November, 2000
Equivalent citations: 2001(1)ARBLR618(BOM), 2001(2)BOMCR72, (2001)2BOMLR67, 2001(2)MHLJ297, 2001 A I H C 347, (2001) 2 CIVILCOURTC 422, (2001) 1 ARBILR 618, (2001) 1 ALLMR 717 (BOM), (2001) 2 MAH LJ 297, 2001 BOM LR 2 67, (2001) 2 BOM CR 72
Author: R. J. Kochar
Bench: R.J. Kochar
ORDER R. J. Kochar, J.
1. The respondent abovenamed has filed the present chamber summons seeking a direction to dismiss the above execution application. She has further sought a declaration that she is not liable to pay the decretal amount in her personal capacity. She has also sought a direction to the petitioner to make a full and complete disclosure as to the persons/ entities/Companies, the petitioner claims to represent in the execution application and their individual decretal sums. She has further prayed for a direction to the petitioner to make full and complete disclosure of the documents on the basis of which the petitioner had based his claim against her husband. In support of the chamber summons she has filed her own affidavit. The petitioner has filed affidavit in reply.
2. The petitioner also has filed a Chamber Summons No. 956 of 2000 for a direction to the respondent to disclose the assets and properties both movable and immovable, which form part of the assets of the deceased Vipin Pandya and/or which she has inherited from him as his widow as also her own assets and properties. The petitioner has also sought injunction orders and attachment of the properties of the respondent etc. In this chamber summons both the parties have filed their respective affidavit, affidavit in reply and affidavit in rejoinder. A third party by name Ms. Smita Patel has also entered the fray between the petitioner and the respondent to stake her own claim. She has also filed her own affidavit in her capacity as one of the creditors of the deceased Vipin Pandya, husband of the respondent.
3. There is also another chamber summons filed by the respondent bearing Chamber Summons No. 1251 of 2000 seeking direction to the petitioner to furnish to the respondent inspection and photo copies of the documents set out in the Schedule of the said chamber summons.
4. From the synopsis submitted on behalf of the petitioner, it appears that there were some disputes and differences between Jaimal Shah group (hereinafter referred to as the petitioners) and the deceased Vipin Pandya, who is represented by the respondent being his widow. By an arbitration agreement the said disputes appear to have been referred to the sole arbitration of one Shri Markand Gandhi, Advocate and Solicitor. The learned Arbitrator appears to have submitted his award dated 29th May, 1995. According to the petitioner, the said award was filed in this Court on or about 22nd September, 1995. It further appears that the petitioner obtained a decree under section 17 of the Arbitration Act, 1940 in terms of the award in Arbitration Petition No. 274 of 1998. By an order dated 22nd March. 2000 this Court (F. I. Rebello, J.) granted decree in terms of the award to the petitioner. In appeal before the Division Bench of this Court the order passed by the learned Single Judge dated 22nd March, 2000 was confirmed by the Division Bench order dated 5th September, 2000.
5. The petitioners have thereafter appear to have taken out execution proceedings under Order XXI Rule 11(2) of the Code of Civil Procedure, 1908. The petitioners sought to recover from the respondent a sum of Rs. 2.28.18.447/- with further interest at the rate of 21% p.a. on the principal amount of Rs. 85 lakhs till payment and/or realisation. The petitioners sought to enforce the decree against the respondent by issuance of warrant of attachment of all the movable and immovable properties of the judgment debtor as provided under Order XXI Rule 43 and Order XXI Rule 54 of the Code of Civil Procedure, 1908. The petitioners have also sought for warrant and proclaimation of sale of the said properties.
6. Shri Thakore, the learned Counsel for the petitioners in chamber summons has raised a preliminary objection against the maintainability of the present chamber summons as barred by the principle of res judicata. According to him various disputes and differences between the petitioners on the one hand and late Vipin Pandya on the other were referred to a common agreed Arbitrator by an agreement dated 6th July, 1993. Shri Thakore further submitted that the said Arbitrator was an Advocate and Solicitor practising in this Court and he gave his award after hearing the parties and perusing the records. According to Shri Thakore even a non-speaking award is binding on the parties and it cannot be challenged. He further submitted that this Court granted petitioners the decree in terms of the award and the said order has been confirmed by the Appeal Court and therefore, the points which are raised have already been concluded and they are governed by the doctrine of res judicata. Sbri Thakore further submitted that this Court sitting as an Executing Court cannot go behind the award which has now become a decree. Shri Thakore further stretched his submissions to the point that the Executing Court has to merely enforce the decree and cannot look into any material or any documents which form part of the award. On merits of the case Shri Thakore has drawn my pointed attention to the fact that the present respondent had signed a memorandum of understanding with the petitioners confirming and admitting the debt under the award and therefore, she is now estopped from disowning any liability under the said award. He has also pointed out that the said memorandum of understanding was signed by the respondent in the presence of two independent witnesses who have also filed separate affidavits to that effect in this Court. He has also relied upon certain authorities which I would deal with at appropriate stage.
7. Ms. Sethna, the learned Advocate for the respondent has very vehementally submitted that this Court even as an Executing Court owes a fundamental duty to do justice in the matter without forgetting Section 151 of the Code of Civil Procedure, 1908. She has reminded me of this duty repeatedly relying upon a judgment of the Supreme Court in the case of Bhavan Vaja & Ors. v. Solanki Hajuji Khodaji Mansang & Anr.,. Para 19 of the said judgment is relevant for our purpose. It defines as well as enlarges the functions of an Executing Court. According to the Supreme Court in appropriate cases the Executing Court can X-ray the decree and can lift the veil to find out what were the pleadings and the proceedings leading upto the decree. It has to ascertain the circumstances under which the words in the decree were found.
8. For the scope of the jurisdiction of the Executing Court, the learned Advocate has also relied upon a judgment of Orissa High Court in the matter of The Fertilizer Corporation of India Ltd. v. M/s. Bharat Painters,. The said judgment was delivered by a learned Single Judge (G. B. Patnaik, J. as he then was). The learned Judge was deciding an appeal under the Arbitration Act of 1940. It was held by the learned Judge that an award passed without any materials on record amounted to misconduct on the part of the Arbitrator and can be interfered with. The ratio of the above judgment appears to be that the conclusions drawn by an Arbitrator must be based on some material and if such conclusions are not backed by any evidence, they would suffer from perversity and which no person acting judicially and properly instructed in law could reach and if he does so he would be guilty of misconduct. The learned Judge has also given emphasis on the decision of the Calcutta High Court in the case of Messrs. Khusiram Benarashilal v. Mathuradass Goverdhandass, and observed that " ..... if they decide in a way in which no reasonable man occupying a judicial or a quasi-judicial position would decide, it is open to the Court to interfere with the award in the interest of Justice." Finally in para 9 of the judgment, the learned Judge has also observed as under :-
"It is too well settled that an award which is the product of non-application of the mind of the Arbitrator cannot be permitted to be sustained in law, since this would come within the expression "otherwise invalid" used In Section 30 of the Arbitration Act. Non-application of mind to the materials on record suggests absence of fair play and indicates that the Arbitrator did not function in a manner befitting his role. On this ground also, the impugned award is liable to be set aside and is hereby set aside."
8. The third judgment on which the learned Advocate for the respondent has relied upon is in the case of S. P. Chengalvaraya Naidu v. Jagannath,. The Supreme Court held that the decree was vitiated by fraud as the party had suppressed the relevant documents. The learned Advocate for the respondent tried to draw support from this judgment in support of her point that in the present case also the petitioners had played fraud on her client's husband and therefore, the decree is vitiated. On the same point another Judgment of the Supreme Court in the case of Indian Bank v. Satyam Fibres (India) Pvt. Ltd., was relied upon by her. In nutshell, the Supreme Court has held that if there is any forgery or fraud the final result would always be vitiated, as fraud and Justice never dwell together and that Judiciary in India also possesses inherent power, specially under Section 151 of the C.P.C., to recall its judgment or order if it is obtained by fraud on Court.
9. Ms. Sethna also cited a Division Bench judgment in the case of Amarchand Sharma v. Moosabhai E. Peer Mahomed,. The learned Judges have elaborated the concept of misconduct under section 30 of the Arbitration Act, 1940. They have given great emphasis on the application of mind in the matter by the Arbitrator. They have held that if the Arbitrator is guilty of gross carelessness and neglect of the duties and responsibilities of an Arbitrator, he would be held guilty of misconduct within section 30 of the Arbitration Act. According to the learned Judges, the Arbitrator must consider all the vital facts in the matter. The next judgment of the Supreme Court relied upon by Ms. Sethna is in the case of Executive Engineer, Irrigation, Galimala and Ors. v. Abnaduta Jena,. The Supreme Court has held that the Arbitrator is bound to make his award in accordance with law and if the Arbitrator could not possibly have awarded interest on any permissible ground because such ground did not exist, it would be open to the Court to set aside the award relating to the award of interest on the ground of an error apparent on the record. On the other hand, if there was the slightest possibility of the entitlement of the claimant to interest on one or other of the legally permissible grounds, it may not be open to the Court to go behind the award and decide whether the award of interest was justifiable. The learned Advocate for the respondent further pointed out that the Arbitrator in her case had awarded interest which the Arbitrator had no powers to do so and therefore the award was vitiated.
10. Shri Thakore has relied upon the following judgments in support.
(i) The Presidency Industrial Bank Ltd. v. The Hindustan Leather Industries Ltd., - On the point of res judicata.
(ii) Madanlal v. Sunderlal, - is cited on the point that an application to set aside the award has to be filed. In this case no such application to challenge the award has been made.
(iii) V. Ramaswami Aiyengar v. T. N. V. Kailasa Thevar, - On the point that Executing Court has no power to go beyond the terms of the decree and create a new decree under the guise of interpretation.
(iv) Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman,.- The Supreme Court has observed that objection of jurisdiction cannot be raised for the first time in execution if the question depends on investigation of facts. The objection should appear on the face of the record.
(v) Nagarbhai Motibhai Makwana v.. The District Panchayat,- Notice of award under section (1) and (2) is not mandatory and would not vitiate the award.
(vi) Champsey Bhara & Company b. Jivraj Balloo Spinning and Weaving Co., Ltd.,. - This judgment has been considered by the Supreme Court in one of the judgment referred hereinabove. I am, therefore, not going into the facts of the case.
11. Having heard the learned Advocates for both the parties and having carefully gone through the case law cited by them, it was utmost necessary for the to begin with the beginning of the matter i.e. the arbitration agreement between the parties. I am fully aware of the restricted and narrow parameters of my jurisdiction as an Executing Court. According to me, they are not as narrow as is suggested by Shri Thakore that I cannot look into any paper and I cannot touch any matter forming part of the proceedings. The running thread through all the aforesaid judgments cited by both the learned Advocates is that the Arbitrator must have all the facts, figures and relevant material before him and that he must apply his mind, skill and experience to the matter before him and that his conclusions should be based on some evidence or material before him. His award need not be a reasoned one or a learned judgment but he must deliver his award as any reasonable man applying his natural, judicial mind would do and that he shall not be careless and he shall not neglect any material before him. Total want or lack of evidence would be fatal to the award. Vice of perversity would put a death nail on an award of an Arbitrator. According to me all these and other tests which emerge from the aforesaid case law will have to be strictly applied to an award of an Arbitrator. Even as a layman he has to apply his mind acting as a reasonable man to the facts and figures and material before him to base his conclusion. No elaborate reasons or Judgments are expected from an Arbitrator. A bare minimum expectation under the law is that the award must have the foundation of some cogent material required of a reasonable man to resolve the dispute referred to him as an Arbitrator. Every award must withstand the scrutiny as aforesaid as we cannot forget that such an award gets an imprint or seal of a Court of law and the award becomes an executable and enforceable decree of a Court of law. All such tests which are applied to a decree will also have to be applied to an award. The award cannot escape the ordeal of these tests, merely because it is an award under the Arbitration Act. It is the duty of the Executing Court to X-ray the award and to lift the veil to find out what material was available before the Arbitrator to have come to his conclusions. Certainly it is not the duty of the Executing Court to decide whether the award was right or wrong but it can certainly decide whether it was baseless and/or perverse and based on any evidence or material at all.
12. On this point a judgment of our Division Bench (P. B. Sawant and M. L. Dudhat, JJ.) in the case of Union of India u. M/s. Ajit Mehta and Associates, is very relevant. Based on the discussion and observation in the said judgment, I conclude very safely that the Executing Court can go into I the question of legal misconduct of an Arbitrator and also whether the award is made without any evidence on record and if the award is made in breach of the principles of natural justice and if the award is made in breach of the express terms of the contract. The learned Judges have clearly observed in para 30 of the judgment that enforceability of an award can be resisted even at the execution stage. They have gone one step further following the judgment of the Supreme Court that the Court has suo motu powers to set aside the award on grounds other than those covered by section 30. Para 36 of the judgment is pertinent for our purpose. It indicates that before the Arbitrator, the parties must file their statement and they need not be exactly as pleadings in strict or technical sense. The Arbitrator would know if there are drawn up terms of reference for his decision. Both the parties must place before the Arbitrator their respective documents and material in support of their respective case. It is, therefore, certainly implied that the Arbitrator must have the terms of reference and the statements of parties and also documentary and other material depending on the nature of the dispute or difference between the parties. It is further observed by the learned Judges that the Arbitrator is required to send all documents perused by him to the Court along with award and not either return or retain any of them. Significantly the Court has observed that when the relevant necessary documents are not before the Arbitrator he cannot proceed with the arbitration on speculation and pass his award as he deems fit. In the case before the learned Judges, there were no documents before the Arbitrator and he had given his award. The learned Judges have observed as under :-
"Hence in the absence of even the primary documents which were the foundation of the disputes if any, the awards given by the Arbitrator can only be described as award/s with no evidence at all or at best based on speculation and therefore prima facie illegal and improperly procured."
Para 38 of the judgment which speaks volumes is reproduced hereunder : -
"In this connection, we may refer to a decision of the Supreme Court in Poulose v. State of Kerala,. In this case the Court went through all the documents and was satisfied that two material documents were not before the arbitrator. The Court held that it was incumbent on the Arbitrator to get hold of the said documents even if the department had not produced them. The Court further held that since the documents were necessary to arrive at a just conclusion, the Arbitrator was guilty of a legal misconduct, and set aside the award."
"In Bhai Sardar Singh & Sons, New Delhi v. New Delhi Municipal Committee, it was held that even where the award is a non-speaking one, it can be set aside on the ground that a document such has the control between the parties which Is the foundation of their rights and liabilities is not before the Arbitrator and the award is passed without perusing such document. In that case also it had come on record through the mouth of the Arbitrator that he had no contract before him, while making the award."
Following the judgment of the Supreme Court in the case of Thavardas v. Union of India, the Division Bench has observed that the Arbitrator cannot entertain claims and award them contrary to the express terms of the contract. Second proposition is that an award must be based either on evidence or on admission. It is further observed that facts cannot be found to exist from a mere contention by one side especially when they are expressly denied by the other.
13. Applying the aforesaid case law and principles which emerge therefrom the impugned award cannot stand judicial scrutiny of the Executing Court even for a minute. I may clarify here the point raised by Shri Thakore that the learned Single Judge of this Court has granted a decree in terms of the said award and that the said order was confirmed by the Division Bench of this Court in appeal. Both the Courts were called upon to grant a decree in terms of the award and no doubt a decree in terms of the award was granted. There is also no dispute that some of the contentions raised before me were also raised at that stage. According to me such a grant of decree does not debar or estop an Executing Court from testing the validity and legality of the award. Even a decree which is confirmed upto the Supreme Court can be questioned when it is to be in execution and the Executing Court can go into the contentions which are open to it under the law. Even the Division Bench had restricted itself only to examine ex facie illegality by observing, "Ex facie illegality, we discover none : We are not required to delve deep to discover such illegality or propriety in the petition". As an Executing Court, I am, however, required to delve deeper and I have done so in the interest of justice to examine whether the Award suffers from the vice of perversity and misconduct on the part of the Arbitrator as per the law discussed hereinbefore. Even the Appeal Court has permitted the respondent to agitate the objections in the Executing Court. There is, therefore, no merit in the contention of Shri Thakore.
14. I have gone through the original arbitration proceedings which form part of the record of this Court, The Arbitrator has forwarded his award to this Court as required under the law. He has also filed his affidavit to that effect. I am skipping the controversial details about the date of the award, affidavit etc. To say the least, I was shocked when I went through the entire arbitration proceedings. I could not believe the fact that the said proceedings were held before a learned Advocate and Solicitor of this Court. I am constrained to observe that even a layman of ordinary commonsense would have given a far better award than the award before me. I do not know why such a shabby work has been done by the learned Arbitrator. An award has a far greater sanctity and far reaching consequences of determination of the rights of the parties as it threatens to be an enforceable and executable decree against the judgment debtor. The present arbitration proceedings through out suffer from a total absence of material on which the award is purportedly based. Nothing is visible to a naked eye. I have deliberately used the word material and not evidence. To begin with, there are no terms of reference formal or informal. The arbitration agreement is classically vague in every respect. The parties have not been specified and identified. Names of persons and individuals are not given. There is absolutely no whisper about the nature of the transaction between the parties, on the basis of which crores/lakhs of rupees are demanded. In the arbitration agreement itself, it was the duty of the parties to have named such persons who are claiming their dues from the judgment debtor i.e. deceased Pandya. It is only Jalmal Shah who is described as the main party and after his name the work "group" is suffixed. Shri Jaimal Shah at no stage, even before me, has Identified the persons who form his so-called "group". He does not disclose anywhere what was his amount due and he does not disclose even primary material on the basis of which he had staked such a huge claim against the deceased. It is very significant to note that no account books, no income tax returns and other documents were produced before the Arbitrator. As no such documents form part of the arbitration proceedings, which are forwarded by the Arbitrator along with his affidavit, I safely presume that no such documents, account books, vouchers, receipts were produced before the learned Arbitrator. I am not able to understand how such a huge claim of more than Rs. 8 crores was lodged by Shri Jaimal Shah without any relevant account books and material. There is nothing on record before the Arbitrator on what basis he was entitled to claim the said amount. I further fail to understand if the aforesaid amount of Rs. 8 crores was due from the deceased Pandya, how he was satisfied with such a very small amount of Rs. 85 lakhs awarded by the Arbitrator. Shri Jaimal Shah has not challenged the said award. This aspect itself gives rise to a very strong suspicion about the genuineness of the dealings between the parties. There have been no account books, no signed or verified statements by the parties were before the Arbitrator. There is not only no evidence of his claim but there is no primary material also. It appears that the entire transactions and the dealings between the parties were not legal and not borne out from record. Approaching an Arbitrator and getting an award sometimes is considered an easy back door entry to get a decree which can be tried to be enforced in the Court of law.
15. The arbitration agreement, as I have already observed, is absolutely silent about the identity of the persons involved. No names, address and their claims or the nature of claims is given in the agreement. All are without any identity and without any face. They are described as "friends", "relatives", "firms". "Companies" and "Trust". What has shocked me more is the fact of missing of Schedule I of the arbitration agreement. The paragraph 2 of the agreement refers to the said Schedule I which purported to give the names of the concerned parties with details. This Schedule I of the agreement would have solved the problem of, perhaps, the identity of the persons and other details if they were mentioned in the said Schedule I. From page 1 to the last page of the original proceedings, which are before me, I have taken pains to see each and every page to find out the missing Schedule I. I therefore, have my own doubts about the existence of the said Schedule I. I am further shocked to realise how the Arbitrator has also acted upon the said agreement without the said Schedule I, which would have enabled him to give the names and their claims and their awarded dues. If the Schedule I had been there in these proceedings, in that case the party interested in suppressing the names of the persons has played a very serious mischief by removing the said Schedule from the original proceedings and is guilty of tempering of the proceedings. The petitioners perhaps were not prepared to disclose their identity for the reasons best known to them. Indeed if they were entitled to get the claims, they would have certainly filed their respective statements before the Arbitrator with sufficient details. No such verified and signed statements are available in the proceedings. What was the nature of the disputes and differences between them is also not stated. The first three paras of the said arbitration agreement are material for our purpose which I reproduce for ready reference :-
"We (1) VIPIN D. PANDYA of Bombay, Indian Inhabitant and (2) JAIMAL SHAH also of Bombay, Indian Inhabitant do hereby solemnly jointly severally declare and state as under :-
We hereby declare that there has been disputes and differences between ourselves including our respective friends, relatives, firms, Companies and trust in regards several transactions etc. which have taken place between us and our respective friends etc. The names of the concerned parties are as per details shown in Schedule I hereto.
We further declare that we have not been able to sort out the disputes and differences between our respective groups and have with the consultation of our said respective friends, relatives, firms. Companies, trust and have decided to settle the disputes by referring the same to the arbitration of Mr. Markand Gandhi, of M/s. Markand Gandhi & Co., Advocates & Solicitors, by signing simultaneously herewith an agreement of reference. We record that the said reference agreement is signed by both of us only representing our respective groups assuring each other that we have full irrevocable authority to do so and that it will be our respective personal responsibilities to see that the said Arbitration and its results are respected."
In the remaining paragraphs there is no relevant material. In the absence of Schedule I disclosing the names of the so-called Jaimal Shah group, according to me, the whole award is required to be struck down. The disputes and differences having not been specified in the agreement, I fail to understand how the Arbitrator could understand the so-called very vague disputes between Jaimal Shah and his relatives, friends etc. In such matters the claims and the dues have got to be ascertained and specified. It can never be left vague. I fail to understand how the accounts can be settled in the manner in which the Arbitrator has done. From the proceedings which I have carefully gone through, I find some scribbling on some loose sheets by the Arbitrator. It is a kind of roznama maintained by the Arbitrator including some notings giving some figures without any particulars. It is very difficult to appreciate the manner in which the proceedings are maintained by the learned Advocate and Solicitor who acted as an Arbitrator. There is absolutely no tenable and tangible material in the proceedings which can be read and understood. There are no names and signatures of the petitioners. There is a typed statement which is called "summary of loans outstanding" as per the agreement dated 16th December, 1986 by Mr. VPP. In this statement some debts and figures are given and net final total of Rs. 86,37,196/- is given. Reading this statement, I have not been able to conclude who is liable to pay what amount and to whom. There are some typed notes in the body of the proceedings which reveal extra legal activities of the parties such as payment to underworld people for getting evicted the tenants of some premises and refusal by the deceased to keep the said promise. On page 42 there is once again a summary giving the figures of additions and deductions without any particulars or description. This statement is also not signed by anyone including the Arbitrator. Thereafter from page 43 onwards some handwritten illegible figure work is seen. In this statement also no names, description and particulars etc. are mentioned. I have not been able to make out head and tail from the aforesaid handwritten statement. Then pages 49 to 53 contain some debts, statements, interest additions and deductions without any ghost of particulars and names and signatures. Even from this statement nothing can be made out. Then there are two letters and a draft of arbitration agreement. It appears that this draft agreement was prepared by M/s. Parimal K. Shroff and Company. This draft contains some names and some details but it appears that parties did not approve and finalise the said draft giving some specifications and particulars for the reasons best known to them. Then we come to the award. Nothing can be very vague than this document. I am tempted to reproduce the entire document for ready reference and it would speak for itself.
"I have pursuant to the reference perused the papers and accounts given to me. I also had several meetings with the parties both jointly and separately. I have also met one Parimal Shroff, Solicitor, one Shri Lalpuria C.A., Jai Chinai, an Advocate practising as Counsel, Suresh Shroff, Mr. Godha and Jayantibhal also who are all having some knowledge of the disputes under reference to me for one reason or the other, to find out the facts of the matter to come to conclusion in respect of the matters under reference and given an award.
I had also been a party to settlement talks which also has helped me to reach to the conclusion.
Going through the papers submitted to me and considering the discussions which have taken place and talks which I had with the parties and other persons mentioned hereinabove, I have come to the conclusion that Vipin Pandya and his group is liable and should pay to the Jaimal Shah and/or his group a sum of Rs. 85,00,000/- (Rupees eighty five lacs only) with interest thereon at the rate of 21% per annum from 1st March, 1995.
The amount becomes payable forthwith by the said Vipin Pandya and/or his group.
Neither party will pay any cost of Arbitration.
Dated this 29th day of May, 1995."
Whether payments of such anti-social elements are also included in the claim of Jaimal Shah and his group is the question which creeps in my mind. The next doubt which follows is about the identity of the persons forming this group and the reason of secrecy being maintained about their names and identity. Why the so-called creditors are hiding themselves? If that be true how the arbitration proceedings can be allowed to be abused by them? If both the parties have not disclosed their proper accounts, they cannot be allowed to evade the taxation and other laws. This award cannot be used as a shield by them for their unaccounted and unaccountable underground deals.
16. We cannot forget that the Arbitration Act of 1940 was the law of the land on the subject and the proceedings thereunder must be conducted within the four corners of the law. Though they are not tied down under the shackles of the procedural rules, still the Arbitrator cannot treat himself as an unruly horse. He must hold the proceedings in accordance with the broad legal frame work in compliance with the principles of natural justice and fair play. He cannot throw over-board the most fundamental concept of law that his decisions must be based on good, cogent and tangible material. Even his subjective satisfaction must have an objective base. By non-speaking award it cannot be understood to be a baseless award. The arbitration of disputes or differences is inbuilt or inherent in our civilisation since ages. We have adorned the Arbitrators Panchas on a very high pedastal and we have respected their "words" as verdict or decision of God himself. "Panch Parmeshwar" was never questioned, his integrity, honesty were beyond any shred of doubt and therefore, their one line decision was accepted by all without any demur. In that cultural background Arbitrators were not required to speak out the reasons for their decisions. But with the changing times and erosion of values and fast weakening of moral fabric of our society the panchas of the old times have slowly started disappearing warranting the necessity and requirement to know the reasons for the decisions to avoid and to minimise growing arbitrariness in the arbitration proceedings. The Panchas have descended from their original high pedastal of the God or Angles to that of an ordinary human being with all the mundane temptations close to frail mind frame. In the process of justice we now cannot run any risk and risk the very justice itself by ignoring totally the basis part of the award. Even an unreasoned award must withstand the test of a reasonable man who would always put his step on some available ground to support. To determine a debt he would certainly base his decision on some account books before him. In our case the learned Arbitrator has not given any intelligible indications of the grounds to find out his mind for his cryptic and incomprehensible decision holding the deceased Pandya to pay to Jaimal Shah and his faceless and nameless group Rs. 85 lakhs with interest at 21% p.a. In F.C.I. v. Great Eastern Shipping Co., the Supreme Court has noted that unreasoned award is bad and that the recent trend is to have reasoned awards to be in consonance with the principles of natural justice. While deciding a case under the Consumer Protection Act of 1986 the Supreme Court has reiterated emphatically the reason for reasoned orders. Like an Arbitrator the Consumer's Forum is also an alternative disputes resolving remedy provided under the law. Even they are required to pass reasoned orders though they exercise quasi judicial powers. The Supreme Court says in para 11 as under :-
"The Consumer Protection Act is one of the benevolent pieces of legislation intended to protect a large body of consumers from exploitation. The Act provides for an alternative system of consumer justice by summary trial. The authorities under the Act exercise quasi judicial powers for redressal of consumer disputes and it is one of the postulates of such a body that it should arrive at a conclusion based on reason. The necessity to provide reasons, howsoever, brief in support of its conclusion by such a forum, is too obvious to be reiterated and needs no emphasising. Obligation to give reasons not only introduces clarity but it also excludes, or at any rate minimizes, the chances of arbitrariness and the higher forum can test the correctness of those reasons."
17. Quicker and just decision are the twin pillers of the arbitration proceedings which were evolved as an alternative remedy for resolution of individual disputes. The Arbitrator is required to deliver his award within "a unified legal framework for the fair and efficient settlement of disputes arising in commercial relations". Though "Award" has not been defined under the Arbitration Act other legislations, Central and State, have defined it. Section 2(b) of the Industrial Disputes Act. 1947 defines an Award as interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Industrial Tribunal and includes arbitration award made under Section 10. Freedom from the stringent technical procedure does not exempt the Arbitrator from the salient features of the Award. He has to scrupulously observe them in his award. I am constrained to hold that the impugned award has totally failed to satisfy any of them. Every decision of a dispute must be a determination and not a mere ipse dixit of the Arbitrator or his speculative figure work, otherwise there will be no distinction between an award and an order of a don. A determination of a dispute or difference cannot be made in the absence of terms of reference or broad formulation of a dispute or difference with some reasonable specifications and particulars of claims with sufficient material in support of the respective contention and some discussion thereof in the Award. As observed in Indian Oil Corporation v. Indian Carbon Ltd., the Arbitrator must give some indications to indicate how his mind has acted. Similarly his view should fall in the category of "a possible view" and not "an impossible view." He should not act irrelevantly or unreasonably. The bare minimum expected from the Arbitrator is "a short intelligible indications of the grounds available to find out the mind of the Arbitrator for his action. The law does not expect a learned and very intelligent reasoning in the award. The Supreme Court has observed :-
"All that is necessary is that the Arbitrators should set out what on their view of the evidence did or did not happen and should explain succinctly why in the tight of what happened, they have reached their decision and what that decision is. That is alt that is meant by a "reasoned award." "A reasoned award" is in consonance with the principles of natural justice."
The Arbitrator is surely not absolved or exempted from the principles of natural justice. The impugned award suffers from one and all such infirmities.
18. In the impugned Award there is absolutely no mention of the basis on which the learned Arbitrator has fastened the liability on the deceased to the tune of Rs. 85 lakhs and similarly there is no mention why the huge amount of Rs. 8 crores is denied to Mr. Jaimal Shah and his group, I am not in search of any reason in the award but some baste and some ground and some discussion about the material placed before him. I do not find from the proceedings "the papers and accounts" given to the Arbitrator who asserts to have seen them. He was not supposed to return them to the parties if they were given to him. He does not disclose what those papers and accounts were. The award has no bottom to base and no legs to stand. According to me, it would be travesty of justice to allow such an award to be enforced against the widow of the deceased Pandya and even against his property and/or her property. Though the award has become a decree in the drifting course of law, my conscience is not at all satisfied to allow execution of such a blatently invalid and perverse award. This award has its own undercurrent of underground dealings, which I have sensed from the number of factors which I have already discussed. According to me no reasonable man having a little common sense and prudence would deal with the matter in such a shabby manner. According to me, this award cannot be executed and cannot be enforced. The execution application, therefore, stands dismissed and warrant of attachment is hereby quashed and set aside.
19. T may deal with another small point raised by the learned Advocate for the petitioner. Shri Thakore had pointed out that there was a memorandum of understanding between Shri Jaimal Shah and the widow of the deceased Vipin Pandya, i.e. the respondent herein, wherein she has agreed to abide by the said award. The original arbitration agreement was between Jaimal Shah and the deceased Vipin Pandya. It appears that the signature of the respondent IIA Pandya is obtained thereon, may be, in the presence of two witnesses. That by itself will not give the lable of legality, validity and sanctity to the award. The respondent has clearly stated on oath that Shri Jaimal Shah was visiting her premises time and again trying to pressurise her and that he had obtained her signature on the said writing under threat of dire consequences. From the nature of transactions between the parties, happening of such an event cannot be ruled out.
20. I, therefore, make the chamber summons absolute in terms of prayer clause (a). As I am dismissing the execution application no other prayers and no other chamber summons would survive. Hence the Chamber Summons Nos. 956 of 2000 and Chamber Summons No. 1251 of 2000 are hereby dismissed. Ad interim order dated 23.8.2000 to continue for further eight weeks. Needless to say that I have not decided the rights of the third party here. She will be free to pursue her remedy if any, in accordance with law. Parties to bear their own cost.
21. All concerned to act on a copy of this order duly authenticated by the Chamber Registrar.
22. The Prothonotary and Senior Master is hereby directed to keep in her safe custody the original proceedings of the learned Arbitrator and permit the parties to take inspection of those proceedings in her personal presence only.