Delhi District Court
Sh. Parmeshwari Das vs Sh. Mool Chand ( Deceased) Through His ... on 23 January, 2015
1
In the Court of Anubhav Jain, Civil Judge05, Central District, Tis Hazari
Courts, Delhi
CS No.43/14
Unique ID No. 02401C0137422002
1. Sh. Parmeshwari Das, S/o Sh. Pyare Lal
R/o 108, Masjid Tehwar Khan,
Naya Bans, Delhi
2. Sh. Prithi Chand S/o Sh. Kapur Chand
R/o 16, New Colony, Behind Filmistan Cinema,
Delhi6
3. Sh. Mool Chand ,S/o Sh. Net Ram
R/o 893, Kucha Pati Ram,
Bazar Sita Ram, Delhi6
4. Sh. Ram Kishan, S/o Sh. Hardwari Lal
R/o 77, Golf Links, New Delhi . .............Plaintiff
Versus
1. Sh. Mool Chand ( deceased) through his legal heirs
a) Smt. Barfi Devi, W/o Sh. Mool Chand
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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R/o 28/4777, Deputy Ganj, Delhi6
b) Sh. Prakash Jain, S/o Sh. Mool Chand
C/o M/S Mool Chand Prakash Prakash Chand Jain (Biri wale)
R/o Barha Gaon, Gher Jhansi (UP)
c) Smt. Sushila Jain ( deceased) through her legal heirs
i) Sh. Parveen Jain, Husband of the deceased Smt. Sushila Jain
R/o 1/200, Sadar Bazar, Near Gurdware, Delhi Cantt.,
New Delhi.
ii) Sh. Lalit Jain, S/o Smt. Sushila Jain
R/o 1/200, Sadar Bazar, Near Gurdwara,
Delhi Cantt., New Delhi
iii) Sh. Rahul Jain, S/o Smt. Sushila Jain
R/o 1/200, Sadar Bazar, Near Gurdwara,
Delhi Cantt., New Delhi
2. Sh. Jagdish Rai ( Deceased) through his legal heirs
a) Sh. Satish Kumar Jain, S/o Sh. Jagdish Rai
R/o H No. 184, Gali No. 4,
Rameshwar Nagar, Delhi33
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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b) Sh. Sunil Kumar Jain, S/o Sh. Jagdish Rai
R/o 28/4777, Deputy Ganj, Sadar Bazar, Delhi6.
c) Sh. Nitin Jain, S/o Sh. Jagdish Jain
R/o 28/4777, Deputy Ganj, Sadar Bazar, Delhi6.
3. Sh. Mange Ram, S/o Sh. Nek Ram
R/o 28/4778, Deputy Ganj, Delhi
Date of Institution: 21.10.1981
Date Of Final Decision: 23.01.2015
1. Present judgment shall dispose off petition under Section 14 Arbitration Act
1940 filed by the petitioner.
2. The factual Scenario stated in the petition is that as per deed of reference dated
09.07.1981 petitioners and respondent no.3 i.e. Sh. Mange Ram were appointed
as arbitrators by respondents no. 1 and 2 to decide their disputes with regard to
their house bearing no. 28/4777 Deputy Ganj, Sadar Bazar Delhi. Vide the deed of
reference petitioner Ram Krishan was designated as Sar Panch. It is further stated
that petitioners and respondent no.3 entered into the reference to, look into the
respective claims of the parties i.e. respondents no. 1 and 2. After hearing the
parties, inquiry and inspection of the property a unanimous award dated
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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14.07.1981 which was typed on a stamp paper of Rs. 20/, was prepared. However
at the time of signing of award, respondent no.3 dis not sign the award without
any reason. This has been stated by the petitioners on the back side of the award.
Petitioner no.3 Mool Chand presented the said award for adjudication to collector
of stamp and petitioners deposited a sum of Rs. 645/ on 12.08.1981 in Delhi
treasury vide order of collector of stamp. Thereafter petitioner no. 3 Mool Chand
presented the said award to the Sub Registrar for registration which was
registered by the SubRegistrar on 14.08.1981. (By way of present petition
petitioner has sought that the present award be made rule of the court).
3. Objections under Section 30/33 of Arbitration Act, 1940 were filed by Jagdish
Rai i.e. respondent no.2 against the petition filed by the petitioners. It has been
submitted the respondent no. 2 Sh. Jagdish Rai, that the suit property was
purchased by Sh. Ratan Lal and Mool Chand (respondent no. 1). After the death of
Sh. Ratan Lal, his half share in the suit property was inherited by his sons Jagdish
Rai, Manak Chand and Vijender Kumar. Moreover Sh. Manak Chand and Sh.
Vijender Kumar relinquished their share in the suit property in favour of Sh.
Jagdish Rai by executing relinquishment deed in favour of Jagdish Rai. Due to
certain disputes between Jagdish Rai and Mool Chand ( respondent no. 1) they
wanted to divide the suit property in two equal parts by erecting the partition wall
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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but there was some dispute about the passage. Mange Ram in connivance with the
petitioners instigated Jagdish Rai (respondent no. 2) to get the matter under
dispute decided by the arbitrators. It is further stated that the petitioners/arbitrators
in collusion with the Mool Chand (respondent no. 1) got arbitration agreement by
playing fraud upon Jagdish Rai (respondent no. 2) and that Jagdish Rai
(respondent no. 2) had no faith in said arbitrators as they have already told him
that they will give their award in favour of Mool Chand(respondent no. 1). It is
further stated that he had filed petition under Section 11 of Arbitration Act against
the petitioners and Mange Ram (respondent no. 3) and notice of said petition was
served upon the petitioners and Mool Chand on 16.07.1981. It is further stated that
the petitioners with malafide motives prepared the award in the back date i.e.
14.07.1981. It is further stated that Mange Ram (respondent no. 3) who was also
an arbitrator in the matter has stated in his written statement that no award was
written or signed by the arbitrators till 16.07.1981. It is further stated that dispute
has not been decided in accordance with the area or value of the property. It is
further stated that no opportunity was given to any party to lead any evidence, nor
any evidence was recorded. It is further stated that the alleged award is liable to be
set aside being null and void.
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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4. Mange Ram( respondent no.3) filed reply to the objections filed by Jagdish Rai.
It is stated that respondent no.1 & 2 wanted to divide the joint property in equal
share as they were entitled to half share each in entire property. He further states
that the arbitration proceedings continued upto 16.07.1981 and answering
respondent participated in the proceedings upto 16.07.1981 along with others. He
further states that in presence of answering respondent no award was made by
arbitrator upto 16.07.1981 and by that time proceedings were not concluded and
arbitrators had not delivered award. He denied the fact that he in connivance with
the petitioners instructed Jagdish Rai to get disputed matter settled by way of
arbitration and stated that Mool Chand and Jagdish Rai both independently agreed
to refer dispute for arbitration. He further denied that arbitrators/petitioners or
Mange Ram forced defendant no. 2 to sign the arbitration agreement under
pressure or influence.
5. Mool Chand ( Respondent no.1) also filed reply to the objections filed by the
Jagdish Rai wherein he has stated that suit property was purchased on 09.01.1944
by Sh. Neki Ram having 1/2 share and Rattan Lal and Mool Chand ( Respondent
no. 1) having 1/4 share each and in the year 1964 partition took place between the
heirs of Neki Ram, Rattan Lal and Mool Chand and in that partition suit property
in dispute got allotted to Sh. Rattan Lal and Sh. Mool Chand, each having onehalf
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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share therein. Sh. Rattan Lal, died leaving behind three sons, namely, Jagdish Rai,
Manak Chand and Vijender Kumar. On death of Rattan Lal his said three sons
became the owners of Rattan Lal's onehalf share in the said property along with
Mool Chand who continued to be the owner of the other half of the said property.
Objector further admitted the fact that Manak Chand and Vijender Kumar
relinquished their claim in favour of Jagdish Rai. It is further stated that prior to
1967 answering respondent no.1 was not in possession of the suit property as he
was residing in Jhansi and the entire property was in the use and occupation of the
objector and his other brothers and about 15 years ago the question of partition of
the said property arose between the answeringrespondent on one hand and the
objector, Manak Chand and Vijender Kumar on the other. Then the instance of Sh.
Mange Ram Jain, respondent no.3. Sh. Chhajju Ram and others, it was amicably
settled that the entire ground floor of the said property shall exclusively belong to
the answeringrespondent no.1, while the entire first floor shall belong to the
objector and his brothers. One big room on the terrace of the second floor, was
allocated to the answeringrespondent no.1, while the small room an the terrace
was allocated to Sh. Jagdish Rai, objector,and his brothers. Ever since then the
answeringrespondent is in occupation of his above said portions. It is further
stated that as no formal partition had taken place, in order to avoid all future
disputes between the respective families of respondent no. 1 & 2 it was agreed to
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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get the above said partition regularized by an award of Arbitrators and by a deed
of reference dated 9th July, 1981, the petitioners and Respondent no.3 were
appointed as Arbitrators. It is further averred that the Arbitrators invited the
claims of the objector as well as of the answeringRespondent. Arbitrators had
given hearing to both the parties and made the necessary enquires and inspected
the property in dispute and on 14th July, 1981 gave their award by majority. In the
said award ground floor was awarded to Mool Chand while the Jagdish Rai was
awarded first floor and the respective portions on the second floor were also been
allotted to them respectively. It is further averred that after the award dated
14.07.1981 was given the objector constructed a room on the roof in front of the
small room on the terrace of second floor of the property which was allotted to
him and respondent no.2 i.e. Jagdish Rai has done renovation work and on the
first floor, thus having acted upon the award, is estopped from objecting to its
being made a ruling of the court.
6. Respondent no. 2 i.e. Jagdish Rai further filed a rejoinder to the reply filed by
Mool Chand wherein he denied all the facts stated by Mool Chand in his reply to
the objection and reiterated facts as stated by his objections.
7. Mange Ram (respondent no. 3)who was also an arbitrator filed his objection
under Section 30 Arbitration Act 1940 to the said petition and stated that he took
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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part in the arbitration proceedings up to 16.07.1981 and by that time the matter
was not finalized and arbitration proceedings were not yet completed. It is further
stated that petitioner no.1 to 4 made the award on 16.07.1981 and predated the
same i.e. on 14.07.1981. It is further stated that he was not a party to thus mis
conduct in predating award by other arbitrators and that award is illegal, invalid
and not enforceable by law.
8. In reply to the objection filed by the Mange Ram (respondent no. 3) it is stated
by the Mool Chand ( respondent no. 1) that Mange Ram has participated in the
arbitration proceedings till 14.07.1981 when the award was made, signed and
announced . He denied all the averments made by the objector in his objections.
9. In reply thereof rejoinder was filed by Mange Ram wherein he denied all the
averments as stated by Mool Chand in his reply to the objection and reiterated
those as stated by him in his objections.
10. Jagdish Rai ( Respondent no. 2) further filed a reply to the objections of
Mange Ram wherein he admitted all the facts as stated by Mange Ram in his
objections.
11. On the basis of pleadings filed by the parties following issues were framed by
the court vide its order dated 02.11.1982:
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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i) Whether the award has been predated to 14.07.1981?
ii) Relief, if any
Again on 27.09.1986 an additional issue was framed:
iii) Whether the respondent no.2 has acted on the award in question and if so, to
what (extend) and with what effect ?
12. In support of their case petitioners have examined Prithvi Chand as PW1,
Sh. Mool Chand as PW2 and Parmeshwari Dass, petitioner no.1. Petitioners have
also filed original arbitration award dated 14.07.1981, Reference made by Jagdish
Rai to arbitrators dated 11.07.1981 Ex. RW2/2, reference made by Mool Chand
to the arbitrators dated 10.07.1981, agreement for appointment of arbitrator dated
09.07.1981 Ex. RW2/1. It is pertinent to state in here that Sh. Ram Kishan,
petitioner no. 4 filed the affidavit in evidence but does not appear for tendering the
affidavit or for cross examination. Similarly Sh. Mool Chand, respondent no. 1
also filed affidavit in evidence but has not tendered the same or appear for cross
examination.
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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13. In support of the objections by Mange Ram examined himself as RW1 and in
support of the objections has filed by Sh. Jagdish Rai he has examined himself as
as RW2.
14. I have heard the Ld. counsels for the parties and perused the case file carefully.
My issue wise findings are as follows
Issue No. 1 :Whether the award has been predated 14.07.1981?
15. Burden to prove present issue lies upon the respondent Jagdish Rai & Mange
Ram.
16. It is stated by Jagdish Rai that he had filed petition under Section 11 of
Arbitration Act, 1940 against the petitioners and Mange Ram (respondent no. 3)
and notice of said petition was served upon the petitioners and Mool Chand on
16.07.1981. However petitioners with malafide intention prepared the award in the
back date i.e. 14.07.1981.
17. Further it is stated by Mange Ram in the objections filed by him that he took
apart in the arbitration proceedings up to 16.07.1981 and by that time the matter
was pending arbitration proceedings were not yet completed.
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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18. In order to prove the issue it is stated by Respondent No. 2 i.e. Jagdish Rai that
Mange Ram (respondent no. 3) who was also an arbitrator in the matter has stated
in his written statement that no award was written or signed by the arbitrators till
16.07.1981.
19. Although arbitrators during their cross examination admitted the fact of
receiving of notice on 16.07.1981 of the petition u/s 11 Arbitration Act, 1940 filed
by respondent no. 2 Jagdish Rai, but evidence has been brought on record to
suggest that present award was predated 14.07.1981 by the arbitrators. Infact, the
award got registered by the petitioners and the stamps affixed by the sub registrar
on the award bears dated 14.07.1981.
20. Further there is nothing on record, except for averments of Jagdish Rai and
Mange Ram which suggest that award was anti dated to 14.07.1981. In view of the
same present issue is decided in favour of petitioners and against the respondent
no. 1 and 2.
Issue framed on 27.09.1986 : Whether the respondent no. 2 acted on the
award in question, if so, with what effect ?
21. Burden to prove present issue lies upon respondent no.1. It is stated by
respondent no. 1 that Jagdish Rai has constructed a room in front of the small
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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room on the second floor of the property and has completely renovated the first
floor of the suit property. Thus he has already acted upon the award and is
therefore estopped from objecting to it being made a ruling of the court. It would
be pertinent to mention here that present issue was raised by respondent no. 1
Mool Chand, however he never appeared before the court for his cross
examination.
22. Court vide its order dated 25.07.1983 appointed a local commissioner to
inquire as to numbers of rooms existing on the second floor of the suit property
and also the state of construction over there. In compliance of the court order,
Report was filed by the local commissioner on 22.08.83 wherein he has stated that
there are three rooms on the second floor of which two are old while third is
newly constructed room however the said LC was never cross examined.
23. To prove the present issue respondent no. 2 and 3 were cross examined at
length. Relevant extract of cross examination of Shri Mange Ram is reproduced as
under:
".......There was an open terrace on the second floor apart from the
two rooms which I have mentioned above. On that terrace one more
room has now been constructed. That room was constructed by Shri
Jagdish Rai, respondent no. 2, some time between 10 th and 11
th July
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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1981. The room had partly been constructed earlier. That was,
however, old construction. (That witness volunteers: In fact the room
had fallen down and Jagdish Rai only repaired the same). This room is
on the terrace infront of the small room which was in the possession of
Jagdish Rai, respondent No.2, in 196768. It is incorrect to suggest
that this room was constructed by Shri Jagdish Rai only after
14.07.1981. It is also incorrect to suggest that this new room existed
previously and that it was repaired earlier and completed on 10th or
11th July 1981. I had seen the house in question. I, However, cannot
make out this house from the photograph if shown to me................
Furthermore during the cross examination of Jagdish Rai he has
stated as under:
Mool Chand has been living on the ground floor of this house No.
48/4777 since 1968 and we have always been living on the first floor of
this house. On the second floor there are two small rooms and one big
room. While the the two small rooms have been in our possession, the
big room has been in the possession of Mool Chand. It is incorrect to
suggest that on the second floor, I.e terrace, there was only one small
room and one big room and that after 14.07.1981 I had constructed
one more small room on the second floor.
.............. It is, however, wrong to suggest that I built second room on
the second floor afterwards in pursuance of the award. In fact the
room was already there and I had carried out only repairs. Both the
rooms which are in may possession existed there since before 1964,
though I had carried out repairs only in the front room on the
terrace. Both these rooms were constructed at one and the same time.
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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I do not know if any permission from the local authority was taken for
the construction of these rooms. The room which I got repaired was
being used for the residence. This room which I say I got repaired, was
earlier bath room. There was no, water tape inside the is bathroom.
The roof on the bathroom was of Iron girders. It is wrong to suggest
that there was no construction and neither the bath room and that I
am deposing falsely in saying so............"
24. Once it has been stated by Jagdish Rai that he has not carried out any further
construction on the terrace of second floor, burden lies upon the respondent no. 1
to prove that fresh construction has been raised by the respondent no. 2
subsequent to passing of the award and as such the respondent no. 2 has acted
upon the same and is therefore estopped from objecting to award being made
ruling of the court. Respondent no. 1 has failed to place on record any document
which can show that fresh construction has been raised by respondent no. 2 on the
terrace of second floor. It is worth reiterating here that respondent no. 1 failed to
appear before the court for his cross examination. Nor he has placed on record any
cogent/ reliable evidence which can show that Jagdish Rai has raised a new
construction in furtherance of the award. It is further pertinent to state that even
the Local Commissioner appointed by the court was not cross examined nor has
he stated in his report whether respondent no. 2 has raised fresh construction or
got in some existing structure repaired. There is further nothing in the complete
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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report as to on which date the said construction/repairs was completed. In view of
the same it cannot be said that Jagdish Rai has acted upon the award by raising
construction thus is estopped from objecting to award being made rule of court.
In view facts discussed above present suit is decided in favour of respondent no.2.
RELIEF:
25. Before dealing with present issue in hand it is pertinent to state in here that an
application under Order 14 Rule 5 CPC was filed by LR's of Jagdish Rai wherein
it was prayed that an additional issue i.e. " Whether the award dated 14/07/1981 is
liable to be set aside as per objection raised by objector/respondent no.2 be
framed?" The court vide its order dated 30.10.2007 while disposing of the
application observed that a similar application was moved on behalf of respondent
no.2 on 30.04.1991 and the same was disposed off vide order dated 14.07.1993 by
Hon'ble High Court wherein the Hon'ble High Court permitted to crossexamine
the witness of the petitioner with regard to paragraph no. 6 and 8 of the objections
filed by Jagdish Rai. It was further held that the obvious import of the order dated
14.07.1993 is that objections of the objector shall be subsumed within the issues
already framed and thus the issues of validity of award shall be treated as part of
issue no.2 i.e. 'Relief'.
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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26. In the light of observations made above, it would be relevant to state in here
Paragraph 6 & 7 of the objections raised by objector Jagdish Rai :
6) That the property in dispute has neither been decided according to the
area nor according to value of suit property.
8) That no opportunity was given to any party to lead any evidence nor any
evidence nor any evidence has been recorded.
27. Before proceeding further with the objections raised by objector Jagdish Rai, it
would be pertinent to reproduce in here Section 30 of Arbitration Act, 1940
"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 roceedings
(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 other wise invalid."
28. From the perusal of objections raised by Jagdish Rai, it seems his main
grievance are:
a) Award was passed by the arbitrators, without following principle of
natural justice
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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b) Award was passed without considering reference made by the parties
29. Before adjudicating upon these issues, it would be relevant to consider in here
jurisdiction of Civil Court while dealing with an arbitration award passed under
Arbitration Act 1940. For this I may gainfully referred to observations made by
Hon'ble Apex Court in State of Rajasthan v. Ferro Concrete Construction (P)
, (2009) 12 SCC 1:
Ltd.
"18.Section 30 of the Act inter alia provides that an award can be set
aside on the ground that an arbitrator had misconducted himself or the
proceedings, or that the award had been improperly procured or is
otherwise invalid. An error apparent on the face of the award, is a
ground for setting aside the award under Section 30 or for remitting the
award to the arbitrator under Section 16(1)(c) of the Act.
19. InChampsey Bhara & Co.v. Jivraj Balloo Spg. & Wvg. Co. Ltd.
[(192223) 50 IA 324 : AIR 1923 PC 66] the Privy Council explained
the term "an error of law on the face of the award" thus: (IA p. 331)
"... An error in law on the face of the award means ... that you can find
in the award or a document actually incorporated thereto, as for
instance, a note appended by the arbitrator stating the reasons for his
judgment, some legal proposition which is the basis of the award and
which you can then say is erroneous."
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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20.It was well settled that under the Arbitration Act, 1940, an award
was not open to challenge on the ground that the arbitrator has reached
a wrong conclusion or failed to appreciate facts, as under the law, the
arbitrator is made the final arbiter of the dispute between the parties.
While considering the challenge to an award, the court will not sit in
appeal over the award nor reappreciate the evidence for the purpose of
finding whether on the facts and circumstances, the award in question
could have been made. When there is no allegation of moral misconduct
against the arbitrator with reference to the award, and where the
arbitration has not been superseded, there were only two grounds of
attack. First was that there was legal misconduct on the part of the
arbitrator in making the award. Second was that there was an error
apparent on the face of the award.
21. This Court explained the principles relating to interference with
awards under the 1940 Act in State of Rajasthan v. Puri Construction
Co. Ltd. [(1994) 6 SCC 485] thus: (SCC pp. 50203, para 31)
"31. ... Similarly, an award rendered by an arbitrator is open to
challenge within the parameters of several provisions of the Arbitration
Act. Since the arbitrator is a Judge by choice of the parties, and more
often than not, a person with little or no legal background, the
adjudication of disputes by an arbitration by way of an award can be
challenged only within the limited scope of several provisions of the
Arbitration Act and the legislature in its wisdom has limited the scope
and ambit of challenge to an award in the Arbitration Act. Over the
decades, judicial decisions have indicated the parameters of such
challenge consistent with the provisions of the Arbitration Act. By and
large the courts have disfavoured interference with arbitration award
on account of error of law and fact on the score of misappreciation and
CS No. 43/14 Parmeshwari Das Vs Mool Chand
20
misreading of the materials on record and have shown definite
inclination to preserve the award as far as possible. As reference to
arbitration of disputes in commercial and other transactions involving
substantial amount has increased in recent times, the courts were
impelled to have fresh look on the ambit of challenge to an award by the
arbitrator so that the award does not get undesirable immunity. In
recent times, error in law and fact in basing an award has not been
given the wide immunity as enjoyed earlier, by expanding the import and
implication of 'legal misconduct' of an arbitrator so that award by the
arbitrator does not perpetrate gross miscarriage of justice and the same
is not reduced to mockery of a fair decision of the lis between the parties
to arbitration. Precisely for the aforesaid reasons, the erroneous
application of law constituting the very basis of the award and improper
and incorrect findings of fact, which without closer and intrinsic
scrutiny, are demonstrable on the face of the materials on record, have
been held, very rightly, as legal misconduct rendering the award as
invalid. It is necessary, however, to put a note of caution that in the
anxiety to render justice to the party to arbitration, the court should not
reappraise the evidence intrinsically with a close scrutiny for finding out
that the conclusion drawn from some facts, by the arbitrator is,
according to the understanding of the court, erroneous. Such exercise of
power which can be exercised by an appellate court with power to
reverse the finding of fact, is alien to the scope and ambit of challenge of
an award under the Arbitration Act. Where the error of finding of facts
having a bearing on the award is patent and is easily demonstrable
without the necessity of carefully weighing the various possible
viewpoints, the interference with award based on erroneous finding of
fact is permissible. Similarly, if an award is based by applying a
principle of law which is patently erroneous, and but for such erroneous
CS No. 43/14 Parmeshwari Das Vs Mool Chand
21
application of legal principle, the award could not have been made,
such award is liable to be set aside by holding that there has been a
legal misconduct on the part of the arbitrator. In ultimate analysis, it is
a question of delicate balancing between the permissible limit of error of
law and fact and patently erroneous finding easily demonstrable from
the materials on record and application of principle of law forming the
basis of the award which is patently erroneous."
30. Now coming upon the objection raised by Jagdish Rai respondent no. 2, it is
pertinent to mention here that in order to prove the objections as alleged,
petitioners were cross examined at length. It would be relevant to reproduce in
here relevant extract of cross examination of the petitioners:
●
Cross examination of Sh. Prithi Chand, Petitioner No. 2.
On SA,
"No hearing was done on that date when the agreement was executed.
Respondent no.1 and 2 must have signed the agreement. I do not
know who else signed the agreement. I do not remember if there were
any witnesses or if the agreement was attested by any witness.
Q. Did you maintain any arbitration proceedings?
Ans. No proceedings were maintained. We heard the parties on
July 10, 1981 for the first time. This hearing was held in the house
of Parmeshwari Dass in Naya Bans.
CS No. 43/14 Parmeshwari Das Vs Mool Chand
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Q. Who were present at that time?
Ans. At the time all the five arbitrators and the parties were present. I
do not remember if anybody else was present or not. The proceedings
continued for about one or two hours. Probably from 3:00 PM to 4 to
5 PM. They were asked to give in writing as to what were their
grievances against each other. They gave us some writings later on
but I do not remember what those writings were.
Q. Did the arbitrators including yourself maintained those writings?
Ans. I do not know what happened to those writings. I cannot say
whether any register or file was prepared.
On the first date of hearing no writing was given. Only oral talks
took place. We did not make any entry of the proceedings which
took place on July 10,1981. As a matter of fact no proceedings were
ever recorded on any date.
Q. Had you gone through the contents of the writings which were
given to the arbitrators by the parties?
Ans. I had not gone through those contents. The other arbitrators had
gone through them.
Q. Did you fixed the next date of hearing?
Ans. Yes. We fixed the date of hearing for the next day. The time was
fixed orally. The hearing took place at the same place.
Q. What happened on July 11, 1981?
CS No. 43/14 Parmeshwari Das Vs Mool Chand
23
Ans. Both the parties came there.Only five arbitrators were present.
On that date also oral hearing was made. Nothing was given in
writing. On July 12, 1981 we sent some persons to Sonepat. Mange
Ram, Mool Chand and Parmeshwari Dass were sent to Sonepat. They
made enquiry from one Chajju Ram. I did not go to Sonepat. So far I
recollect neither of the parties went to sonepat.
Q. Is it correct to suggest that the property was divided half and half
keeping in view the price of the property as well as the area of the
property?
Ans. It is wrong. We were to decide the dispute keeping in view the
facts that which portion had been allotted to which party by their
ancestors. We were to decide whether any partition had taken place
between the parties earlier and whether that should be maintained
or not and we decided accordingly. We did not keep in view the
price or area of the property.
On July 13,1981 we asked the party to come on July,14 1981. It was
oral direction.
.......................................
Q. Whether any report was prepared by the arbitrators who went to Sonepat to make enquiry?
Ans. I do not know. I do not know what happened in Sonepat. I did not meet Sh. Chajju Ram or his son. I did not go to Sonepat at all in this connection.
CS No. 43/14 Parmeshwari Das Vs Mool Chand 24 Q. Did you see the previous judgment or compromise yourself? Ans. I did not see the previous compromise or decree myself. Q. Who had the previous compromise or decree or judgment? Ans. I do not know who had it. I do not know if there was any such previous judgment or compromise or decree or who had executed it. ......................................... Q. After three arbitrators came back from Sonepat did you hear Jagdish Rai?
Ans. We gave him no hearing. We made no enquiry from him. The award was prepared on a stamp paper. I do not know who purchased the stamp paper. It was purchased on the same date. I do not recollect from where it was purchased. I do not remember whether at the time of making application for making the award rule of the court I knew as to who purchased the stamp papers for the award. Probably a rough draft of the award was prepared. It was prepared probably by Mool Chand and Mange Ram, arbitrators. I do not know what happened to that rough draft. I do not remember if I read it. But it was prepared with my consent. The contents of the rough draft were put on the award. The rough draft was prepared probably one or two hours before the parties came. It might have been prepared on July 13, 1981. It must have taken an hour or two for preparing the rough draft. I do know if the rough draft was filed in court. I do not know if all the papers were filled in court. I do not CS No. 43/14 Parmeshwari Das Vs Mool Chand 25 know if I had signed the rough draft at the time of making the application to this court.
...................................
Q. Did you and your coarbitrators knew about the previous compromise between the parties?
Ans. Yes, we have some knowledge.
Mage Ram, arbitrator is the real brother of respondents no. 1 and 2. Q. Is it correct to suggest that only Mange Ram knew about the previous settlement and none else.
Ans. It is wrong. The other arbitrators knew something about the previous compromise. I knew that some partition had taken place between the parties earlier. I do not know the details of that settlement.
Q. Is it correct to suggest that the claims filed by parties in writing are with Mange Ram, arbitrator only?
Ans. All the arbitrators have seen those claims. I do not know to whom the claims were given.
............................................. Q. Did you make any measurement of the property?
Ans. No. We did not prepare any plan or map of the property at any time.
CS No. 43/14 Parmeshwari Das Vs Mool Chand 26 ● Statement of Sh. Mool Chand Jain, Petitioner No. 3 ........................................
Q. Who paid the expenses of the typing, stamp papers etc.? Ans. The expenses were paid by all the arbitrators expect Mange Ram. A sum of about Rs. 100/ was spent on the preparation of this award. We got the award registered. About Rs. 650/ were spent at the time of registration. That amount was also spent by all the arbitrators expect Mange Ram. We have not demanded the expenses from them. We have not made any entries about these expenses in our account books. We took out the money from the shop and out of this lumpsum money these expenses were incurred.
.............................
Ques. Did you prepare any arbitration proceedings? Ans. No. .....................................
We were appointed arbitrators on July 9, 1981. On the same day we asked the parties to give their statements in writing. Mool Chand gave his statement on 10 th July, 1981 and Jagdish Rai on th July, 1981. We held a hearing on 10th July,1981 and then on 11 11th July, 1981 and we went to Sonepat on 12th July, 1981. Myself, Mange Ram, Parmeshri Dass alone had gone to Sonepat.
Neither
of the parties
accompanied
us.
Both the parties had told us that
a settlement between them had taken place 12 years and at the
CS No. 43/14 Parmeshwari Das Vs Mool Chand
27
time of the said settlement Chajju Ram was Panch. That Chajju
Ram was available at Sonepat and we went to Sonepat. Chajju Ram told us that they have settled the dispute and divided the house according to their present possession. We did not met anybody else besides Chajju Ram.
Q. Do you know whether there was any written arbitration agreement and who were the arbitrators 12 years back? Ans. Chajju Ram, Chandgi Ram, Mange Ram and Bharat Singh were the arbitrators. I do know whether they made the award in writing or not. Chajju Ram gave the information orally.
He
had
no document with him in this behalf.
At the time
when
we made
inquiry from Chajju Ram besides myself, Parmeshri Dass,
Mange Ram, Arbitrators, Chajju Ram and his son were present.
None else
was present.
Mahavir Prasad is the name of the son of
Chajju Ram. Chajju Ram has since died. Probably he died in 1982 or 1983. Chajju Ram was a petition writer. His son Mahavir Prasad was also a petition writers.
Q. Had
Chajju Ram made any entry in writing
anywhere
in his
register or any other place about the award given
by them earlier?
Ans. Chajju Ram told us that they
have given the award
but he
could not say who had the award.
Q. Where are the statements which were filed before the
arbitrators by the parties, as stated by you earlier? CS No. 43/14 Parmeshwari Das Vs Mool Chand 28 Ans. Those statements were with Mange Ram. We had taken those statements from Mange Ram on July 20,1981. Q. Whether those statements were with you and other arbitrators when the award was prepared?
Ans. I cannot say.
I do not know if Chajju Ram had made any entry regarding the previous award in his register. I do not know if the earlier award was registered or not. We did not make any enquiry about it. Q. Did you make a note anywhere regarding enquires made by you at Sonepat?
Ans. After coming
back from
Sonepat we made no note about the
enquiry
made
at Sonepat. We
however
had informed
about
the
enquiries made
to the remaining
two arbitrators.
Nothing
else
was done about
this
enquiry.
....................................
Q. What was the basis of your award?
Ans. The basis of the award was the enquiry at Sonepat besides we
are seeing the parties in possession of their respective portions for last 15 years.
Before the partition both respondents no. 1 and 2 were owners of the property in dispute in equal shares.
Q. What was to be done by the arbitrators?
CS No. 43/14 Parmeshwari Das Vs Mool Chand 29 Ans. We were appointed arbitrators to settle the disputes between the parties.
What
Q. was the dispute between the parties?
Ans. Jagdish Rai wanted to construct a room on the upper
storey. The other party objected to it and that gave rise to a
dispute and that
was a dispute to be decided
by the arbitrators.
We did not ascertain
that market value
of the
property in dispute
before giving
the award.
We
did not
divide the property keeping
in view its value. We did not divide its area. We divided it
according to the settlement or the decision which had already
arrived at 15 years back. In this petition I filed my
been
affidavit. As a matter of fact all the arbitrators filed their
affidavits except respondent no.3. I do not recollect if all the
arbitrators filed one affidavit or separate affidavits. It is incorrect to suggest that Nem Chand Jain is not an advocate and is only an incometax consultant. The stamp paper for writing the award was purchased through Prem Chand or Mange Ram. I do not recollect whether it was brought by Mange Ram or Prem Chand. I have not seen the endorsement on the stamp paper. I do not recollect if the affidavits filed by the arbitrators were jointly prepared or discussed with each other. I do not recollect if I had stated anywhere that we had decided the dispute according to the decision made earlier about 15 years back. Neither of the parties had given anything in writing stating that a settlement had been arrived at between them 12 years before. It is correct that now the market value of the ground floor portion is much more CS No. 43/14 Parmeshwari Das Vs Mool Chand 30 than the first floor. (allowed subject to objection) . I have seen the property in dispute. Chajju Ram was not ill when we met him at Sonepat. I do not know if the parties had given in writing appointing him as arbitrator earlier. We had given a copy of the award to Mr. Jagdish Rai. It was given by hand by me. I did not obtain his signature in token of receipt. So far I recollect, the copy was given on 15.07.1981. I cannot given any reason why his signature were not obtained. I did not feel the necessity of it.
...................................................
Q. Did you give any opportunity of hearing and producing
evidence to the parties after
your
visit to Sonepat?
No such opportunity
Ans. was given.
......................................
Cross examination of Sh. Parmeshwari Dass, petitioners No.1 I was one of the arbitrators who made the award in question. Apart from me there were four other abritrators. The award had to be made with regard to the partition of the property known as House No. 28/4777, Deputy Ganj, Delhi, between the parties to the suit.
It is true that there was no dispute between the two persons
before the arbitrators that they were owners of 50 % each of
property in question. Therefore, the award had to be made
the
keeping in mind
the rights
of the parties.
It is
true
that we did
not have the value of the property or for that matter the total
CS No. 43/14 Parmeshwari Das Vs Mool Chand
31
area of the property in respect of which a partition had to be
made. Actually some settlement had been arrived at between the
parties which was incorporated in the award in writing made by four persons. We enquired into earlier settlement between the parties and award made by four persons earlier and on the same basis made are our award. But on inquiry from one Sh. Chajju Ram, who was one of the four arbitrators earlier, we learnt about the settlement and accordingly gave our award. Sh. Chajju Ram was a resident of Sonepat. The other three persons who were arbitrators earlier, live in Delhi and they were brothers. Out of these four we went only to Sh. Chajju Ram.
When we went to Chajju Ram, Sh. Mange Ram another arbitrator out of the four persons who made the award earlier had accompanied us. The other two persons are Sh. Bharat Singh and Sh. Chandgi Ram. The Same Mange Ram is respondent no. 3 in these proceedings. We went to Sh. Chhajju Ram in Sonepat on 12.07.1981. No notice was given to any of the parties about the enquiry to be made by us from Sh.
Chajju Ram in Sonepat.
Therefore, the award made by us was without taking into account either the area or the value of the property to be divided. We have only three persons namely myself. Shri. Mool Chand and Sh. Mange Ram, arbitrator when we went to Chajju Ram on 12.07.1981. We made notes of what we learnt from Sh. Chajju Ram. We were maintaining files in respect of this case with regard to which we had to make an award......................
..................We have not got the property valued by anybody nor we the area measured..................... We have not recorded any got CS No. 43/14 Parmeshwari Das Vs Mool Chand 32 statement of the parties. No ordersheet datewise was recorded. We have not recorded any proceedings. Expect the award, we have not written anything and we just informed both the parties............................I cannot give the names of those who were present at the time of hearing. We made inquiry from Chajju Mal and Mange Ram and not from others. We have not recorded what was stated by them...............................We spent the money from own pocket for purchasing the stamp paper through Prem Chand.
31. Before proceeding further it would be relevant to state in here that in reference made by respondent no. 2 before the arbitrator on 11.07.1981 he has categorically stated that he is owner of half of portion of suit property and he demanded that the property should be partitioned in half from ground floor till third floor.
32. Further in reference made by Sh. Mool Chand, respondent no. 1 before the arbitrator on 10.07.1981 he has stated that the suit property was already partitioned about 14 years before and he came into possession of ground floor as well as bigger room on the terrace of the second floor whereas Jagdish Rai came into the possession of first floor and smaller room on the terrace of second floor. He has further stated that Jagdish Rai has started constructing another room in front of his smaller room on the terrace of second floor and if Mool Chand i.e. respondent no. 2 also raised a construction in front of his bigger room on third floor then, it be made clear by the arbitrators, as to where the passage will be. He CS No. 43/14 Parmeshwari Das Vs Mool Chand 33 has further specifically stated in the reference made by him that if the arbitrators change the settled possession of any of the parties the same would not be objected.
33. After perusal of objections filed by respondents, reference filed by the parties before the arbitrators and cross examination of the petitioners it seems that no terms of reference were ever settled. For the sake of convenience " dispute" or "Issue" or " Reference" as understood by the parties and arbitrators in the present matter are summarized as below. Two arbitrators were of opinion that property has to be partitioned between respondent no.1 and 2. On the other hand, one arbitrators was of the view that property has already been partitioned and arbitration award has to be passed considering the previous partition. Remaining arbitrators was of opinion that dispute between the parties was with respect to construction on terrace of second floor by respondent no.2 Jagdish Rai. ● Dispute as per reference filed by Jagdish Rai before the arbitrators is that the suit property should be partitioned in half from ground floor till third floor ● Dispute as put up by Mool Chand before the arbitrators is that suit property was already partitioned about 14 years before and he came into possession of ground floor as well as bigger room on the terrace of second floor whereas CS No. 43/14 Parmeshwari Das Vs Mool Chand 34 Jagdish Rai came into the possession of first floor and smaller room on terrace of second and Sh. Jagdish Rai has started constructing another room in front of his smaller room on the third floor and in case if Mool Chand i.e. respondent no. 2 also raised a construction in front of his bigger room on terrace floor then, no passage will be left.
● Dispute as per objections filed by Mool Chand before the court appears to be that although partition has already taken place between the parties 14 years ago but since no formal partition took place, in order to avoid all future disputes it was agreed that said be partition regularized by an award of Arbitrators. ● Dispute between the parties as per arbitrator Prithvi Chand was whether any partition had taken place between the parties earlier and whether that should be maintained or not.
● Dispute between the parties as per arbitrator Mool Chand was that Jagdish Rai wanted to construct a room on the upper storey and respondent no. 2 i.e. Mool Chand objected to the same.
● Dispute between the parties as per arbitrator Parmeshwari Das was that both the parties were owner of 50 % share in the suit property and award has to be passed with the regard to partition of property. CS No. 43/14 Parmeshwari Das Vs Mool Chand 35 ● Dispute between the parties as per arbitrator Mange Ram was property was to be partitioned between the parties into equal half.
34. Furthermore it has been admitted by all the arbitrators/ petitioners during their cross examination that no records of arbitration proceedings were ever maintained by the arbitrators. Hence there is no record of proceedings took place before arbitrators or evidence tendered. Also, it is stated by the arbitrators that they went to Sonipat and made inquiry from one Chajju Ram. However, at the same time they have stated that no notice about their visit to Sonipat was given to the parties, nor any of the parties to arbitration accompanied them to the Sonipat. No record of proceedings has been maintained as to what happened in Sonipat or intents of deposition of Chajju Ram to the arbitrators. It was disclosed in their cross examination that no award/ document regarding prior partition was ever shown by Chajju Ram to the arbitrators. It is further admitted by the arbitrators that no hearing was given by them to the parties after coming back from Sonipat. Again, it was stated by the arbitrators that they have inspected the property but neither any site plan nor any proceedings were drawn during the inspection.
35. One of the significant proceedings during the course of arbitration before passing the award in question, was making inquiry from Chajju Ram with respect to partition that took place between the parties 14 years before. No record of the CS No. 43/14 Parmeshwari Das Vs Mool Chand 36 same was maintained by the arbitrators, neither the parties to the arbitration were served with any notice. This court is at total loss in understanding as to what exactly was the procedure that was followed by the arbitrators to decide the dispute. If for the sake of argument, it is believed that dispute to be adjudicated upon by the arbitrators was partitioning of property in equal half, arbitrators have stated that they have not considered the area or value of property while adjudicating upon the dispute. On the other hand, the issue to be adjudicated upon by the arbitrators was regarding construction raised by Jagdish Rai, then there is no explanation as to what was the need to make inquiry from Chajju Ram. Further at the cost of repetition it is worth mentioning that there is nothing on record to show as to how many times parties were heard or what evidence was led by the parties.
36. The sine qua non of any litigation before a court/ proceedings or before an authority is the very existence of dispute. The process of adjudication takes its first leap only when this dispute is circumscribed in form of a issue or a point of a reference. It is only quixotic to infer that a dispute between two or more persons can leap to its resolution owing to a successful adjudication without zeroing in on a point to be decided i.e. issue or a point of reference. Coming to the case at hand, the factual matrix reveals assertion of one set of facts by one party and denial of CS No. 43/14 Parmeshwari Das Vs Mool Chand 37 same set of facts by other party. It is pertinent to mention that at no point the two parties have accepted or denied the same facts and hence the point of controversy itself is quite ambigious in its existence. The perusal of record reveals that when the alleged dispute, was referred to arbitration Jagdish Rai had in mind that the dispute is qua the partition. However the pleadings reveal that qua Mool Chand the dispute was not the partition rather an objection in reference to alleged wrongful construction. The court is in awe of arbitrators who not only adjudicated over the present matter but also surprisingly came up with arbitration award.
37. in course of existence cross examination of the arbitrators it has come to the forefront that the arbitral proceedings were not conducted in Black and White. There is not even iota of documentation involved which could reveal very basis of adjudication, the genesis of the dispute or/ and the possible outcome i.e. the award thereof. The overall appreciation of pleadings reveals that the entire proceedings were conducted by keeping the principles of Natural Justice at bay. As it is settled principle of law that principle of Natural Justice is the very essence not only of the procedure but also of the law, for procedure which is devoid of its fairness can only lead to dictate and can never yield in a reasoned, equitable, just and fair adjudication. The same is evident from the statement of all the arbitrators wherein the arbitrators reveal that no documentation regarding the manner in which CS No. 43/14 Parmeshwari Das Vs Mool Chand 38 proceedings were conducted was never maintained. Upon having entire view of the proceedings conducted, the oral testimonies and pleadings herein I am of the considered opinion that in the case in hand the adjudicators were divorced from any possibility of a reasonable and lawful adjudication owing to their ignorance of issue involved which in the present matter should be called terms of reference. Considering the fact that very terms of reference were not created or settled the present arbitration award at be best can be called dialogue between two aggrieved parties who were unaware about the greviances involved between each other and five gentlemen who in all their sincerity to work and eagerness to help forgot to ask as what precisely is the dispute.
38. Considering the facts and law discussed above I am of the view this is a clear that case of misconduct on part of arbitrators in the course of arbitration proceedings. In view of the same objections raised by respondent number 2 are allowed. Arbitrations proceedings are set aside.
In view of the observation made above suit of the plaintiff is dismissed. In such circumstances, there is no order as to cost. Decree sheet be prepared accordingly.
CS No. 43/14 Parmeshwari Das Vs Mool Chand 39 File be consigned to record room after due compliance. Pronounced in open court on 23.01.2015 ( Anubhav Jain ) Civil Judge05, Central District Tis Hazari Courts,Delhi Present judgment is consist of 39 pages and each page is signed by me. CS No. 43/14 Parmeshwari Das Vs Mool Chand