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PETITIONER: CHAMPALAL

       Vs.

RESPONDENT: MST.  SAMARATH BAI

DATE OF JUDGMENT: 21/01/1960

BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. IMAM, SYED JAFFER SUBBARAO, K.

CITATION:  1960 AIR  629            1960 SCR  (2) 810  CITATOR INFO :  R          1970 SC 833  (11)

ACT:        Arbitration Award, Registration of--power of court to extend        time  for filing--The Arbitration Act, 1940 (X of 1940),  s.        14(2)--Indian  Registration  Act,  (XVI of  1908),  ss.  17,        49--lndian  Limitation  Act, (IX of 1908),  Art.  178-Indian        Succession Act, 1925 (XXXIX of 1925), S. 192.

HEADNOTE: By  means of a will the respondents husband autliorised  her to  adopt  the appellant, and the will was  duly  registered after  the death of the testator.  The relevant  portion  of the will ran thus:- "Under  this  will,  I am  authorising  the  said  Champalal Ishwardas  to  execute the same.  I have appointed  him  the executor  of  this  will.   Under the  said  will  the  said Champalal alone shall be the full owner of my entire movable and immovable property and the executor of the will after my 811 death  if I adopt him during my lifetime or even if my  wife adopts him (after my death)." The  appellant  applied for appointment of a  curator  under S.192  of  the Succession Act but subsequently  the  parties entered  into  an agreement for arbitration in  the  matter. Three arbitrators were appointed and the time for making the award  was extended by the Court on their application.   The arbitration  agreement  stated that the arbitrators  had  to decide  what should be the respective rights of the  parties in the estate in case the respondent adopted the  appellant. An  award was made and filed in Court by the arbitrators  to the  effect that the respondent should adopt  the  appellant according to Hindu Law within four months failing which  the appellant would be their and executor of the entire property of  the deceased and the respondent would be entitled  to  a maintenance  of Ks. 200 per mensem.  But it in spite of  the respondent’s readiness to adopt, the appellant refused to be adopted  within four months, he would not have any right  in the property nor would he be the executor.  The award was at first unregistered and on being returned it was subsequently registered and refiled in Court.  The attorney of two of the

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arbitrators  furnished  to the Sub-Registrar a list  of  the property  covered by the award.  The proceedings  under  the Succession Act and the Arbitration Act were then  separated. The  respondent  made an application under s. 14(2)  Of  the Arbitration Act, and the appellant applied for setting aside the award.  The Court passed a decree in terms of the award. The High Court on appeal by the appellant upheld the award. On  appeal by a certificate of the High Court the  appellant contended  that  being an executor lie could not  refer  the matter  to arbitration, that the award was not filed  within the  time prescribed by the Limitation Act, that it was  not registered according to law, that the First Additional judge had  no  jurisdiction to extend time for making  the  award, that the arbitrators were guilty of misconduct and the award was  in excess of the power given to them and that  even  if the award was proper and legal the respondent having refused to  adopt  the  appellant the decree  should  have  been  as provided  by the award on the happening of  the  contingency and the Court passing the decree had no jurisdiction to take subsequent events into consideration. Held, that the filing of the award by the arbitrators  after notice  to the parties was not barred by limitation as  Art. 178  of the Limitation Act applied to applications  made  by the  parties  and  not to the filing of  the  award  by  the arbitrators. The  award  required registration but the filing of  an  un- registered award under S. 49 of the Registration Act was not prohibited;  what  was prohibited was that it could  not  be taken  into  cvideince so as to  affect  immovable  property falling under s.   17 Of the Act.  812 The Court had jurisdiction to entertain the application  for filing the award and to extend time for filing it. By the will the appellant could not get the property of  the Bai  testator nor was he constituted an executor  except  in the event of his being adopted and therefore he could  enter into the arbitration agreement. The  agreement  for arbitration having  specifically  stated that the consequences of adoption or non-adoption were to be decided by the arbitrators, they rightly laid down what  was to  happen if the adoption did not take place owing  to  the default of either party, imposing a time limit Was  implicit in  the  terms of the agreement and their award was  not  in excess  of  the  power  given to  them  by  the  arbitration agreement. The award could not be treated as having perverted the  line of succession by merely stating that if the adoption did not take  place  the  respondent would receive I  share  of  the testator’s property and it would form her stridhan.

JUDGMENT:        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 34 of 1956.        Appeal  from the judgment and order dated February 19,  1954        of the former Nagpur High Court, in Misc.  Appeal No. 164 of        1949, arising out of the judgment and decree dated  November        22, 1949, of the First Additional District Judge, Akola,  in        Civil Suit No. 12-A of 1948.        C.   B. Agarwala and Ganpat Rai, for the appellant.        S.   K. Kapur and B. P. Maheshwari, for the respondent.        1960.  January, 21.  The Judgment of the Court was delivered        by        KAPUR J. KAPUR J.-This is an appeal against the judgment and

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      order of the Nagpur High Court and arises out of proceedings        under the Indian Arbitration Act.        The  appellant in this case is Champalal and the  respondent        is  Samarath Bai, the widow of Lal Chand.  The  parties  who        are Jains belong to Balapur in the district of Akola in  the        previous  State of Madhya Pradesh.  The relationship of  the        parties is shown by the following pedigree table:        813                             Phool Chand              |------------------|---------------------|-              |                  |                     |        Nanak Chand        Khushal Chand             Sundarlal              |                  |                     |        Bulakhidas=        Lalchand=                 Deolal        jivanbai           Samarathbai                  |                  |------------|-----------|            |                  |                        |            |                Babibai=             Ratanbai=          |                Rasiklal             Vijay Kumar        |                                                        |                      |-------------|--------------------------|                      |             |                          |                  Ishwardas       Baglal              Digamber Das                      |             |                  Champalal         |                                    |                         |----------|---------------|                         |          |               |                  Sakarchand      Vinaychand      Vimalchand        On  September  14, 1944, Lal Chand made a will by  which  he        authorized his wife Samarath Bai to adopt Champalal and made        certain  disposition  of his property.  Lal  Chand  died  on        September 26, 1944.  On October 20, 1944, the appellant made        an  application  under s. 192 of the Succession Act  to  the        First Additional District Judge of Akola for the appointment        of  a  Curator.   This  was Misc.  Judl.   No.  3  of  1944.        Notices were issued to the respondent, Samarath Bai and  her        daughters, The will was registered on December 29, 1944.  On        January 10, 1945, an arbitration agreement was entered  into        between the appellant and the respondent and on January  16,        1945,  both parties applied for stay of proceedings  in  the        case  (Misc.   Judl.   No.  3 of  1944)  and  the  case  was        adjourned to March 28, 1945, and then was adjourned to  June        18, 1945.  On that date the arbitrators made an  application        to the First Additional District Judge for extension of time        for four months for making the award.  This application  was        opposed  by the appellant but the court gave  three  months’        time  on July 26, 1946.  The award was made on  October  18,        1946.  On October 21, it was filed by the arbitrators in the        court of the First Additional District Judge who on  October        30,  gave to the parties ten days’ time for objections.   On        November 15,        814        1946,  the  appellant filed objections to the award  and  on        January  31, 1947, the respondent applied for a judgment  in        terms  of  the  award  and  for  a  decree.  The  award  was        unregistered and therefore at the request of the  respondent        it was handed over for getting it registered to Mithulal who        was  an  attorney  of two of the  arbitrators  Magandas  and        Sakarchand.   On  February  7, 1947,  he  presented  it  for        registration  to  the Sub-Registrar  but  the  Sub-Registrar        returned  it  as  it  was not  accompanied  by  a  list  and        particulars  of  the  property covered  by  the  award.   On        February  15,  1947,  the list  and  particulars  signed  by        Mithulal  were  supplied and the award was  represented  for

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      registration by Mithulal.  As he was an attorney of only two        of  the three arbitrators the Sub-Registrar  registered  the        document  on March 26, 1947, in regard to  said  arbitrators        and  refused  it qua the third  arbitrator,  Bhogilal.   But        under   the  orders  of  the  Registrar  the  document   was        registered in regard to Bhogilal also and it was refiled  on        July 21, 1948, in the Court of the First Additional District        Judge.   He ordered the two proceedings one under s. 192  of        the  Succession Act and the other under the Arbitration  Act        to  be separated and the proceedings under  the  Arbitration        Act  were ordered to be registered as a suit on  August  14,        1948,  and  on  August  30,  the  court  ordered  a   proper        application  as  required under the High Court Rules  to  be        filed.  On September 15, 1948, an application under s. 14(2)        of  the Arbitration Act was filed.  On October 14,1948,  the        appellant  filed an application for setting aside the  award        and  therein raised various objections which  were  rejected        and  on  November  22,  1949,  a  judgment  was  passed   in        accordance with the terms of the award followed by a decree.        Against this order the appellant took an appeal to the  High        Court  which was dismissed on February 19, 1954.   The  High        Court  held  that the application filed. by  the  respondent        dated September 15, ’1948, under s. 14(2) of the Arbitration        Act  was not within time but the original application  filed        by  the arbitrators on October 21., 1946, was  within  time;        that no objection could be taken to the award on the  ground        that        815        there  were two awards one by the arbitrators and the  other        by  Mithulal who had added to the award by giving  the  list        and  particulars; that the First Additional  District  Judge        was  authorised  to extend time for making an award  an  the        application of the arbitrators and he was properly seized of        the  case;  that no misconduct had been proved and  that  no        illegality  had been established and that the appellant  did        not  get anything under the will except on adoption nor  was        he  until  then  constituted  an  executor.   Against   this        judgment this appeal has been filed on a certificate by  the        High Court.        In  appeal  before us counsel for the appellant  raised  six        points:  (1) the filing of the award was not within time  as        no application was made under s. 14 within the time  allowed        by   the  Limitation  Act;  (2)  that  the  award   required        registration  and was not registered in accordance with  law        and the mere fact that it was registered does not clothe  it        with  legality ; (3) the First Additional  District.   Judge        had no jurisdiction to grant three months’ extension of time        to the arbitrators for making the award which was granted on        July 26, 1946 ; (4) that the arbitrators were guilty of mis-        conduct; (5) that the award is in excess of the power  given        to  the arbitrators under the agreement of  arbitration  and        (6)  even if the award was proper and legal  the  respondent        had  refused to adopt the appelant and therefore the  decree        should  have been as provided by the award on the  happening        of  that contingency and in the alternative the First  Addi-        tional   District  Judge  who  passed  the  decree  had   no        jurisdiction to take subsequent events into consideration.        In  our  opinion points nos. 1, 2 and 3 are  wholly  without        substance.  The award was made on October 18, 1946, and  the        arbitrators  filed it in the court of the  First  Additional        District  Judge and they also gave notice to the parties  by        registered  post informing them of the making of the  award.        It  has not been shown as to how the filing of the award  is        barred  by  Iimitation.  Article 178 of the  Limitation  Act        which was

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      104        816        relied upon by the appellant applies to application,made  by        the  parties  and  not to the filing of  the  award  by  the        arbitrators.        The second question that the award required registration and        could  not  be  filed  by  the  arbitrators  before  it  was        registered  is  equally without substance.The filing  of  an        unregistered  award under s. 49 of the Registration  Act  is        not  prohibited;  what is prohibited is that  it  cannot  be        taken  into  evidence so as to  affect  immoveable  property        falling  under s. 17 of that Act.  That the  award  required        registration  was rightly admitted by both parties.  It  was        contended  by counsel for the appellant that under s. 21  of        the  Registration  Act  and the rules made tinder  s.  22  a        description  of the property was necessary and as  that  was        supplied through Mithulal who, according to counsel, did not        have  the  necessary authority to do so, the award  must  be        taken  to  be  an incomplete document  which  could  not  be        registered.    The  High  Court  has  found  that   in   the        circumstances  of  this case lists were  not  necessary  and        therefore  anything done by Mithulal whether  authorised  or        not  will not affect the legality of the registration.   The        third point that the First Additional District Judge  before        whom  the  application was made for extending the  time  for        making   the   award  had  no  jurisdiction  is   also   not        sustainable.   It  so  happened that  the  court  which  had        jurisdiction  to  entertain applications for the  filing  of        awards was the same before whom the application under s. 192        of the Succession Act had been filed.  If that court was the        proper court in which such applications were to be made then        no defect can be found in the application being made to that        court or that court giving such extension.        The  ground  on  which  the  charge  of  misconduct  of  the        arbitrators was founded was that the arbitrators had  before        hearing  the  parties decided amongst themselves  that  they        would  give  a particular award.  The High Court  has  found        that  this  charge has not been proved.  It was based  on  a        statement  of  the appellant that one  of  the  arbitrators,        Magandas,  had  suggested  to him that  he,  the  appellant,        should agree to give to        817        the  respondent  an  absolute estate in  a  portion  of  the        property and if that was done the dispute would be  settled,        but  he was agreeable only to giving a life estate  and  the        arbitrators then told him that in that  case they would give        an absolute estate to the respondent.  As the High Court has        pointed  out  this  fact  was  not  pleaded  in  the   first        application of objections filed by the appellant and it  was        in  its opinion an after-thought.  Reliance was also  placed        on the following statement of Magandas in  cross-examination        as P.W. 3:        "  We had decided as to how the award was to be made by  us,        but  as  these  two  persons  did  not  come  we  made   the        application to the Court for extension of time ".        But  the explanation of the other arbitrators was that  they        wanted to bring about an amicable settlement and had gone to        Balapur  and then to Akola.  The appellant and  his  brother        had  promised to follow them there but as they did not  turn        up an application was made for extension of time.  There  is        nothing  wrong in what the arbitrators did and it cannot  be        said  that,  any inference of misconduct can be  drawn  from        this evidence.        It  was then submitted that the award was in excess  of  the        powers  given to the arbitrators and was therefore  invalid.

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      This  point  was  divided into three points:  (i)  that  the        reference  itself was invalid and therefore the award was  a        nullity;  (ii)  that the award was in excess of  the  powers        given to the arbitrators and (iii) the award was contrary to        law  on the face of it. In support of point No. (1)  it  was        submitted  that the appellant having accepted the office  of        an  executor could not enter into an arbitration  concerning        the execution, authority to adopt or the property covered by        the will.  It is unnecessary to decide the vitality of  this        point because according to the true construction of the will        the  appellant  was not to become the executor till  he  had        been adopted.  Paragraph 10 of the will was as follows:        "  I  have this day, made as above the wilt  of  my  estate.        Under this will, I am authorising the said        818        Champalal  Ishwardas to execute the same.  I have  appointed        him  the  executor of this will.  Under the said  will,  the        said  Champalal alone shall be the full owner of  my  entire        movable and immoveable property and the executor of the will        after my  death if I adopt him during my lifetime or even if        my wife adopts him (after my death).        "  The words " under the said will the said Champalal  shall        be  the executor of the will after my death if I  adopt  him        during  my lifetime or even if my wife adopts him  after  my        death " show that the appellant was to become executor after        his  adoption  and as he was not adopted he  cannot  be  the        executor and therefore the argument that an executor  cannot        enter into arbitration does not arise and we do not think it        necessary  to  decide  this matter beyond  saying  that  the        appellant  was not constituted an executor eo  nominiee  but        was  to  be an executor if he was  adopted.   Similarly  the        question whether the appellant after accepting the office of        an  executor had renounced it or a discharge  was  necessary        under s. 301 of the Succession Act does not arise.        Points  (ii)  and  (iii) may be taken up  together.  lt  was        argued that the award is in excess of the power given to the        arbitrators   because  it  determined  the  rights  of   the        appellant  as  an executor and because it was in  excess  of        para.   No.  1 of the arbitration agreement  which  provided        that the arbitrators should maintain the gifts to  charities        and  the  gift  in favour of the  testator’s  daughters  and        others. lt is difficult to see how the award has lost  sight        of this paragraph.  As a matter of fact the arbitrators have        maintained  the gifts to charities and other gifts  made  by        the  testator in the will and they have clearly stated  that        the  person becoming the owner of the  deceased’s  property,        will  have  to provide for the maintenance  of  the  persons        named in the will and pay the charities therein enumerated.        Another   objection  raised  was  that  according   to   the        arbitration  agreement  the arbitrators had to  enforce  the        will  and,  not to act outside it and also  they  could  not        impose a limit of time for adoption.  How they        819        have  acted  dehors  the  will  has  not  been  shown.   The        contention  raised  was that according  to  the  arbitration        agreement  the arbitrators had to decide in what  proportion        the  parties to the dispute were to " enjoy " the estate  of        the  testator and not that one of them will get  nothing  at        all.   As  we read paragraph 10 of the will,  and  the  High        Court  also  so construed it, the appellant  could  get  the        property  of  the  testator only if he was  adopted  by  the        testator  or his widow, the respondent.  It is not  correct,        therefore, to read the term of the arbitration agreement  as        meaning that the appellant was to get at least some  portion        of the property irrespective of his being adopted.

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      Paragraph 2 of the arbitration agreement shows that they had        also  to  decide  that in case the  respondent  adopted  the        appellant  what  should  be the  respective  rights  of  the        parties  in  the estate.  The arbitrators decided  that  the        respondent should adopt the appellant according to Hindu Law        within  four  months  before  February,  1947,  and  if  the        respondent  failed so to do within the time above  specified        the  appellant  would  be  the  heir  and  executor  of  the        deceased’s  entire  property  and the  respondent  would  he        entitled  to Rs. 200 per mensem as maintenance.  But  if  in        spite  of the respondent’s readiness to adopt the  appellant        refused  to be adopted within four months, he would not  get        any  rights in the property of the deceased nor would he  be        the  executor.   As  it  was  specifically  stated  in   the        arbitration agreement that the consequences of the  adoption        or non-adoption were to be decided by the arbitrators,  they        rightly laid down what was to happen if the adoption did not        take  place and also provided that if it was due(,,  to  the        default of the appellant one consequence will follow and  if        it  was  the default of the respondent  another  consequence        would  follow.  The words of the agreement "In the same  way        the  arbitrators may also decide that in case it is  decided        that  the  party No. 2 should adopt the party No. 1  and  if        that  thing is accepted by the party No. 1 and in  case  the        adoption  takes place, what shall be the rights of both  the        parties   and  how  they  will  stand  in  respect  of   the        property  ............ ..        820        mean  that the power to limit the time was implicit  because        the  happening  of  these events could not  be  left  for  a        limitless period.           The  courts  below have found on  the  evidence  that the        appellant  was  not prepared to be adopted.   We  have  been        taken  through the evidence and we find no reason to  differ        from  the opinion of the High Court that the  appellant  was        not prepared to be adopted.  His attitude in regard to  that        matter is clear from ground No. 37 of the Grounds of  Appeal        taken by him in the High Court which was:-        "  The lower Court erred in holding that Champalal  was  not        within  his  rights  in consenting to  get  adopted  by  Mt.        Samarathbai within the time fixed by the arbitrators without        prejudice to his objections against the award "        and  the  courts have rightly come to that  conclusion.   In        this  view of the matter the alternative argument of  taking        subsequent events into consideration does not arise.        It was also argued that by making the award the  arbitrators        had  perverted the line of succession.  All that  the  award        has  stated  is that in case the adoption  takes  place  the        respondent  would  receive I share of the  property  of  the        testator  and  it would form her stridhana.   How  that  has        perverted the line of succession is difficult to understand.        There is no force in this appeal and it must there. fore  be        dismissed with costs.        Appeal dismissed.        821