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PETITIONER: JAGDISH CHANDER BHATIA

       Vs.

RESPONDENT: LACHHMAN DAS BHATIA

DATE OF JUDGMENT11/01/1993

BENCH: SHARMA, L.M. (CJ) BENCH: SHARMA, L.M. (CJ) AHMADI, A.M. (J)

CITATION:  1993 SCR  (1)  51        1993 SCC  (1) 548  JT 1993 (1)   232        1993 SCALE  (1)66

ACT: Arbitration Act, 1940: Sections   14,  17,  30  and  33--Award--When  can  be   set aside--Non-consideration by the Arbitrator of all  documents submitted       by      party--Whether      amounts       to misconduct--Interference by Court--Whether called for--Court not to sit in appeal or re-assess evidence.

HEADNOTE: The  dispute  between the appellant and  the  respondent  in respect  of  their  Interests  In  certain  properties,  was referred  to arbitration by this Court and a  retired  Chief Justice of a High Court was appointed as the sole Arbitrator with direction to make a speaking award, and the  Arbitrator submitted  his  Award.  Against this  award  the  appellant- objector   filed   objections  under  Section  30   of   the Arbitration  Act, 1940, contending that the  Arbitrator  had misconducted   himself  in  that  he  did  not   take   into consideration several documents which were placed on  record before  him to support the objector’s case and,  hence,  the award was invalid under clauses (a) and (c) of Section 30. Disposing of the Appeal, this Court HELD  : 1.1. There is no infirmity on the face of the  award which  would  entitle this Court  to  exercise  jurisdiction under Section 30 of the Arbitration Act.  The Arbitrator has made  a  speaking  award setting out  his  reasons  for  the conclusions  reached by him and has thus complied  with  the direction of this Court given earlier. [56D, 55E] 12.  The  documents in question mainly relate to the  rights and  interests of the parties In the properties  situate  in that  part  which now belongs to the Dominion  of  Pakistan. Since they were refugees they had made certain claims  under the  law  governing rehabilitation of displaced  persons  in respect  of the properties left behind by them.   The  claim was   sanctioned  in  the  joint  same  of  the   objector’s predecessor-in-Interest and the respondent in respect of the properties  left behind by the family.  On the  strength  of that 52 claim,  one  of the houses was purchased in the  said  name. The  Arbitrator, however, came to the conclusion,  that  the property   in   question  was  purchased  from   the   funds

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contributed  by the objector’s  predecessor-in-interest  and the  respondent.  The share of the objector was held  to  be 1/7th  in  the share of the  predecessor-in-interest,  since deceased.   Since the contribution made for payment  of  the price was not equal, the Arbitrator allotted a larger  share to objector’s predecessor-in- interest and consequently, the objector  has  got  a  share  on  the  basis  thereof,  when inheritance  opened  on  the  death  of  the  predecessor-in interest. [55B-D.H, 56A] 1.3. It is clear from the award that the Arbitrator did  not go  into the rights and interests of the  parties  including the HUF in the properties left behind in     the Dominion of Pakistan.  That was not necessary because the fact that the claim  was  sanctioned in the joint name of  the  Objector’s predecessor-in-interest  and  the respondent  was  never  in dispute.   The  short  question, which  the  Arbitrator  was required  to  consider,  was as regards  the  title  of  the properties, which were the subject matter of the  reference, which  included  a house purchased on the strength  of  that claim.   It  is not necessary for the Court to go  into  the question  of the rights and interests of the parties in  the properties left behind in the Dominion of Pakistan since the Arbitrator  was right that he was called upon to decide  the interest  of  the parties in respect of  two  houses  alone, which were the subject matter of the reference.   Therefore, the  Arbitrator had not misconducted himself by refusing  to enumerate  all  those  documents in question  in  his  award because he was bound by the scope of the reference which was limited to the two houses and not the properties left behind in the Dominion of Pakistan by the parties. [55F, 56B-C] 2.   In  order  to interfere with an award, the  Court  must rind out whether the Arbitrator has misconducted himself  or there  was  any  infirmity in the procedure,  such  as,  the Arbitrator   having  travelled  beyond  the  terms  of   the reference  or there being an error apparent on the  face  of the  award.   It  is  not  misconduct  on  the  part  of  an Arbitrator to come to an erroneous conclusion on a  disputed issue.   The  Court  does not sit in  appeal  and  does  not reassess the evidence.  Even if the Court feels that had  it been  left  to  it,  it would  have  assessed  the  evidence differently  that  would not be a valid ground  for  setting aside the award. [56E, G] 3.   Therefore, in the facts and circumstances of the  case, there  is  no reason to interfere with the award,  which  is made the rule of the 53 Court. [56H, 57A-B] Food Corporation of India v.Joginder pal Mohinderpal & Anr., [1989]2  S.C.C.  347 and Hind Builders v.  Union  of  India, [1990] 3 S.C.C. 338, relied on.

JUDGMENT: CRIMINAL  APPELLATE JURISDICTION: Criminal Appeal No. 32  of 1982. From  the  Judgment and Order dated 1.10.1981 of  the  Delhi High Court in Criminal Misc. (Main) No. 304 of 1980. S.L. Chowdhary and Pradeep Misra for the Appellant. Rakesh K. Khanna and R.P. Singh for the Respondent. The following order of the Court is delivered: Even  though  the dispute between the parties came  to  this Court from an initial order passed under Section 145 of  the Code  of Criminal Procedure, this Court realising  that  the dispute  was  between close relatives in  respect  of  their

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interests in certain properties which were also the  subject matter  in a Civil Suit No. 434/78 (Remand) of the Court  of Sub-Judge,  First Class, Delhi, advised the parties to  have the  same  resolved through an Arbitrator.  On  the  parties agreeing,  this Court passed an order on September  5,  1986 recording the agreement to refer the dispute to  arbitration and appointed Mr. Justice V.D. Misra, retired Chief  Justice of  the  High  Court  of  Himachal  Pradesh,  as  the   Sole Arbitrator.  The parties had agreed to deposit a sum of  Rs. 3,000 each with the Arbitrator to meet with his expenses and remuneration subject to further directions that may be  made in  that behalf.  It was further directed that  the  learned Arbitrator will render a speaking award within four  months. In  view of the said agreement, the appeal was  allowed  and the  High Court’s impugned order was set aside.  It  appears that thereafter one of the parties, namely, Jagdish  Chander Bhatia, did not deposit the expenses with the Arbitrator and raised objection in regard to the arbitration proceedings on the  plea  that the property in dispute was proposed  to  be resumed by the Union of India.  In the meantime, it  appears that  the sole Arbitrator passed away and in his  place  Mr. Justice M.S. Gujral retired Chief Justice of the High  Court of  Sikkim, was appointed the Sole Arbitrator.   This  Court did not approve of the conduct of Jagdish Chander Bhatia  in not   depositing  the  amount  and  ’in  trying   to   avoid adjudication of the dispute through arbitration.  After this 54 order was passed on October 12, 1990 by which a further  sum of  Rs.  8,000  was  directed  to  be  deposited  with   the Arbitrator,  subject to the Arbitrator deciding  who  should bear  the cost, the newly appointed Arbitrator entered  upon the reference and submitted his award on November 14,  1991. This concluding part of his Award reads as under:               "House   No.  17  would  entirely  belong   to               Lachhman Das Bhatia whereas House No.18  would               be  jointly owned by Lachhman Das and  Jagdish               Chander.  Lachhman Das would have 76.50% share               whereas  Jagdish  Chander  would  have  23.50%               share  in  House  No.18. As  House  No.17  has               entirely been given to Lachhman Das Bhatia  in               all  fairness, Jagdish Chander  Bhatia  should               give  vacant  possession  of  House  No.17  to               Lachhman Das Bhatia." The  parties  were directed to bear their own costs  of  the arbitration  proceedings except that Jagdish Chander  Bhatia had to pay Rs. 4,000 to Lachhman Das Bhatia as his share  of the  Arbitrator’s  fees  which he had  initially  failed  to deposit.    Against  this  award,  Jagdish  Chander   Bhatia (hereinafter  called  ’the objector’) has  filed  objections under  Section  30  of  the  Arbitration  Act,  1940   which provision reads as under:               "An award shall not be set aside except on one               or more of the following grounds, namely               (a)   that   an  arbitrator  or   umpire   has               misconducted himself or the    proceedings;               (b)   that  an award has been made  after  the               issue of an order by the  Court    superseding               the   arbitration  proceedings   have   become               invalid under Section 35;               (c)   that   an  award  has  been   improperly               procured or is otherwise invalid." It was conceded by the learned counsel for the Objector that clause (b) would not be attracted.  His main submission  was that  the Arbitrator had misconducted himself, in  that,  he did not take into consideration several documents which were

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placed  on  record before him which support  the  Objector’s case and hence the Award was invalid.  He, therefore, partly relied on clauses (a) and (c) for setting aside the Award. 55 The documents to which the learned counsel for the  objector invited our attention, are to be found in Vol.2 of the paper book placed before us.  These documents are 31 in number and they  mainly  relate  to the rights  and  interests  of  the parties in properties situate in that part which now belongs to the Dominion of Pakistan.  Since they were refugees  they had   made   certain   claims  under   the   law   governing rehabilitation  of  displaced  persons  in  respect  of  the properties  left behind by them.  These documents show  that the  claim was sanctioned in the name of Punnu Ram  Lachhman Das in respect of the properties left behind by the  family. On the strength of that claim, House No.18 was purchased  in the  said  name.   The  Arbitrator,  however,  came  to  the conclusion, as is evident from the discussion from paragraph 26  and onwards of the Award, that the property in  question was  purchased for Rs. 12,850 from the funds contributed  by Punnu Ram and Lachhman Das, the former paying Rs. 9,233  and the latter Rs. 3,617.  This is the conclusion reached by the Arbitrator  as  is evident from paragraph 37 of  the  Award. The share of the Objector was held to be 1/7th in the  share of  Punnu  Ram,  since deceased.  It  was  on  this  finding recorded by the Arbitrator that he passed the ultimate order extracted above. The  arbitrator  has made a speaking award setting  out  his reasons  for  the conclusions reached by him.  He  has  thus complied with the direction of this Court given earlier.  On a perusal of the award, it becomes clear that the Arbitrator did  not  go into the rights and interests  of  the  parties including  the  HUF  in the properties left  behind  in  the Dominion  of  Pakistan.   That  was,  in  our  opinion,  not necessary because the fact that the claim was sanctioned  in the name to the Punnu Ram Lachhman Das was never in dispute. The  short  question, which the Arbitrator was  required  to consider,  was as regards the title of the properties  which were the subject matter of the reference which included  the property  purchased for Rs. 12,850 on the strength  of  that claim.  In dealing with that question the Arbitrator came to the   conclusion  that  Punnu  Ram  and  Lachhman  Das   had contributed the entire consideration of Rs. 12,850 and hence they  were  the owners of the property and on the  death  of Punnu  Ram  inheritance opened insofar as his share  in  the property  was  concerned  and the  Arbitrator  came  to  the conclusion  that the Objector was entitled to 1/7th  out  of the share of the deceased.  Since the contribution made  for payment of the price was not equal, the Arbitrator  allotted a  larger share to Punnu Ram and consequently  the  Objector has got a share on the basis thereof.  Practically, all  the documents included in Vol.2 relate to the interest of the 56 parties  and their HUF in the properties left behind in  the Dominion of Pakistan.  The learned counsel for the  Objector then  tried to take us into the rights and interests of  the parties in those properties, but we declined to go into  the same as we thought that the Arbitrator was right that he was called upon to decide the interest of the parties in  Houses Nos.  17 and 18 alone which were the subject matter  of  the reference.   We  are,  therefore, of the  opinion  that  the Arbitrator  had  not  misconducted himself  by  refusing  to enumerate  those documents in Vol.2 in his award because  he was bound by the scope of the reference which was limited to Houses Nos. 17 and 18 and not the properties left behind  in

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the  Dominion of Pakistan by the parties.  For this  reason, we are of the opinion that there is no infirmity on the face of the award which would entitle us to exercise jurisdiction under Section 30 of the Arbitration Act. This  Court  pointed  out in Food Corporation  of  India  v. Joginderpal  Mohinderpal  & Anr., [1989] 2 SCC 347  that  an award  of an Arbitrator can only be interfered with  or  set aside  or modified within the four comers of  the  procedure provided  by the statute.  The Court must find  out  whether the  Arbitrator  has misconducted himself or there  was  any infirmity  in the procedure, such as, the Arbitrator  having travelled  beyond the terms of the reference or there  being an  error  apparent  on the face of the award.   It  is  not misconduct  on  the  part of an Arbitrator  to  come  to  an erroneous conclusion on a disputed issue.  In case of  error apparent  on  the face of the award, the award  can  be  set aside  only if there is any proposition of law on which  the award  is based which is in conflict with law.  It  must  be demonstrated  to  the Court that the reasons  given  by  the Arbitrator  are so palpably erroneous in law that they  have resulted  in  the Arbitrator taking a view which  cannot  be sustained in law.  To put it differently the Court does  not sit in appeal and does not re-assess the evidence.  Even  if the  Court feels that had it been left to it, it would  have assessed the evidence differently that would not be a  valid ground  for  setting aside the award.  In Hind  Builders  v. Union  of  India, [1990] 3 SCC 338, this Court  pointed  out that where on an interpretation of any contract or document, two  views are possible and the Arbitrator accepts one  view while the other view is more appealing it would not be  open to the Court to interfere with the Award.  We, therefore, in the  facts and circumstances of this case, see so reason  to interfere with the award of the Arbitrator. The  Suit No. 434/78 pending in the Court of the  Sub-Judge, Delhi 57 was  disposed of by that Court, and an appeal,  being  Civil Appeal  No. 211 of 1979 (Jagdish Chander Bhatia v.  Lachhman Das Bhatia) preferred on April 23, 1979 against that decree, is  pending in the Court of the District Judge,  Delhi.   We transfer  that appeal to our file and make the  Arbitrator’s award the rule of the Court.  The decree of the trial  court is  set  aside and a decree in terms of the  award  will  be drawn  up in the appeal proceedings arising out of Suit  No. 434/78.  We, however, do not make any order as to costs in the present proceedings. N.P.V.                       Appeal disposed of. 58