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PETITIONER: SMT.  SANTA SILA DEVI AND ANOTHER

       Vs.

RESPONDENT: DHIRENDRA NATH SEN AND OTHERS

DATE OF JUDGMENT: 26/04/1963

BENCH: AYYANGAR, N. RAJAGOPALA BENCH: AYYANGAR, N. RAJAGOPALA SINHA, BHUVNESHWAR P.(CJ) SHAH, J.C.

CITATION:  1963 AIR 1677            1964 SCR  (3) 410

ACT: Arbitration-Incompletion  of award-Silence of Arbitrator  on plea  placed  for decision-Implies rejection  of  the  Plea- Validity  of award-Should be upheld if reasonably  possible- Arbitrator  need not decide every matter of  dispute  unless specifically required-Arbitration Act, 1940 (X of 1940),  s. 30.

HEADNOTE: The  appellant as well as the respondents are the  heirs  of one  Hemendra  Nath Sen who died intestate in  1929  leaving considerable properties.  Dispute having arisen between  his heirs   an   agreement  for  partition  was   entered   into determining  their shares  Among other provisions there  was one by which the 2nd appellant was to have 5 annas shares in a  glass  factory and the rest of the members  dividing  the balance  of the  II annas share  Further disputes arose  and the  parties executed an arbitration agreement in which  the dispute  between  the  parties  was  set  out   Before   the reference  was submitted to the arbitrator  the  respondents applied to the High Court under s. 20 of the Arbitration Act for  an  order directing the agreement to be  filed  in  the Court and for making a reference to the arbitrator appointed by  the parties.  The present appellants were  impleaded  as respondents.  The court made an order referring the disputes to the  411 arbitrator  named in the agreement.  The arbitrator  entered on   the  reference  and  after  following  the   prescribed procedure  he pronounced the award.  The award was filed  in the  court where upon the appellants applied for setting  it aside on various grounds the principal of which was that the award  was incomplete., in that all the disputes  which  had been  referred for arbitration had not been disposed  of  by it.   The Single judge before whom the application came  for hearing rejected the application and directed a decree to be passed in terms of the award.  The two appeals filed by  the appellants in the High Court, one from the order refusing to set  aside the award and the other from the decree in  terms of  the award were dismissed.  The present appeal is by  way of special leave granted by this Court

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The main contention raised was that the award was incomplete in  as  much as the award did not dispose of  three  matters referred  to the arbitrator.  These three matters  were  (a) the award bad given no direction regarding the rendition  of accounts and profits with reference to a lease of the  Glass Works  Ltd.  which the award had declared  invalid  (b)  the award  had failed to comply with the request,  contained  in the  arbitration agreement, that the arbitrator should  give directions  as  regards the future management of  the  Glass Co.,  (c)  there  was  an  allegation  in  the   arbitration agreement  as  regards  which evidence was  led  before  the arbitrator,  in relation as to miappropriation of moneys  by 6th  respondent but the arbitrator had not specified in  the award  whether this allegation had been made out or not  and no direction had been given in regard to the matter. Held that a court should approach an award with a desire  to support  it if that is reasonably possible, rather  than  to destroy it by calling it illegal. Salby v. Whitbread and Co.. [1917] I.K.B.736 referred to. Unless the reference to arbitration specifically so requires the  arbitrator  is not bound to deal, with  each  claim  or matter separately, but can deliver a consolidated award. Re  Brown and the Croydon Canal Co. (1839) 9 Ad & E11 522  : 112  E.R. 1309 and Jewell v. Christe (1867) L.R.  C.P.  296, referred to. The silence of the arbitrator upon the subject placed before him  means  that  the arbitrator has  negatived  such  plea. Unless the contrary appears the court will presume that the 412 award  disposes  of finally all the matters  in  difference. Where  an  award is made de praemissis, the  presumption  is that  the arbitrator intended to dispose finally of all  the matters in difference and his award will be held final if by any intendment it can be made so. Harrison v. Creswick, (1853) 138 E. R. 1284 referred to. Since  the impugned award expressly states that it  is  made --de  praemissis",  i.e.. of and concerning all  matters  in dispute  referred to the arbitrator, there is a  presumption that  the  award is complete.  The silence of the  award  as regards the claim for accounting must therefore be taken  to be intended as a decision rejecting the claim to the relief. If   the   lease  were  set  aside  because   of   technical informality. it would not necessarily follow that the relief of  accounting  was  implicit  in  the  declaration  of  the invalidity  of  the lease. Non constat, the  amount  due  on taking  an account has not been taken into account  adjusted in  making  the  other provisions of the  award.  Hence  the contention that the nature of the claims required a specific adjudication is repelled. The  silence of the arbitrator on the question of the  award in the facts and circumstances of the case, on the  question of future management of the Glass Company and his failure to make any specific provision in regard to the management  did not  therefore  leave any lacuna as regards the  rights  and must  be taken to have left the right of the parties  to  be determined  by  the relevant general law applicable  to  the management of the company. The  absence  of any provision regarding the claims  of  the appellants to relief from the respondents on the ground that they misappropriated the money of the company is capable  of only  one  interpretation and that is  that  the  arbitrator rejected the claims.

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JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 197 of 1961. Appeal by special leave from the judgments and decrees dated January  29, 30, 1957 of the Calcutta High Court in  Appeals from Original Orders Nos. 122 and 156 of 1956 respectively.  413 G.S.  Pathak,  A.N.  Sinha  and  P.K.  Mukherjee,  for   the appellants. A.V  Vismanatha   Sastri,    B. R.L.  lyengar     and  S.  N. mukherjee for the respondents. 1963.  April 26.  The judgment of the Court was delivered by AYYANGAR J.--This is an appeal by special leave against  the judgment  of  the  High  Court  of  Calcutta  affirming  the decision  of  a Single judge of that Court refusing  to  set aside the award of an arbitrator dated May 27, 1955. One Hemendra Nath Sen, father of the second appellant,  died intestate in 1929 leaving his widow Premtarangini Debi and 8 sons.  Respondents 1,2,3, 4, 6 and 7 are the brothers of the 2nd  appellant.   The  5th  respondent is  the  widow  of  a deceased  brother who died in 1933 while the 8th  respondent is the wife of the 2nd respondent.  The 1st appellant is the wife of the 2nd appellant.  The parties were governed by the Dayabhaga   School   of  Hindu  law.  Hemendra   Nath   left considerable  properties  and on his  death  disputes  arose between his several heirs but an agreement dated January 31, 1933 these were settled  By then one of the sons the husband of  the  5th respondent had died leaving a  widow  (the  5th respondent)  and these viz., the widow, the 7 sons  and  the widowed daughter-in-law entered into this agreement by which the  properties left by the deceased were partitioned  among them  Broadly stated, the agreement specified the shares  of the  9 parties thereto as equal i.e., one ninth  each,  with however  the  two  widows being  allotted  their  respective shares  for their life as for their maintenance.  There  was also  a provision that in regard to a glass factory the  2nd appellant  was  to  have a 5 annas share, the  rest  of  the member dividing the balance of the II annas 414 (presumably  because the 1st appellant’s money went  in  for the  initial capital for starting the concern) till  certain specified  contingencies occurred.  Fresh disputes  however, arose  between the parties and by a formal  agreement  dated May 11, 1953, they set out those disputes between themselves and agreed to refer the same to the sole aribitration of Dr. Radha  Binode Pal-an eminent lawyer and jurist of  Calcutta. As the terms of reference have some relevance to the  points urged before us in the appeal it would be convenient to  set them out.  It read :               "We  the I undersigned hereby agree, First  to               refer  all  disputes  arising  out  of  or  in               connection  with  or in relation  to  the  New               Indian   Glass  Works  Ltd.,   including   the               management thereof and the acts of any of  the               parties  in  respect of or in relation  to  or               arising  out  of  the said  Company,  and  for               future   management  thereof   including   the               dispute regarding the alleged lease in  favour               of  R.  N.  Sen (7th respondent)  and  of  the               alleged,prior  leases in favour of A.  N.  Sen               (2nd appellant) and F. N. Sen (6th respondent)               of  the said Company’s business, the  legality               and validity thereof and Secondly all disputes               whatsoever in relation to the joint properties               as per Schedule hereunder written or otherwise               which were or are owned by the parties or some

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             of them, to the sole-Arbitration of Dr.  Radha               Binode  - Pal, Advocate.  The said  Arbitrator               is  to  enquire, ascertain and  partition  the               said  joint  properties.  We agree  that  the,               said  Dr. Radha Binode Pal would have  summary               powers  and the award which would be  made  by               him would be final and conclusive and  binding               upon the parties." This  was  followed  by  a  Schedule  in  which  the   joint properties  were  specified  and to this  document  all  the family members affixed their signatures.  415      Before,  however,  the reference was submitted  to  the arbitrator, the respondents made an application to the  High Court  of  Calcutta on its original side on July  12.,  1954 under s. 20 of the Indian Arbitration Act, 1940 for an order directing  the  agreement  to be filed into  Court  and  for making  a  reference  to the  arbitrator  appointed  by  the parties.   Notices  were issued to the appellants  who  were impleaded  as  respondents to that application and  after  a hearing,  an order was made on November 29,  1954  referring the  disputes  set out in the agreement  to  the  arbitrator named  therein.  The arbitrator entered on the reference  on January 16, 1955 and the parties thereafter filed statements of cases before him setting out their respective claims  and contentions.  Evidence was taken and counsel were heared and thereafter’  the arbitrator pronounced his award on May  27, 1955.   It  is  the validity of this  award  that  is  under challenge  in these proceedings.  We might, merely to  clear the ground, mention even at this stage that no  ’misconduct’ is  alleged  against the arbitrator but the main  ground  on which the award is impugned is that it is incomplete.      The award is a long document and purports to decide all the  disputes which -had been referred to him.  It does  not set  out the arguments or even the contentions urged by  the parties  in  regard  -to any specific  matter  or  even  the reasons   for   the  particular   decisions   recorded   but corresponds in form to what might for convenience be  termed a decree in a civil suit.  The award was filed into Court on June  29, 1955, and thereupon the appellants made an  appli- cation for setting it aside on various grounds the principal of  which  was,  as already indicated, that  the  award  was incomplete, in that all the disputes which had been referred for  arbitration  had  not  been disposed  of  by  it.   The application  came  on for hearing before  a  learned  Single judge  on the original side and it was dismissed on May  26, 1956, the 416 learned  judge directing a decree to be passed in  terms  of the  award.  The appellants preferred two appeals  one  from the order refusing to set aside the award and the other from the decree in terms thereof.  These were heard and  disposed of  by  a  common  judgment dated  January  29,  1957  which directed  the dismissal of the appeals and  thereafter  they applied for and obtained special leave of this court and  in pursuance thereof the present appeal which is a consolidated one  against  the judgment in the two appeals  in  the  High Court has been filed.      Before the High Court a very large number of objections were taken to the validity or legality of the award and they have been elaborately considered and dealt with by the judge of  first  instance  and by the appellate  Bench.   Most  of these, however, were not repeated before us and Mr.  Pathak- learned  Counsel for the appellants intimated that he  would press  only three of the grounds: (1) that all the  disputes

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which  had  been  referred to the arbitrator  had  not  been disposed of by the award, and that for this reason the award was  incomplete and had to be set aside.  He submitted  that there was this incompleteness in respect of three matters  : (a) the award had given no direction regarding the rendition of  accounts  and profits with reference to a lease  of  the Glass  Works Ltd., which the award had declared was  invalid and not binding on the Company in which all the shares  were owned  by  the  parties, (b) the  parties  had  specifically required the arbitrator in their agreement of reference that he  should give directions as regards the future  management of  the Glass Co.., but the award had failed to comply  with this  request.,  (c)  there was an allegation  made  in  the reference, and as regards which evidence was led before  the arbitrator,  as  to misappropriation of moneys  by  the  6th respondent.   The arbitrator had not specified in his  award as to whether this allegation of misappropriation had been  417 made out or not, nor had he given any direction in regard to the  matter.   These  related  to  the  head  of  objections touching  the  incompleteness of the award. (2)  The  second ground urged was this : This award had directed that a piece of  land situated at Ketugram in the district of Burdwan  be allotted to the 7th respondent in trust for sale for meeting the  costs and charges of filing the award and  other  Court proceedings  in  reference  thereto and  to  distribute  the balance remaining after meeting the said costs and  charges, equally between himself and 6 other named.  Learned  Counsel urged that it was beyond the power of the arbitrator to have created  this  trust  of the property in  dispute.  (3)  The values  of the several items of property were  specified  in the award and the division effected was on the basis of this valuation.  Learned Counsel urged that the arbitrator failed in  his duty in not valuing the properties himself  but  had adopted the values suggested by one or other of the parties.   We  shall  now  deal with these points.   As  however,  we consider  that it is only the 1st of the above points  about the   incompleteness   of   the  award   that   merits   any consideration  and  that  the  other  two  have  really   no substance and it would be convenient first to dispose of the second and the third of the above points.      The  trust  created by the award to which point  No.  2 relates  is in the following terms.  Clause 13 of the  award which the relevant clause runs :               "That  the  land  at Ketugram,  Katwa  in  the               District   of  Burdwan  is  allotted  to   Sri               Dhirendra  Nath Sen, in trust for selling  the               same  to meet the costs and charges of  filing               the   award  together  with  minutes  of   the               arbitration   proceedings,   depositions               and  documents to be filed in court  with  the               award and to distribute the balance if               418               any,  left  after meeting the said  costs  and               charges,  equally  amongst himself and  the  6               other sons..." and  then  the  award proceeds to make  provisions  for  the contingency of the sale proceeds being insufficient.  It was submitted  by  learned Counsel that the  arbitrator  had  no jurisdiction to create a trust in respect of property  which he  was  called upon to divide between  the  parties.   This contention  however  proceeds on a misreading  of  what  the arbitrator  had  done, for he has done nothing of  the  sort alleged.   He has merely made provision for the  payment  of the  costs  to  be  incurred  in  filing  the  award   which

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obviously, if it were a valid award, would have to be  borne by  all the parties whose property was being  divided  under the  award and he had made provision just for  that  purpose and  had  directed a division of the surplus  sale  proceeds among  the  parties  entitled to the  property.   When  this aspect of the matter was pointed out to learned Counsel  the contention was not seriously maintained.      The  third  point  about  the  arbitrator  not   having determined the values of the property himself has even  less merit  than the one we now disposed of  The minutes  of  the proceedings  before the arbitrator were produced before  the court and those clearly showed that the estimated values  of the items, as set out in the award, were those to which  the parties  themselves had agreed.  The point, therefore,  does not call for any further consideration.      Coming next to the point regarding the in  completeness of the award, we shall deal first with the contention  based on  the absence in the award of a direction to  account  for profits  with regard to a lease of the Glass  factory  which was  declared  void.  The relevant facts  relating  to  this objection  are as follows.  Under the arbitration  agreement the 1st  419 head  of the disputes referred was this  "-disputes  arising out  of  or  in connection with or in relation  to  the  New Indian Glass Works Ltd. including the management thereof and the acts of any of the parties in respect of or in  relation to or arising out of the said company".  This was  amplified in  a statement filed before the arbitrator on February  12, 1955 by the 1st appellant.               "Para 12.  Dhirendra Nath Sen, Phanindra  Nath               Sen, Satyendra Nath Sen, Rabindra Nath Sen and               jitendra Nath Sen should render true  accounts               of  their  dealings  with  the  assets  and/or               properties  of  the said Company  (New  Indian               Glass  Works)  and an award be passed  for  my               share of the amount found due on accounting.               13.   The alleged leases in favour of Rabindra               Nath  Sen and Phanindra Nath Sen  were  fraud-               ulently made in order to defraud me.  I  claim               for  an  adjudgment that the said  leases  are               void and I pray for accounts, against the said               alleged  lessees and an award for my share  of               the profits on accounting." The arbitrator decided in paragraph 9 (c) of the award  that "the alleged lease of the factory to Rabindra Nath Sen to be declared void and to be of no binding effect on the  Company or  on the shareholders." The award contained,  however,  no further  direction  ordering or refusing to  order  Rabindra Nath  Sen  to account for the profits with  regard  to  this lease  declared void.  The point that is now urged  is  that the award is incomplete, in that it has not followed up this declaration   or  invalidity  of  the  lease  by  making   a consequential order for accounting or by rejecting the claim of  the appellants to the accounting and for their share  of the  amounts found due on the taking of such accounts.   The learned 420 Single  judge on the original side as well as the  appellate Bench rejected this objection on the authority of an English decision  in  Harrison  v. Creswick (1),  where  Parke,  B., delivering the judgment of the court, stated :               "The  silence  of  the  Arbitrator  upon   the               subject  placed  before  him  means  that  the               Arbitrator has negatived such plea."

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It  was submitted by Mr. Pathak that this decision had  been misunderstood  by the learned judges of the High Court,  and that,  in  fact,  it was an authority in  his  favour.   The contention  urged  before  the Court of common  pleas  as  a ground  for setting aside the award was that  the  defendant bad pleaded a cross-claim before the arbitrator and that The award bad granted the- plaintiff a decree for a certain  sum without specifically allowing or negativing the  defendant’s cross  claim.   Dealing with this objection  Parke,  B.  who spoke for the Court, observed :               "The  only question is whether the  arbitrator               has  not  by his award impliedly,  if  not  in               express terms, finally disposed of the matter.               The rule as laid down in the notes to Birks v.               Trippett is, that, where an award professes to               be made de praemissis ’Even where there is  no               award of general releases, the silence of  the               award as to some of the matters submitted  and               brought before the arbitrator, does not per se               prevent it from being a sufficient exercise of               the authority vested in him by the submission.               An  award is good, notwithstanding the  arbit-               rator  has not made a distinct adjudiction  on               each  or any of the several  distinct  matters               submitted  to him, provided that it  does  not               appear that he has excluded any......... Where               an  award is made de praemissis, the  presump-               tion  is,  that  the  arbitrator  intended  to               dispose               (1)   (1853) 118 E. R. 1254.                421               finally of all the matters in difference;  and               his  award  will  be held  final,  if  by  any               intendment  it  can be made so.  The  rule  is               this  where there is a further claim  made  by               the plaintiff, or a cross demand set up by the               defendant,  and  the award, professing  to  be               made  of and concerning the matters  referred,               is  silent respecting such, further  claim  or               crossdemand,   the   award   amounts   to   an               adjudiction  that  the plaintiff has  DO  such               further  claim, or that the defendant’s  cross               demand is untenable : but where the matter  so               set   up  from  its  nature  requires  to   be               specifically  adjudicated upon,  mere  silence               will not do." It  is  this  last sentence on which Mr.  Pathak  relies  in support  of  the submission that in the case now  before  us there  was  a  need for the arbitrator to  have  rendered  a decision  in express terms accepting or rejecting the  claim for the accounting and that a rejection of that claim  could not  be inferred from the mere failure of the arbitrator  to deal with it.  Learned Counsel pointed out that a case of  a cross  demand  or  a cross claim with which  Parke,  B.  was dealing  was quite different from an independent claim  such as that for accounting made by the appellants in the present case,  for  where  a  sum  is  decreed  to  a  plaintiff  it necessarily  involves  the acceptance or  rejection  of  the cross  claim  made  by the defendant  but  the  position  is different  where  the  claim  made  stands  on   independent footing.      Before  dealing  with  this point it  is  necessary  to emphasize  certain  basic positions.  The first of  them  is that  a  Court should approach an award with a  desire’  ’to support  it, if that is reasonably possible, rather than  to

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destroy it by calling it illegal (See Salby v. Whitbread and Co.,  (1).  Besides it is obvious that unless the  reference to  arbitration specifically so requires the  arbitrator  is not bound to deal with each (1)  [1917] 1 K. B. 736, 748. 422 claim  or matter separately, but can deliver a  consolidated award.    The  legal  position  is  clear  that  unless   so specifically required an award need not formally express the decision  of  the arbitrator on each matter  of  difference. (Vide Re.  Brown and The Croydon Canal Co. (1) and Jewell v. Christie  ().  Further, as parke, B. himself put  it  during the course of arguments in Harrison v. Creswick (3) :               "Unless  the contrary appears the  court  will               presume that the award disposes finally of all               the matters in difference." and to repeat a sentence from the extract quoted earlier :               "Where  an  award is made de  praemissis,  the               presumption  is, that the arbitrator  intended               to  dispose  finally  of all  the  matters  in               difference ; and his award will be held final,               if by any intendment it can be made so." We shall approach the argument addressed to us in the  light of  these  considerations.   Now  the  award  opens  with  a paragraph which recites, after setting out the reference :               "Whereas I have heard and duly considered  all               the  allegations  advanced,  evidence  adduced               before  me regarding the respective  cases  of               the  parties............ I do hereby make  and               publish  this, my award in writing as  to  all               the disputes mentioned above." It  need hardly be added that the arbitration agreement  and the  statements  filed extracts from which we have  set  out earlier  were  among the documents  incorporated  with  this award  and  included  among the matters  considered  by  the arbitrator which (1) (1839) 9 Ad. & Ell. 522-112 E. R. 1309. (2) (1867], L.R. 2 C.P. 296 (3) [1853] 138 E.R. 1254.  423 disputes  he intended to resolve by this award.  The  award, therefore,  on its face intended and purported s  to  decide all the disputesr aised for this adjudication and  therefore the  Court  will  assume  that he  has  Di,  considered  and disposed  of every claim made or defence raised.  Since  the award  now impugned or expressly states that it is made  "de pruemissis,"  i.e.,  of and concerning all  the  matters  in dispute  referred to the arbitrator, there is a  presumption that  the  award  is complete.   In  the  circumstances  the principle  of  construction enunciated by  Parke,  B.  aptly covers the case and the silence of the award as regards  the claim  for  accounting  must,  therefore,  be  taken  to  be intended as a decision rejecting the claim to that relief.      We shall next turn to the Submission that the nature of the claim here made required a specific adjudication and the appellants   were  logically  entitled  to  the  relief   of accounting  when once the lease of the factory was  declared void  and  that  viewed from that angle the  award  must  be treated as incomplete as not expressly dealing with a  legal consequence of the declaration granted.  We do not  consider this  contention sound, for two reasons : (1) If  the  lease were  held  to be void because of technical  informality  it need not necessarily involve any accounting since accounting postulates,  the lease being for an improperly  low  rental. If  the lease be set aside for such a reason, it  would  not

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necessarily  follow  that  the  relief  of  accounting   was implicit in the declaration of the invalidity of the  lease, (2)  Non constat, the amount due on taking on an  accounting has  not been taken into account or adjusted in  making  the other provisions of the award.  This objection, there  fore, has to be repelled.      The next item alleged as regards the incompleteness  of the  award was the failure on the part of the arbitrator  to provide by his award, for the future 424 management  of the New Indian Glass Works Ltd.  We  consider that  there  is no substance in this objection  either   The award  had declared the shares’ of the parties in the  Glass Company  and  by cl. 9 (b) had set aside the  agreements  or arrangements  put forward as regards the management  of  the affairs  of  the company regarding whose validity  and  pro- priety  disputes  had  been  raised.   When  those   alleged agreements were set aside and declared not to be binding  on the parties, the law would step in and the provisions of the Indian  Companies  Act  as regards  the  management  of  the business  and  affairs  of  the  company  would  come   into operation, and the arbitrator may well have considered  that the  provisions contained in the law of the land  sufficient to safeguard the interests of the shareholders.  The silence of the arbitrator in this regard and his failure to make any specific provision therefor in regard to the management  did not therefore leave any lacuna as regards the rights of  the parties  to manage but must be taken to have left the  right of the parties to be determined by the relevant general  law applicable  to  the  management  of  the  company.   If  the arbitrator  considered  that these  provisions  sufficiently secured the rights of the parties and did not consider  that any special provision as regards this matter was needed  the award  would be silent on that point and that might  be  the explanation for the state of affairs.      The last of the points urged was that the award had not referred to or decided the claim of the appellants to relief from the respondents or some of them on the ground that they had  misappropriated  the moneys of the  company  and  were, therefore,  bound to bring the money back into  hotch  potch for  division  among  the  parties.   The  absence  of   any provision  in  regard to this claim is capable only  of  one interpretation  and  that is that  arbitrator  rejected  the claim.   It is, therefore, an instance where the silence  of the award is a clear indication, having regard to  425 the   adjudication   being  professedly  complete   and   de praemissis,  that the claim in that respect was not  upheld. This  would  not render the award incomplete.   We  consider therefore  that none of the three points urged in  challenge of  the  validity  of  the  award  on  the  ground  of   its incompleteness has any substance.      The appeal fails and is dismissed with costs.