JUGAL KISHORE PRABHATILAL SHARMA Vs. VIJAYENDRA PRABHATILAL SHARMA

JUDGEMENT

(1.) All these applications can be disposed of by a common order. They arise out of awards given by an arbitrator appointed by this Court in C. A. 1763 of 1980. The applications mainly raise issues as to how far the awards should be made a rule of Court and can, therefore, be conveniently dealt with together.

(2.) A brief resume of the broad facts of the case will help in appreciating the points debated before us. The controversy has arisen out of disputes in the family of Prabhatilal Parashram Sharma (P.P.) which consisted of his wife Bhuribai, four sons --------- Jugalkishore Prabhatilal (J.P.), Vijayendra Prabhatilal (V.P.), Gnanendra Prabhatilal (G.P.) and Mukesh Prabhatilal (M.P.), --------- and three daughters--------Surajidevi, Kamaladevi and Chamelidevi. The father (P.P.) died during the pendency of the proceedings whereupon the wife and daughters, inter alia, were impleaded as his legal representatives. The widow has also subsequently died. The daughters have evinced no interest in this litigation which pertains to the assets and liabilities of a partnership firm run by P. P., J. P., V. P. and G. P., M. P. was not a partner of the firm and was not even represented in the arbitration proceedings initially. It was only after P.P. died that he was brought in as one of his legal representatives. An allegation was made before. us that M. P. was a person of unsound mind with lucid intervals and that the award is vitiated by a non-consideration of his rights and interests. However, there is no evidence to support, much less substantiate, the allegations as to his incompetence except a general allegation. Moreover, he is represented . before us by counsel, Shri Bisaria, who states that he has no objections to the award and that he supports the stand of J.P. in these proceedings. In the result, the disputes are between P.P. and J.P. (who seek to have the awards made the rule of court except on two or three issues) on the one hand and V. P. and G. P. (who seek to have the awards set aside' in material respects) on the other. P.P. and J.P.-------of whom P.P. has since died --------- are hereinafter referred to as 'the applicants' and V. P. and J. P. as 'the objectors'. This is the first important aspect to be taken note of. The second essential aspect is that the issues in controversy before us have narrowed down considerably. The firm in which P.P., J.P., V.P. and G.P. were partners was carrying on business under two names and styles : viz. Variety Body Builders and Variety Engineers. It had two factories, the latter at Maneja and the former at Pratapnagar. The dispute between the two groups was in regard to the equal division of the assets and liabilities of the two businesses on the retirement of P.P. and J. P. from the firm as per the terms of a "deed of dissolution" dated 31-12-1979 executed by and between the partners. This was the subject matter of Civil Suits Nos. 194, 510 and 584 of 1980. When one of the interim orders came up before this Court in C. A. 1763 of 1980 this Court suggested that the disputes be settled by arbitration. This suggestion was accepted and the parties agreed that the "subject matter of the three suits as well as disputes relating to the dissolution deed" be referred to the arbitration of Shri A. A. Dave a retired Judge of the Gujarat High Court. After some time, Shri Dave was succeeded by Shri A. D. Desai, another retired Judge of the High Court of Gujarat and the latter was succeeded by Shri N. M. Miabhoy, a retired Chief Justice of the Gujarat High Court, who eventually completed the arbitration and made two awards: one, an interim award dated 22-2-91 and the other, the final award dated 18-7-91. The parties are agreed that the Pratapnagar factory should be taken over by the applicants and the Maneja factory by the opponents. About this broad division, there is no dispute. The controversy at present is restricted to the following issues:

(3.) (a) LAND : The arbitrator has fixed the value of the lands at Pratapnagar at Rs. 25 per sq. ft. and that, of the lands at Maneja at Rs. 4.50 per sq. ft. These were the values ascribed to the lands in the report of Sri Punambhai Patel,, a Government recognized valuer, who, by consent of parties, had been asked to submit a report in this regard. According to the objectors, the value of the lands at Maneja should not have been taken at more than Rs. 3 per sq. ft.; on the other hand, it is urged, that the lands Pratapnagar should have been valued at Rs. 58 per sq. ft. These were the figures suggested by an expert witness (Shri Jaiswal) examined by them. Prima facie, the question of such a valuation would be a question of fact and this Court would be loath to interfere with a finding of fact by the arbitrator. Shri B. K. Mehta, appearing for the objectors, however, seeks to coat this finding with a legal hue by urging that, in determining the values which he did for these lands, the arbitrator has just adopted the figures set out in the report of Punambhai Patel. In doing this he has erred in law on two counts: (i) he seems to think that Patel, being a "Government" valuer, his report was binding and conclusive; and (ii) he has accepted the report without examining the said P.D. Patel as a witness, notwithstanding an application therefor on behalf of his clients, and giving them an opportunity of cross-examination. These two errors, according to him, vitiate the valuation arrived at by the arbitrator. Learned counsel cited passages from Russel on Arbitration to the effect that the provisions of the Evidence Act are applicable in arbitration proceedings and that the report of an expert witness is not admissible in evidence by the arbitrator unless the witness is orally examined and the parties given an opportunity to cross-examine him on his opinion, irrespective of whether the parties made a specific request for such examination or not. He also cited the decisions in U. P. Hotels v. U. P. State Electricity Board (1989-1 SCC 359): (AIR 1989 SC 268), Ahmedabad Municipality v. Shantilal, (AIR 1961 Guj 196), Payyavula Vengamma v. Payyavula Kesanna, (1953 SCR 119) (AIR 1953 SC 21) and Perumal Mudaliar v. S. I. Railway Co., (ILR 1937 Mad 764) : (AIR 1937 Mad 407) in this context.