KOSARAJU THIRUPATHIRAYUDU Vs. KOSARAJU VENKATASUBBAYYA

JUDGEMENT

(1.) BY an agreement, Ex. A. 1, dated 20th September 1945 six persons referred the disputes between them to an arbitrator and in that document various points in dispute have been recited which the arbitrator had to decide and pass an award. One of the points was with regard to the cash in the possession of one of the executants by name Venkatasubbaiah, who was the second executant of Ex. A. 1. Subsequently, on 7th October 1945, there was another document styled 'an agreement of further reference' Ex. A. 2 by which it was stated that if Venkatasubbaiah were to pay Rs. 10000 in the manner mentioned in that document into the hands of the arbitrator in order that the same may be paid over to the other partners in full satisfaction, he should not thereafter have any concern in respect ofthe profits or losses of the mill and that the others will have nothing to do with the cash balances then with him. The arbitrator, after an elaborate consideration, was of opinion that Ex. A, 2 the further document of reference, was the result of fraud, and did not act upon it. On the evidence the arbitrator found that Venkatasubbaiah was liable to pay a sum of Rs. 25000 to the other partners for the sums appopriated by him and which he had no authority to do. Thereafter, under s. 33 Arbitration Act, Venkatasubbaiah filed a petition to the Subordinate Judge to set aside the award and the learned Judge has found that the arbitrator had no jurisdiction not to abide by the terms of the further agreement and held that the award was not binding upon Venkatasubbaiah. This appeal is by the aggrieved parties praying that the award should be restored after the decision of the Subordinate Judge is set aside.

(2.) MR . Ramachandra Rao for the appellants raises two points, the frist of them being that under Section 5 of the Indian Arbitration Act it is not open to the parties, when once an agreement of reference has been made and accepted by the arbitrator, to revoke the same except with the leave of the court unless a contrary intention was expressed in the arbitration agreement itself. It is plain that Ex. A. 1 does not contain any such intention to revoke it. Therefore the learned advocates contends that the subsequent document Ex. A. 2 should be construed as one revoking the earlier one and as such invalid. We are not satisfied that the further terms of the reference can be. construed as one revoking the earlier agreement. All that the subsequent document says is that with regard to one of the points in dispute between the parties there is an agreement and the arbitrator has to take note of that. By that agreement if Venkatasubbaiah pays Rs. 10000 he is completely absolved from all liability so far as the profits and losses of the rice mill are concerned. In our opinion it cannot be said that the provisions of Section 5 of the Indian Arbitration Act can be called in aid to invalidate the second document.

(3.) THE memo of cross -objections filed by the respondent relates to the learned Judge's discretion in awarding only Rs. 5 as costs to the successful party. We are not satisfied that there are any legal principles on which this discretion exercised by the learned Judge can be interfered with. In the circumstances, the memorandum of cross objections fails and is dismissed but without any order as to costs.