LAWS(MPH)-1962-9-3

RUSTOMJEE DORABSHA Vs. MANMAL PRABHUDAYAL

Decided On September 12, 1962
RUSTOMJEE DORABSHA Appellant
V/S
MANMAL PRABHUDAYAL Respondents

JUDGEMENT

(1.) THIS is the defendants' appeal from a decree for the arrears of rent of a leased factory and premises included, based on an umpire's award, with a few modifications by the 'court substantially in their favour. This is one ot the four cases that have come up before this Court at about the same time in which different problems concerning awards on arbitrations have been raised and equivalent Citation: decided. Quite a number of grounds were raised before the trial Court by the defendants, most of which were rejected. Before this Court the following grounds are emphasised: (i) The reference itself was invalid because it had included two items of claim which was outside the scope of the suit; this is a basic illegality not cured by the Court's separating the portion within the scope of the suit, and basing its decree on that only, (ii) The umpire was not properly appointed at all and as such did not get any jurisdiction, (iii) The award does not contain any reasoning so that we are in doubt as to whether the umpire gave due regard to the evidence before him. (iv) The proceedings before the arbitrators were bad for several defects, in particular, refusal to permit the defendants to amend their statements, (v) The lease itself was against the law -- both for contravention of the statute in force at that time and in view of the subsequent events by which the plaintiff was divested of his property in the leased factory and premises, (vi) Finally, the failure of the umpire to comply with, several formal requirements also vitiates the award.

(2.) THE facts of the case are broadly common ground. The defendants were the lessees of a bone Crushing factory and the premises attached to it for a fixed monthly rental. An additional amount was provided as rent for a railway siding which the lessor was to get opened. The siding, incidentally, was not opened, and the claim was restricted only to that separately fixed for the premises and the land. This point, however, is of interest for the consideration of the defendants' plea of frustration for failure on the part of the lessor to get the siding opened. The defendants paid the rent upto the end of August 1952, but defaulted during the later period. A suit was filed for the rent payable upto the end of March 1954, with an additional amount as interest. A number of grounds in defence were raised including the statutory invalidity of the lease, the alleged failure on the part of the lessor to observe the terms, and the effect of the Zamin-dari Abolition Act, by which, according to the defendants, the property itself had vested in the State government, at one stage, the suit was referred to arbitration by two arbitrators, one appointed by each of the two parties, and an umpire also named, in case the arbitrators failed to do the arbitration or did not agree. The matters proceeded with various relays, petitions, and the like, till ultimately it was found that the arbitrators would not arbitrate. Accordingly, a prayer was made by the plaintiff that the matter should be referred to the umpire (Shri C. M. Mehta, Solicitor at Bombay ). After calling upon the defendants to show cause why the dispute should not be referred to him in accordance with the agreement, the matter was referred to him; he, in his turn, gave an award granting the plaintiff certain amounts of money as rent for the suit period plus two additional sums specified; one, as the rent for the subsequent period, and the other, as compensation for the damage caused to the machinery. There was some delay in the filing of the award; but it was condoned and the time enlarging by an express order of the Court. In reply to the plaintiff's prayer that a decree should be passed on the basis of the award, the defendants urged various grounds why it could not be, eighteen in number. The Court considered them and rejected all but one. It held that the grant of compensation for damage to the machinery and future rent was really outside the scope of the arbitration, being outside the scope of the suit itself; but this was. severable from the dispute that could be, and had been, properly referred to arbitration, and accordingly passed a decree only for the rent for the suit period and interest, plus future interest and costs. From this order, the defendants have come up in appeal. There is no appeal by the plaintiff for the part of the award that has been disallowed. Ground (i)

(3.) ON facts, it calls for no elaborate discussion. Clearly, the claims under different headings are separate, and if the Court did exclude some, it has no bearing either on the competency of the umpire to investigate the remaining claims, or on the ability of the Court to find that the umpire's decision on the proper subject-matter of the suit has not been affected by his decision on what the Court (rightly or wrongly) holds to be something outside the scope of the suit. On law, there is ample authority for the proposition that in the event of the award covering a field wider than the proper subject-matter of the reference and the additional subject-matter is distinct and severable, the Court can accept the award in regard to the former. The position certainly would be different if persons who are not parties to the suits are affected or if the two parts of the award are not clearly severable, or where the decision in regard to one is so inextricably mixed with the decision on the other that it is impossible to see how much the one has affected the other. That was the position in the Calcutta case already referred to. This principle has been laid down after full consideration in Ram Protap v. Durga Prasad, AIR 1925 pc 293. The law of arbitration in those days was contained in the second schedule to the Civil Procedure Code. But the principles in this regard are just the same; "it is incumbent upon arbitrators acting under an order made in pursuance of paras 1 and 2 strictly to comply with its terms. " in that case, some of the persons affected by the award as was placed before the court were not even parties to the suit. Accordingly, the Privy Counsel held further-