SHIAM LAL Vs. PARSHOTTAM DAS

JUDGEMENT

(1.) This appeal arises out of an application made under paragraph 20 of the second schedule to the Code of Civil Procedure to have an award made in an arbitration conducted without the intervention of the court filed. The party contesting the award put in what we may call a written statement, in which they contested the award on a great variety of grounds. They went so far as to contend that the award sought to be filed had never been made by the gentleman to whose arbitration the matters in dispute between the parties had been referred, but was a forgery concocted after that gentleman s death. On the pleadings of the parties a number of issues were fixed, ten in all and the case was set down for hearing. The objector moved the court to decide first of all two issuer only, in respect of which it was represented to the court that it would not be necessary to take any evidence. The issues as framed ran as follows: Issue No. 2.-- Has the arbitrator determined any matter not referred to arbitration under the agreement, dated the 6th of April, 1918"? Issue No. 4.--" Is an objection to the legality of the award apparent on the face of it?

(2.) On each of these issues the court below, after hearing arguments, found in the affirmative, and on these findings alone, and without any inquiry into the matters of fact raised by the pleadings, it has dismissed the application to have the award filed. The appeal before us is against the order refusing to file the award, and we have to consider whether that order is justified upon the only findings, which have been recorded. The first finding is that the arbitrator has determined two matters not referred to arbitration under the agreement. The first of these matters relates to a sum of Rs. 2,000, which the arbitrator has held in effect to be a debt due from the joint family business, the assets of which it was his duty to apportion between the parties to the arbitration, and due from them to a connection of the family named Baijnath Prasad. Now it is quite true that Baijnath Prasad was no party to the reference, that there is no mention of Baijnath Prasad in the agreement of reference, and that the arbitrator had no authority to make an award of Rs. 2,000 or of any other sum in favour of Baijnath Prasad. The arbitrator, however, was bound to distribute between the parties the assets of the joint family business, and in so doing he recorded the finding that those assets were subject to a liability of Rs. 2,000 in favour of Baijnath Prasad. It is only incidentally relevant to note that he purports to do this with the full consent of the parties to the agreement; but in any case he had authority to determine what were the divisible assets of the business before he proceeded to divide them; Looking at the matter from another point of view, it may be that, in so far as the award purports to operate in favour of Baijnath Prasad to the extent of Rs. 2,000, it is a matter which can be separated from the rest of the award without affecting the determination of the matter really referred to the arbitrator, namely, the division of the assets of the joint family business. This is of course subject to what has already been remarked, namely, that for the purpose of determining the divisible assets the arbitrator had authority to find that the assets of the firm were less by Rs. 2,000 in consequence of a debt due to Baijnath Prasad. This portion of the award is within the powers of the arbitrator. The award cannot operate as a decree in favour of Baijnath Prasad, who was not a party to the reference, hut if, and in so far as it purports to do so, that portion of the award is obviously separable from the rest. The same remarks apply in substance to the other portion of the award, in which the arbitrator finds that certain money and jewellery must be taken out of the divisible assets of the joint family and left with one Musammat Tara Devi, a member of the family. I hold, therefore, that the finding of the. court below on the second issue fixed by it is incorrect and that the award is not open to any valid objection on the ground of the arbitrator s having determined a master not covered by the agreement of reference.

(3.) The decision of the court below on the fourth issue raises two quite distinct points. They may be conveniently taken in the reverse order to that in which they are dealt with in the judgment under appeal. Part of the arbitrator s duty was to divide between the parties certain residential houses. The objector contends that the arbitrator first of all made a division of these houses in a particular way and that he subsequently altered that division. In so doing it is contended that the arbitrator acted illegally and that this illegality is apparent on the face of the award, within the meaning of paragraph 14 (c) of the schedule. We have been taken through that part of the award in which the decision about these residential houses is embodied, and in my opinion it does not show that the arbitrator was guilty of any illegality. I wish to express myself somewhat cautiously on this point, because I think it necessary to distinguish between an illegality apparent on the face of the award and an allegation of misconduct on the part of the arbitrator. I can conceive of cases in which it might amount to misconduct on the part of an arbitrator, dealing with a reference covering a large number of matters, to announce to the parties a final decision upon one of those matters and at a later stage to revise that decision, in spite of the protest of one of the parties affected by it. We are not called upon to consider whether the arbitrator in the present ease was guilty of any misconduct of this kind. The simple point is whether the final award made by the arbitrator in respect of these residential houses, as embodied in paragraph 18 of the award, is on the face of it illegal. The paragraph is somewhat curiously worded. The arbitrator does not content himself with merely announcing his final decision on the point, but goes into a detailed recital of the negotiations between the parties and so forth which had preceded his final decision. He evidently felt that this question of the residential houses was one of the most difficult of those with which he had to deal, and he gives in the most candid manner his reasons for finding the point a difficult one to determine, He says that on the 13th of June, he proposed to determine it in a certain way, but that only two days later, i. e., on the 15th of June, upon some suggestion made to him, he decided that one of the parties alone should take both the houses concerned, provided compensation, which he assessed at Rs. 7,000, was paid down within a week to the opposite party. He then notes that this payment was not made within the period which he had fixed, but that the party required to make it asked for more time and finally tendered the money after the date which he had fixed. The opposite party then refused to accept the tender and asked the arbitrator to take up the question of the division of the houses de novo and to give his own decision on the point. The arbitrator says that, if he were looking at the matter as a pure question of law, he could not deny that the party who had been required to pay Rs. 7,000, had a reasonable cause for asking for extension of time, but the fact remained that the negotiations which had ended in the proposals to allot both the houses to one party upon prompt payment of this compensation had broken down and that the matter was referred back to him. to be decided upon his honour and conscience. In a somewhat quaint phrase, which seems quite unnecessarily to have excited the derision of the learned Subordinate Judge, the arbitrator says in effect that the voice of conscience compelled him to re-consider his decision and to make a division of the houses in a certain way. This he proceeds to do in detail. I was about to add that he does this before signing the award on the 12th of August, 1918, but I am at once brought up by the fact that one of the objections taken by the respondent in this Court was that the award was never really signed by the arbitrator at all. This may serve to illustrate the practical inconvenience of the course adopted by the court below in taking out these two issues from the rest and attempting to decide them separately. As the matter stands, however, I am obliged to deal with it as if the question of fact had been determined, for purposes of argument, in favour of the appellant in this Court, that- is to say, as if there were no doubt that the arbitrator did in fact formally sign this award, embodying his final decision on the question of division of the house property, on the date which that document purports to bear, namely, the 12th of August, 1918. In fact I am bound to take the document as it stands and to determine simply whether its 18th paragraph, embodying the arbitrator s decision on the question of the houses, is open to an objection on the score of illegality apparent on the. face of the award itself. I feel quite unable to accept the view of the court below on this point. It seems to me that this question must clearly be answered in the negative.