SHERBANUBAI JAFFERBHOY Vs. HOOSEINBHOY ABDOOLABHOY

JUDGEMENT

(1.) This is an appeal from a judgment of Mr, Justice Tendolkar by which the learned Judge refused to accede to the appellant's petition to set aside an award made by Sir Sajba Rangnekar on August 9, 1946.

(2.) The facts leading up to this appeal are briefly these. Jafferbhoy, the brother of respondent No. 1, died on May 14, 1936, leaving a will dated June 13, 1933, under which he appointed his wife, the petitioner, his brother, respondent No. 1, and his brother's son, respondent No. 2, executrix and executors. Before the death of Jafferbhoy he and Hooseinbhoy, respondent No. 1, were doing business in the name of Abdullabhoy Lalji and Co. and this firm also did business in other names. By Clause 12 of his will Jafferbhoy authorised his executors to carry on the business on behalf of the estate, and pursuant to the directions contained in this clause Hooseinbhoy and the executors of Jafferbhoy agreed to carry on the business. The petitioner then filed a suit for dissolution of this partnership and for accounts. On March 27, 1941, the petitioner took out a notice of motion for the appointment of a receiver. On April 5, 1941, respondents Nos. 1 and 2, who were defendants in that suit, took out a notice of motion for stay of proceedings on the ground that in the partnership agreement there was a submission clause. Both the notices of motion came on for hearing on April 17, 1941. The Court appointed the Court Receiver as the Receiver of the books of account of the partnership and also made an order referring all matters in dispute between the parties to the sole arbitration of Sir Sajba Rangnekar. The arbitrator was directed to make his award within eight months after entering on the reference and he was given the liberty to take only such evidence as he in his absolute discretion thought fit to call for or allow. The learned arbitrator made his award on August 9, 1946, and this petition was filed on October 21, 1946, to set aside the award. The learned Judge, as I have said, dismissed the petition and upheld the award.

(3.) The award has been challenged on three grounds. The first ground is that the arbitrator assumed to himself powers wider than those conferred upon him by the Court, Now, the position in law is that an order of reference is made by the Court under Section 23 of the Indian Arbitration Act and in making the order of reference the Court substitutes a domestic forum in its own place. But it does not follow that the Court give's up its supervision over the conduct of the reference. In Ram Protap Chamria V/s. Durga Prosad Chamria (1925) I.L.R. 53 Cal. 258 a suit had been filed for a dissolution of a family partnership and accounts, and while the suit was pending, the members of the family referred to arbitration all matters in difference between them. Some of the differences so referred were not the subject of the suit, and a member of the family who was not a party to the suit was interested in certain of them. The Court made an order referring to the agreed arbitrators all matters in difference in the suit between the parties to the suit. The arbitrators made an award as to all the matters in dispute without discriminating between those which were the subject of the suit and those which were not, and the Privy Council held that the award so far as it dealt with matters in difference in the suit was rightly set aside, as it was one which was "otherwise invalid", and Lord Blanesburgh delivering the judgment of the Privy Council said (p. 266): It is incumbent upon arbitrators acting under such an order strictly to comply with its terms. The Court does not thereby part with its duty to supervise the proceedings of the arbitrators acting under the order. And at p. 268 Lord Blanesburgh also remarks that an award which takes into consideration matters other than those referred to the arbitrator is in no true sense one made in obedience to the order of May 23, 1922, which was the order of reference. Therefore, an arbitrator has got to make an award which is in obedience to the order of reference.