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1925 Supreme(SC) 54
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD BLANESBURGH, LORD DARLING, AND SIR JOHN EDGE.
RAM PROTAP CHAMRIA - Appellant
Versus
DURGA PROSAD CHAMRIA (DEFENDANTS) - Respondents
On Appeal from the High Court at Calcutta.
Decided On : Oct. 20. 1925.
Important Points
Subject
Civil Law - Arbitration
Act Referred
Headnote
(B) Arbitration - Validity of Award - Where an award blends matters within the jurisdiction of the court (matters in the suit) with matters outside that jurisdiction (private disputes between parties and non-parties), and where the findings on the suit are coloured or dictated by the view taken by the arbitrators on questions to which the suit had no reference, such an award cannot be upheld in relation to the suit.
Facts of the case:
A suit for the dissolution of a partnership was filed. Subsequently, the parties entered into an agreement to refer all family disputes to arbitration. The court, acting on a petition, referred only the matters in difference within the suit to the arbitrators. The arbitrators, however, published an award that addressed both the issues in the suit and various other family disputes involving persons who were not parties to the suit. The award also proposed the creation of a new partnership with terms that were not authorized by the court's reference and provided limited rights to partners refusing to join the new firm.
Findings of Court:
The award was not made in obedience to the court's order of reference. It is impossible to uphold an award where the conclusions regarding the suit were coloured by the arbitrators' views on other questions to which the suit had no reference. Specifically, the provision to constitute a new partnership was unauthorized and invalid.
Issues: Whether arbitrators appointed by a court order can validly decide matters not referred in that order, and whether an award that combines matters within and outside the court's jurisdiction can be sustained.
Ratio Decidendi: Arbitrators acting under a court order are bound by the terms of that order. Any award made outside the authority conferred by the court is invalid. When the findings on the referred matters are inextricably linked to or influenced by findings on non-referred matters, the award cannot be upheld in relation to the suit.
Result: Appeal dismissed.
Legal Category Hierarchy
-
practice and procedure
-
arbitration
- court-referred arbitration
-
arbitration
-
civil law
-
partnership law
- dissolution of partnership
-
partnership law
Solicitors for appellant:W. W. Box & Co. Solicitor for respondents: H. S. L. Polak.
Judgement
Appeal (No. 121 of 1924) from an order of the High Court in its appellate jurisdiction (July 19, 1923), affirming an order of the Court in its original jurisdiction.
The order appealed from set aside an award of arbitrators dated May 27, 1922, in so far as it purported to deal with matters which were the subject of a suit in which an order of reference to the arbitrators had been made by the High Court.
74 Law Rep. 53 Ind. App. 1 ( 1925- 1926) Ram Protap Chamria V. Durga Prosad Chamria
175
The facts are fully stated in the judgment of the High Court, and appear shortly from the headnote.
1925. July 13. De Gruyther K.C. and Wallach for the appellant.
Dunne K.C. and Narasimham for respondent No. 1.
Upjohn K.C., Sir G. Lowndes K.C. and Narasimham for respondents Nos. 4 and 5.
[Reference was made to the Code of Civil Procedure, 1908, Sch. II., ss. 1, 10, 12, 14, 15 ; the Indian Arbitration Act, 1899, ss. 4, 11, 14, 15; and to Darlington Wagon Co. v. Harding . ([ 1891] 1 Q. B. 245.)]
Oct. 20. The judgment of their Lordships was delivered by
LORD BLANESBURGH. This appeal is from an order of the High Court of Judicature at Port William in Bengal, exercising appellate jurisdiction and in effect affirming an order made by Greaves J., sitting in the exercise of the ordinary original civil jurisdiction of the Court. Both were orders propounded in a suit for the dissolution of a partnership, and their result was to set aside an award of arbitrators so far as that award affected to deal with matters in question in the suit. The appellant upholds the award and asks that the orders setting it aside be discharged.
The circumstances are somewhat involved and, in detail, elaborate. It will be possible, however, as their Lordships hope, to state the facts in a summary form without endangering such accuracy as is requisite for the purposes of their judgment.
The disputants are descendants of one Nandram Chamria, and their disputes are to a large extent, although not altogether, traceable to questions concerning the division of the estate of one of his sons—Hardatroy Chamria—whose position in the family with his relationship to the parties before the Board appears in the following pedigree, taken from the judgment of Mookerjee J. in the appellate
Court.
Nandram Chamria
|
| |
Gorakhram Hardatroy
| Chamria
M. Annardeyi
|
| | | | |
Ramprotap Amlokchand Durgaprosad Radhakissen Motilal
(Plaintiff) M. Surji |
(adopts Keshabdeo)
|
Keshabdeo
The suit (No. 120 of 1922) related to a business of brokers and bankers carried on under the style of Hardatroy Chamria and Company. The business originally had been started by Hardatroy alone. Some years later he took into it, first as an assistant, then as a partner, his nephew, the plaintiff and present appellant, Ram Protap Chamria. The appellants share as a partner was, in its origin, two annas ; subsequently, it became one of five annas. Later still, the appellants brother, Amlokchand, was
74 Law Rep. 53 Ind. App. 1 ( 1925- 1926) Ram Protap Chamria V. Durga Prosad Chamria
176
admitted a partner with a two annas share. He died, however, in 1911, and after his death the business was carried on by Hardatroy and the appellant together, Hardatroy being treated as possessed of an eleven annas share and the appellant of the remaining share of five annas. By an indenture dated October 1, 1916, and made between Hardatroy and the appellant, it was agreed that this partnership should continue for twenty years. There is no further reference in the appellants plaint to the two annas share which belonged to Amlokchand at the time of his death. The appellant appears to treat it as merged in the shares of himself and Hardatroy. This position, however, is not accepted by the representative of Amlokchands estate, as will later appear.
Amlokchand left no issue, but he was survived by his wife, the respondent, Musammat Surji, and on her expressing a desire to adopt as a son to her deceased husband, Hardatroys youngest so
