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1993 Supreme(AP) 295

Andhra Pradesh High Court
Judges : S.S.M.QUADRI
N.Khadervali Saheb - Appellant
Versus
N.Gudu Sahib - Respondent
Decided On : 06-29-93

An arbitrator is not required to give a second notice of his intention to proceed ex parte against a person who was absent from service of notice, and an award that creates a right, title, or interest in immovable property valued at more than Rs. 100 is compulsorily registrable under Section 17 of the Registration Act, 1908.

Headnote:

ARBITRATION - MISCONDUCT OF ARBITRATORS - NOTICE TO PARTIES - COMPULSORY REGISTRATION OF AWARD - INTERPRETATION OF SECTIONS 11, 17 AND 49 OF THE ARBITRATION ACT, 1940 AND SECTION 17 OF THE REGISTRATION ACT, 1908.

Fact of the Case:

A dispute arose between partners in a business, leading to arbitration. The arbitrators passed an award, which was challenged by the petitioners on various grounds, including misconduct by the arbitrators and non-registration of the award. The trial court found the arbitrators guilty of misconduct and held that the award was compulsorily registrable but was not registered, therefore inadmissible in evidence.

Finding of the Court:

The court held that the arbitrators were not guilty of misconduct as they had given due notice to the parties and were entitled to proceed ex parte in the absence of any party despite service of notice. The court also held that the award was compulsorily registrable under Section 17 of the Registration Act, 1908, as it created a right, title, or interest in immovable property valued at more than Rs. 100.

Issues: 1. Whether the arbitrators were guilty of misconduct in not giving a second notice to the parties before proceeding ex parte? 2. Whether the award was compulsorily registrable under Section 17 of the Registration Act, 1908?

Ratio Decidendi: 1. The court held that there is no statutory rule requiring the arbitrator to give a second notice of his intention to proceed ex parte against a person who was absent from service of notice. The court also held that the notice given by the arbitrators implied that the parties or any one of them, if choose to remain absent without a valid reason, the arbitrator is entitled to proceed ex parte and pass the award. 2. The court held that the award was compulsorily registrable under Section 17 of the Registration Act, 1908, as it created a right, title, or interest in immovable property valued at more than Rs. 100.

Final Decision: The court dismissed the Civil Revision Petition and the Civil Miscellaneous Appeal, holding that the arbitrators were not guilty of misconduct and that the award was compulsorily registrable.

SYED SHAH MOHD. QUADRI, J.

( 1 ) THE Civil Revision Petition and the Civil Miscellaneous Appeal arise out of the common judgment dated 29/03/1989 of the learned Principal Subordinate Judge, Ananthapur, in O. S. No. 3/73 and O. P. No. 38/74 on the file of his court. The petitioners in the C. R. P. are the appellant in the CMA.

( 2 ) TO appreciate the controversy in these cases it would be useful to notice the relevant fact. Two brothers and one son of each of them entered into a partnership and started a business under the name and style of "sri Baba Fakruddin Oil Mills". In the course of business disputes arose between the parties. They made reference of the disputes to the arbitrators. The arbitrators passed an award on 2. 10. 1972. Petitioners 1 and 2 in O. P. No. 38/74 filed that O. P. under Section 30 of the Arbitration Act to set aside the award dated 2. 10. 1972 and respondents 1 and 2 in the said O. P. filed O. S. No. 3/1973 under Sections 14 and 17 of the Arbitration Act praying the court to direct one of the arbitrators J. Gundappa Rao (respondent No. 5 therein) to produce the original award dated 2. 10. 1972 into court and to make the award rule of the court. The parties will be referred to as they are arrayed in the O. P. The 1st petitioner is the brother of the 1st respondent. The 2nd petitioner is the son of the 1st respondent and the 2nd respondent is the son of the respondent. During the pendency of the proceedings in the trial court, the 1st petitioner died and the 3rd petitioner was brought on record as his legal representative; the 1st respondent died and the 9th respondent was brought on record as his legal representative. Petitioners 1 and 2 nominated respondents 3 and 4 as the arbitrators and respondents 1 and 2 nominated respondents 5 and 6 as the arbitrators. The said arbitrators (respondent 3 to 6) nominated the 7th respondent as the umpire. The award was challenged by the petitioners on various grounds, including the ground of misconduct by the arbitrators and non-registration of the award. The respondents denied the allegation of misconduct and took plea that the award is not registrable under Section 17 of the Registration Act. In support of their contentions the parties led oral and documentary evidence P. W. 1 was examined on behalf of the petitioners and Exs. A1 to A16 were marked by them. The contesting respondents examined R. W. 1 and marked Exs. B1 to B39. On consideration of oral and documentary evidence on record, the trial court came to the conclusion that the arbitrators were guilty of misconduct and that the award Ex. B22 was a compulsorily registrable document, but was not registered, therefore it was inadmissible in evidence. It view of those findings the trial court allowed the O. P. and dismissed the suit by its common judgment on 29. 3. 1989. C. R. P. No. 2250/89 is filed against the common judgment and decree in O. S. No. 3/73 and C. M. A. No. 1859/89 is filed against the said common judgment and decree in O. P. No. 38/74.

( 3 ) MR. N. Ramamohan Rao, the learned counsel appearing for the petitioners and the appellants, contends that the misconduct alleged against the arbitrators is legal misconduct in not giving a second notice to the parties, that the arbitrators passed an ex party award and in view of the authoritative pronouncements of various High Courts the conclusion arrived by the trial court is unsustainable in law. Mr. J. V. Suryanarayana, the learned counsel appearing for the respondents in these two cases contends that the arbitrators have proceeded in the matter in undue haste and that by itself is a misconduct, as such the trial court has rightly recorded the finding that the arbitrators were guilty of misconduct.

( 4 ) NOW the short question is whether the arbitrators are guilty of misconduct in this case ?

( 5 ) ADMITTEDLY the parties nominated the arbitrators, as stated above, on 10. 6. 1972. The arbitrators entered upon the reference on 15. 6. 1972. On 4. 9. 1972 the










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