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1973 Supreme(AP) 32

Andhra Pradesh High Court
Judges : C.V.RAMULU
Ariyur Mohd.Habeebur Rahman - Appellant
Versus
Ansuri Varamma (died) - Respondent
Decided On : 03-12-73

An Award is inadmissible in evidence for want of proper stamp duty and is liable to be set aside if the arbitrators misconducted the proceedings.

Headnote:

ARBITRATION - AWARD - SETTING ASIDE - GROUNDS - EX PARTE AWARD - NOTICE OF INTENTION TO PROCEED EX PARTE - CIRCUMSTANCES JUSTIFYING EX PARTE PROCEEDINGS - MISCONDUCT OF ARBITRATORS - REGISTRATION OF AWARD - REQUIREMENT OF STAMP DUTY.

Fact of the Case:

The father of the petitioners agreed to sell 5 1/2 acres of land to the 1st respondent for a sum of Rs. 3,200.00 and executed an agreement of sale dated 16-4-1952 having received an advance consideration of Rs. 1,300.00. The father of the petitioners put the 1st respondent in possession of the property in pursuance of the agreement of sale. Disputes arose between the parties as the balance was not paid and the sale deed was not executed by the petitioners father in favour of the 1st respondent. The dispute was referred to the arbitration of five named arbitrartors , among whom one K. Appa Rao was to be the Sarpanch or Umpire. After recording the evidence and hearing the parties , the arbitrators passed the Award dated 21-7-1957.

Finding of the Court:

The District Judge held that the Award was inadmissible in evidence for want of proper stamp duty, and a decree could not be passed in terms of that Award. He also found that the arbitrators misconducted the proceedings and that the Award was, therefore, liable to be set aside.

Issues: 1. Whether the Award was inadmissible in evidence for want of proper stamp duty? 2. Whether the arbitrators misconducted the proceedings? 3. Whether the Award was liable to be set aside?

Ratio Decidendi: 1. The Award was inadmissible in evidence for want of proper stamp duty, as it was not executed on a stamped paper and was not registered. 2. The arbitrators misconducted the proceedings by holding an ex parte enquiry without giving proper notice to the respondents and by not being present at an important portion of the enquiry. 3. The Award was liable to be set aside due to the misconduct of the arbitrators and the want of proper stamp duty.

Final Decision: The Civil Revision Petition was dismissed with costs.

( 1 ) THIS Civil Revision Petitions directed against the judgment and decree in A. S. No. 51 of 1965, whereby the District Judge, Khammam, allowed the appeal and set aside the Award.

( 2 ) BRIEFLY stated, the facts are: The father of the revision-petitioners agreed to sell 5 1/2 acres of land, bearing Survey No. 320 situated at Khammam, to the 1st respondent, for a sum of Rs. 3,200. 00 and executed an agreement of sale dated 16-4-1952 having received an advance consideration of Rs. 1,300. 00. The father of the petitioners put the 1st respondent in possession of the property in pursuance of the agreement of sale. Admittedly, a sum of Rs. 200. 00 was paid by the 1st respondent on 5-8-1954 to K. M. Hussain, the Power of Attorney holder of the mother of the petitioners. Subsequently disputes arose between the parties as the balance was not paid and the sale deed was not executed by the petitioners father in favour of the 1st respondent. The 1st respondent alleged that a sum of Rs. 800. 00 was paid to the petitioners on 23-3-1953, but the petitioners denied that payment. The dispute was referred to the arbitration of five named arbitrartors , among whom one K. Appa Rao was to be the Sarpanch or Umpire. After recording the evidence and hearing the parties , the arbitrators passed the Award dated 21-7-1957. As per the Award , the 1st respondent was to pay Rs. 1,700. 00 with interest at 9% per annum by 27-7-1957 and in default the 1st petitioner should refund the purchase money of Rs. 1,500. 00 by 29-7-1957 to the 1st respondent. The respondents did not pay the amount within time and the petitioners, therefore, in compliance with the terms of the Award, deposited Rs. 1,500. 00 with the arbitrators and obtained a receipt. The Award was registered on 25-7-1957 and kept with the arbitrators.

( 3 ) THE petitioners filed O. S. No. 41 of 1958 in the Court of the Subordinate Judge, Khammam , for making the Award a rule of Court. The respondents opposed the suit. According to them, the dispute that was referred to the Arbitrators was not with regard to the sale of the land, but was with regard to the amounts paid by respondent No. 1. The Agreement of Reference was brought about by undue influence, misrepresentation and fraud. No enquiry was made and the Award was an ex-parte one. The arbitrators colluded with the petitioners and misconduct themselves. The ward was not read out and explained to the 1st respondent. The registration of the Award and the refund of the amount by the petitioners to the arbitrators , were all false. The respondents were in continuous possession of the property since the date of the agreement of sale, i. e. , 16-4-1952 and they, therefore, cannot be dispossessed. Since the arbitrators colluded with the petitioners, the respondent did not accept the arbitration and accordingly , sent a written communication to the arbitrators on 20-7-1957. The respondents had to pay only Rs. 866-75p. and were also willing to pay that amount and to take the registered sale deed. The Award is vitiated in law. The respondents , accordingly, prayed for setting aside the Award and for dismissing the plaintiffs suit.

( 4 ) THE petitioners filed a suitable rejoinder.

( 5 ) ON the basis of those pleadings , the trial Court framed appropriate issues and after considering the evidence adduced by the parties in support of their respective versions, decreed the plaintiffs suit in terms of the Award.

( 6 ) AGGREIVED by the above Judgment and decree of the trial Court, making the Award a rule of Court, the respondents in the suit filed before the Subordinate Judge filed an appeal to the District Judge, Khammam. While supporting the judgment of the trial Court, the respondents in the said appeal before the District Judge raised a preliminary objection that the appeal filed before him by the appellants was not maintainable, in law. For the reasons stated by him in paragraph (9) of his judgment, the District Judge overruled the preliminary objection r































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