SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

1963 Supreme(AP) 204

Andhra Pradesh High Court
Judges : P.CHANDRA REDDY, SHARFUDDIN AHMED
Lingam Dasaradharamayya - Appellant
Versus
Kanuri Raja Rao - Respondent
Decided On : 11-06-63

An arbitration award must determine all the differences which the parties by their submission referred to arbitration. An award which does not decide the differences referred to arbitration is bad and unenforceable.

Headnote:

ARBITRATION - AWARD - VALIDITY - OMISSION TO DECIDE VITAL ISSUES - EFFECT - ARBITRATION ACT, 1940, SECTIONS 30, 33.

Fact of the Case:

A partnership business was dissolved and disputes arose between the partners regarding the settlement of accounts and whether the partnership ended in loss or profits. The matter was referred to an arbitrator who passed an award after going through the accounts of the partnership and scrutinising the claims of various creditors. The petitioner, one of the partners, filed a petition under Sections 30 and 33 of the Arbitration Act to set aside the award on the ground that it was illegal and vitiated as the arbitrator had not examined the accounts and did not give findings on each of the several questions specifically referred to him for decision.

Finding of the Court:

The court held that the award was invalid and was, therefore, liable to be set aside. The court found that the arbitrator did not give a finding in regard to three specific and distinct matters which were referred to him for arbitration, namely, the amounts advanced by each of the partners to the partnership business, whether the partnership business ended in loss or profits, and whether the accounts were genuine or not. The court held that these were matters of vital importance and that the arbitrator's failure to give findings on these aspects rendered the award incomplete and invalid.

Issues: Whether the arbitrator's failure to give findings on certain vital issues referred to him for arbitration rendered the award invalid.

Ratio Decidendi: The court held that an arbitration award must determine all the differences which the parties by their submission referred to arbitration. An award which does not decide the differences referred to arbitration is bad and unenforceable. The court also held that the award must be final, and therefore a conditional award is bad unless it provides an alternative in case the condition be not fulfilled for can power be reserved to deal with any difference which may arise on the award.

Final Decision: The court dismissed the appeal filed by the appellant, who was one of the partners in the dissolved partnership, and upheld the order of the lower court setting aside the arbitration award. The court also dismissed the appeal filed by the 9th respondent, who was the petitioner in the petition to set aside the award, and upheld the order of the lower court dismissing the suit filed by the 9th respondent to pass a decree in terms of the award.

SHARFUDDIN AHMED, J.

( 1 ) THIS Miscellaneous Appeal (No. 331 of 1958) arises out of the judgment and order of the Sub-ordinate Judge, Masulipatnam dated 17th of April 1958 made in O. P. No. 21 of 1956 on his file while A. S. No. 260 of 1958 is directed against the order of the Court, refusing to pass a decree in terms of the award, made in the suit (O. S. No. 17 of 1956) filed by the 9th respondent in the said O. P. The 5th respondent is the appellant in C. M. A. No. 231 of 1958 while the 9th respondent in the O. P. is the appellant in the other appeal. The parties will be described for the sake of convenience as arrayed in O. P. No. 21 of 1956.

( 2 ) THE relevant facts may briefly be stated. The petitioner in O. P. No. 21 of 1956 and respondents Nos. 1 to 9 were running a partnership business under the name and style of Sri Murali Krishna Rice Mill Contractor Company of which R. 1 was the Working Manager. The Mill was taken on lease by the partnership firm from 5-12-195 (sic) till the end of November 1952. The petitioner had a four-anna share and subscribed considerably towards the capital. The 1st respondent as the Working Manager and the 3rd respondent as the General Manager were in-charge for running the business, maintenance of accounts and other acts incidental to the running of the business. After sometime disputes arose between the partners regarding the settlement of accounts and as to whether the partnership ended in loss or profits. The matter was ultimately referred to an arbitrator, the 17th respondent who is an advocate practising at Masulipatnam and all the parties concerned executed an arbitration agreement dated 20/07/1955, Ex. A. 1, in his favour. The arbitrator passed an award, Ex. A. 2, dated 6/01/1956 after going through the accounts of the partnership and scrutinising the-claims of various creditors.

( 3 ) THE petitioner thereupon filed a petition under Sections 30 and 33 of the Arbitration Act praying to set aside the award given by the 17th respondent in the O. P. It was contended by him that the award was illegal and vitiated as the arbitrator had not examined the accounts and did not give findings on each of the several questions specifically referred to him for decision. It was also alleged that the arbitrator did not decide the share of the partners, the amount advanced by each of them and whether the accounts were genuine or not. Respondents 2, 3 and 16 supported the contention of the petitioner while the 5th respondent i. e. , the appellant herein pleaded that the enquiry held by the arbitrator was complete and the award was not liable to be set aside. Respondents Nos. 1, 4, 7, 8, 12, 13, 14, 15 and 18 remained ex parte. The learned Subordinate Judge on a consideration of the documents produced before him and the arguments advanced on either side came to the conclusion that the award, Ex. A. 2, was invalid and was, therefore, liable to be set aside. The Civil Miscellaneoue Appeal arises against the said order. He consequently dismissed the suit filed by the 9th respondent to pass a decree in terms of the award, which is the subject-matter of A. S. No. 260 of 1958,

( 4 ) THE learned counsel for the appellant contends that the lower Court was not justified in setting aside the award merely because the award did not record findings on each and every aspect of the matter that had been referred for determination. According to him as it had finally decided the rights of the parties it should have been accepted notwithstanding the omission on the part of the arbitrator to record a finding on certain aspects. It would be convenient to reproduce the relevant portion of the arbitration agreement at this stage :"it is found better to appoint you as an arbitrator as you are interested in the well-being of all of us. Therefore, this arbitration agreement is executed in your favour for a determination of all the questions in dispute between us, namely, (i) the amounts advanced by each of parties 1 to 9 to the p









Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
Judicial Analysis

AI

SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top