A compromise in a misfeasance summons can be recorded under Order 23, Rule 3, Civil Procedure Code.

Judgment - Chagla, C.J.

1. The Exchange Bank of India and Africa, Ltd., was incorporated on 30-4-1942. It suspended payment on 2-5-1949, and an order of winding up was made on 24-6-1949, and the Official Liquidator was appointed liquidator. On 12-9-1951, the Official Liquidator took out a misfeasance summons against eight directors and two auditors calling upon them to pay various sums of money as being due by them on account of misfeasance committed by them. This summons came on for hearing before Tendolkar J. on 3-11-1952. On 4-11-1952, a compromise was arrived at between six directors and the compromise was to the effect that these directors were prepared to pay a total sum of Rs. 20 lakhs to the Liquidator in such proportion or manner as Sir Jamshedji Kanga shall in his absolute discretion decide as a valuer and not as an arbitrator after giving each of the directors a summary hearing. When this compromise was reported to counsel for the Liquidator, he insisted on the liability of all the directors being joint and several. He was prepared to accept a sum of Rs. 20 lakhs, but he did not want the liability to be fixed by Sir Jamshedji Kanga to be several, and he wanted each of the directors to be liable for the whole amount. This anxiety on the part of the counsel for the Liquidator arose from the fact that he had serious doubts as to the solvency of one of the directors who (was Anandji, respondent 3 to the summons. Thereupon the appellant, who was respondent 8, Vadilal Chatra-bhuj Gandhi, offered in Court to guarantee the liability of Anandji to pay such amount as was fixed by Sir Jamshedji Kanga. Mr. Seervai, counsel for the Liquidator, was satisfied with this offer and the matter was adjourned in order that the Liquidator should get the sanction of the Company Judge to this compromise. The Liquidator then made a report to Coyajee J. who was the Company Judge to whom this particular company was assigned and who had made the winding up order, and Coyajee J. sanctioned the compromise on 6-11-1952, and on November 7 Sir Jamshedji Kanga gave his decision fixing the amounts which each of the directors was liable to pay, and he fixed the amount of the appellant at Rs. 2,30,000 and he fixed the amount in respect of Anandji at Rs. 3,60,000. The appellant then took up the contention that there was no binding compromise and that he was neither liable to pay the amount fixed by Sir Jamshedji Kanga, nor was he liable to guarantee the amount fixed in respect of Anandji. A notice of motion was then taken out by Messrs. Amarchand Mangaldas, attorneys for respondent 4, to record the compromise and Tendolkar J. recorded the compromise and passed an order in terms of that compromise. It is from that decision of Tendolkar J. that Vadilal has now come in appeal.

2. The first contention that has been raised before us by the Advocate General is that the decision of Sir Jamshedji Kanga constituted an award and that award could only be given effect to in the manner provided under the Arbitration Act and that a decree could not be taken on that award by having a compromise recorded. In order to determine this point we have to consider what Sir Jamshedji Kanga had to do in order to fix the liability of each of the directors. If a dispute is referred to a person and if a person decides that dispute and in deciding that dispute he holds a judicial inquiry and comes to a judicial decision, then undoubtedly that decision would constitute an award. On the other hand if a matter is referred to a person and he is not called upon either to hold a judicial inquiry or to give a judicial decision, but it is permissible to him to rely on his own skill, knowledge or experience in order to arrive at a particular decision, then the decision would not be an award. The authorities have made a distinction between what is known as a valuer and an arbitrator, but there is a third category which may consist of persons who are neither arbitrators nor valuers, and the

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