2009 Supreme(Bom) 1303

BOMBAY HIGH COURT
Anoop V. Mohta, J.
DR. VIJAYPAT SINGHANIA AND ORS.
v.
HARI SHANKAR SINGHANIA AND ORS.
Arbitration Petition No. 570 of 2008 along with Arbitration Petition No. 6 of 2009,
Decided on: October 1, 2009.

Headnote:Arbitration and Conciliation Act, 1996 - Section 34 - Arbitration award.

       Where arbitrator effected distribution of properties in specie to extent possible for equalization of shares directing payments of money in balance therefore award of arbitrator warrants no interference. - The Arbitral Tribunal has noted that while carrying out a physical division in specie, an exact division is impossible. Hence, an equalization in terms of money would necessarily be warranted. In a petition under Section 34, the test is not whether another division or a better division could have been carried out. The only question that has to be answered is as to whether the arbitrator has transgressed the terms of the agreement and the governing principles of law that are applicable. An exact physical divisi on in specie was not possible. As the Supreme Court has held, in such a case, there is no alternative but to resort to the process called owelty according to which the rights and interests of the parties in the properties are protected by allowing only one to retain the same.

       [Badrinarain Prasad Choudhary and others v. Nil Ratan Sarkar, (1978) 3 SCC 30].

       In the present case, however, the arbitrator in accordance with his mandate, which was to effect a distribution in specie, has carried out that exercise, to the extent to which it was practicable and feasible and for the purposes of equalization of the shares, directed payments of money in balance.

       Arbitration and Conciliation Act, 1996 - Section 34 - Award by arbitrator.

       Where parties allowed a distribution to take place and five properties sold through their agreement during course of arbitration therefore arbitral award cannot be challenged on ground of limitation. - In the reply that was filed by the Kolkata group before the Single Judge to the arbitration petitions, it was stated that the appellants had made no submissions in respect of the contention of limitation before the arbitrator; that the appellants had participated actively in the arbitration proceedings and had entered into further agreements during the process, which had resulted in the passing of the award and that the disputes related to the distribution of the family properties in which each group consisted of co-owners. Once again it was reiterated that no oral submissions had been made on behalf of the appellants at any point before the Arbitral Tribunal in regard to the alleged bar of limitation. The rejoinder that was filed on behalf of the appellants before the Single Judge does not contain an adequate traverse. According to the appellants they were not called upon and/or were not permitted to make submissions in respect of the contention of limitation before the arbitrator. The entire traverse on the part of the appellants, is, hence vague and bereft of, material particulars. Undoubtedly, as a matter of first principle, the issue as to whether the invocation of arbitration is within limitation has to be distinguished from the question as to whether a substantive claim in the arbitral proceedings is within limitation. At the same time, having regard to the broad canvass of the observations of the Supreme Court in the judgment inter parts noted earlier, it cannot be postulated that those observations were to be completely ignored in dealing with the question as to whether the claim in arbitration was barred by limitation. In several parts of the judgment to which a reference has already been made earlier, the Supreme Court while laying down the principle of special equity that applies to what are essentially family settlements, held, that following the dissolution of the partnership, the parties were in serious negotiations and that as a result, the first dispute that arose between them related to September, 1989.

       During the course of these proceedings, it was urged on behalf of Kanpur group that the governing period of limitation would be that which is prescribed by Article 5 to the Schedule to the Limitation Act in respect of a suit for accounts and a share of the profits of a dissolved partnership. The period of, limitation is three years and limitation commences to run from the date of dissolution. The claim in the arbitral proceedings in the present case was certainly not one that meets the description of a suit on accounts and for a share in the profits of a dissolved partnership referred to in Article 5 of the Schedule to the Limitation Act. That apart, substance in the submission that it will be manifestly unfair to the Arbitral Tribunal to find fault with it on the ground that the Tribunal had not dealt with a submission which was neither agitated nor advanced. The parties in the present case have allowed a distribution to take place and it is not in dispute that five properties have been sold through their agreement during the course of arbitration. For all these reasons, Court is of the view that the challenge to the arbitral award on the ground of limitation must fail.