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High Court Of Calcutta
SABYASACHI MUKHERJI
TAPAN KUMAR PAUL - Appellant
Versus
KRISHNA KANTA PAUL - Respondent
Award Case 157 Of 1978
Decided On : 01/19/1979
ARBITRATION - AWARD - CHALLENGE - GROUNDS - REGISTRATION OF AWARD - WHETHER REQUIRED - ERROR APPARENT ON THE FACE OF THE AWARD - MEANING AND SCOPE - DIVISION OF ASSETS OF COMPANY BY ARBITRATOR - WHETHER VALID - INCOMPLETE AWARD - TENANCY RIGHTS - DIVISION WITHOUT CONSENT OF LANDLORD - WEST BENGAL TENANCY ACT, 1956 - APPLICABILITY - LIMITATION - SECTION 14(2) OF THE ARBITRATION ACT, 1940 - FILING OF AWARD - MEANING AND SCOPE.
Fact of the Case:
The dispute arose out of a family concern named Ramkanai Jamini Ranjan Paul Pvt. Ltd. The parties agreed to refer the disputes to the arbitration of Shri A. K. Sen, Barrister-at-Law. The arbitrator made an award on 30th January, 1978. The award was challenged by the petitioners on various grounds, including that the award required registration under Section 17 of the Registration Act, 1908, that the arbitrator had committed an error apparent on the face of the award by dividing the assets of the company, that the award was incomplete as it had not dealt with all the points of disputes, that the arbitrator had sought to divide the tenancy rights without the consent of the landlord, and that the application was barred by limitation.
Finding of the Court:
The Court held that the award did not require registration under Section 17 of the Registration Act, 1908, as it had been registered subsequently. The Court also held that the arbitrator had not committed an error apparent on the face of the award by dividing the assets of the company, as the company was a party to the arbitration agreement and there was evidence of claims by the shareholders against the company in respect of their dues, his remuneration as director and unpaid dividends etc. The Court further held that the award was not incomplete as it had dealt with all the points of disputes, and that the arbitrator had not sought to divide the tenancy rights without the consent of the landlord, as there was evidence that the landlords had given consent and would act in compliance with the divisions made. The Court also held that the application was not barred by limitation, as the award had been filed on 12th July, 1978, and the application had been filed on 29th August, 1978, within the period of 30 days prescribed under Section 14(2) of the Arbitration Act, 1940.
Issues: 1. Whether the award required registration under Section 17 of the Registration Act, 1908? 2. Whether the arbitrator had committed an error apparent on the face of the award by dividing the assets of the company? 3. Whether the award was incomplete as it had not dealt with all the points of disputes? 4. Whether the arbitrator had sought to divide the tenancy rights without the consent of the landlord? 5. Whether the application was barred by limitation?
Ratio Decidendi: 1. An award does not require registration under Section 17 of the Registration Act, 1908, if it has been registered subsequently. 2. An arbitrator does not commit an error apparent on the face of the award by dividing the assets of a company, where the company is a party to the arbitration agreement and there is evidence of claims by the shareholders against the company in respect of their dues, his remuneration as director and unpaid dividends etc. 3. An award is not incomplete if it has dealt with all the points of disputes. 4. An arbitrator does not seek to divide the tenancy rights without the consent of the landlord, where there is evidence that the landlords have given consent and would act in compliance with the divisions made. 5. An application for setting aside an award is not barred by limitation, if it is filed within the period of 30 days prescribed under Section 14(2) of the Arbitration Act, 1940.
Final Decision: The Court dismissed the application challenging the award.
( 1 ) THIS is an application under Sections 30 and 33 of the Arbitration Act, 1940 challenging the award dated 30th of Jan. 1978 made by one Shri A. K. Sen, Barrister-at-Law. The award and the dispute centre round a family concern named as Ramkanai Jamini Ranjan Paul Pvt. Ltd. Before I deal with the history of the dispute it may be relevant to refer to certain facts for the purpose of appreciating the grounds upon which the challenge to the award is based. It appears that there was an application to this Court under Sections 237, 397, 398 and 402 of the Companies Act, 1956 about the disputes amongst the shareholders in the company named Ramkanai Jamini Ranjan Paul Pvt. Ltd hereinafter called the said company. It is not necessary to set out in detail the history of the said dispute. But thereafter the parties agreed to refer the disputes to the arbitration of Shri A. K. Sen, arbitrator; an arbitration agreement in writing dated 10th of May, 1977 was entered into. It would be necessary to refer in brief to the said arbitration agreement. The agreement is between Krishna Kanta Paul the respondent No. 1 herein who is the son of Ramani Kanta Paul being the respondent No. 4 herein, Malay Kumar Paul being the son of one Mrinal Kanti Paul being the respondent No. 2 herein and Ramani Kanta Paul and one Tapan Kumar Paul, son of Ramani Kanta Paul. The said company was also a party to the said agreement. The agreement dated 10th of May, 1977 recited that disputes and differences had arisen between the parties regarding various movable and immovable properties and businesses as set out in Schedule I to the said agreement. The agreement, further, states that some of the parties hold shares in the company as set out in Schedule II of the said agreement. The agreement, further, goes on to recite that as differences and disputes had arisen between the parties to the agreement in respect of and arising out of such business and/or properties and the management of the said company and the holdings and ownership of the shares therein and as the parties had failed to arrive at an amicable settlement of such disputes the parties "do hereby agree and consent that all disputes arising out of and/or in connection with the nature and extent of the business and/or properties and/or in respect of share holdings and/or rights of each of the parties herein shall be referred to the Sole Arbitration of Mr. Asoke Kumar Sen, Barrister-at-Law whose decision on such matters will be accepted by all parties hereto as final and binding. " Schedule I which dealt with the properties in respect of which disputes had arisen contains the following :--"1. Stock-in-trade. 2. Fixture and Furniture. 3. Tenancy right of shop room. 4. Good-will of Company. 5. Bank Balance. 6. Cash-in-hand. 7. Four Cars ; Nos. WMB 717 WBJ 838 WBG 8454 WBM 8334 8. Shares of the Company. 9. 24 Cottahs of land more or less in Belghoria with buildings and sheds. 10. Sundry Creditors. 11. Sundry Debtors. 12. Godowns. 13. Garages. "after the agreement was entered into an application was made under Section 20 of the Arbitration Act, 1940 for filing of the said arbitration agreement in Court. By an order made on the 19th of May, it was directed that the agreement be filed and there was a reference of the disputes to Shri Asoke Kumar Sen. By the said order it was recorded that the arbitrator would have power to proceed summarily. Thereafter parties filed their respective statements and the arbitrator held several meetings of the parties on diverse dates between the 25th of May, 1977 and 30th of January, 1978. On the 30th of Jan. 1978, the arbitrator has made the award which is the subject matter ol challenge in this application.
( 2 ) AS several points have been taken in respect of the award made by the arbitrator and inasmuch 33 the arbitrator has recorded certain reasons for making of the award it would be necessary to set out in extenso the said award of the arbitrator. Afte
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