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1990 Supreme(Del) 299
High Court Of Delhi
SUSHIL KUMAR GUPTA - Appellant
Versus
ANIL KUMAR - Respondent
Suit 1754 of 1988
Decided On : 09/17/1990
D.K.AGRAWAL, I.S.MATHUR, K.K.JAIN, S.V.BAHADUR, TASLIM AHMEDI
An arbitrator does not commit an error of law apparent on the face of the award by awarding money as the share of the objectors and also by evaluating the share of the objectors as on the date of death of the partner.
Headnote:
None
Fact of the Case:
The case pertains to a partnership firm known as M/s. Deoki Nandan and sons owned various immovable properties and other assets. This firm was in existence since 1967 but on death of Hanuman Prasad, the head of the family on 8/12/1972, a partnership deed dated 25/12/1972 was executed in between his sons viz., Atul Kumar Gupta (predecssor-in-interest of respondents 2 to 5 ). Anil Kumar Gupta (respondent no. 1), Sushil Kumar Gupta (petitioner) and Smt. Sudhagupta (respondent No. 6), widow of pro-deceased son Shrikrishan Kumar Gupta, the said partnership deed is Ex. PW. 1/1 (existing at pages 174-177 of the Arbitration file ). Clauses 13 and 14 of the partnership deed which are reproduced in the award were to the following effect, as they are very material for deciding the various points arising in the objection petitions.
Finding of the Court:
The court found that the arbitrator had not committed any error of law apparent on the face of the award in awarding money as the share of the objectors and also he was not wrong in evaluating the share of the objectors as on the date of death of the partner. The court also found that the arbitrator had not committed any error of law in determining the market value of the land located at Gur Mandi.
Issues: 1. Whether the arbitrator committed errors of law apparent on the face of the award in giving the finding that respondents 2 to 5 were entitled to have their share from the partnership assets in the share of money and not in specie and that they were entitled only to the value of the assets of the partnership as it existed on 14/09/1983 the day on which their predecessor-in-interest had died. 2. Whether the arbitrator had committed an error of law in ignoring the plea of the objector that property No. 1, tuglak Lane, New Delhi was capable of actual physical division and the arbitrator was wrong in directing sale of the said property.
Ratio Decidendi: The court held that the arbitrator had not committed any error of law apparent on the face of the award in awarding money as the share of the objectors and also he was not wrong in evaluating the share of the objectors as on the date of death of the partner. The court also found that the arbitrator had not committed any error of law in determining the market value of the land located at Gur Mandi.
Final Decision: The court directed that the award modified to the extent mentioned above be made rule of the court. Respondents 2 to 5 shall have interest at the rate of 6% per annum on the amount found due to them from the date of the award till realization.
( 1 ) VIDE letter dated 12/06/1988, thesola arbitrator, Mr. Justice Jaswant Singh (retired Judge,supreme Court) had sent the award dated 8/06/1988 alongwith the proceedings to this Court. Notice of filing of the awardwas issued to all the partics and all the parties have filed objectionpetitions which are now being disposed of by this judgment.
( 2 ) A partnership firm known as M/s. Deoki Nandan andsons owned various immovable properties and other assets. This firm was in existence since 1967 but on death of Hanuman Prasad, the head of the family on 8/12/1972, apartnership deed dated 25/12/1972 was executed inbetween his sons viz. , Atul Kumar Gupta (predecssor-in-interest of respondents 2 to 5 ). Anil Kumar Gupta (respondentno. 1), Sushil Kumar Gupta (petitioner) and Smt. Sudhagupta (respondent No. 6), widow of pro-deceased son Shrikrishan Kumar Gupta, the said partnership deed is Ex. PW. 1/1 (existing at pages 174-177 of the Arbitration file ). Clauses 13 and 14 of the partnership deed which are reproduced in the award were to the following effect, as they arevery material for deciding the various points arising in theobjection petitions.
"13. That the partnership shall not be dissolved onaccount of retirement or death of any party. Incase of retirement of a party, he/she shall cease tohave any title to or right in the firm s name andgoodwill of the business, including tenancy rightquota rights and licences which thereupon shallbelong exclusively to the remaining parties. Incase of death of a party, his/her legal heirs wouldbe entitled to the share of the deceased party andmay be admitted to the partnership by the con-sent of all the remaining parties hereto to the extent of the share of the deceased party. "
"14. That all disputes and differences arising in between the parties as well as the determination ofshare accruing to the retting or deceased partyand the manner in which such share is to be reimbursed to the said retiring partner or the legalheirs of the deceased party shall be referred toarbitration and settled according to the provisionsof the Arbitration Act. "atul Kumar Gupta had died on 14/09/1983. Theremaining partners viz. , Sushil Kumar Gupta and Smt. Sudhagupta refused to admit respondents 2 to 5, heirs of Atul tothe partnership. It was evident from clause 13 above thatthey could be admitted into partnership only with the consent of all the remaining partners. , On or about 7/11/1983, an application under Section 20 of the Arbitration Actwas given by; respondents 2 to 5. Initially the parties agreedto refer their disputes and differences to Mr. Justice Shiv Narainshankar a retired Judge of this Court vide Court s order dated 5/12/1983. But thereafter the arbitrator returned thereference expressing his inability to continue with the proceedings. The parties then made a joint application to this Courton 14/11/1985 praying that the disputes be, referredto a retired Judge of the Supreme Court for arbitration. Therelevant clauses of the aforesaid agreement are as fellows asthey have been referred to during the course of argumentsrepeatedly :
"l. The matter regarding the ascertainment of theassets and liabilities as on 14-9-83 and again onthe date of the execution of this agreement andthe mode and manner of distribution of theassets and liabilities of DNS and 1. Tughlaklane, New Delhi be referred to an Arbitrator;2. The parties have agreed amongst themselves, thatthe property 1, Tuglak Lane, New Delhi (whether forming part of assets of DNS or not) bedivided equally amongst the four parties physicallywith separate titles, with power to the Arbitratorto direct the sale of the property if the physicaldivision is not possible/equitable. "
( 3 ) THE High Court thus referred the aforesaid disputes forarbitration to the present arbitrator and it was agreed by allthe parties that the proceedings already carried out by theprevious arbitrator shall also be taken into consideration. Theparties also were co-own
