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1958 Supreme(Ker) 143

Judges : KOSHI,VARADARAJA IYENGAR
Vulson - Appellant
Versus
Kelukutty - Respondent
Case No : C. M. A. No 244 of 1957
Decided On : 07/30/1958
Advocates Appeared :
T. K. Lakshmana Iyer; T. L. Viswanatha Iyer; N. K. Venkatachalam; G. M. Kuruvilla; For Appellants K. V. Surianarayana Iyer; S. Nataraja Iyer; C. M. Devan; For Respondents

The arbitrator has the power to decide the matters in dispute between the parties, and the court may interfere and correct the decision only if there is a mistake of law on the face of the award.

Headnote:

Arbitration - Validity of Award - S.29 of the Indian Arbitration Act, 1940 - R.8 of Schedule.1 of the Act - Validity of Reference - [INTEREST, COSTS, VALIDITY OF REFERENCE] - [S.29 of the Indian Arbitration Act, 1940, R.8 of Schedule.1 of the Act] - The court discussed the validity of the interest provision in the award, the costs of the suit, and the lack of power in the arbitrator to decide the question of law involved in the case. The court interpreted S.29 of the Indian Arbitration Act, 1940 and R.8 of Schedule.1 of the Act to determine the validity of the interest provision and the costs of the suit. The court also considered the validity of the reference and the parties' understanding of the matter.

Fact of the Case:

The appeals were against the orders refusing to set aside the award made in favor of the plaintiffs by the sole arbitrator in two connected suits. The suits were for recovery of money based on pro-notes, and the disputes were referred to an arbitrator. The defendant objected to the validity of the award on various grounds, including the interest provision, costs of the suit, and the lack of power in the arbitrator to decide the question of law involved in the case.

Finding of the Court:

The court discussed and dismissed the objections raised by the defendant, including the validity of the interest provision, costs of the suit, and the lack of power in the arbitrator to decide the question of law involved in the case. The court found that the arbitrator had the power to decide the matters in dispute between the parties and upheld the award.

Issues: Validity of the interest provision in the award, costs of the suit, lack of power in the arbitrator to decide the question of law involved in the case.

Ratio Decidendi: The court interpreted S.29 of the Indian Arbitration Act, 1940 and R.8 of Schedule.1 of the Act to determine the validity of the interest provision and the costs of the suit. The court found that the arbitrator had the power to decide the matters in dispute between the parties.

Final Decision: The appeals failed, and the court dismissed them with costs.

Judgment :-

1. These two appeals are by the common defendant in two connected suits O. S. Nos. 50 and 53 of 1954 on the file of the Subordinate Judge of Kozhikode and are directed against two similar orders passed by the court below, refusing his motion to set aside the award made in favour of the plaintiffs by the sole arbitrator in the case.

2. O. S.50 of 1954 was instituted by two plaintiffs, viz. (1) K. Kelukutty-a partnership firm and (11) K. Kelukutty one of the partners of the 1st plaintiff-firm. The plaintiffs in O. S.53 of 1954 were similarly the firm of U.K. Sankunny and U.K. Sankunny a partner thereof. O. S.50 of 1954 was for recovery of Rs. 6300 with interest and costs from the sole defendant C. C. Vulson, on the basis of a pro-note dated 27-5-1951 executed by the latter, in favour of the 2nd plaintiff, K. Kelukutty. O. S.53 of 1954 was based on a pro-note, of same date and for same amount and executed by the same defendant but in favour of Sankunny the 2nd plaintiff in that suit. In both suits, the plaintiffs averred that the consideration for the pro-notes concerned, moved from the respective 1st plaintiff-firms, though the 2nd plaintiff in each actually paid the same. Decrees were accordingly prayed for in both the suits, in favour of the respective 1st plaintiff-firms and only alternatively in favour of the 2nd plaintiffs. In view to the single origin of the transactions in the two suits and same contention raised by the common defendant, the two suits were being jointly tried together. While so, the disputes in both were referred to Mr. P. S. Bharatha Iyer, sole arbitrator of the parties' choice. The plaintiffs in the two cases were represented by two separate advocates before the arbitrator, who finally submitted his award to court, on 10-91956. The 1st defendant thereupon filed the objection herein questioning the validity of the award on various grounds. It is the order rejecting these objections that forms the subject-matter of the appeals and we are concerned with some only of the grounds so raised and disallowed. We will deal with these grounds in the order in which they were raised before us.

3. Firstly, in regard to the interest provision in the award: The plaint in both the suits prayed for grant of future interest from date of suit and the arbitrator had, conformably, granted the same The award does not mention that any question was raised in this connection. The defendant, in his objection raised however, the point that S.29 of the Indian Arbitration Act, 1940 forbade the grant of future interest at all, after suit. S.29 runs as follows:

"Where and in so far as an award is for the payment of money, the Court may in the decree order interest, from the date of the decree at such rate as the Court deems reasonable, to be paid on the principal sum as adjudged by the award and confirmed by the decree."

The Court below, dealing with the matter, thought that the section prevented only the grant of interest from the date of the award, and so it disallowed the same, while confirming the order of the arbitrator to the extent of the future interest from date of plaint up to the date of the award. The contention is raised before us that the court below should have struck down even this portion and learned counsel referred to Thawardas v. Union of India, A.I.R. 1955 S. C. 468. We think this argument is entitled to succeed. For the arbitrator is not a court which has been given special power to give interest after suit under S.34, C.P.C. In the absence of that section, even a court would not have power to give future interest.

4. Next as regards the costs of the suit. In regard to this matter, the arbitrator allowed costs in both the suits in favour of the respective plaintiffs and fixed for himself a fee of Rs 1500 payable in equal thirds by the respective 2nd plaintiffs in the two suits and the common defendant. The defendant did not dispute the fees of Rs. 500 ordered as against himself in favour of the arbitrator.







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