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IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
S. Murtaza Fazl Ali,Mufti Baha-ud-Din Farooqi, JJ.
Mulk Raj - Appellant
Versus
Hem Raj & Anr. - Respondent
Civil Revision No. 24/1971
Decided On : 19 January, 1973
ARBITRATION - AWARD - VALIDITY - AWARD BASED ON PREVIOUS STATEMENT OF ONE OF THE ARBITRATORS - STATEMENT NOT BINDING ON PARTY AGAINST WHOM IT IS SOUGHT TO BE READ - JUDICIAL MISCONDUCT - AWARD SET ASIDE - ARBITRATION ACT, 1940, SECTION 16(1).
Fact of the Case:
Plaintiff filed a civil suit against defendants for permanent injunction restraining them from using the walls, closing the smoke chimneys and Jharnas in his house. The parties agreed to refer the dispute to arbitration. The arbitrators made an award on 26-9-1962. The plaintiff challenged the award on various grounds. The trial Court set aside the award. On appeal, the Additional District Judge held that the only flaw in the award was that the arbitrators had left issue No. 1 undetermined and remanded the case to the trial Court for fresh directions. The trial Court referred the matter to the arbitrators with the direction that they should give their decision on issue No. 1. The arbitrators found the issue in favor of the plaintiff and filed their award in the Court on 18-1-1964. The defendants filed objections and challenged the award. The objections were treated as an application under section 33 of the Arbitration Act and the parties were directed to produce their evidence. The case was transferred from the Court of Munsiff, Jammu, to the file of City Judge, Jammu. The City Judge held that the award dated 18-1-1964 was invalid and unenforceable and that issue No. 1 was still open. On appeal, the District Judge recorded a finding to the contrary and remanded the case for consideration of the remaining objections taken by the defendants. The order was confirmed on revision by the High Court. The remaining objections taken by the defendants were that the award dated 18-1-1964 was procured improperly and it was vitiated because it was based on the previous statement of one of the arbitrators. The City Judge held that issue Nos. 2 & 3 were concluded by the previous award dated 26-9-1962 and after negativing the remaining objections, as aforesaid, to the award dated 18-1-1964 confirmed both the awards and made them the rule of the Court. The order was upset on appeal by the Additional District Judge, Jammu, who set aside both the awards dated 26-9-1962 and 18-1-1964; superseded-the order of reference and directed that the suit be tried on its merits by the Court below.
Finding of the Court:
The award dated 18-1-1964 is mainly founded on the statement of one of the arbitrators namely, Om Parkash, which was given by him in the Court of City Judge, Jammu, in case Mulk Raj Vs. Lala Kapoor Chand (Civil Suit No. 126 of 1963) on 7-9-1963 in which he stated that the present house was built by the plaintiff after demolishing the old house and that the chimneys and Jharnas in dispute were located in the new house at the places at which they existed in the old House. The action of the arbitrators in placing reliance on the previous statement of one of them constitutes legal misconduct. The award dated 19-1-1964 is vitiated by misconduct and must be set aside. The award dated 26-9-1962 concerning issues Nos. 2 & 3 stood concluded by it. It was not open to the Additional District Judge to reopen the case in this respect and set aside the entire award dated 26-9-1962.
Issues: Whether the award dated 18-1-1964 is valid and enforceable?
Ratio Decidendi: The arbitrators are not bound by the rules of evidence contained in the Evidence Act but that is not the same thing as saying that they are not bound by any rule of evidence. They must follow rules of evidence founded on fundamental principles of justice. They will be guilty of judicial misconduct if they decide the matter on evidence which is not binding on the parties. Accordingly where the arbitrators act on a previous statement which the party against whom it is sought to be read had no opportunity to meet, they are guilty of judicial misconduct.
Final Decision: The judgment of the Additional District Judge under revision is upheld to the limited extent that the award dated 18-1-1964 on Issue No. 1 is set aside and it is hereby directed that the trial Court will determine issue No. 1 after affording the parties opportunity to produce their evidence in relation thereto and then pass appropriate orders in the case based on such determination and the award dated 26-9-1962 concerning issues Nos. 2 & 3.
(1) Whether the smoke-chimneys and the Jharnas in dispute have been existing for more than twenty years, and, therefore, the plaintiff has acquired a right of easement in respect of their use which right is still subsisting? "O. P. P.
(2) Whether the walls in dispute are the exclusive property of the plaintiff? O. P. P.
(3) In case issue No. 2 is not proved, whether the said walls are the common walls of the parties, and whether, according to the custom prevalent in Jammu, the defendants are entitled to construct on them? O. P. D.
2. During the progress of the suit the parties agreed to refer the dispute to the arbitration of Sarva Shri Radha Krishen Anand, Om Parkash Gupta and Krishen Lal. Accordingly they filed the agreement EXPW. 1 in the trial Court on June 6, 1962. The trial Court recorded the statements of the parties in support of the agreement and then referred the matter to the arbitration of the said arbitrators. The arbitrators made their award on 26-9-1962 and filed it in the trial Court on the following day. The plaintiff challenged the award on various grounds. The objections found favour with the trial Court and the Court set aside the award by its order dated 31-12-1962. On appeal the learned Additional District Judge Jammu held that the only flaw which could be found in the award was that the arbitrators had left issue No. 1 undetermined and that the trial Court should, therefore, have more appropriately remitted the award to the arbitrators under section 16 (1) of the Arbitration Act for decision on this issue. Accordingly he set aside the order of the trial Court and remanded the case to the trial Court for fresh directions. By its order dated 16-7-1963 the trial Court referred the matter to the arbitrators with the direction that they should give their decision on issue No. 1. The arbitrators found the issue in favour of the plaintiff and filed their award in the Court on 18-1-1964. The award was, inter, alia, based upon the previous statement of one of the arbitrators namely, Om Parkash, given by him in a different case in the Court of City Judge Jammu on 7-9-1963, who, therefore declined to associate himself with the award and made an endorsement to that effect on the award itself. The defendants filed objections and challenged the award.
The objections were treated as an application under section 33 of the Arbitration Act and the parties were directed to produce their evidence. At this stage, on an application made by the pl
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