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1985 Supreme(J&K) 54
IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
K.K. Gupta, J.
Lal Chand Roshan Lal - Appellant
Versus
Gh. Mohd. Nazir Ahmad - Respondent
CMP No. 212/1980
Decided On : 09 May, 1985
Advocate For Appellant: V.K. Gupta
Advocate For Respondent: Joginder Singh
An arbitrator's award is final and binding on the parties, and the court cannot review the award or correct any misconduct in the arbitrator's adjudication unless the objection to the legality of the award is apparent on the face of it.
Headnote:
ARBITRATION - AWARD - VALIDITY - CHALLENGED - GROUNDS - AGREEMENT TO REFER DISPUTE TO ARBITRATION - EXISTENCE - SINGLE REFERENCE IN RESPECT OF SEVERAL DISPUTES - VALIDITY - AWARD MADE BEYOND STATUTORY PERIOD - VALIDITY - MISCONDUCT OF ARBITRATOR - ALLEGATION - SUBSTANTIATION - AWARD OPPOSED TO PRINCIPLES OF NATURAL JUSTICE - ALLEGATION - SUBSTANTIATION.
Fact of the Case:
Petitioner-firm supplied Hans brand sarson oil to the respondents as per orders placed by them. A dispute arose regarding payment, and the matter was referred to arbitration as per clause 10 of the supply orders. The arbitrator made an ex parte award on 16-6-1980. The petitioner-firm filed an application before the court to direct the arbitrator to file the award and pass a decree accordingly. The respondent objected to the award and applied to set it aside under section 33 of the Arbitration Act, alleging that the petitioner-firm was not registered under the Partnership Act, that he had not entered into any agreement with the petitioner-firm, that the arbitrator had misconducted himself, and that the award was opposed to the principles of natural justice.
Finding of the Court:
The court held that the petitioner-firm was not required to be registered under the Partnership Act to file the proceedings, as the proceedings were not a suit. The court also held that there was an agreement between the parties to refer the dispute to arbitration, that the single reference in respect of several disputes was valid, and that the award was made within the statutory period. The court further held that there was no evidence to substantiate the allegations of misconduct by the arbitrator or that the award was opposed to the principles of natural justice.
Issues: 1. Whether the petitioner-firm was duly registered under the Partnership Act and whether Wazir Chand was shown as one of its partners in the Register maintained by the Registrar of Firms. 2. If issue No. 1 is not proved, what is its effect on the award as also the application made by the petitioner under sections 14 & 17 of the Arbitration Act? 3. Was there any agreement between the parties to refer the disputes to the Arbitrator? 4. Did the respondents join the petitioner in making a reference of the disputes to the Arbitrator? If not, is the award still valid? 5. Is the award bad because a single reference was made the Arbitrator in respect of several disputes arising out of more than one distinct transaction between the parties? 6. Is the award bad because it was given by the Arbitrator beyond the statutory period? 7. Has the arbitrator misconducted himself in making the award? If so, in what manner? 8. Is the award opposed to principles of natural justice? If so, how? 9. Relief?
Ratio Decidendi: 1. The court held that the petitioner-firm was not required to be registered under the Partnership Act to file the proceedings, as the proceedings were not a suit. 2. The court held that there was an agreement between the parties to refer the dispute to arbitration, that the single reference in respect of several disputes was valid, and that the award was made within the statutory period. 3. The court further held that there was no evidence to substantiate the allegations of misconduct by the arbitrator or that the award was opposed to the principles of natural justice.
Final Decision: The court made the award a rule of the Court and directed that a decree be passed in terms of the award. The court also allowed interest at the rate of 12% per annum on the awarded amount from the date of the award till the realization of the amount.
2. The petitioner-firm filed application before this Court for directing the arbitrator to file the award made by him in this Court and to pass decree in accordance with the same.
3. On receipt of notice from this Court, Ghulam Mohd respondent filed objections to the award and also made application under section 33 of the Arbitration Act for setting aside the award. It is averred by him in the said application that the firm M/s Ghulam Mohd Nazir Ahmed does not exist at all and he has been served in the case in his personal capacity. He has never dealt with the petitioner-firm and had never entered into any agreement with the same. He has challenged the validity of the agreements of arbitration and also validity of the award on various grounds. According to him, the petitioner referred the matter to Shri I. D. Grover, advocate, for arbitration for which he had not knowledge. The award is invalid and illegal because there number of transactions alleged which not a single award could be said to be competent. The award is also illegal as the arbitrator entered into arbitration before the month of February, 1980 and passed award on 16-6-1980. As such the award was not passed within the statutory period of four months after entering into reference. The award has also been filed in violation of the principles of natural justice and the same is thus invalid. The respondent has also challenged the award on the ground of misconduct of the arbitrator. He has further submitted that he instructed his counsel Shri F. A. Goni, not to appear before Shri I. D. Grover, the arbitrator, as he had no faith in his impartiality because the said arbitrator and counsel for the petitioner-firm were father and son respectively. The arbitrator proceeded exparte against him without giving him further opportunity to appear as his own witness. The arbitrator has further misconducted himself by entering upon the reference without issuing any show cause notice to him or to the respondent-firm. He had never consented to the referring of any dispute between the parties to Shri I. D. Grover, advocate as sole arbitrator. He has also taken plea that the petitioner-firm is not registered under the provisions of the Partnership Act and as such the present proceedings are in violation of the Partnership Act and no relief can be granted to the petitioner-firm.
4. This Court on 4-2-1982 framed the following issues in the case:
1. Is the petitioner-firm M/s Lal Chand Roshan Lal duly registered under the Partnership Act and has Wazir Chand been shown as one of its partners in the Register maintained by the Registrar of Firms: O. P. P.
2. In case issue No. 1 is not proved, what is its effect on the award as also the application made by the petitioner under sections 14 & 17 of the Arbitration Act? O. P. P.
3. Was there any agreement between the parties to refer the disputes to the Arbitrator? O. P. P.
4. Did the respondents join the petitioner in making a reference of the disputes to the Arbitrator? If not, is the award still valid? O. P. P.
5. Is the award bad because a single reference was made the Arbitrator in respect of several disputes arising out of more than one distinct transaction between the parties? O. P. R.
6. Is the award bad because it was given by the Arbitrator beyond the statutory period? O. P. R.
7. Has the arbitrator misconducted himself in making the award? If so, in what manner? O. P. R.
8. Is the award opposed to principles o
