IN THE HIGH COURT OF JUDICATURE AT MADRAS
Mr. Frederick William Gentle, Chief Justice and Mr. Justice Rajamannar, XJ.
J. Kuppuswami Chetty
Versus
B.V. Anantharamier and another
O.S.A. No. 22 of 1946.
Decided On : 10 February 1947
The Chief Justice.-The appellant and the two respondents formerly carried on a business in partnership under the name of Bhagyalakshmi & Co. Disputes arose between them which were referred to the arbitration of three named arbitrators by an agreement in writing between the parties, dated 4th January, 1945. The agreement, inter alia provides that (1) in case P. Govindasawmi Chetti (one of the arbitrators) declined to act, the appellant should be at liberty to nominate another arbitrator in his place; (2) in case two of the arbitrators declined to act, the whole arbitration should come to an end and the parties be relegated to their prior rights; a decision of the majority of the arbitrators should be the decision which must prevail in all matters connected with the arbitration; (3) the arbitration should be completed within one month from the date of the agreement subject to an extension of time, not exceeding six weeks thereafter, being taken if all the three arbitrators passed a resolution to that effect.
No resolution was passed by the three arbitrators extending the time during which they could conclude the arbitration and make their award. The one month’s period expired on February 4th, 1945, by which date no award had been made.
Subsequently the three arbitrators examined the partnership accounts. This examination was completed by February the 27th. Thereafter P. Govindaswami Chetti declined to act further as an arbitrator, but the appellant did not appoint another arbitrator in his place pursuant to his power or right to do so given by the agreement.
Later, on 15th March, 1945, the remaining two arbitrators addressed a communication, which later was called a letter, to the first respondent and to the appellant. None of the parties requested the signatory arbitrators to file this document in Court and no other steps were taken in that behalf and it has not been filed in Court as an award as provided in the Arbitration Act.
The document states that the two signatory arbitrators give “the following decision”. It recites that a copy of the account ascertained by the three arbitrators, dated 27th February, 1945, had been given to the first respondent (who acted on his own behalf and on that of the second respondent) and an unsigned copy to the appellant; thereafter Govindaswami Chetti did not associate with the other two arbitrators in further proceedings; the document then states that the other two arbitrators “decide the following matters mentioned herein finally in accordance with our joint opinion.” Then follows their conclusions regarding the subject of their arbitration.
On 23rd April, 1945, the same two arbitrators wrote to the respondents that they had ascertained that their letter, dated 15th March, addressed to the respondents as well as to the appellant was served upon him (the appellant) also, through post several days back and he had not chosen to send a reply or to use the arbitrators in that connection and they refused to act as arbitrators for such people; the letter concludes that they would do nothing more in the arbitration matter and the respondents were at liberty to take such proceedings in Court as they liked; the arbitrators declined to act.
On 25th May, 1945, the respondents instituted against the appellant a suit claiming dissolution of the partnership and the customary consequential relief in a suit of that nature. In his written statement the appellant pleaded that the respondents had induced him to consent to the arbitration and had procured an award which would be rejected by the Court on the face of it as illegal and invalid, and further that the respondents had lost their right to institute the suit, which was barred, by reason of the arbitration ending in an award.
On 25th February, 1946, the respondents made an application under section 33 of the Arbitration Act to the Court for a declaration that there is no valid award in existence and no subsisting arbitration agreement. In his affidav
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