1930 Supreme(Mad) 301
Madras High Court
Curgenven
S.C.T. Al. Alagappa Chettiar
Versus
S.S.C.T. Chidambaram Chettiar
Decided On : 16 December, 1930
Implied waiver of irregularities during arbitration proceedings when a party voluntarily signs the award with knowledge of the irregularities.
Headnote:
Arbitration - Misconduct - Award not set aside due to waiver - Irregularity passed over by party - Award upheld
Fact of the Case:
Disputes arose between two brothers over the division of immovable property. The disputes were referred to three arbitrators who presented an award. The defendant, after signing the award, impugned it for various reasons, including coercion and fraud. The plaintiff filed a suit upon the hundi and an application for an order that the award be filed in Court and a decree passed accordingly. The defendant appealed the lower court's decision.
Finding of the Court:
The court found that the defendant had knowledge of the award's nature and effect, and voluntarily signed it. The court held that the defendant's failure to protest against irregularities during the arbitration proceedings amounted to an implied waiver. The court also rejected objections related to a mistake in calculation and the law of limitation. The court confirmed the lower court's decision to file the award and upheld the decree upon the hundi, dismissing the appeals with costs.
Issues: 1. Whether the defendant's signature on the award was obtained fraudulently and under coercion. 2. Whether irregularities during the arbitration proceedings were waived by the defendant. 3. Whether a mistake in calculation and violation of the law of limitation invalidated the award.
Ratio Decidendi: The court held that the defendant's voluntary signature on the award, with knowledge of the irregularities, amounted to an implied waiver. The court also found that objections related to a mistake in calculation and the law of limitation did not invalidate the award.
Final Decision: The court confirmed the lower court's decision to file the award and upheld the decree upon the hundi, dismissing the appeals with costs.
Curgenven, J.
1. The plaintiff and the defendant are brothers by blood, being the sons of one Subramaniam Chettiar, and first cousins by adoption, the defendant having been adopted by his senior paternal uncle, Chidambaram Chetty. Chidambaram Chetty and Subramaniam Chetty had a third brother Alagappa Chetty. Disputes arose between the two parties in regard to various matters including the division of three items of immovable property, a house and two vacant sites in the village of Pallattur. On 21st February 1925 they referred their disputes by means of muchilika, Ex. C, to three arbitrators residing in Devakotta and on 29th April the arbitrators presented their award. Under this the plaintiff was to have one of the sites (item 1) and the defendant the house and the other site (items 2 and 3). The defendant had acquired the interest of the third branch, that of Alagappa Chetty, in the property so that he held a two-thirds share to the plaintiffs one-third share. The value of the property assigned to him was however in proportion greater than this two-thirds share and, further, a sum of Rs. 4,000 was found due from him as principal and interest of a debt incurred for his marriage.
2. Consequently the arbitrators provided that he should pay to the plaintiff a sum of Rs. 23,000, the award permitting this payment to take the shape of a hundi. Both parties signed this award on the evening of 29th April and at the same time the defendant executed a hundi for the sum abovementioned. Very shortly afterwards, on 2nd May, the defendant sent a lawyers notice to the plaintiff impugning the award for various reasons, one in particular being that he had signed it under compulsion and in ignorance of its purport. At the same time he stopped the hundi which was accordingly dishonoured. The plaintiff then filed a suit upon the hundi and an application under paras. 20 and 21, Schedule 2, Civil P. C, for an order that the award be filed in Court and a decree passed accordingly. He has succeeded in both these proceedings and the two appeals now before us are accordingly presented by the defendant.
3. The defendant attacks the award upon several grounds. The circumstance that he signed it must necessarily tell heavily against the acceptance of any contentions based upon irregularity of procedure and I will accordingly deal first with his allegation that his signature both to the award and to the hundi was obtained fraudulently and under coercion, and affixed with no knowledge of what the documents contained. The evidence shows that the three arbitrators some time after they had conducted an enquiry at Pallattur arrived at their conclusions at Devakotta on the forenoon of 29th April. One of them, Swaminatham Chetty, had then to leave the place. Later in the day the other two drew up the award according to what had been decided and obtained the signatures of the parties to it. Then after Swaminatham Chetty returned on the following day all the three arbitrators signed it. The defendants version of how he came to sign these documents has not always been the same. In his first notice, Ex. 4 already referred to, he said that the two arbitrators compelled him to sign two sheets "without giving any particulars," which would seem to suggest that the sheets were blank. In a subsequent notice Ex. 4, sent on 1st July 1925 the arbitrators are accused of having:
pressed our client much and keeping the sheets covered, asked him to sign two sheets.
4. In his written statement he said that the arbitrators by coercion and undue influence made him sign certain incomplete papers without revealing their contents. He also alleged that the arbitrators had antedated the award. There is here no reference to the papers having been covered, but the allegation reappears in his evidence, where he says that both papers were covered and that though he pressed the arbitrators for about an hour to read them to him, they did not do so. An inspection of the award, Ex. A, will s