1955 Supreme(All) 131

IN THE HIGH COURT OF ALLAHABAD
James, J.
MAHADEO PRASAD - Appellant
Versus
KAMALA VARMA - Respondents
O. S. 6 Of 1948
Decided On : 08/19/1955

The court held that the arbitrators had no jurisdiction to adjudicate upon the right of certain individuals who were not parties to the suit, and that the part of the award dealing with their donations was redundant and unnecessary. However, the court found that this part of the award could be separated from the rest and did not affect the decision on the matters referred to arbitration.

Headnote:

ARBITRATION - AWARD - SETTING ASIDE - JURISDICTION - ARBITRATORS - JUDICIAL MISCONDUCT - PARTIES TO SUIT - REFERENCE TO ARBITRATION - VALIDITY - ENROLMENT OF DONOR-TRUSTEES - RULES - INTERPRETATION - GOVERNING COUNCIL - REPRESENTATION - LIMITATION - APPLICATION TO SET ASIDE AWARD - WRITTEN STATEMENT - INTEREST OF GOVERNING COUNCIL - UNLAWFUL DONATIONS - REFUND.

Fact of the Case:

A dispute arose between members of the Kayastha Pathshala, Allahabad, regarding the validity of the enrolment of certain donor-trustees. The matter was referred to arbitration, and the arbitrators awarded in favor of the plaintiffs, declaring the enrolment of the defendants as donor-trustees invalid and restraining them from exercising any rights as members of the Governing Council. The defendants filed objections to the award, and the matter came before the court for confirmation of the award.

Finding of the Court:

The court held that the arbitrators had no jurisdiction to adjudicate upon the right of certain individuals who were not parties to the suit, and that the part of the award dealing with their donations was redundant and unnecessary. However, the court found that this part of the award could be separated from the rest and did not affect the decision on the matters referred to arbitration. The court also held that the objection that all the parties to the suit had not agreed to refer the disputed points to arbitration was untenable, as the Arbitration Act allows only some of the parties to a suit to apply for arbitration provided that the matter in difference can be separated from the rest of the subject-matter of the suit. The court further held that the objection that the arbitrators did not allow some of the defendants to produce evidence in support of their case and did not consider the individual case of each defendant was untenable, as the arbitrators had discretion to take or not to take evidence, and that the arbitration agreement did not contemplate the examination of individual cases. The court also held that the objection that the arbitrators took an erroneous view of the law when they held that the enrolment of the defendants as donor-trustees was in contravention of the Rules was untenable, as a wrong view of the law cannot make an award invalid.

Issues: 1. Whether the arbitrators had jurisdiction to adjudicate upon the right of certain individuals who were not parties to the suit? 2. Whether the objection that all the parties to the suit had not agreed to refer the disputed points to arbitration was valid? 3. Whether the objection that the arbitrators did not allow some of the defendants to produce evidence in support of their case and did not consider the individual case of each defendant was valid? 4. Whether the objection that the arbitrators took an erroneous view of the law when they held that the enrolment of the defendants as donor-trustees was in contravention of the Rules was valid?

Ratio Decidendi: 1. The court held that the arbitrators had no jurisdiction to adjudicate upon the right of certain individuals who were not parties to the suit, and that the part of the award dealing with their donations was redundant and unnecessary. However, the court found that this part of the award could be separated from the rest and did not affect the decision on the matters referred to arbitration. 2. The court held that the objection that all the parties to the suit had not agreed to refer the disputed points to arbitration was untenable, as the Arbitration Act allows only some of the parties to a suit to apply for arbitration provided that the matter in difference can be separated from the rest of the subject-matter of the suit. 3. The court held that the objection that the arbitrators did not allow some of the defendants to produce evidence in support of their case and did not consider the individual case of each defendant was untenable, as the arbitrators had discretion to take or not to take evidence, and that the arbitration agreement did not contemplate the examination of individual cases. 4. The court held that the objection that the arbitrators took an erroneous view of the law when they held that the enrolment of the defendants as donor-trustees was in contravention of the Rules was untenable, as a wrong view of the law cannot make an award invalid.

Final Decision: The court confirmed the first part of the arbitration award, which declared the enrolment of the defendants as donor-trustees invalid and restrained them from exercising any rights as members of the Governing Council. The court pronounced judgment accordingly against the defendants who were still on the record, except the defendant Governing Council (against whom no relief was sought). The plaintiffs were entitled to recover their costs from the defendants who had contested the suit until the very end.