1. This is an application under Sections 30 and 33 of the Arbitration Act, 1940 challenging the award dated 30th of Jan. 1978 made by one Shri A.K Sen, Barrister-at-Law. The award and the dispute centre round a family concern named as Ramkanai Jamini Ranjan Paul Pvt. Ltd. Before I deal with the history of the dispute it may be relevant to refer to certain facts for the purpose of appreciating the grounds upon which the challenge to the award is based. It appears that there was so application to this Court under Sections 237, 397, 398 and 402 of the Companies Act, 1956 about the disputes amongst the shareholders in the company named Ramkanai Jamini Ranjan Paul Pvt. Ltd. hereinafter called the said company. It is not necessary to set out in detail the history of the said dispute. But thereafter the parties agreed to refer the disputes to the arbitration of Shri A.K Sen, arbitrator; an arbitration agreement in writing dated 10th of May, 1977 was entered into. It would be necessary to refer in brief to the said arbitration agreement. The agreement is between Krishna Kumar Paul the respondent No. 1 herein who is the son of Ramani Kanta Paul being the respondent No. 4 herein, Malay Kumar Paul being the son of one Mrinal Kanti Paul being the respondent No. 2 herein and Ramani Kanta Paul and one Tapan Kumar Paul, son of Ramani Kanta Paul. The said company was also a party to the said agreement. The agreement dated 10th of May, 1977 recited that disputes and differences had arisen between the parties regarding various movable and immovable properties and businesses as set out in Sch. I to the said agreement. The agreement, further, states that some of the parties hold shares in the company as set out in Sch. II of the said agreement. The agreement, further, goes on to recite that as differences and disputes had arisen between the parties to the agreement in respect of and arising out of such business and/or properties and the management of the said company and the holdings and ownership of the shares therein and as the parties had failed to arrive at an amicable settlement of such disputes the parties “do hereby agree and consent that all disputes arising out of and/or in connection with the nature and extent of the business and/or properties and/or in respect of share holdings and/or rights of each of the parties herein shall be referred to the Sole Arbitration of Mr. Asoke Kumar Sen, Barrister-at-Law whose decision on such matters will be accepted by all parties hereto as final and binding.” Schedule I which dealt with the properties in respect of which disputes had arisen contains the following:—

“1. Stock-in-trade.

2. Fixture and Furniture.

3. Tenancy right of shop room.

4. Good-will of Company.

5. Bank Balance.

6. Cash-in-hand.

7. Four Cars : Nos. WMB 717

WBJ 838

WBG 8454

WBM 8334

8. Shares of the Company.

9. 24 Cottahs of land more or less in Belghoria with buildings and sheds.

10. Sundry Creditors.

11. Sundry Debtors.

12. Godowns.

13. Garages.”

2. After the agreement was entered into an application was made under Section 20 of the Arbitration Act, 1940 for filing of the said arbitration agreement in Court. By an order made on the 19th of May, it was directed that the agreement be filed and there was a reference of the disputes to Shri Asoke Kumar Sen. By the said order it was recorded that the arbitrator would have power to proceed summarily. Thereafter parties filed their respective statements and the arbitrator held several meetings of the parties on diverse dates between the 25th of May, 1977 and 30th of January, 1978. On the 30th of Jan. 1978, the arbitrator has made the award which is the subject matter of challenge in this application.

3. As several points have been taken in respect of the award made by the arbitrator and inasmuch as the arbitrator has recorded certain reasons for making of the award it would be necessary to set out in extenso the said award of the arbitrator. After setting out the reference and the fact that several meetings had been held with the parties and their counsel had appeared and evidence was produced, the arbitrator observed, inter alia, as follows:—

“I hereby direct and award as follows:

1. The shop room of the Company (hereinafter referred to as “the said shop room”) is situated at premises Nos. 213 and 213-B, Mahatma Gandhi. Road, Calcutta and also at premises Nos. 76/1 and 76.G, Netaji Subhas Road, Calcutta, which comprises of (a) the ground floor having an area of 2,144 sq. ft. approximately with a frontage of 43' having 5 door openings and 2 shop-windows and an average depth of 45' from the Northern side of Mahatma Gandhi Road with a mezzanine floor on the ground floor. The said ground floor consists of a western portion comprising Lots A and B shown in the Plan annexed hereto and marked “K” (hereinafter referred to as the “annexed plan”) bounded on the west, north and south by red lines and on the east, north and south by yellow lines and the eastern portion comprising of Lot “C” shown in the annexed plan bounded by green lines on the east, west, north and south and (b) the first floor comprising of an area of 2,270 sq. ft. approximately consisting of two portions viz. the northern and southern portions, the access to both being from the ground floor through a staircase rising from the ground floor of the said shop room itself. In addition to this staircase, there are two separate staircases, on the eastern side of the said premises Nos. 213 and 213-B, Mahatma Gandhi Road, Calcutta, which are for the common use of the Company as also other tenants of the said premises through which access is also available to the northern portion of the first floor. The northern portion of the first floor is about 1340 sq. ft. in area and the southern is about 1250 sq. ft. in area. The northern portion includes a godown situated in the portion of Premises No. 76/1, Netaji Subhas Road, Calcutta, comprising of the area shown as Lot B-1 in the annexed plan and bounded by yellow lines which is contiguous to the said shop room on the first floor where sales of goods of the Company take place and of the area shown as Lot A-1 in the annexed plan and falling within premises No. 76.C, Netaji Subhas Road, Calcutta, and bounded by red lines. The southern portion comprises an area of 1250 sq. ft. approximately and shown as Lot C-1 in the annexed plan, bounded by green lines and falling within premises No. 76.C, Netaji Subhas Road, Calcutta.

2. The ground floor of the said shop room of the Company described above is shown in the annexed plan, as Lot A, Lot B, and Lot C, the area being the aggregate of the said Lot A, Lot B and Lot C. Lot A is a segment on the western portion of the said shop room on the ground floor formed by two perpendicular straight lines from the base line of the said Premises No. 213-B, Mahatma Gandhi Road, Calcutta, being the northern side of the said premises on Mahatma Gandhi Road, the straight lines drawn from the western border of the said shop room on the west and from a point 11-4' from the extreme western end of the said shop room at premises No. 213-B, Mahatma Gandhi Road, Calcutta, respectively and by two straight lines on the north and the south respectively of the said shop room connecting the said straight lines and all marked red. Lot B is a segment falling in the middle portion of the said shop room on the ground floor thereof, bounded by the straight perpendicular line marked in yellow dividing Lot A on the west and another straight line also marked in yellow to the east thereof drawn from the said base line on Mahatma Gandhi Road, at a width of 114' in between the said boundary of Lot ‘A’ and the said line drawn perpendicularly from the said base line on the east and two lines on the north and south of the said shop room connecting the said two straight lines also marked in yellow and shown as Lot B in the annexed plan. Lot A is shown by boundaries in red lines and Lot B is shown as boundaries in yellow lines in the annexed plan. Lot C is a segment shown and bounded by green lines in the annexed plan, being the segment lying to the east of Lot B and bounded on the west by the boundary of the said premises No. 213, Mahatma Gandhi Road, and on the east by the boundary on the east of the said shop room. Lot A and Lot B are comprised in the premises No. 213B Mahatma Gandhi Road. The Lot C is comprised in the premises No. 213, Mahatma Gandhi Road. The eastern and western portions of the said shop room on the ground floor is shown as such in the annexed plan.

3. The first floor of the said shop room is included in premises No. 76/1, Netaji Subhas Road, Calcutta and 76.C, Netaji Subhas Road, Calcutta and are shown in the annexed plan as consisting of the portions marked Lot A-1, Lot B-1 and Lot C-1. Lot A-1 comprises of an area of 380 sq. ft. approximately shown and bounded by red-lines in the annexed plan and forms the extreme eastern portion of the first floor of the said shop room, Lot B-1 is shown as bounded by yellow lines in the annexed plan and comprises of an area of 460 sq. ft. approximately forming the extreme north eastern portion of the said shop room on the first floor including the said godown measuring approximately 13′-6″ × 8′-3″ in the Lot B-1. Lot C-1 comprises of the extreme western portion of the said shop room in the first floor and is shown as bounded by green lines in the annexed plan, having an approximate area of 740 sq. ft. on the southern portion of the said Lot C-1. The northern and southern portions of the said shop room on the first floor are marked as such in the annexed plan and consist of an area of A-1 and B-1 for the northern portion and C-1 for the southern portion respectively.

4. The said premises Nos. 213 and 213-B, Mahatma Gandhi Road, Calcutta end 76/1 and 76.G, Netaji Subhas Road, Calcutta belong to four landlords, viz. (i) Smt. Kailash Devi Burman, widow of Shri Rashbehari Burman deceased, (ii) Krishna Kumar Burman, (iii) Madan Mohan Burman and (iv) Raj Kumar Burman under whom the company is a monthly tenant in respect of the said shop room. By mutual partition and family arrangement amongst the landlords the said shop room has been divided between the said landlords in the manner following, namely, (a) Lots Nos. A and B mentioned above and marked and bounded by red lines and yellow lines respectively in the annexed plan and having respectively the said areas of 506 sq. ft. and 724 sq. ft. approximately, and falling within premises No. 213-B, Mahatma Gandhi Road, Calcutta have been allotted to and belong to Krishna Kumar Burman. Lot No. C on the ground floor of the said shop room having an area of 914 sq. ft. approximately and falling within the said premises No. 213-B, Mahatma Gandhi Road, Calcutta, has been allotted to and belongs to Madan Mohan Burman. Lot A-1 on the first floor falling within the said premises No. 76.G, Netaji Subhas Road, and shown as bounded by red lines in the annexed plan and having an approximate area of 880 sq. ft. has been allotted to and belongs to Raj Kumar Burman. Lot No. B-1 on the first floor of the said shop room including the said godown falls within the premises No. 76/1, Netaji Subhas Road, Calcutta, and is shown as bounded by yellow lines in the annexed plan. It comprises an area of 460 sq. ft. and the said godown and has been allotted to and belongs to Smt. Kailash Devi Burman. Lot C-1 on the first floor of the said shop room falls within premises No. 76.G, Netaji Subhas Road, Calcutta, and is shown as bounded by green lines in the annexed plan. It comprises an area of 910 sq. ft. and 340 sq. ft. approximately and has been allotted to and belongs to Madan Mohan Burman.

5. In satisfaction of all the claims that Krishna Kanta Paul has or may have against the Company and by way of discharge and satisfaction of all his claims against the Company the Company shall assign and transfer to the said Krishna Kanta Paul all its right, title and interest of the tenancy of the company in respect of the portion of the said shop room marked and shown as Lot A and Lot A-1 in the annexed plan and he shall be the tenant of the said portions being Lot A and Lot A-1 under the Landlord Krishna Kumar Burman for Lot A and Rajkumar Burman for Lot A-1 at half the rent which is now being paid to Krishna Kumar Burman by the Company for the portions of Lots A and B shown in the annexed plan of which the said Krishna Kumar Burman is the owner and at the rent which is now being paid and/or is payable by the Company for the portion marked Lot A-1 to Raj Kumar Burman, who is the owner of the said portion marked Lot A-1. Krishna Kanta Paul will continue to pay half the rent payable in respect of the portions being shown as Lot A and Lot B in the annexed plan to Krishna Kumar Burman for the tenancy in respect of the portion being Lot A and the rent which is now being paid or is payable to Raj Kumar Burman for the portion shown as Lot A-1 in annexed plan as rent for the tenancy of the said portion of Lot A-1 hereafter. The consent for such transfer and assignment of the said portions being Lot A and Lot A-1 by the Company in favour of Krishna Kumar Paul has been filed before me and I am satisfied that both Shri Krishna Kumar Burman and Shri Raj Kumar Burman have consented to and are agreeable to accept the said assignment.

Krishna Kumar Paul shall also pay ⅓rd of all the Municipal Rates and taxes payable by the Company for the said shop room from the date of this Award.

Krishna Kumar Paul is declared to be the tenant in respect of the said portion being Lot A and Lot A-1 with effect from the date of this Award.

6. The Company shall assign and transfer all its rights, title and interests in the tenancy of the Company in respect of the portions of the said shop room marked and shown as Lot B and Lot B-1 in the annexed plan in favour of Mrinal Kanti Paul and Malay Kumar Paul jointly in full settlement and satisfaction of the claims that they have or may have against the Company. They are declared to be the tenants in respect of the said portion Lot B and Lot B-1 under Krishna Kumar Burman and Smt. Kailash Devi Burman respectively and they shall pay half the rent, now being paid by the Company in respect of the said portions being Lot A and Lot B to Krishna Kumar Burman for the portions marked Lot B of which they shall be the tenants from the date of the Award and also the rent now being paid or payable by the Company to Smt. Kailash Devi Burman for the portion marked and shown as Lot B-1 in the annexed plan of which he shall be the tenant with effect from the date of this Award under Smt, Kailash Devi Burman. The consent for such assignment of Smt. Kailash Devi Burman has been filed before me and I am satisfied that Smt. Kailash Devi Burman has consented to and is agreeable for such assignment. Mrinal Kanti Paul and Malay Kumar Paul shall pay one third of the municipal rates and taxes payable by the Company for the said shop room from the date of this award.

7. On the assignment and transfer of the tenancy of the Company in respect of the said portion Lot A and Lot A-1 in favour of Krishna Kanta Paul, and Lot B and Lot B-1 in favour of Mrinal Kanti Paul and Malay Kumar Paul jointly as directed hereby Krishna Kanta Paul, Mrinal Kanti Paul and Malay Kumar Paul shall have no claim or demand against the Company or against any other parties in these proceedings and all their claims against the Company or any other party shall stand fully satisfied and discharged.

8. The Company will continue to be the tenant of the portions shown as Lot C and Lot C-1 in the annexed plan which fall with the ownership of Shri Madan Mohan Burman with effect from the date of this Award and it will continue to pay the rent now being paid or is payable to Madan Mohan Burman by the Company in respect of the said portions shown as Lot C and Lot C-1 in the annexed plan. The consent of Madan Mohan Burman for the Company assigning its tenancy rights in respect of the portions Lot A and Lot A-1 and Lot B and Lot B-1 as aforesaid and for its continuing as the tenant in respect of the said portions Lot C and Lot C-1 under the said Madan Mohan Burman has been filed before me and I am satisfied that he is agreeable to such assignment and transfer in favour of Krishna Kanya Paul and Mrinal Kanti Paul and Malay Kumar Paul jointly and to the Company continuing to be the tenant in respect of the said portions being Lot C and Lot C-1 at the rent which is now being paid or is payable by the Company to Madan Mohan Burman for the said portions being Lot C and Lot C-1 respectively.

The company shall continue to pay ⅓rd of the Municipal rates and taxes payable by the Company in respect of the said shop room.

9. Krishna Kanta Paul will put up and erect a partition wall at his own cost on the eastern side of the portions marked as Lot A and western side of the portion marked as Lot A-1 in the annexed plan along the red lines showing the portion between Lot A and Lot B and the partition between Lot A-1 and Lot C-1. Such partition wall shall be either masonry or wooden and shall not exceed 5′ in width. Krishna Kanta Paul will commence the erection of the said partition walls within the two months of the date of this Award.

10. Mrinal Kanti Paul and Malay Kumar Paul shall put up and erect a partition wall at their own costs along the yellow lines dividing Lot B from Lot C and Lot B-1 from the rest of the said shop room on the first floor wherever there is no partition between Lot B-1 and rest of the said shop room alone yellow lines shown in the annexed plan marking the said portion being Lot B-1 from the rest of the said shop room on the first floor. Such partition walls shall be masonry or wooden and shall not exceed 5' in width. Mrinal Kanti Paul and Malay Kumar Paul shall commence the erection of the said partition walls along the yellow lines shown in the annexed plan within two months from the date of this Award.

11. The Company shall allow uninterrupted use and enjoyment of the portions marked Lots A and A-1 in the annexed plan to Krishna Kanta Paul and the portions shown and marked as Lots B and B-1 in the annexed plan to Mrinal Kanti Paul and Malay Kumar Paul and shall afford all reasonable opportunities to them to put up the partition walls for the said Lots A and A-1 and Lots A-1 and Lots B and B-1 as directed above.

12. Krishna Kanta Paul holds 713 equity shares of the Company of the face value of Rs. 160/- each, Mrinal Kanti Paul holds 804 equity shares in the Company of the face value of Rs. 100/- each end Malay Kumar Paul holds 397 equity shares of the Company of the face value of Rs. 100/- each I direct that Krishna Kanta Paul, Mrinal Kanti Paul and Malay Kumar Paul shall within one month of the commencement of the erection of partition walls for the portions marked Lots A and A-1 and Lots B and B-1 as directed above, assign and transfer the equity shares held by them in the Company as mentioned above, be Tapan Kumar Paul at Rs. 250/- (Rupees two hundred fifty only) per share.

13. On such assignment and transfer of the said equity shares held by Krishna Kanta Paul, Mrinal Kanti Paul and Malay Kumar Paul in the Company in favour of Tapan Kumar Paul, they shall have no claim against each other or against Tapan Kumar Paul or Ramani Kanta Paul nor shall Tapan Kumar Paul or Ramani Kanta Paul have any claim against Krishna Kanta Paul, Mrinal Kanti Paul or Malay Kumar Paul thereafter.

14. If Krishna Kanta Paul intends to transfer, sell or assign the tenancy rights in respect of Lots A and A-1 shown in the annexed plan to any third party he shall give the first option to purchase or to take transfer or assignment of the said tenancy right to Tapan Kumar Paul who shall be entitled be purchase or take the transfer or assignment of the said tenancy rights at which it is proved that Krishna Kanta Paul was able to sell or assign the tenancy right of the said portion of Lot A and Lot A-1 to the said third party.

15. If Mrinal Kanti Paul and Malay Kumar Paul intend to transfer, sell or assign the tenancy rights in respect of Lots B and B-1 shown in the annexed plan to any third party they shall give the first option to purchase or to take - transfer or assignment of the said tenancy rights to Tapan Kumar Paul who shall be entitled to purchase or take transfer or assignment of the said tenancy rights at which it is proved that Mrinal Kanti Paul and Malay Kumar Paul were able to sell or assign the tenancy right of the said portion of B and Lot B-1 to the said third party.

16. Shri Amal Mukherjee was appointed as a Stenographer for the arbitrator to take down the proceedings of the arbitration meetings and also to assist the arbitrator and his remuneration was fixed at 60 G.Ms initially. The arbitration proceedings have continued for a fairly long period and Shri Amal Mukherjee has worked satisfactorily. I fix a further sum of Rs. 1,020 (Rupees One thousand Twenty only) as a fair and reasonable remuneration for the work done by Shri Amal Mukherjee. Shri Amal Mukherjee has already received 60 G.Ms, i.e Rs. 1,020 from the parties in equal shares. The balance of his remuneration amounting to Rs. 1,020 (Rupees one thousand twenty only) is now due to him. The said sum will be paid by Shri Ramani Kanta Paul, Shri Krishna Kanta Paul, Shri Mrinal Kanti Paul and Shri Tapan Kumar Paul in equal shares immediately be Shri Amal Mukherjee.

17. The annexed plan has been prepared by Shri D.K Dutta, Chartered Engineer, under my supervision. I fix his remuneration at Rs. 500. The said sum will be paid by Shri Krishna Kanta Paul, Mrinal Kanti Paul and Malay Kumar Paul in equal shares.”

4. The said award is under challenge on several grounds in this application filed on the 29th of August, 1978. It was contended that the award created and/or extinguished rights of the parties in immovable properties and as the same was not registered the award could not be looked into and given effect. It was secondly, urged that the annexed plan upon the basis of which the award was made contained inaccuracy and the said plan was prepared without the knowledge and/or consent and without giving any opportunity to the parties in violation of the principles of natural justice and therefore the arbitrator had committed an error and/or misconducted the arbitration proceedings on this aspect. It was, thirdly, contended that on the face of the award, the award indicated errors apparent on the face of the same and there was non-application of mind by the arbitrator. It was urged that there was error regarding reference to the arbitration agreement and description of the premises in question. It was, fourthly, contended that the award purported to divide the tenancy rights and divide the shop room and create separate tenancies and the same was in violation of the provisions of the West Bengal Tenancy Act, 1956 as there was no proper and/or valid and/or acceptable evidence of any consent on behalf of the landlords. It was, further, submitted in this connection that the award could not bind the landlords who were not parties to the arbitration agreement but the rights of the landlords had been illegally affected by the impugned award and the parties had therefore been jeopardised. It was, then, contended that the award was bad because it sought to divide the assets of the company which it was urged the arbitrator was incompetent under the law to do. The company was a separate entity from the shareholders and in respect of the disputes between the shareholders the assets of the company could not be bartered away. It was, then, contended that the award was incomplete inasmuch as it failed to make proper adjustments and failed to deal with the liabilities and had left the disputes regarding other properties undetermined. I may in this connection mention that the said award has been impugned by three separate applications which were heard together. The other application being gone made by Shri Ramani Kanta Paul which was filed in this Court on the 22nd of August, 1978 and another application being one filed by Shri Ramkanai Jamini Ranjan Paul Pvt. Ltd. which was filed in this Court on the 24th of August, 1978. In all these applications more or lese identical points were taken and the disposal of one application would dispose the other applications. On behalf of the respondent it was contended that the application for setting aside the award was barred by limitation and I shall deal with the relevant contentions on this aspect of the matter with reference to the relevant dates later on. Now, so far as the point of registration was concerned numerous authorities were cited which I shall presently note contending that the award in fact did create or declare or extinguish rights of the parties in the immoveable property namely, the tenancy right and therefore required registration and not being registered was bad in the sense that it could not be looked into by the Court. On behalf of the respondent on the other hand it was urged that the award in question did not require registration under Section 17 of the Registration Act, 1908. But during the pendency of this application leave was obtained from me to send the award to the Registrar of Assurances for registration with an application for extension of time for allowing such registration. I was subsequently informed that such registration has been allowed and extension of time has been granted and the award has been registered. Therefore, for the purpose of this application under the Arbitration Act, 1940 the question whether the award in question required registration as such is not of relevance any more. I shall note the relevant authorities on this point cited from the Bar by the different parties. I am not concerned in this application with the validity or otherwise of the order of the Registrar of Assurance granting extension of time.

5. In this connection reliance was placed on a decision of mine in the case of Pramode Kumar v. Bhuramal, AIR 1977 Cal 340 where I had reviewed some of the principles enunciated in the different decisions. Similarly, my attention was also drawn to the decision given by me in the case of Mulchand v. Dalam Chand, AIR 1978 Cal 352. Parties drew my attention to the observations of the Division Bench of this Court in the case of Aditya Kumar v. Narayandas, AIR 1971 Cal 65, a Division Bench judgement of the Patna High Court in the case of Kubad Mia v. Guhi Mia, AIR 1940 Pat 92, in the case of Ranjagamier v. Ranjagam Iyyar of the Madras High Court, AIR 1920 Mad 172 and in this connection my attention was also drawn to the decision of the Supreme Court in the case of Satish Kumar v. Surinder Kumar, AIR 1970 SC 833. As I have mentioned before it is not necessary for me to refer to the aforesaid decisions in view of the fact that under Section 25 of the Registration Act, 1908 the Registrar has extended the time and the award has been registered and the contention about the invalidity of the award on this ground is no longer relevant for consideration.

6. Apart from the aforesaid contention as indicated before several other contentions were raised in the case. A question of limitation was also urged on behalf of the respondent. I shall deal with the contention later on and deal with the relevant dates on this aspect. I have set out the other contentions. Before I deal with the actual contention that there was error apparent on the face of the award it is necessary to remind oneself of the principles that should be followed in this regard. In the case of Union of India v. Kalinga Construction Co., (1970) 2 SCC 861 : AIR 1971 SC 1646 the Supreme Court has reiterated that in proceeding to set aside an award the Court could not sit in appeal over the conclusion of the arbitrator by re-examining and reappraising the evidence considered by the arbitrator and hold that the conclusion arrived at by the arbitrator was wrong. If the findings of the arbitrator are not perverse even though the Court differs from the said findings the Court could not set aside the award as it could not be said that there was any error apparent on the face of the award. The same principle was again reiterated by the Supreme Court in the case of Allen Berry and Co. v. Union of India, (1971) 1 SCC 295 : AIR 1971 SC 696. There the Supreme Court referred Co the well-known decision on this point of the Privy Council in Champsey Bhara and Co. v. Jivraj Balloo Spinning and Weaving Co. Ltd., 1923 AC 480 : (AIR 1923 PC 661 and reiterated that as the parties chose their own arbitrator they could not, when the award was good on the face of it object to the decision either upon the law or the facts. Therefore, even when an arbitrator committed a mistake either in law or in fact in determining the matters referred to him but such mistake did not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it the award would neither be remitted nor set aside notwithstanding the mistake. In the case of N. Chellappan v. Kerala S.E Board, (1975) 1 SCC 289 : AIR 1975 SC 230, the Supreme Court again reiterated the well-known principle that an error of law on the face of the award means that you can find in the award or in a document actually incorporated therein as for instance a note appended by the arbitrator stating the reasons for his judgement, some legal proposition which was the basis of the award and which you could (then) say was erroneous. The Court has no jurisdiction to investigate into the merits of the case and to examine the documentary and oral evidence on the record for the purpose of finding out whether or not the arbitrator had committed any error of law.

7. Now, in this case the first point on the aspect of the error of law was that the arbitrator had purported to divide the assets of the company which under the law, the arbitrator was not competent. I have set out the award before. My attention in this connection was drawn to Cls.(1), (2), (3), (5), (6), (7), (8) and (11) of the award in support of the contention that the assets of the company had been dealt with by the award which could not be the subject-matter of the award by the arbitrator in the manner done by him. Now in this connection before I deal with the actual contentions it may be necessary to remember that in the background of the litigation leading to this award by the arbitrator there was proceeding under Sections 397 and 398 of the Companies Act, 1956 and in this connection therewith the parties had agreed to refer the matters to the arbitration of the arbitrator. In support of the proposition that in dealing with the assets of the company the arbitrator committed an error of law reliance was placed on the observations of the House of Lords in the case of Macaura v. Northern Assurance Co. Ltd., 1925 AC 619, where the House of Lords reiterated that neither a shareholder nor a creditor of a company had any insurable interest in any particular assets of the company. My attention was drawn to the observations of Lord Buckmaster at pages 625 and 627 of the report and the observations of Lord Wrenbury at p. 633 of the report where the learned Lord observed that the corporator even if he held all the shares was not the corporation and neither he nor any creditor of the company had any proprietary right legal or equitable in the assets of the corporation. Similarly, reliance was placed on the case of Bacha F. Guzdar v. Commr. of I.-T., Bombay, AIR 1955 SC 74 and my attention was drawn to the observations of the Supreme Court in para 7 of the judgement.

8. It may be appropriate to bear in mind that the company was a party to the arbitration agreement and I have set out the schedule to the arbitration agreement which indicated the assets which were the subject-matters of dispute. It is indisputable that company is a separate entity than the shareholders and the assets of the company as such cannot be bartered away or parted with in liquidation of claims inter se between the shareholders and directors. But in a private limited company which is in the nature of a partnership and where the company is a party to the agreement referring the pules to the arbitration and where, as in this case there were evidence of claims by the shareholders against the company in respect of their dues, his remuneration as director and unpaid dividends etc., there is no violation of any principle of law in distributing in specie the assets of the company in lieu of or in satisfaction of the claims of the creditors even if they are the shareholders of the company. Giving up a part of the tenancy or parting with some of the assets of the company is possible in law in liquidation of the claims against its creditors even if such creditors are the shareholders of the company and such claims perhaps originated out of the shareholdings in the company. There was evidence before the arbitrator on this point and, furthermore, the entire proceedings before the arbitrators proceeded on the basis that the parties were willing to divide the assets of the company. In such circumstances, in my opinion, the arbitrator did not commit any error of law in the award that he made on this aspect of the matter. Where certain consequences might be expected of certain adjudication it such disputes are referred for adjudication then it cannot be said that the arbitrator has acted in excess of his jurisdiction if those consequences follow. Some support for this proposition was sought to be drawn on behalf of the respondents from the decision in the case of Union of India v. M.L Dalmiya and Co., (1977) 81 Cal WN 168.

9. As I have mentioned before there are two other applications impugning the award and I am in this judgement dealing with all the several points raised. The second ground of attack to the award was that the award was incomplete as it had not dealt with all the points of disputes. It was contended that the schedule to the arbitration agreement indicated that there were inter alia certain lands in the shape of immoveable property and certain motor cars, dispute regarding which has not been resolved by the award. It appears to me that the said contention was under a misapprehension. These items which were alleged to have been left unresolved were items of property belonging to the private limited company. Therefore, it the arbitrator has not specifically provided for these items then it must be presumed that the arbitrator has awarded that these items of property would continue to be with the company. I must note in this connection that on behalf of the petitioners challenging the award it was contended that an arbitrator did not enjoy the same amplitude of powers which a court of law exercising jurisdiction under Section 397 and allied Sections of the Companies Act, 1968 did. Counsel for the petitioners stressed the point that these powers were exclusively given to the court on grounds of public policy and could not be delegated to a private forum. Counsel is right on this point. It is true that a private adjudicator did not enjoy the same amplitude of powers as a court of law under certain provisions of the Act does. But the background under which the disputes had been referred to the arbitrator cannot be totally ignored Secondly, in the impugned award I do not find that the arbitrator has in any way sought to exercise the powers that the Court enjoys exclusively under the provisions of the Companies Act, 1956 though it may at times appear that some of the provisions in the award indicate that same consequences have followed.

10. The next ground upon which good deal of stress was laid in this matter was that the arbitrator has sought to divide the tenancy or assign the tenancy rights without the consent of the landlord. In this connection it is important to beat in mind that there were different landlords on respect of the premises which were the main assets of the company namely, the tenancy in premises Nos. 213 and 213 (B) Mahatma Gandhi Road, and the other adjoining premises. The premises in question belonged to the Burman brothers or members of the Burman family and there was evidence that those brothers and co-sharers of the Burman family had shared amongst themselves the rents payable in respect of the different portions of the premises which comprised the tenancy rights of the company. The arbitrator has divided in essence the said tenancy rights of the different allottees in the manner he bas done. Now, it was contended that in view of the provisions of the West Bengal Tenancy Act, 1956 assignment or sub-letting or transfer of tenancy require the consent in writing of the landlords. My attention was drawn to Section 13(1) of the said Act, to S. 14, Section 17 and to Section 30(3) of the Act, and it was contended that from the evidence on record there was no consent of the landlord in writing to the sub-division or assigning as the arbitrator has purported to do and if the landlords refuse to accept such sub-divisions and the different allottees as their tenants the whole award would fail and would become unworkable. It appears that this point had been specifically argued before the arbitrator and a letter dated 9th of September, 1977 written by three of the landlords was filed before the arbitrator. The said letter was as follows:—

“Messrs. Krishna Kanta Paul,

Mrinal Kanti Paul

Dear Sirs,

With reference to your proposal for division of tenancy in premises Nos. 213 and 213B, Mahatma Gandhi Road and 76/1, 76.D and 76G, Netaji Subhas Road in favour of company Ramkanai Jamini Ranjan Paul (P.) Ltd. we are agreeable to division of the entire tenanted portion, into three different tenancies as may be decided by the learned Arbitrator in the Arbitration proceedings between yourselves and other shareholders of the company in favour of (i) the said company (ii) Sri K.K Paul and (iii) Sri M.K Paul and apportionment of the existing rents as may be settled by yourselves.

We also agree to give consent to supply of electricity within the tenanted portions allotted to you separately and shall also allow you to carry out renovation, partition and alteration for making such portions separate units of tenancy.

You and your agents will be entitled to use of common staircase and common latrine within the premises.

We further place on record that the statement as to the frontage of 23 feet in the term portion in the ground floor of the shop room made by Shri Hariah Kumar Burman son of Mr. Madan Mohan Burman before the learned arbitrator on 21st August, 1977 includes portion of the common passage on the eastern side of shop-room in the ground floor.

Yours truly,

Madan Mohan Burman.

Kailash Debi Burman

(in Hindi)

Krishna Kumar Burman.”

Dated 9-9-77.

11. It further appears that evidence was tendered before the arbitrator on this point at the meeting held on the 10th of Sept. 1977 and the minutes of the meeting were also annexed, The said minutes read as follows:—

“Mr. P. Sen tenders Shri Raj Kumar Burman, son of late Gopi Nath Burman residing at No. 9, Burdwan Road, Calcutta-27.

Mr. Burman you are the owner of the part of the premises in which the shop room of Ramkanai Jamini Ranjan Paul is situated?/I am the owner of the part of the premises which is occupied by them in the first floor.

Shown Ext. C tendered by Shri P.C Sen being a draft plan prepared by Shri S.R Dey, Chartered Engineer for identification. This may be proved later on in the usual way unless admitted to be correct. It is tendered for identification and marked ‘C’.

Please look at this map Ext. C and kindly mark the portion of which you are the landlord?/The witness encircles the portion ‘CA’ as demarcated by him in Blue ink and puts his signature before the learned Arbitrator and states that portion encircled by blue ink belongs to him.

Mr. Burman, you have told the learned Arbitrator that you are the landlord in respect of the portion marked as ‘CA’?/correct.

Can you tell the learned Arbitrator how you have become the landlord of portion CA?/This is our ancestral property and it has come to me by partition and this portion was allotted to my father.

And it was done by formal partition deed?/Yes there is a partition deed.

Pursuant to which the portion CA has been allotted to you?/Yes.

Mr. Burman, are you willing to give tenancy right in respect of the portion ‘CA’ to any one of the parties, if allotted to him by the learned arbitrator?/I do not have any objection to their partition as far as the partition is concerned because it is their internal affair. Whichever party gets the portion will have to negotiate with me, and if we come to an agreement the tenancy will be transferred in his name. I have Sled an ejectment suit the tenancy will be transferred, in hie name.

What do you mean by dealing with?/If proper term are settled then I am willing to give.

Mr. Burman, I understand you had discussion with come of the persons interested in the matter?/Yes.

I believe that on the line of this discussion, if the learned Arbitrator allots you portion to any party you have no objection. It the learned Arbitrator allots any portion to any party I am willing to give tenancy right to the party if he comes to an agreement.

So far as the rents and other considerations are concerned I understand that you have already come to an agreement with Krishna Kanta and Mrinal Kanti Paul?/Yes.

You are willing to abide by the agreement if the learned Arbitrator makes the allotment to any of them?/Yes.

I have given my gentlemen's word to Krishna Kanta Paul and Mrinal Kanti Paul that if they are given the portion ‘CA’ by the learned Arbitrator I shall accept their tenancy for that portion.

Sd/- A.K Sen

10-9-77.

Sd/- R.K Barman.

10th Sept. 77.”

12. It further appears from the records of the arbitration proceedings that the arbitrator had visited the shop room and had met the landlords during those visits and there was elaborate argument on behalf of both sides and my attention was drawn to the minutes of several proceedings before the arbitrator to which in my opinion it is not necessary to refer in detail. Upon this if the arbitrator has come to the finding that the landlords have given consent and would act in compliance with the divisions made, in my opinion, it cannot be said that the arbitrator has acted without evidence or contrary to the evidence or the findings of the arbitrator were perverse. It has, further, to be borne in mind that there are certain factors which operate in the division or transfer of tenancies and the parties being hard-headed businessmen and the landlords also being experienced landlords the Court cannot take a very legalistic view in judging the evidence adduced whether actually in terms consent in praesenti to the division has been given by the landlords to the action of the arbitrator. But judging the evidence from a pragmatic point of view and keeping in the background the manner in which such transactions are done in Calcutta I cannot say that the arbitrator has acted without evidence or he has dealt with the tenancy rights in such a way which was in breach or in violation of the relevant provisions of the West Bengal Premises Tenancy Act, 1956.

13. Before I conclude this aspect of the matter I must say that subsequent to the arbitration award a letter dated 19th of Sept., 1978 written by Bose and Mitter on behalf of Rajkumar Burman was produced before me in aid of the submission that the landlords had not acted in compliance with the so-called consent that they were supposed to have given in respect of this matter. But, this letter being subsequent to award, in my opinion, cannot be taken into consideration in judging the validity of the award.

14. It was, then, contended that the arbitrator has acted without jurisdiction in valuing the shares at Rs. 205 while the face value of the shares was very much less. It appears. that from the minutes of the meeting appearing at page 34, page 7, page 9, page 23, page 26, page 27, page 28, page 29, pages 30 to 33 that there was evidence on the assets of the company and there was evidence upon which the arbitrator could value the said shares in the manner he did. If that was the position, then, in my opinion, it cannot also be said that the arbitrator has acted illegally or without evidence.

15. The next ground of attack was that the arbitrator in his award has made the allotments on the basis of a plan which has been marked as the annexed plan and there was no opportunity given to the parties to make submissions in respect of this plan and Shri D.K Dutt had prepared this plan at the instance of the arbitrator and the arbitrator had proceeded on the basis of the said plan in respect of which no opportunity was given. Furthermore, it was urged that the said annexure purports to be one which is based upon Ext. C which had been tendered before the arbitrator but on comparison with Ext. C it was sought to be demonstrated before me that the annexed plan could not be said to have been prepared on the basis of Ext. C and therefore the arbitrator had acted in violation of the principles of natural justice in relying upon annexed plan and the award was bad on this ground. It was, further, urged that the annexed plan was unworkable. It appears that the division of the shop room was very much a matter which was before the parties and on the 22nd of July, 1977 Shri K.C Paul was appointed to report whether the shop room could be divided into three parts and whether it was commercially feasible. On the 5th of August, 19 77 Shri Paul made his report, that the said report was considered at the meeting before the arbitrator on the 6th of August, 1977 and parties made their submissions. Thereafter, on the 27th of August, 1977 Mr. R.C Nag on behalf of the respondent appeared before the arbitrator and submitted a plan prepared by one S.K Dey showing division of the said crop room into three parcels. On the other hand, Mr. P.C Sen also submitted a sketch plan. Copies of the said plan were given to counsel for the petitioners and they were asked to make submissions on the new plan. The minutes of the said meeting appear in the minutes of the arbitration proceedings. Rival submissions were made on the 28th of August, 1977 about the possibility of division as indicated in those plans. Then, at the meeting held on the 10th of Sept., 1977 Shri P.C Sen, counsel made submissions on the ground floor of the draft plan marked ‘C’ and other counsel took time to make further submissions. The next meeting was held on the 10th of Sept. 1977 and thereafter at the last meeting held on the 30th of January, 1978 the arbitrator indicated that he would make the award. It appears that in between these dates the arbitrator had visited the premises in question in the presence of the parties and had made certain alterations or modifications in the draft plan submitted to him. Such alterations in the hand of the arbitrator himself were produced before me from the record of the arbitration proceedings and it appears to me that annexed plan upon which the arbitrator has made the award represents substantially more or less the pictorial representation of the alterations and modifications made by the arbitrator of Ext. C after hearing the submissions of the parties on Ext. C. It is true that the arbitrator had not called upon specifically and separately upon the parties to make any separate submissions on the annexed plan nor had given them any opportunity to make any submissions on that plan. But in my opinion, that does not affect the position. The arbitrator is not bound to make known before he makes his award what his award was to be and if an award incorporates certain pictorial representation of his findings it is not necessary that such pictorial representation should be made known to the parties before the arbitrator proceeds to make the award finally. I do not find in the background of the prolonged discussions and proceedings before the arbitrator on this aspect of the matter any breach of the principles of natural justice and this contention urged in support of this application, therefore, must be rejected.

16. It was, then, contended that the arbitrator has failed to deal with the assets of the company. About such assets and the liabilities of the company there was evidence before the arbitrator and in my opinion read properly if in the award the arbitrator has not specifically dealt separately with any particular as set or liability of the company it must be presumed that the arbitrator has allowed those assets and liabilities to remain with the company. It was, then, contended that there was a large number of employees of the company and the arbitrator has burdened the company with those large number of employees, though its business and assets had been truncated. The employees normally would continue to be the employees of the company and if the arbitrator has not specifically provided for transferring of such employees then the company could because of the shrinkage of the business terminate such employment according to law as it was entitled to do. But this again, in my opinion, appears to be a rather technical view of the matter because there was evidence that some of the employees had given letters that they were willing to go to the other parties and the other parties had also expressed the desire to take up those employees. If in this background the arbitrator has made the award in the manner he has done in my opinion, it cannot be said that the arbitrator has acted perversely.

17. It was, then, urged that there were some mistakes about the date of the arbitration agreement and description of the premises. It was submitted that the same showed non-application of the mind. But these mistakes are in the recitals and on the non-essential parts of the award. Such mistakes do not make the award bad - See Trew v. Burton, (1833) 148 ER 511, Russel on Arbitration (1970 Ed.) P. 271.

18. Before I deal with the last aspect of the matter namely, the question of limitation I must reiterate that this was a family dispute between the father, the sons and grandson. The father had married more than once and is now over 85 years old and perhaps in accordance with the normal human conduct has more sympathy for the child of the subsequent or later marriage and reading the award as a whole it appears to me that the arbitrator has tried to resolve the disputes which had arisen between the parties by and large in a fair manner. It would be unfair and improper to read the award of an arbitrator with minute technicality. Judged from this point of view in my opinion the award cannot be said to be bad.

19. The last contention that requires consideration in this case is the question of limitation. On the 30th of January, 1978 the award was made by the arbitrator. On the 31st of January, 1978 the arbitrator wrote to the parties informing them that he had made an award and sending the parties copies of the same. On the same date that is to say on 31st of Jan., 1978 there was a letter by the arbitrator to the Registrar of this Court for filling the award. It is alleged in the affidavit-in-opposition by Krishna Kanta Paul that the arbitrator had filed the award on the 10th of March, 1978. It, further, appear that on the 26th of June, 1978 there was a report by one G.K Dutt who was appointed Administrator that the arbitrator had filed his award and the parties thereby came to know that the award had been filed on the 29th of June, 1978. From the notice issued under Section 14(2) of the Arbitration Act, 1940 by the Court to the parties it appears that it was stated that the award had been filed on the 12th of July, 1978. It appears that the award was filed at the instance of Messrs. M.N Mitra and Co. for Krishna Kanta Paul. On the 26th of July, 1978 notice under Section 14(2) of the Arbitration Act, 1940 was issued wherein it was stated that judgement upon the award would be passed on the 7th of Sept., 1978. Tapan Kumar Paul is alleged to have received the said notice on the lot of August, 1978 and on the 8th of August, 1978 application was made for a certified copy of the awards and on the 28th of Aug., 1978 application was made by Ramani Kanta Paul for setting aside of the award In thus correction It is not necessary for me to go into the question whether a party is entitled to the exclusion of time for certified copy where the party is in possession of copy of the award, and there is no dispute about the contents of award as filed in this Court and the copies given to the parties. it was, however, contended with reference to Section 14(2) of the Arbitration Act, 1940 and the relevant provisions of the High Court Rules that until the necessary stamps had been paid in respect of the filing of the award the award could not be said to have been filed and it appears that on the 22nd of June, 1978 the Collector had adjudicated the stamp at Rs. 130.10 p. and the stamp Paper was purchased on the 4th of July, 1978 and the stamped award was filed on the 12th of July, 1978.

20. Upon this basis it was urged that there was no proper award filed before the 12th of July, 1978 and until the award had been properly filed no party could apply for the setting aside of the award. It was urged that filing as such was not a mere technical matter. It was further contended on behalf of the petitioners that in view of the notice issued by this Court if there was any delay the same should be condoned. It was further urged on behalf of the respondent that the petitioner had notice of the filing of the award and it was not necessary to have separate notice from the Court. Reliance in this connection was placed on the decision in the case of Nilkantha v. Kashinath, AIR 1962 SC 866, State v. L.M Das, AIR 1976 Cal 406, Parasramka Commercial Company v. Union Of India†, AIR 1970 SC 1654. I am inclined to think that this application in view of the tests narrated above is barred by limitation. But in the view I have taken on the other aspect of the matter it is not necessary for me to rest my decision on this aspect of the matter, so it is not necessary to discuss this question in detail.

21. In the aforesaid view of the matter the application therefore fails and is accordingly dismissed. The other applications also fail and are dismissed. Then will however be no order as to costs in any of these applications.

22. Applications dismissed.