Kumarayya, J.:— These two proceedings arise out of the orders made in O.S No. 24 of 1959 and O.P No. 33 of 1959 which were tried together and disposed of by a common judgment dated 31st December, 1961 by the subordinate Judge, Gudivada. O.S No. 24 of 1959 was originally entertained as O.P No. 15 of 1959. It was an application Under section 14 of the Arbitration Act, 1940, with a prayer that the Court after directing the arbitrators (defendants 5 to 8) to file their award may pass a decree in terms thereof. The 1st defendant while opposing this move by a counter, himself made a separate application O.P No. 33 of 1959 under sections 30 and 33 of the Arbitration Act requesting the Court to set aside the award made by defendants 5 to 7. The learned Subordinate Judge saw no ground to set aside the award and acceeding to the request of the plaintiff, passed a decree in terms of the award. The 1st defendant therefore, has challenged the correctness of these orders by filing the revision petition and also the Civil Miscellaneous Appeal.

2. The facts leading to these proceedings are few and may be set out here in brief for the correct appreciation of the respective contentions of the parties. The 1st defendant is the natural brother of the plaintiff and defendants 2 to 4. He was given in adoption to his senior paternal uncle Seetharamayya in or about the year 1920 when he was barely two. It was the widow of Seetharamayya who adopted him for her husband. She died within a few days after adoption. The 1st defendant lived thereafter in his natural family with his natural father and brothers. In the following year, however, on 26th May, 1921 there was a partition between all the brothers of his natural father. The share of Seetharamayya, the adoptive father, was given to the 1st defendant, his natural father Venkata Kotayya having acted as his guardian at the partition. The registered partition deed, Exhibit B-4 was executed to evidence the partition. As a result of the partition, the 1st defendant got to his share arable lands Acs. 6 and odd, besides a portion of houses and house site. He got also a sum of Rs. 4,200 cash. Venkata Kotayya did not get any landed property, but got only Rs. 6,200 cash to his share. It is not necessary to set out the details of the properties which fell to the share of each brother. Venkata Kotayya after the partition made certain acquisitions with his own efforts. He got valuable properties at Pamarru. They consisted of rice mill, godowns, Cinema hall and a tiled house. Before long the family became involved in debts. Venkata Kotayya mortgaged under Exhibit B-6 his acquisitions in favour of certain marwadis for a sum of Rs. 19,000 and odd. The plaintiff to rid himself of the liabilities offered to walk out of the family accepting Rs. 5,000 in lieu of his share and executed a registered relinquishment deed Exhibit B-10 in 1933. The debt under the mortgage was not redeemed. An action for the sale of the property was brought and in execution of the decree that followed the hypotheca was put to sale. Eventually one of the creditors Bolumal (P.W 5) became the auction purchaser and a sale certificate Exhibit B-8 dated 28th October, 1935 was granted to him. There was a lull thereafter for six years. On 10th February, 1935, Bolumal offered to sell this property and executed a sale deed in favour of the 1st defendant and his junior paternal aunt Seshamma, wife of Ramabrahmam, for a consideration of Rs. 13,500. Their respective shares shown in the sale deed are Rs. 0-13-6 and Rs. 0-2-6 in a rupee. We are not concerned with the Re. 0-2-6 share of Seshamma, as the dispute was only with regard to Re. 0-13-6 share in the sale deed in favour of the 1st defendant. The case of the plaintiff was that the Rs. 0-13-6 share shown in the name of the 1st defendant did not belong exclusively to him and that he himself (plaintiff) and his mother had their shares therein in proportion to the purchase-money contributed by them. However, they were not shown as vendees in the sale deed for fear that by doing so they may run the risk of the property being attached by the father's creditors on the ground that the purchase was benami for him. It is also the definite case of the plaintiff that on the very date of purchase i.e, 10th December, 1941 the 1st defendant had executed Exhibit A-38 in favour of the plaintiff agreeing to convey Re. 0-3-6 share to him. The 1st defendant does not admit the execution of this deed which he characterised as a fabricated document brought into existence somewhere in the year 1959. The property on the very day of purchase was leased out under Exhibit B-16 by the vendees Seshamma and the 1st defendant (Nagabhushanam). It was a lease for a period of four years for a sum of Rs. 6,800 at the rate of Rs. 1,700 per year. It was stipulated that the lessees should pay the entire amount to the vendor Bolumal as part of the consideration of Rs. 13,500. In 1948, Exhibit B-50, the partnership deed was executed between the 1st defendant and Seshamma probably for the purpose of income-tax. The 1st defendant made further acquisitions. As he had these properties situated at different places like Nellore, Gudivada etc., the management thereof was entrusted to his natural father and his brother the plaintiff. In 1951 a house was constructed by the 1st defendant under the supervision of his father with the moneys, supplied by him. By that time the family of the 1st defendant had lost all that they had. The property which they had was about Acs. 10 at Peddamaddai and it was sold by their father Venkata Kotayya. The plaintiff filed in vain a suit, O.S No. 47 of 1951 to set aside the sale executed by his father. The suit was dismissed and an appeal A.S No. 870 of 1952 to the High Court was also dismissed on 8th November, 1957. The family resources thus became strained. The family members then fell on evil days. It is the case of the 1st defendant that they were devising ways and means of getting at the property of the 1st defendant. The 1st defendant himself sometimes made some gratuitous offers to them as under Exhibit A-38 dated 21st June, 1952, but not a single slice of property was ever given to them. It is claimed by the plaintiff, though denied by the defendant, that on 20th August, 1955 the defendant executed a family settlement deed Exhibit A-44 making provision for the plaintiff, his two brothers and sister. The deed is unstamped and unregistered and is alleged by the defendant to be a faked one. The case of the 1st defendant is that he and Seshamma continued as ever in possession and enjoyment of the properties purchased from Bolumal, that he further improved the said properties. An old dramatic hall was remodelled and converted into a pucca cinema hall at an enormous outlay of Rs. 50,000 in 1953. Then the Cinema-hall and the godowns were attached by some of the creditors as the properties of Venkata Kotayya. The 1st defendant and Seshamma intervened successfully and the order in the claim petition in their favour became final. His further case is that his junior paternal uncle Ramabrahman (P.W 19) and one Kanuri Sivaramakrishna and others were actively conspiring to carve out an estate from the properties of the 1st defendant for the plaintiff and his brothers defendants 2 and 3. Matters came to a head when in October 1958 the 1st defendant received two annonymous letters Exhibit B-39 and B-40 wherein he was alerted that some serious plot was being made to clutch at his property. The 1st defendant being apprehensive, moved the police to institute proceedings under section 107 Criminal Procedure Code, against the plaintiff and his family including his sister's husband. While the matter was under police investigation, it is said that defendants 5 to 7 making the 1st defendant believe that they are well-wishers of the family and were intrested in settling the disputes between the parties forming the subject matter of the criminal proceedings under section 107, Criminal Procedure Code, got his signatures on a written agreement on stamp papers while, he was in a hurry to go to Nellore and prevailed upon him to withdraw the proceedings filed under section 107 Criminal Procedue Code. The 1st defendant made his signature on the stamp papers shown to be an agreement of reference in favour of the arbitrators. He made his signature in faith of the arbitrator's assurance that it was an agreement of reference for settlement of disputes covered by the proceedings under section 107 Criminal Procedure Code. As a result on 28th December, 1958, the proceedings under section 107, Criminal Procedure Code, were withdrawn. The 1st defendant suspectcd thereafter that there was some foul-play being played on him. He gave a wire to the arbitrators on 1st February, 1959 cancelling his submission and asking them not to proceed with the arbitration proceedings or make the award. The arbitrators sent a reply that the award was already made and they cannot stop its registration. The award was made on 29th January, 1959 and it was registered on 5th February, 1959. On 2nd April, 1959 the plaintiff filed O.P No. 15 of 1959 to get the award filed into Court. Thereafter the plaintiff made a further application on 7th August, 1959 to get the notices of the award served on the 1st defendant. He also made a further application to put the agreement of reference filed by the arbitrators in a sealed cover. This application is said to have roused suspicion in the 1st defendant who then applied for inspection and found that Exhibit A-1 was not a stamp paper. He then filed his counter and made a separate application 1 for setting aside the award on 5th September, 1959. The pleas taken were, that the agreement of reference filed in the Court is not the same as was executed by him, for the one he had executed was on five stamp papers and the contents thereof as made known to him then are altogether different from the contents of the agreement filed in Court. The contention of the defendant is that the original agreement is suppressed and a different arbitration agreement has been prepared in collusion with Ramabrahmam and Sivaramakrishnayya and the arbitrators. The award pursuant thereto therefore must be wholly without jurisdiction. It was further alleged that the arbitrators did not give any notice to him, did not conduct any enquiry, did not receive any documents and contravened the natural principles of justice. Further, they acted in collusion with the plaintiff and gave the award in his favour. These contentions have been denied by the arbitrators and also the plaintiff. The trial Court settled seven issues in all and found that the agreement, Exhibit A-1, is true and the arbitrators did not misconduct themselves or the proceedings. In this view of the matter, it passed a decree in terms of the award. It may be noted at this very stage that the learned Subordinate Judge reviewed the material placed before him with a view to ascertain whether the sale transaction was to any extent benami whether the plaintiff and his brothers and sister had any share in the property and whether there were disputes in relation thereto and all this because he wanted to see whether there was preponderance of probabilities in favour of the contention of the plaintiff that the agreement of reference is true.

3. The learned Counsel for the appellant-petitioner Mr. M. Krishnarao takes exception to this course in view of the limited scope of enquiry warranted under the Arbitration Act and urges that the Court ought not to have pronounced on the benami nature of the transaction. May be that the learned Counsel is right on principle that the enquiry in an application under section 30 of the Arbitration Act is confined to matters specified therein; but when the existence and validity of the agreement is brought into question, it has to be naturally decided. If it became necessary to consider incidentally other matters having bearing on that question, such a consideration cannot be open to adverse criticism. However, we think nevertheless that the learned Counsel is right in his other contention that if the matter can be disposed of on the question of misconduct the other questions need not be gone into, especially when they involve an enquiry into certain matters the pronouncements whereon by this Court would prejudice the parties in any future proceedings that may be open to them to resort to. We therefore, first consider the question as to whether the arbitrators misconducted themselves or the proceedings. Before we consider this point, we wish to set out here precisely the three points which are really in issue in this proceeding and they are:

“(1) Whether the agreement Exhibit A-1 is not the submission to arbitration made by the parties and is a faked document ?

(2) If true whether this agreement obtained by the arbitrators from the plaintiff is a product of fraud and misrepresentation ? and

(3) Whether the arbitrators misconducted themselves or the proceedings ?”

4. As we have already noticed, that if the third contention prevails, the other two contentions need not be gone into specially because the other contentions involve questions, the discussion whereon even incidentally in this proceeding may prejudice the rights of the parties in any future litigation.

5. Taking up the third point first which is covered by issues Nos. 2 and 3 framed by the Court below we may observe that the misconduct attributed to the arbitrators consists firstly in the fact that they conspired along with the plaintiff, Kovelamudi Ramabrahmam (P.W 19) and Kanuri Sivaramakrishnayya and forged Exhibit A-1. This aspect we need not consider first for the same reason as we have given to notice fixing the place, time and dates of hearing; that the arbitrators did not enter upon the reference at all, that no inquiry was made, no witnesses examined and no evidence recorded and that no record of enquiry was maintained. It is contended that the arbitrators only made a farce of the enquiry and gave their award behind the back of the 1st defendant. If these things are true, there can be little doubt that they will constitute misconduct. We therefore examine this aspect on the material on record.

6. The evidence on record is that of the plaintiff as P.W 16 the arbitrator (P.W 3) on one side, and the 1st defendant as D.W 1 on the other. The other arbitrators though in view of the allegations made against them were material witnesses did not choose to come in the box to give an opportunity to the opposite party, the 1st defendant, to cross-examine them. This is no doubt a circumstances against them. Even so if the testimony of P.W 3 and P.W 16, already on record is satisfactory enough and must be accepted in preference to that of D.W 1, we may not be prepared to accept a case of misconduct. We, have therefore, to see whether their evidence is acceptable. P.W 3 is the 5th defendant who is the arbitrator in the case. He says that there were disputes between the parties from a month prior to the agreement of reference, that after the agreement of reference the arbitrators did not give any written notice, that they held the enquiry in the same room where Exhibit A-1 agreement of reference was executed, that during the enquiry 1st defendant filed before them one list of debts, and account books, that they returned the account books, that Exhibit A-4 is the list of debts filed by the 1st defendant; that they did not mention in Exhibit A-2, the award, the date of enquiry that during inquiry they did not examine any witness, they did not take down the statements of the parties in writing, did not note down what documents they had examined, th?t not even their award bears reference to the books or documents filed, they did not examine the creditors mentioned in Exhibit A-4, list filed, they did not examine the title deeds pertaining to the 1st defendant, nor did they ask him to produce the same. He further stated that the award was dictated by him to the 7th defendant, and that it was not read over to any person. He also says that after the award, the plaintiff and 1st defendant each gave Rs. 650 to the arbitrators a fact that is categorically denied by the 1st defendant. As regards the disputes, he says that the disputes were in regard to partitioning of all the properties of the parties and debts. We have to see how far this testimony accords with probabilities and Stands to reason. This of course has to be considered along with the testimony of the plaintiff, P.W 16. It must be noted at this very stage that whereas the agreement of reference was on 27th December, 1958, the award was made on 29th January, 1959 and it was registered on 5th February, 1959. Thus, between the agreement of reference and making of the award, there was an internal of full one month and more. Indeed it was too long a period to bear everything in mind especially when the matter involved scrutiny of accounts of various items and of different persons and of other details. Let us then see what the plaintiff says in this behalf. Curiously enough he starts with the statement that there were no disputes but soon corrects himself for were it not so the occasion for reference could not be made out. Like P.W 3 he refers to the points in dispute between the parties. According to him, the 1st defendant was disputing that he should get a share of Re. 0-5-6 in both the properties, whereas his brothers and sister were contending that he should get only Re. 0-3-6 in Pamarru property and equal share in Nellore property. The other point was that whereas the 1st defendant was contending that the plaintiff and defendants 2 and 3 were liable for the debts incurred by the 1st defendant, the plaintiff and his brothers were contending that he was liable for his debts.He says that it was these two matters which were referred to the arbitrators. What transpired later according to him was this. The arbitrators did not give notice in writing before they held their session. They examined the parties originally for four days. Then they asked the 1st defendant to file the list of debts and his account books. He was given time therefor. After a break of eight days, when Exhibit A-4 the list was filed and account books were brought the parties were again examined for full four days. In fact, according to the plaintiff he himself was examined by the arbitrators for four days. Despite such detailed and searching examinations of the parties and the account books the arbitrators did not note anything. They did not maintain notes of proceeding of dates of inquiry, of adjournments given, of substance of evidence taken or notes of inquiry or even of the documents filed or looked into. The plaintiff says that he had filed Exhibit A-38 and Exhibit A-44 before the arbitrators; not even the award bears reference to the same. Neither of these documents nor even Exhibit A-4 the list bears any marking of the arbitrators to afford even the vestige of proof that they were looked into by the arbitrators or that they were filed before them. There is practically no evidence whether intrinsic or independent to connect Exhibit A-4 with the 1st defendant. D.W 1 has categorically stated that the arbitrators never entered upon the reference, that there was no enquiry, that they did not examine any of the parties at any time, that he (1st defendant) did not give any list of the debts to the arbitrators; nor did the arbitrators ask him to furnish any list. When he was shown Exhibit A-4 and the particular portion marked Exhibit A-37 alleged to be in his writing he categorically denied the same. Nevertheless it was not sought to be proved by any evidence.

7. In view of these conflicting versions the question naturally arises which version stands to reason and is highly probable. It must be noted that even though the arbitrator and the plaintiff say that there was an enquiry, there is nothing to suggest that there was in fact any enquiry. The enquiry as is reported to be was somewhat exhaustive. Books were looked into documents inspected and parties were examined for days together. Could that all be done without taking any notes whatsoever or without maintaining any record ? If it is a fact that for four days continuously the parties were examined in the beginning and then after an interval of eight days again for a further period of four days the examination of parties continued and account books, documents, etc., were examined and arguments heard, It is difficult to believe that all this could have been done without making any notes or maintaining record and that the arbitrators would rely so much on their memory when the award had to follow long after. It is significant that the matter was not quite simple. It pertained to accounts of the various creditors and also the shares in various properties. It is surprising that the books and documents they alleged to have examined do not contain a single mark or indication that they have been perused or noted. Even in Exhibit A-4, the list of debts, we search in vain for any tick mark which may enable the arbitrators to remember such of the debts as have been in their estimation proved. The account books are said to have been examined and immediately returned. Could that be done without any notes? Itisun-imaginable that they could have remembered all the details and produced an award on the basis of their memory after sufficiently long time. Even with regard to the starting of enquiry admittedly no notice was given for the first hearing nor for the adjourned date. P.W 3 has given an explanation that since the 1st defendant lived next door to the place of hearing, he was apprised of and accordingly he had participated in the meetings which were held. But, apart from the interested testimony of the plaintiff, there is nothing to support him. The 1st defendant has categorically denied it and has said that there was no inquiry at all and the award was a product of fraud and collusion. He has imputed serious motives to P.W 3 for deposing falsely. His contention is that the original stamped agreement which was obtained by the arbitrators pretending themselves to be well-wishers has been suppressed and a fresh agreement has been prepared in collusion with certain persons, that probably this has become possible as certain signed blank papers were available with the plaintiff. This contention however, is denied by P.W 3, but it is no longer in doubt that stamped papers of the description given by the 1st defendant were in fact purchased by one of the arbitrators on the very day on which the agreement was executed. D-7 is said to have purchased them for D-5. The arbitrators who made no mention thereof in their counter have at the instance of the plaintiff brought them to the Court. It is surprising how the plaintiff came to know of the same if they were not purchased for the agreement, which is usually executed on stamped paper. It is all the more surprising that the stamped papers purchased for this purpose on 27th December, 1958 were not used for several years till the date of the evidence. No satisfactory explanation is forthcoming for the same. It was brought in evidence that one of the stamp papers which bears Re. 1 stamp could not have been purchased from the place when it is said to have been purchased for such stamp papers of that year were not issued to that circle. All this indeed conjures up serious doubts. These circumstances coupled with the subsequent conduct of the arbitrators raise doubt as to the truth of their story that the award was made after enquiry. The balance of probabilities is strongly in favour of the story of the 1st defendant rather than in favour of the plaintiff, that the enquiry was made by the arbitrators, that the parties, were examined, their evidence was adduced and the matter was decided after coming to an honest conclusion on the basis of the materials produced. It is then contended whether inquiry or no inquiry the award is equally binding for the arbitration agreement leaves it to the discretion of the arbitrators to give award either after scrutinizing the oral and documentary evidence or without it. The arbitration agreement it is said gave such wide powers to the arbitrators in making their award as to the allocation of shares in the properties mentioned in ‘A’ and ‘B’ schedules as to the future management of the properties mentioned in the ‘A’ schedule as to the shares in the working of the cinema hall, as to the way in which the debts alleged by the first individual should be borne among the parties, as to the disposing of shares separately as to the repairs to the mill, cinema hall and machinery and as to the maintenance of Venkata Kotayya, father of all the parties and it has been stated further that the parties will abide by their decision. Be that what it may we do not think that these terms warrant in any manner dispensing with the ordinary principles of judicial conduct or the procedure which the arbitrators constituting domestic forum should follow for arriving at substance of justice. As stated in Halsbury's Laws of England Simonds, Third Edition, Volume 2, para. 80:

“Conduct of Proceedings.— In the conduct of the proceedings the arbitrator or umpire must conform to any directions which may be contained in the agreement of reference itself. Subject to any such directions he should observe so far as may be practicable, the rules which prevail at the trial of an action in Court; but he may deviate from those rules, provided that in so doing he does, not disregard the substance of justice.”

8. In fact as stated in Russel on Arbitration, Seventeenth Edition at page 167:

“As a general practice, the arbitrator should himself carefully take notes in writing of everything material stated by the witnesses, in order that he may be enabled to do full justice between the parties. Before making his award he will have to go over the whole of the evidence collectively accurately comparing what a witness says at first, with what he admits on cross-examination and what another witness deposes to. Even when the case is so short that the arbitrator can safely trust to carrying all the evidence in his head, it is advisable that there should be written minutes of the evidence, in case ulterior proceedings should be taken on the award and the arbitrator (being required to give information respecting the proceedings before him) should desire to refresh his memorsy.”

9. Their Lordships of the Privy Council as early as in the, year 1914 stressed on the need of proper hearing and laid down in Mt. Amir Begum v. Syed Badr-ud-din . 27 M.L.J 181; I.L.R 36 All. 336; A.I.R 1914 P.C 105. thus:

“Tf irregularities in procedure can be proved which would amount to no proper hearing of the matters in dispute there would be misconduct sufficient to vitiate the award without any imputation on the honesty or impartiality of the arbitrator.”

10. To the like effect are the observations of Federal Court in Tirtha Lal v. Bhusai Moyee Dasi . 1949 F.C.R 396; 1949 F.L.J 192; 1950 1 M.L.J 249; A.I.R 1949 F.C 195 at 205.. which are as under:

“The arbitrator ordinarily has to follow the rules of natural justice and generally the enquiry before him is assimilated as near as may be to the proceedings or trial in a Court.”

11. In fact, Justice Wadia of the Bombay High Court even years milch earlier expressed himself in similar terms in Pratap Singh v. Kishan Prasad & Co.. The learned Judge observed thus:

“It is a well-known principle of the law of arbitration that an inquiry before the arbitrator should be assimilated as near as possible to proceedings in a trial in a Court of law, and that therefore a party to the arbitration must not only have notice of the time and place of the meeting but he should be allowed reasonable opportunity if he wants to be heard. If there is no sufficient notice there cannot be a proper hearing nor a valid award, it being a well-recognised rule of natural justice that a man's legal rights cannot be determined without giving him an opportunity of being heard.”

12. While observing so, the learned Judge referred to the dictum of the Privy Council in this behalf in Md. Amir Begum v. Syed Badr-uddin. Again in Sherbanubai v. Hoosain-bhoy . A.I.R 1948 Bom. 292. a Division Bench of that Court observed as under:

“There can be no doubt that arbitrators perform judicial functions and they must observe the fundamental rules which govern judicial proceedings. What a Court of law cannot do judicially an arbitrator also cannot do.”

13. It is apt at this stage to refer to the following remarks of Earl of Halsbury, L.C in Andrews v. Mitchell . L.R 1905 A.C 78..

“………………I should be anxious myself, as I have no doubt all your Lordships would, to give every effect to their decisions, on the other hand, there are some principles of justice which it is impossible to disregard, and giving every credit to the desire on the part of this arbitration Court to do justice, I think it is manifest that they proceeded far too hastily in this case and apartfrom imputing to them any prejudice or any desire to do wrong I think that the mode in which the whole thing arose and was disposed of was so slipshod and irregular that it might lead to injustice…………”

14. In Chinoy Chalani & Co. v. Y. Anjaiah . 1958 2 An.W.R 69; A.I.R 1958 A.P 384., a Division Bench of this Court while citing with approval the observations made by Justice Wadia in Partapsingh v. Kishen Prasad, made it clear that the arbitrators should perform their quasi-judicial functions in a judicial manner and should not make a farce of the enquiry before them, but should give full opportunity to the parties to adduce their evidence and also allow them to be heard. Even as early as in the year 1909 in Hurdwary Mull v. Ahmed Musaji Selaji . 1909 13 C.W.N 63., the Calcutta High Court observed that if the arbitrators do not appoint a time and place for the hearing of the reference they failed in their duty. Their Lordships further observed:

“Whether the arbitrators should or should not hear evidence and the parties by Counsel or otherwise must depend on the particular circumstances in every case. The Rule vests a discretion in the arbitrators which, like every other discretion vested in a person exercising judicial functions must be exercised in a judicial manner. Thus, there are many arbitrations where the arbitrators are experts where it is not necessary for them to hear evidence of the parties as the arbitrators have themselves the expert knowledge rendering them capable of deciding the matter without hearing evidence or the parties. On the other hand, the reference may be such that the arbitrators cannot decide the matter in dispute without hearing evidence and the refusal to hear evidence, in such a case would amount to misconduct on the part of the arbitrators.”

15. That indeed, with great respect is a sound principles of law and justice which must govern all arbitration proceedings or proceedings of a quasi-judicial nature, whether or not there is any stipulation in the agreement itself with regard to the course of action that the arbitrators should take. As against this, the learned Counsel for the respondent referred us to the cases reported in (Firm) Ram Dhan Das v. (Firm) Shankar Das . A.I.R 1936 Lah. 492., Kanshi Ram v. Harnam Das . A.I.R 1940 Lah. 73. and G. Martirosi… v. A.K.C.T Subramaniam Chettiar…. . A.I.R 1930 Mad. 723., where it was held that there was no law to keep record of enquiries by the arbitrators. It is no doubt true that the Evidence Act does not apply in terms as is provided in the Act itself to the enquiries, in arbitration proceedings. Similar is the case with the Civil Procedure Code. It is but fundamental that that the course of enquiry that should be adopted should be such as would best serve the interests of justice. Indeed that should be the motto of every forum concerned with the dispensation of justice whether it is domestic or otherwise. The cases discussed above sufficiently illustrate this principle. The ratio of decision in G. Martirosi… v. A.K.C.T Subramaniam Chettiar…. is consistent with the principle embodied in Hurdwary Mull v. Ahmed Musaji Selaji, which can be better appreciated in the light of the discussion made in Hurdwary Mull v. Ahmed Musaji Selaji.

16. It follows therefore that the arbitrators are in duty bound to follow fundamental rules which govern judicial proceedings and act judicially. It must also be remembered that the Court has powers notwithstanding the agrement between the parties to the submission to consider the validity of the award. Even the parties are not precluded from raising such objections. We may in this behalf refer to the following remarks of Justice Kapur (as he then was) in a Punjab case Mahar Chand v. Magan:

“As a matter of fact it has been held by Indian Courts that even where there is an express agreement that no objection would be taken to an award on any ground whatsoever the parties are not deprived of the right of raising objections as to validity of the award on the ground of misconduct or otherwise.”

17. Thus the agreement between the parties to accept the award without any objection whatsoever does not fetter discretion of the Court to set aside the award on any valid ground. As Rahman J., in Abdul Majid v. Bahavoal Bakhsh, has said:

“The discretion of the Court to set aside the award on any valid ground cannot be controlled by an agreement between the parties to accept the award without any objection whatsoever.”

18. The result of the above discussion is that the arbitrators in their function which is quasi-judicial must act in the judicial manner and their enquiry should not be slipshod, but full and complete. They should not simply make appearances of conducting enquiry, but should follow the fundamental rules which govern judicial procedure. All this can be satisfactorily done only if they given due notices, maintain proper records and notes. Of course it may not necessary for them to strictly comply with the rules of procedure and evidence as the Indian Evidence Act does not in terms apply to their proceedings; but in no event can they dispense with the substance of justice which is sacrosanct. It is necessary that they conduct themselves in such a manner as will subserve the interests of justice. Any departure from the fundamental rules of procedure and established canons of justice is sure to vitiate their award and the discretion of the Court conferred by the statute to set aside the award will be duly exercised as it is not controlled by an agreement between the parties to the contrary whether express or otherwise. In the present proceeding it is clear that even though having regard to the points in dispute between the parties full enquiry was necessary, it is not established that any enquiry has been made. The testimony of the P.Ws in this behalf does not ring true. The plaintiff's statement on oath is fully rebutted by the defendant and the probabilities are in favour of the defendant rather than in favour of the plaintiff. The absence of the record and notes are further clear indicia that, there was no enquiry at all. It is obvious that the arbitrators misconducted the proceedings. We, therefore, uphold the contention of the 1st defendant that the arbitrators are guilty of misconduct within the meaning of section 30 (a) of the Arbitration Act. The award is therefore liable to be set aside on that very basis. In this view of the matter, it is unnecessary for us to go into the other points relating to the truth and validity of the agreement of reference. The question that remains is what is the further consequential order to be passed when as we have said that the award is liable to be set aside. Section 19 provides that “where an award has become void under subsection (3) of section 16 or has been set aside, the Court, may by order supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect with respect to differences referred”. Having regard to the particular circumstances of this case, we think it just and necessary to make an order that the reference stands superseded and the arbitration agreement shall cease to have effect with respect to the differences referred.

19. In the result C.M.A No. 61 of 1962 and C.R.P No. 336 of 1962 are allowed. The orders of the Court below are set aside. In the circumstances, there will be no order as to costs.

20. C.M.A and C.R.P allowed.