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  • section 327 of Act VIII of 1859
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  • section 327 of Act VIII of 1859
Smart Summary

Structured Summary of the Opinion (Rachhpal Singh and Bajpai, JJ.)

Factual and Procedural Background

Indar Singh (plaintiff) and Ganga Dhar (defendant) were brothers in dispute over partition of the mahal of Naubat Singh. Indar Singh applied for partition in the revenue court; lots were prepared and Ganga Dhar obtained a lot considered better. Indar Singh asked the Collector to permit him to withdraw his partition application; the Collector allowed withdrawal despite objection by Ganga Dhar. Ganga Dhar successfully appealed to the Commissioner who set aside the Collector's order. Indar Singh's further appeal to the Board of Revenue was unsuccessful.

On 10 March 1934 the brothers executed a reference agreement appointing Karan Singh as arbitrator to decide matters in dispute; the parties agreed to accept the arbitrator's decisions "from his sense of justice" and to treat them as acceptable like a decision of the court. The arbitrator made a first award on 18 April 1934 determining the dispute in respect of mahal Naubat Singh and its profits. Shortly thereafter he made a second award deciding other points in dispute. Prior to the second award, the defendant (appellant) had sent the arbitrator a written notice asking him not to take further proceedings in respect of properties about which no award had yet been made.

Indar Singh applied to the Civil Judge to have the arbitrator's awards made a rule of the court. Ganga Dhar objected, including on the ground that the arbitrator could not validly give his decision piecemeal (i.e., in more than one award). The learned Judge below held that the two awards were valid and that it was open to the arbitrator to give decisions piecemeal. The defendant appealed that decision to the present court.

Legal Issues Presented

  1. Whether an arbitrator, in the absence of an express agreement to the contrary, may give his decision piecemeal in more than one award, or whether an award must be one entire and complete instrument (i.e., a single final award).
  2. Whether the two awards made by the arbitrator in this case constitute valid awards capable of being made rules of the court, or whether they are "no awards" because they were given piecemeal when the submission did not empower multiple awards.

Arguments of the Parties

Appellant's Arguments (Ganga Dhar)

  • The awards given by the arbitrator were not valid awards; they were "no awards" because the arbitrator split his decision and delivered it piecemeal.
  • It was the duty of the arbitrator to give one complete, final award; by failing to do so and making two separate awards, both awards are void and unenforceable.
  • Cited authorities and texts (Comyn's Digest; Russell's Law of Arbitration; Quintin McGarel Hogg) support the proposition that an award ought to be entire and final unless the parties have expressly agreed otherwise.

Respondent / View Below

  • The learned Judge of the court below held that the two awards were valid and that it was open to the arbitrator to give his decision piecemeal; therefore a decree in terms of the awards should be passed.
  • The opinion records that learned counsel on both sides were heard, but the detailed submissions for the respondent (plaintiff) are not set out in the text beyond the court-below conclusion.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Gould v. Staffordshire Potteries Waterworks Co. Principle that it is implied in submissions that the arbitrator can make but one award; the award must be one entire and complete instrument unless a contrary intention appears in the submission. The court relied on the authority to support the general rule that, absent contrary agreement, an arbitrator must make a single complete award and cannot validly split it into parts.
Winter v. Munton Where, without special power, the arbitrator makes two awards each deciding part of the matters referred and not one entire award, both may be set aside. The court cited this case (via Russell's text) to support the proposition that piecemeal awards can be void where no power to divide the award exists.
Ganes Narayan Singh v. Malida Koer. (Mookerjee, J.) An arbitrator must ensure his award is a final decision on all matters requiring determination; whether that obligation exists depends on the submission—unless the arbitrator is empowered to make more than one award. The court used this Indian authority to show that the same rule applies in India: an arbitrator must give a complete adjudication unless the submission permits multiple awards; the present submission did not.
Dowse v. Coxe Example of cases where arbitrator was empowered to make one or more awards at his discretion (exception to the single-award rule). The court referenced this case as illustrating the exception where parties empower the arbitrator to make several awards; it concluded that no such empowerment existed in the present agreement.
Wrightson v. Bywater Another example of authority recognizing that an arbitrator may be empowered to make multiple awards when such power is given. Used to demonstrate the limited exception to the single-award requirement; the court found the present submission did not fall within that exception.
Shoshemukhi Dabia v. Nobin Chunder Where an arbitration bond provides that matters may be taken up and dealt with seriatim and the award delivered bit by bit, it is not necessary under section 327 of Act VIII of 1859 that all matters be decided before the first portion can be filed. The court acknowledged this decision as supporting the exception permitting multiple awards only where the parties' agreement authorises such procedure; it distinguished the present case on that basis.

Court's Reasoning and Analysis

The court considered text authorities and case law establishing the general rule that, unless the submission or agreement expressly or by necessary implication authorises otherwise, an arbitrator is expected to make a single entire and final award. The court cited Comyn's Digest and leading arbitration texts (Russell; Quintin McGarel Hogg) and applied English and Indian authorities (including Gould and Ganes Narayan Singh) to explain the rule and its rationale: the award must be final and complete so that no further controversy remains.

The bench accepted appellant's concession that multiple awards are permissible if the parties mutually agreed to confer that power on the arbitrator. The court therefore examined the terms of the reference agreement to determine whether such power was granted. The court found that the agreement merely appointed Karan Singh as arbitrator and empowered him to decide matters "from his sense of justice" but contained no words authorising him to make more than one award or to proceed seriatim.

The arbitrator's own statement that he had "forgotten" to decide certain points was not accepted by the court. Because the arbitrator was a close relative of the parties and under the terms of the submission was entrusted with deciding all points in controversy, the court held it was his duty to decide all matters and then make his award. Once he made the first award, the court concluded he became functus officio (i.e., his authority to make further awards was exhausted) and therefore the subsequent award could not be treated as a valid continuation of his jurisdiction.

On that basis the court held that both awards were in substance "no awards" (invalid) because the arbitrator had failed to produce the required single complete adjudication and had no demonstrable authority in the submission to issue multiple awards. Consequently, the learned Civil Judge's conclusion that the awards were valid was incorrect.

Holding and Implications

Holding: The appeal is allowed. The order of the court below directing that a decree be passed in terms of the awards is set aside and the plaintiff's suit is dismissed with costs in both courts.

Implications:

  • Direct effect on the parties: The arbitrator's two awards are declared invalid and cannot be enforced; the Civil Judge's order to pass a decree in terms of those awards is set aside; the plaintiff's suit is dismissed with costs.
  • Legal principle applied: Reinforces the principle (as stated in the cited authorities) that, in the absence of an express or implied agreement allowing multiple awards, an arbitrator must make one entire and final award; piecemeal awards are void.
  • Broader precedent: The opinion applies existing authorities to the facts; the text does not assert that it establishes a new doctrinal rule beyond applying settled authority to the submission before it. (The opinion does not state any broader or novel precedent was laid down.)

This summary is drawn exclusively from the provided opinion and does not add information beyond the text supplied.

    Ganga Dhar v. Indar Singh

    Rachhpal Singh and Bajpai, JJ.:— This is a first appeal from order against the decision of the learned Judge of the court below dismissing the objections raised by the defendant to the validity of an award made by an arbitrator.

    The facts which have given rise to the dispute between the parties, briefly put, are these. Indar Singh and Ganga Dhar are two brothers. Indar Singh made an application for partition of mahal Naubat Singh in the revenue court. The revenue court proceeded with that application and eventually lots were prepared and drawn. It appears that Ganga Dhar, defendant, drew a lot containing properties which were considered to be better than the properties which went into the other lot. Thereupon Indar Singh applicant prayed the Collector that he may be permitted to withdraw his application. The Collector granted that application in spite of the objections raised by the opposite party. Ganga Dhar preferred an appeal to the Commissioner and was successful in getting an order under which the decision of the Collector was set aside. There was a further appeal by Indar Singh to the Board of Revenue which was, however, unsuccessful.

    On the 10th of March, 1934, Ganga Dhar and Indar Singh entered into an agreement by which they referred the matters in dispute between them to one Karan Singh, who is the husband of their sister. In this reference they stated at one place: “Whereas there is a dispute between us about the partition of properties, movable and immovable, and about the accounts of profits of the property and cash, etc., on account of which there is a danger of litigation in future and which will entail loss and ruin of the parties.” At another place it is stated, “and we agree that whatever the arbitrator decides about the assets (tarka) of Naubat Singh, father of the parties, movable and immovable properties and profits of the properties and cash, etc., from his sense of justice, the same will be acceptable to us like a decision of the court and no party shall have any objection at any case and at any time.” The arbitrator gave two awards in the case. The first award was made by him on the 18th of April, 1934. The arbitrator decided the dispute between the parties in respect of mahal Naubat Singh and also about profits of the same mahal. A short time 9 after the arbitrator made a second award under which the other points in dispute between the parties were decided by him. It may be pointed out here that before the second award had been given by the arbitrator, the defendant appellant had sent him a written notice asking him not to take further proceedings in respect of the properties about which no award had been made by him.

    Indar Singh, plaintiff, made an application in the court of the learned Civil Judge praying that the award made by the arbitrator be made a rule of the court. To this application several objections were taken by Ganga Dhar, defendant. In the view which we take of the case it is not at all necessary to refer to all of them. One of them was that no valid award had been made by the arbitrator. It was pleaded that it was not competent to the arbitrator to give his decision about the points in dispute piecemeal as had been done in this case. The contention, therefore, was that both the awards given by the arbitrator were not valid and therefore the application of the plaintiff should be rejected.

    The learned Judge of the court below came to the conclusion that the two awards which were given by the arbitrator were quite good and that it was open to the arbitrator to give his decision piecemeal, and as under the two awards all the points on which parties were at variance had been decided the awards were good. It is against that decision that the present appeal has been preferred by the defendant.

    We have heard learned counsel on both sides and after consideration of the question have come to the conclusion that the appeal must succeed. Sir Tej who appeared on behalf of the appellant has contended before us that the awards given by the arbitrator in the present case were no awards. He further contended that it was the crusty of the arbitrator to give one complete award, and as he failed to do so, the two awards which he gave piecemeal were not good and therefore could not be enforced. We think that the contention is well founded and is amply supported by the authorities which have been cited before us by him. The first authority to which reference might be made is Comyn's Digest, volume I, page 666. It is laid down there as follows: “So an award ought to be entire; and therefore, if it be made, part at one day and part at another, though all be made before the time limiters for it, it shall be void.” In Russell's Law of Arbitration, 13th edition, page 202, the law on the point is stated to be as follows: “It is implied in all cases, unless something to the contrary is expressed, or may be inferred from the submission, that the arbitrator can make but one award: Gould v. Staffordshire Potteries Waterworks Co.(1), per Parke, B. This must be one entire and complete instrument in itself; therefore, if it is made part at one day and part at another, though each and every part is made within the time limited for the award, it will be void, (Com. Dig. Arb. E-16). If, without special power, the arbitrator makes two awards, each deciding part of the matters referred, and not one entire award on all together, both may be set aside, for there is no one final award on all the subjects: Winter v. Munton.”

    Sir Tej in his arguments addressed to us has also cited the view expressed in a book recently published on the law of arbitration in England and that is the Law of Arbitration by Quintin Mcgarel Hogg. At page 137 the learned author states that “The principle from Bacon's Abridgement set out at the beginning of this chapter requires an award to be final as well as complete. It is not enough that the arbitrator should determine the issues referred to him and all of them; he must further determine them finally, so that in relation to them no further controversy can arise.” The view enunciated in the above mentioned book is amply supported by authority. In this connection we need only refer to the case of Gould v. Staffordshire Potteries Waterworks Co.(2), where Parke, B., made observations which clearly support the contention raised before us by learned counsel for the appellant. Parke, B., observed as follows: “…and this was contended for by analogy to the ordinary practice on submissions to arbitration, where everything to be inquired into must be included in the award. But the ground for that rule is to be found in the agreement of the parties to the submission, in which it is usually one of the terms that the arbitrator is to make but one award. That condition is implied in all cases, unless something to the contrary is either expressed in or may be inferred from the submission.” This view has been taken in several English cases and if is clear that there should be one and complete award which should determine the dispute between the parties finally. The law in India is the same. We may also refer in connection with this matter to the case of Ganes Narayan Singh v. Malida Koer. Mookerjee, J., at page 403 observed: “It is well settled that an arbitrator must be careful to see that his award is a final decision on all matters requiring his determination. The obligation so to decide depends upon the question whether the submission requires that all or only some of the matters in dispute are to be determined by him …. The same rule has been adopted in the American Courts in a series of decisions …. The position, of course, is different where the arbitrator is empowered to make one or more awards at his discretion, as in Dowse v. Coxe, Wrightson v. Bywater(3); and the decision of this Court in the case of Shoshemukhi Dabia v. Nobin Chunder(4) must be taken to fall within this class of cases. In the case before us, howaver, it was clearly the duty of the arbitrator to give a complete adjudication of the matters in controversy.” The case of Shoshemukhi Dabia v. Nobin Chunder is also in favour of the appellant it was laid down in that case that where an arbitration bond provides that the matters in dispute referred to the arbitrator may be taken up and dealt with seriatim and the award delivered bit by bit, it is not necessary under section 327 of Act VIII of 1859 that all the matters referred should have been decided before the first portion of the award dealing with some only of the subjects in dispute can be filed. At page 94 we find the following observations: “Thirdly, the objection is again raised that the arbitrators did not decide all the points in dispute. The parties, it seems to me, were at liberty, if they chose, to allow the arbitrators to take up seriatim the matters in dispute, and, so to say, to deliver a series of awards.” A perusal of this case shows that unless there is an agreement between the parties which authorises the arbitrator to make several awards, it is not competent to him to do so and that the whole award should be like a judgment complete, giving the decision of the arbitrator on all the points involved in the case.

    Learned counsel for the appellant conceded before us that if the parties agreed between themselves that the arbitrator would have the power to give decisions in more than one award and then if the arbitrator gave awards seriatim there would be nothing objectionable in that and the awards would be good. The question, therefore, for consideration is whether in the present case the agreement under which Karan Singh was appointed an arbitrator gave him power to make several awards. We have perused the terms of the reference and we do not think that it gives any power to the arbitrator to make more than one award. All that the agreement of reference says is that Karan Singh is appointed arbitrator and he is empowered to decide matters in dispute in any manner and the matter is left to his sense of justice. The parties agreed to accept his decision, but there are no words from which it can be gathered that the arbitrator was given a power by the parties to make more than one award. It is therefore clear to us that it was the duty of the arbitrator to decide all the points in difference between the parties and then to make his award. In the present case the arbitrator stated that he had forgotten to give his decision on some of the points and therefore it became necessary for him, after his having given one award, to give another. We do not think that this statement of the arbitrator can be accepted. Under the agreement of reference he was given powers to decide all the points in difference between the parties. He is a close relation of both the parties to the suit and his statement that he by mistake omitted to give an award in respect of the properties other than mahal Naubat Singh is clearly not correct. We accept the contention of learned counsel for the appellant that after the arbitrator had given his first award he became functus officio and it was no longer open to him to make a second award. The result is that both the awards made by the arbitrator are in fact no awards and cannot stand. We must, therefore, hold that the decision of the learned Civil Judge on this point is not correct.

    The result is that this appeal is allowed, the order passed by the court below directing that a decree be passed in terms of the awards is set aside and the suit of the plaintiff is dismissed with costs in both the courts.

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    Ganga Dhar v. Indar Singh
    (Nov 29, 1937)