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Smart Summary

Structured Summary of the Opinion (Marten, J. and Madgavkar, J.)

Factual and Procedural Background

This is an appeal from the judgment of the District Judge of Khandesh affirming the order of the Subordinate Judge of Nandurbar, which had decreed the plaintiffs' claim and directed that they should be put in possession of certain lands for their maintenance.

Key factual and procedural points stated in the opinion:

  • Up to the date of the Mamlatdar's order of June 26, 1916, the plaintiffs had been in possession of the suit land.
  • The plaintiffs claimed title by reason of a partition roughly one hundred and forty years earlier, asserting the land fell to them as a share on that partition.
  • The defendant's case was that the plaintiffs were not members of the Raul family, that the lands had been given on condition of performing certain services, and that the defendant was entitled to resume possession when the services were refused.
  • The defendant obtained a Mamlatdar order in his favour dated June 26, 1916; the plaintiffs' attempt to discharge that order in the High Court in January 1918 was unsuccessful.
  • The plaintiffs filed the present suit seeking to set aside the Mamlatdar's order and recover possession, pleading title founded on the alleged historical partition.
  • On June 17, 1919 the plaintiffs applied (Exhibit 65) for leave to amend to plead an alternative case that the share was obtained either by partition or for maintenance; that amendment was refused by Subordinate Judge Desai on July 5, 1919.
  • By consent order dated December 20, 1919, Sirdarsing Dalpatsing Raul (a member of the Raul family) was appointed arbitrator to decide the suit.
  • The arbitrator made an award on February 24, 1920 (Exhibit 115) dismissing the plaintiffs' suit, finding that the land was not obtained by plaintiffs by partition and that plaintiffs had not proved relationship to the Raul family and therefore had not proved ownership.
  • The arbitration award had been set aside below on the ground alleged misconduct of the arbitrator in taking into account his personal knowledge of family history and customs; that factual and legal issue formed a principal part of the appeal to this Court.

Legal Issues Presented

  1. Whether the lower Courts were entitled to conclude in favour of the plaintiffs having regard to the pleadings and the issues actually raised in the case (i.e., whether the Courts were correct to decide the case on an alternative plea of grant for maintenance which had not been expressly pleaded or raised by issue).
  2. Whether, in any event, the plaintiffs' claim was barred by an arbitration award in favour of the defendant and, relatedly, whether the arbitration award was vitiated by the arbitrator's alleged misconduct in relying on his personal knowledge as a member of the Raul family.

Arguments of the Parties

Appellant's (defendant's) arguments

  • The arbitration award in favour of the defendant should be treated as valid and operate to bar the plaintiffs' claim; the Court below should not have set it aside.
  • It was submitted that the arbitrator had no right to act upon his own personal knowledge of the Raul family and that arbitrators are bound by the same rules of evidence as judges; consequently he had acted improperly in taking into account his private knowledge.
  • The defendant further contended that, although the trial Court and the lower appellate Court decided the case against the defendant on the alternative point of grant for maintenance, that alternative had not been properly pleaded (amendment refused) nor framed as an issue; therefore the case ought not to have been decided on that unpleaded ground.

Respondents' (plaintiffs') arguments

  • The plaintiffs maintained that they were entitled to possess the land by reason of a share obtained in an historical partition of about 140 years ago.
  • They challenged the arbitration award on the ground that the arbitrator had misconducted himself by relying upon his personal knowledge of the history and customs of the Raul family (of which he was a member), such reliance being improper and sufficient to set aside the award.
  • The respondents had sought leave to amend their plaint to plead an alternative case (grant for maintenance) but that amendment was refused; nevertheless the lower courts decided on that alternative ground in their favour.

Table of Precedents Cited

Precedent (authority) Rule or Principle Cited For Application by the Court
Russell on Arbitration (11th Edn.) Statement that "Arbitrators are bound by the same rules of evidence as the Courts of law" while also recognizing exceptions to that rule where arbitrators are chosen for skill or local knowledge. The Court acknowledged the general proposition but relied on the text's acknowledgment of recognized exceptions: where an arbitrator was appointed for his skill or local knowledge, he may legitimately act on that knowledge subject to circumstances. This supported the view that the arbitrator in the present case could use his family knowledge.
In re Enoch and Zaretzkey, Bock & Co. (Court of Appeal) Authority cited for the proposition in the head-note that "Arbitrators are bound to observe the rules of evidence no less than judges." The Court treated this as part of the general rule but placed it in context with exceptions; it did not regard the statement as decisive against the arbitrator's use of personal knowledge where parties appointed him for that knowledge.
Johnston v. Cheape (House of Lords) Where an arbitrator is appointed because of his skill/knowledge, he may take his local knowledge into account and can refuse to receive evidence which, in his view and guided by his knowledge, would have no effect on his determination. The Court relied on this authority to demonstrate that an arbitrator chosen for his knowledge may properly use that knowledge and need not accept evidence that would not alter his decision; used to support the validity of the Raul arbitrator's conduct.
Eads v. Williams (Lord Cranworth) An arbitrator or appointed expert (e.g., surveyor) is not necessarily required to examine witnesses if, bona fide, they consider they know sufficient of the subject to decide properly without witnesses. The Court cited this passage to analogize the Raul arbitrator to a business expert or surveyor who may rely upon experience and observation rather than formal witness examination; this supported upholding the award.
Right v. Howson Example where an arbitrator experienced in cloth was justified in deciding upon inspection of samples only (expert inspection rather than oral testimony). The Court used this example to show that in many referrals to experts/arbitrators, reliance on personal inspection or knowledge is permissible and practical; this analogy underpinned the decision to validate the arbitrator's conduct.

Court's Reasoning and Analysis

The Court proceeded in the following analytical steps, closely following the opinion's exposition:

  1. Identification of the two central disputes: (a) whether the lower courts could properly decide for the plaintiffs given the pleadings and issues, and (b) whether the plaintiffs' claim was barred by an arbitration award said to be tainted by arbitrator misconduct.
  2. The Court examined the facts surrounding the arbitration: the arbitrator, Sirdarsing Dalpatsing Raul, was a member of the Raul family and was apparently chosen because of his knowledge of family history and customs. The award (Exhibit 115, 24 Feb 1920) dismissed the plaintiffs' suit on the ground that the plaintiffs had not proved that they were members of the Raul family nor that the land had been received as a share on partition.
  3. The Court considered the contention that arbitrators are bound to act only on evidence before them, like judges, and therefore could not act upon personal knowledge. The opinion acknowledged the general rule but recited authorities and established exceptions where arbitrators are chosen for their skill or local knowledge (citing Russell, Johnston v. Cheape, Eads v. Williams, Right v. Howson).
  4. Applying those principles to the present case, the Court found (i) there was no suggestion the arbitrator rejected evidence tendered, (ii) the pleaders did not press for formal summings-up and the case had been conducted by the evidence and cross-examinations tendered, and (iii) it would have been preferable to have explicit notes that the arbitrator had disclosed his personal knowledge and offered parties an opportunity to adduce evidence, but his notes were destroyed.
  5. On balance the Court concluded the arbitrator had given a fair hearing to all contentions and had a right to use his own expert knowledge of the family history and customs (one of the reasons for his appointment). The arbitrator was analogized to business experts and surveyors who are legitimately relied upon for their knowledge and experience.
  6. Consequently the Court held that the arbitration award should not have been set aside on the ground of arbitrator misconduct; because the award was valid, the appeal against the plaintiffs' claim had to be allowed and the plaintiffs' suit dismissed.
  7. Separately, the Court addressed the procedural complaint that the trial and appellate Courts decided the case on an unpleaded alternative (grant for maintenance) despite the refusal to allow the amendment. The Court agreed with the defendant that, strictly speaking, the case ought not to have been decided on that unpleaded alternative and that, if the arbitration point had been decided differently, a remand for fresh trial and allowance of the amendment would have been appropriate. However, because the arbitration point disposed of the appeal, the Court did not go further into those contingencies.
  8. Madgavkar, J., concurred, stating that no legal misconduct under paragraph 15 of the Second Schedule of the Code of Civil Procedure had been proved to justify setting aside the award; he emphasized that an arbitrator is often chosen for knowledge rather than disqualified by it and noted that the arbitrator's finding on the second issue (that respondents were not members of the Raul family) alone was fatal to the respondents' claim.
  9. The opinion additionally observed that the appellant had sought an advantage by recourse to the Mamlatdar in a possessory suit and that although the respondents' application to amend was late, it might have been permitted in the circumstances on payment of costs; nevertheless these observations did not alter the final result.

Holding and Implications

Core Ruling: Appeal allowed; the plaintiffs' suit dismissed.

Immediate implications for the parties:

  • The arbitration award in favour of the defendant is validated by this Court; the award cannot be set aside on the ground alleged in this case (reliance on the arbitrator's personal knowledge as a member of the family).
  • The plaintiffs' suit to set aside the Mamlatdar's order and recover possession is dismissed; the defendant (appellant) succeeds and the appeal is allowed with costs throughout.

Broader legal implications:

  • The Court applied established authorities to confirm that arbitrators chosen for local knowledge or special skill may, in appropriate circumstances, rely on their knowledge and experience; this does not amount to legal misconduct warranting setting aside an award where there is no evidence the arbitrator improperly rejected tendered evidence or denied a fair hearing.
  • The opinion recognizes procedural limits: a case should not be decided on an unpleaded alternative requiring separate evidence; had the arbitration point not disposed of the matter, a remand and allowance of the refused amendment would have been appropriate. However, the Court did not establish any new legal principle beyond applying existing authorities and principles to the facts of this case.

No new precedent was announced; the decision applies existing authorities to uphold an arbitration award where the arbitrator was appointed for his knowledge and there was no proven legal misconduct under the relevant provision of the Code of Civil Procedure.

Disposition: Appeal allowed with costs throughout. The plaintiffs' claim dismissed.

    Daulatsing Bapusing Raul v. Ratna Anadsing

    Marten, J.:— This is an appeal from the judgment of the District Judge of Khandesh affirming the order of the Subordinate Judge of Nandurbar, who had decreed the plaintiffs' claim and directed that they should be put in possession of certain lands for their maintenance. There are two main disputes advanced in the appeal before us, namely, first, whether the lower Courts were entitled to come to the conclusion which they did in favour of the plaintiffs having regard to the pleadings in the case and the issues which were raised, and, secondly, whether, in any event, their claim was barred by an arbitration award in favour of the defendant. I will final with the second point first. This arbitration award has been set aside on the ground of the alleged misconduct of the arbitrator in taking into consideration his personal knowledge of the history and customs of the family, in which certain disputes had occurred between the plaintiffs and the defendant, and of which family the arbitrator was himself a member.

    2. To understand the position, I must state a few facts as briefly as I can. Admittedly, up to the date of the Mamlatdar's order of June 26, 1916, the plaintiffs had been in possession of the suit land. The plaintiffs claimed that they held that land by reason of a partition arrived at some one hundred and forty years ago by reason of one of their ancestors being a junior member of a particular family called Raul. The defendant's case was that the plaintiffs had never obtained these lands on any partition, nor, indeed, were members of the family of Raul, but that they had been given these lands on condition of performing certain services, and as they had recently declined to perform those services any longer, the defendant was entitled to resume possession of the land. Disputes having thus broken out, the present defendant took proceedings in the Mamlatdar's Court, which resulted in fine order of June 26, 1916, in his favour, which I have already mentioned. After an unsuccessful application to the High, Court in January 1918 to discharge this order, the plaintiffs filed the present suit in effect to set aside this order of the Mamlatdar and to recover possession of the land. It is important to note that they framed their plaint on the basis that they were entitled to possession by reason of the share, which had fallen to them on the above-mentioned partition Subsequently, on June 17, 1919, they applied for leave to amend and to plead that the share was obtained either by partition or for maintenance. (See Exhibit 65). That amendment was refused by the then Subordinate Judge, Mr. Desai, on July 5, 1919. Thereafter, namely, on December 20, 1919, there was a consent order by which Sirdarsing Dalpatsing Raul was appointed arbitrator to decide the suit. Now this arbitrator seems to have been appointed because he was a member of the Raul family. It was urged in the Court below and also before us and the learned District Judge has apparently acquiesced in the view, that the arbitrator was chosen because:

    The fact of his being in possession of such information was known to both the parties when they choose him as arbitrator this being, in fact, the main reason for their choice.

    3. The arbitrator made his award on February 24, 1920, and it is Exhibit 115. That award was against the plaintiffs' and he dismissed their suit. In the course of that award, he found, in the first place, that the suit land was not given to the plaintiffs, as alleged in the suit, for their share in the partition. Farther, it was not satisfactorily proved that the plaintiffs were, in any way related to the Raul family of the defendant. Accordingly, his finding on the second issue was that the plaintiff had not proved their ownership of the suit land. (His Lordship then dealt with the findings of the arbitrator generally and proceeded.) The main argument addressed to us is that the arbitrator had no right to use his personal knowledge of the Raul family and of these other Raul Inams in Khandesh, and that he could only make his award on the evidence actually before him. It was said that an arbitrator is in exactly the same position as a Judge, and that he can no more act on his own knowledge than a Judge can. We were referred, in support of this proposition, to a passage in Russell on Arbitration, 11th Edn., at page 394, where it is said, “Arbitrators are bound by the same rules of evidence as the Courts of law” and reference was made to In re Enoch and Zaretzkey, Bock & Co.(1), a decision of the Court of Appeal in England, where the head-note runs: “Arbitrators are bound to observe the rules of evidence no lass than judges.” But that rule, like other rules, must be taken subject to certain recognized exceptions. For instance, there is a further passage in Russell at page 397, which illustrates what I mean. It runs:

    Where a submission recited that the arbitrator had been appointed on account of his skill and knowledge of the subject, and one of the parties brought before him a statement of certain facts which he alleged to be material, and offered to support it by proof, the House of Lords held that the arbitrator was justified in refusing to receive it, if, taking all the matters alleged to be facts into consideration, with his own local knowledge to guide him, and all the circumstances in his view, he felt that such facts would have no effect upon his determination: Johnston v. Cheape(2).

    4. Similarly, there is a reference to the judgment of Lord Cranworth where certain surveyors were appointed to settle the amount of rent and other, terms of a lease of a coal mine. Lord Cranworth said:

    I do not agree in the suggestion that it was incumbent on the arbitrators to examine witnesses. I do not think that is the meaning, when a matter is referred to surveyors and people of skill to settle what the value of the property to be bought or let is. Necessarily they are entrusted, from their experience and their observation to form a judgment which the parties referring to them agree shall be satisfactory. Therefore I do not think there was anything of importance in their not examining witnesses, provided, bona fide, they meant to say: ‘We know sufficient of the subject to decide properly without examining witnesses:’ Eads v. Williams(3).

    5. Then reference is made to Right v. Howson(4) where an arbitrator experienced in cloth was held justified in deciding a dispute as to quality upon inspection of samples only. And indeed, everyday practice tells us that in many important commercial matters such as in the sale of goods by sample, the whole benefit of referring a dispute to expert arbitrators would be almost nullified, if it was essential for them to decide the case solely by witnesses called on the one side or the other, as to the comparison between the goods tendered and the sample. In the present case, we consider that the arbitrator, Mr. Raul, was appointed by the parties because he was a man acquainted with the history and customs of the Rails and the manner in which the lands of the various branches of the family were held. Otherwise, we can see little advantage in referring a dispute of this sort to a layman, who, on his own showing, did not profess to have any knowledge of technical law. And, if one looks at the award as a common sense document, there seems a pleat deal to be said in its favour from the way in which the arbitrator has stated his reasons and his conclusions. But in the present case we need not go so far as the Court did in Johnston v. Cheape.

    6. There is no suggestion here that the arbitrator rejected any evidence that was tendered to him. On the contrary, the pleaders did not even wish to make summing up speeches. Their speeches were sufficiently put in the cross-examinations of the witnesses that were tendered to the arbitrator. It might have been more satisfactory if there was definite evidence on the arbitrator's notes that the arbitrator had told the parties what his personal knowledge of the history of the family was, and had expressly offered either side an opportunity of adducing evidence, if they wished, to vary or after his views of the history. But, unfortunately the arbitrator's notes have been destroyed, and, therefore, we have to deal with the case as best as we can. On the whole the conclusion we have come to is that the arbitrator gave a fair hearing to all contentions that were brought before him by the parties and that he had a right to use his own expert knowledge as to the history of his own family which, indeed, was one of the very reasons why he had been appointed also arbitrator. For all practical purposes therefore, he was in much the same position as the business experts such as the surveyor or the cloth merchant in the cases I have already referred to. That being so, it follows that the appeal oust be allowed, and that the plaintiffs' suit must be dismissed.

    7. But, before parting with it, I should mention the other point that was urged before us by the defendant. It amounted to this, that although Mr. Desai had expressly refused the plaintiff's proposed amendment to raise expressly the alternative plea of a grant for maintenance, and although the issues were framed on the original pleadings and contained no issue as to a grant for maintenance, yet the trial Court, and also the lower appellate Court decided the case against the defendant on this very alternative point of a grant for maintenance, although both Courts admitted that on a strict interpretation of the pleadings before the Court and of the original issues before the Court, the plaintiffs' case must fail. The ground for the Courts' decisions appears to have been that the word ‘partition’ which had been used in the plaintiff's pleadings, might be given a wide meaning and held to include an alternative plea of a grant for maintenance. If it became necessary to decide the point we think that the defendant's contention before us was correct, and that the case ought not to have been decided against him on an alternative plea which involved separate evidence, and which had never been properly pleaded nor raised be any express issue. On the other hand, we think it would have been necessary, in that event, to remand the case for a new trial, and to allow the plaintiff's original proposed amendment, which Mr. Desai refused. Similarly, we should have given some express directions as to the framing of certain issues, and, in particular, Issues Nos. 2 and 5 which were subsequently amended by the trial Judge, Mr. Mehta. But, having regard to our decision on the arbitration point, it is not necessary, in our opinion, to deal more precisely with contingencies that would only arise, if that decision had been a different one.

    8. Madgavkar, J.:— I agree on the ground that no legal misconduct within the meaning of para. 15 of the Second Schedule of the Code of Civil Procedure on the part of the arbitrator has been proved, sufficient to entitle the plaintiffs respondents to have their award set aside. A comparison of arbitrator and Judge is, in my opinion, fallacious. A Judge, with any knowledge of the facts, considers himself disqualified to act as such; an arbitrator, on the other hand, is often chosen, because of his knowledge. In the present instance, the finding on the second issue of the arbitrator is clear that the respondents were not members of the family of the appellant and could not, therefore, have obtained the lands by partition. Incidentally I might observe that this finding was equally fatal to the case they sought to set up in their application (Exhibit 65) to amend, which was disallowed by the first Judge. It follows, therefore, that, even it the award of the umpire on the other issues were disregarded, his finding on the second issue would be fatal to the respondents' claim. But, as a matter of fact it was not, in my opinion, misconduct for the arbitrator, being himself a Raul of age and experience, acquainted with other Raul families, their manners and customs, to consider that in the absence of any evidence of the power of partition in the case of the Raul family of the appellant, the general absence of such power was proved. This suffices to dispose of the appeal and to entitle the appellant to have his appeal allowed and the claim dismissed.

    9. On the other points, it appears to me that the appellant attempted, in the first instance, to obtain an unfair advantage by appeal to the Mamlatdar in his possessory suit; secondly, that, although the respondents' application, Exhibit 65, was made late in the day, it would have been perhaps in the circumstances better to allow that application on payment of costs or otherwise and to permit the respondents to set up their third case of grant by way of maintenance with its limitations, if any, to which it was subject, if it ever existed. I agree that the appeal must be allowed with costs throughout.

    10. Appeal allowed.

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    Daulatsing Bapusing Raul v. Ratna Anadsing
    (Dec 18, 1925)