Judgement

:- D/-25-09-1963.

These are two appeals filed under Clause 10 of the Letters Patent against the order of Gosain, J., partially allowing a petition filed under Article 226 of the Constitution by one of the appellants, Jit Singh.

2. In the petition the prayer was for the quashing of the whole scheme of consolidation and repartition proceedings relating to the village of the petitioner Ghariala on certain grounds one of which was that it was proposed in the scheme to allot 400 kanals or 50 acres of land to provide income for the Panchayat. The learned Single Judge without discussing any of the other grounds on which the scheme was challenged accepted the petition to the extent of setting aside the scheme so far as it related to the provision of land for furnishing income to the Panchayat on the strength of the decision of the Full Bench in Munsha Singh v. State of Punjab, 1960-62 Pun LR 1 : (AIR 1960 Punj 317).

3. Against this order appeals have been filed by Jit Singh who claims that the scheme should have been set aside as a whole and by the State. Regarding the appeal of the State it must be said at once that it has to be allowed on account of the fact that since the decision of the learned Single Judge the law was amended so as to legalise the allotment of land to the Panchayat for its income and the validity of the amending law has been upheld by this Court.

4. The learned counsel for the petitioner has argued that the scheme should be set aside in any case on the ground of the reservation of land for a number of other purposes which have been held to be outside the scope of the Act by Mehar Singh and Dua, JJ., in L. P. A. 100 of 1961, Gurdas Singh v. Director of Consolidation of Holdings, D/-28-1-1963 : (AIR 1964 Punj 117). A very large number of petitions under Article 226 of the Constitution have been instituted in which schemes of consolidation in various villages have been attacked on the grounds of reservation of land for water channel, roads, schools, hospitals, tonga and lorry stands and other purposes, and apart from the fact that the decision to which I have just referred seems to me to require reconsideration, there has also been some amendment of the Act, the validity of which will presumably be challenged in these petitions although the Amending Act has been passed after many of them were filed. In the circumstances I am of the opinion that these appeals as well its other petitions relating to alleged illegal reservation of lands in consolidation schemes should be collected together and heard by a Full Bench at an early date.

5. A. N. GROVER, J. :- I agree.

(OPINION OF THE FULL BENCH)

A. N. GROVER, J. :- These two appeals (Letters Patent Appeals Nos. 131 of 1960 and 182 of 1960) filed under Clause 10 of the Letters Patent against the order of Gosain, J., dated 19th January, 1960, have been referred for decision to a Full Bench owing to the pendency of a large number of petitions in this Court under Article 226 of the Constitution in which schemes of consolidation in various villages have been attacked on grounds of reservation of land under Section 18(c) of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, (hereinafter called the Act) for various common purposes.

2. Before the facts are set out, it is necessary to notice the provisions in the Act and the amendments made therein from time to time which are relevant, together with the previous decisions of this Court which necessitated those amendments. According to the preamble, as it stood before the amendment by Punjab Act 27 of 1960, the Act was meant to provide for the compulsory consolidation of agricultural holdings and for preventing the fragmentation of agricultural holdings. Section 2(bb) defined "common purpose" to mean any purpose in relation to any common need, convenience or benefit of the village. Section 18(c) provided :-

"Notwithstanding anything contained in any law for the time being in force, it shall be lawful for the Consolidation Officer to direct -

(c) that if in any area under consolidation no land is reserved for any common purpose including extension of the village abadi, or if the land so reserved is inadequate, to assign other land for such purpose."

On 19th April, 1957, the Governor of Punjab amended the existing Rule 16 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Rules by renumbering it as Rule 16(i) and also by adding as Rule 16(ii), according to which in an estate or estates where during consolidation proceedings there is no shamilat deh land or such land is considered inadequate, land shall be reserved for the village Panchayat, and for other common purposes, under Section 18(c) of the Act, out of the common pool of the village at a scale prescribed by Government from time to time. The management of such land was to vest in the Panchayat of the estate or estates concerned on behalf of the village proprietary body and the Panchayat had the right to utilise the income derived from the land so reserved for the common needs and benefits of the estate or estates concerned.

3. In Munsha Singh v. State of Punjab, 1960-62 Pun LR 1 : (AIR 1960 Punj 317) (FB), a number of right-holders of village Majatri of Tehsil Kharar moved a petition in this Court under Articles 226 and 227 of the Constitution praying that consolidation proceedings taken in that village be quashed. The reservations which had been made under the consolidation scheme relating to the aforesaid village under Section 18(c) were numerous, the items being similar to those for which reservations have been made in the present cases, namely,

1. Village roads including Circular Road.

2. Road under the Development Scheme with 12 karams width.

3. Water tanks.

4. Manure pits.

5. Hada rori.

6. Latrines.

7. Primary school and playground for children.

8. Fuel plantation.

9. Cattle ground.

10. Cremation ground for Harijans and others.

11. Graveyard.

12. Grazing ground for cattle.

13. Area given to civil Panchayat.

14. Area for extension of abadi given to the non-proprietors.

On the dismissal of that petition by me on 23rd May, 1958, an appeal was filed which later on was referred to a Full Bench, consisting of A.N. Bhandari, C.J., Dulat, Tek Chand, R.P. Khosla and Dua, JJ. It is apparent from the Judgments delivered by the learned Judges that the items which were subjected to serious attack on behalf of the petitioning appellants were the areas given to the Panchayat and to the non-proprietors for extension of the abadi (items 13 and 14), apart from items 1 and 2 which were only subjected to some criticism. It was held by the Full Bench (R.P. Khosla, J., dissenting) that Rule 16(iii) went far beyond the scope of the Act or of Section 18(c) which did not authorise the giving of land to the Panchayat so that it may utilise it for raising income, which in its turn may be spent for the common needs and benefits of the village. Dulat, J., made it quite clear that the other items, apart from the above items, which had been included in the area reserved for common purposes, had been objected to, but those objections had neither been seriously pressed nor did they seem to be well-founded. According to him, all those items directly concerned the reservation of land for common purposes which the Act authorised.

4. The Judgment of the Full Bench was delivered on 5th November, 1959 and the Act was amended by Punjab Act 27 of 1960. By this Act, the scope of the preamble was enlarged by adding the words "and for the assignment or reservation of land for common purposes of the village". The change made in the definition of common purpose" in Section 2(bb) was that the following purposes were included :-

"(i) extension of the village abadi; and

(ii) providing income for the Panchayat of the village concerned for the benefit of the village community."

Section 23-A was added for the first time. All these amendments, of course, were with retrospective effect. In a later case Kishan Singh v. State of Punjab, 1960-62 Pun LR 840 : (AIR 1961 Punj 1) (FB), the validity of Section 18(c) and Section 2(bb) as also the other amendments made by Punjab Act 27 of 1960 was challenged. A Full Bench, consisting of G.D. Khosla, C.J., Gosain and Mahajan, JJ., upheld the same. The matter came up for reconsideration, in view of the observations contained in the majority judgment of the Supreme Court in Kochuni v. State of Madras, AIR 1960 SC 1080, in Jagat Singh v. State of Punjab, 1962-64 Pun LR 241 : (AIR 1962 Punj 221) (FB) before a larger Bench consisting of five Judges. The argument canvassed on behalf of the State was that the law was saved by the provisions of Art. 31-A(1)(a) inasmuch as the act of setting aside the land reserved for providing income to the Gram Panchayat was nothing more than acquisition by the State of an estate which fell within the purview of that Article. The land-owners contended that according to the majority judgment in Kochunis case, AIR 1960 SC 1080 Article 31-A could only save that legislation which had for its object agrarian reform. Khosla, C.J., after referring to Kochunis case, AIR 1960 SC 1080 and some later decisions of the Supreme Court, expressed the view that in all these cases where there was a question of acquisition, the aim of agrarian reform had not been deemed a condition precedent to the statute being declared intra vires and the observations in Kochunis case, AIR 1960 SC 1080 did not go beyond the scope of that case. He proceeded, however, to decide the matter on the ground that the impugned provisions formed a part of the pattern of legislation aimed at agrarian reform. The concluding portion of his judgment is as follows :-

"I am, therefore, of the opinion that the impugned Act has for its objects agrarian reform and as such it cannot be declared invalid by anything contained in the decision of their Lordships of the Supreme Court in AIR 1960 SC 1080."

In my separate Judgment I agreed that the impugned Act was valid as its object generally was to bring about a change in the village and agricultural economy, rendering it immune from attack by virtue of Article 31-A(1)(a) of the Constitution. In my view, on a true and correct appraisement of the observations made and decision given in the majority judgment it was difficult to accept that legislation enacted to acquire an "estate" would be protected by that Article even if its object and purpose were completely divorced from agrarian reform. Tek Chand, J.s conclusion may be reproduced in his own words :-

"Following the rule in Kochunis case, AIR 1960 SC 1080 and on the ground that the impugned Act has an agrarian reform as one of its objects, the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act (50 of 1948) is not ultra vires of the Constitution, and I would dismiss the petition and would make no order as to costs."

Dua, J., refrained from expressing any considered opinion on the question as to whether or not the existence of agrarian reform, as a legislative object, is an essential pre-requisite for the constitutional validity of law providing for acquisition of estates by the State within the contemplation of Article 31-A(1)(a) of the Constitution. He, however, agreed that the impugned statute was designed to facilitate agrarian reforms and that was enough for the disposal of the case. Shamsher Bahadur, J., while expressing inability to deny the cogency of the reasoning which weighed with the learned Chief Justice in coming to the conclusion that agrarian reform has never been intended by the legislature to form an essential pre-requisite for imparting validity to legislation made under Article 31-A(1)(a), considered it unnecessary to decide that question. He concluded by saying -

"The majority view of their Lordships of the Supreme Court in Kochunis case, AIR 1960 SC 1080 however having been so clearly expressed, the question whether or not agrarian reform should be a touchstone to test the validity of legislation is not open to debate at least by this Court. I am in complete agreement with the views which have been expressed by my learned brethren that the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act L of 1948 is a measure designed to promote agrarian reform and its vires in any event cannot be challenged."

In Gurudas Singh Lakha Singh v. Director of Consolidation of Holdings, AIR 1964 Punj 117, Mehar Singh and Dua, JJ., had to decide a case in which in consolidation proceedings reservations had been made for the Government Primary School, for a road to be constructed by the Public Works Department from Jandusingha to Kartarpur and for water channels. The Bench held that no reservation could be made under Section 18(c) of the Act for the aforesaid purposes so as to deprive the landowners of their claim to compensation for such acquisition. The Punjab Legislature then enacted Punjab Act 39 of 1963. In clause (bb) of Section 2 of the Act, the following sub-clauses (iii) and (iv) containing more purposes were added after sub-clause (ii) with retrospective effect :-

"(iii) village roads and paths; village drains; village wells, ponds or tanks; village watercourses or water-channels; village bus stands and waiting places, manure pits; hada rori; public latrines; cremation and burial grounds; Panchayat Ghar; Janj Ghar; grazing grounds; tanning places, mela grounds; public places of religious or charitable nature; and

(iv) schools and playgrounds, dispensaries, hospitals and institutions of like nature, water-works or tube-wells whether such schools, play-grounds, dispensaries, hospitals, institutions, water-works or, tube-wells may be managed and controlled by the State Government or not."

For Section 23-A, another Section was substituted but it is unnecessary to set it out. Section 4 of this Act further validated all the reservations which had been made in the schemes which were covered by the amendments introduced.

5. The controversy before us now has centred on the validity of the aforesaid amendments which have been made by the Act of 1963. The principal contention of Mr. H.S. Gujral, learned counsel for the appellants, is that the purposes which have been added in the definition of "common purpose" with the exception of water-courses, channels, hada rori, manure pits, grazing grounds and tube-wells have nothing to do with agrarian reform and their inclusion would not be saved by Article 31-A(1)(a) of the Constitution. He has relied largely on the view expressed by most of the Judges constituting the Full Bench in Jagat Singhs case, 1962-64 Pun LR 241 : (AIR 1962 Punj 221) while interpreting the observations in the majority judgment in Kochunis case, AIR 1960 SC 1080 that in order to get protection under the aforesaid Article the legislation must have as its object and purpose agrarian reform. In particular, objection has been taken to bus stands, waiting places, public latrines, cremation and burial grounds, Janj Ghar, mela grounds, public places of religious or charitable nature, schools and playgrounds, dispensaries and hospitals. It is said that although all these may be for the common good of the villagers but the State is under an obligation to provide these amenities and for that purpose it must pay compensation to the right-holders who would be deprived protanto of their share in the lands which will be reserved for the aforesaid purposes. Mr. Gujral has stressed the observations in the majority judgment in Kochunis case, AIR 1960 SC 1080 that Article 31-A is concerned only with land tenure and that if an Act does not effectuate agrarian reform and regulate the rights inter se between landlords and tenants, it is not protected by that Article.

The majority view in Kochunis case, AIR 1969 SC 1080 has been fully discussed in the earlier Full Bench decision of this Court in Jagat Singhs case 1962-64 Pun LR 241 : (AIR 1962 Punj 221) (FB). When the reservation of a portion of proprietary land for providing income to the Gram Panchayat was held to be valid on the ground that the object of doing so pertained to agrarian reform, it is apparent that quite a wide and liberal connotation was given to those words. Indeed, as the words "agrarian reform" are not be found in Article 31-A, we are not confined to their literal or narrow meaning. If the impugned legislation is meant to improve the standard of living and working in the villages, it would certainly have agrarian reform as its object, not in a narrow or pedantic sense but in a context in which the general good of the village agricultural community would be covered. It is well known that the objectives of the various Five Year Plans have been, firstly, to remove such impediments in the way of agricultural production as arise from the character of the agrarian structure and to create conditions for evolving as speedily as possible an agrarian economy with high levels of efficiency and productivity and, secondly, to establish an egalitarian society and eliminate social inequalities.

The need for consolidation of holdings has been emphasised in all the Plans and the Planning Commission recommended that consolidation should be undertaken in Community Project areas as a task of primary importance to the agricultural programme (India 1960 - Publication by Government of India). It has been stated that the main tests by which the success of Panchayati Raj will need to be measured from time to time are : (1) agricultural production; (2) development of rural industry; (3) development of co-operative institutions; (4) full utilisation of the local manpower and other resources; (5) development of facilities for education and adult literacy; etc. (Government of India Publication - Third Five Year Plan). Under the Punjab Gram Panchayat Act, 1952, the Village Panchayat is charged with numerous tasks which are given in Section 19 and which include inter alia the maintenance of -

"19(1)(a) any public place including its sanitation and drains; (b) wells, water-pumps, baolies, springs, ponds and tanks for the supply of water for drinking washing and bathing;

(c) burial and cremation grounds;

(e) buildings for the accommodation of travellers;

(f) pounds for animals;

(h) public health and sanitation;

(i) the organization and celebrations of public festivals, other than religious festivals;

(j) the improvement of the breeds of animals used for agricultural or domestic purposes;

(k) public gardens, playgrounds, establishment and maintenance of recreation parks, organization of games and sports, supply of sports materials and holding of tournaments;

(l) libraries and reading-rooms;

(n) the development of agriculture and village industries, and the destruction of weeds and pests;

(q) allotment of places for preparation and conservation of manure;

(s) the laying out of new roads and pathways and maintenance of existing ones; and

(x) measures to promote the moral, social and material well-being or convenience of the inhabitants of the Sabha area;"

and the Gram Panchayat has also to make provisions for -

"19(2)(b) medical relief and first-aid;

* * * *

(f) providing such educational facilities as may be deemed necessary and desirable; * * * *."

If the Panchayat has been charged with duties relating to all the aforesaid matters and if it is to be the pivot round which the life of village community, which is primarily agricultural, is to revolve, there can be no manner of doubt that in the development of agricultural economy it is not only the land reforms strictu sensu which have to play the dominant part but also such institutions and measures as are conducive to the physical, social, education and moral well-being of the members of the agricultural community. It is not denied that all the purposes for which provision has now been made by the amending Act will promote the common good in every sense of the people living in the villages. After the decision in Munsha Singhs case, 1960-62 Pun LR 1 : (AIR 1960 Punj 317) (FB) where hardly any objection was taken to items 1 to 13 set out in the earlier part of this Judgment, any other position would have been wholly untenable.

6. There would have been hardly any room for argument if the observations in Kochunis case, AIR 1960 SC 1080 as interpreted in Jagat Singhs case, 1962-64 Pun LR 241 : (AIR 1962 Punj 221) (FB) had not been pressed into service, but since all the purposes which have now been added by the amending legislation are for the improvement and progress of the village community which will make the agriculturists more efficient and better equipped for agricultural work and production, it cannot possibly be said that the object of the impugned legislation is divorced from agrarian reform. Thus it must be held that by virtue of Article 31-A(1)(a) of the Constitution the amending legislation is wholly immune from attack on the grounds on which it has been made.

7. A faint argument has been addressed on the basis of the language employed in Section 15 of the Act that compensation is payable whenever any owner is allotted a holding of less market value than that of his original holding, but Section 15 simply says that the scheme prepared by the Consolidation Officer shall provide for the payment of compensation to any owner who is allotted a holding of less market value than that of his original holding for the recovery of compensation from any owner who is allotted a holding of greater market value than that of his original holding. This Section, therefore, relates only to grant of compensation inter se between the owners and has nothing to do whatsoever with any compensation being awarded in the event of reservations being made for common purposes. Section 17 also can be of no avail to the appellants as that Section contains the machinery for amalgamation of any road, street, lane etc., or other land reserved for common purposes with any holding in the scheme.

8. Lastly, Mr. Gujral has contended that Section 18(c) confers uncontrolled and arbitrary power on the consolidation authorities to reserve any area for common purposes and to invent new heads of common purpose. Section 18(c) itself lays down the conditions under which reservation can be made. Reference has already been made to Rule 16 which has been framed under the Act in connection with reservations and also to the definition of "common purpose" contained in Section 2(bb), as amended. There can be no doubt that if the land is reserved in any consolidation scheme not in conformity with the provisions of the Act and the rules but in violation of them, that scheme will certainly be open to challenge, but so long as the land has been reserved in accordance with the aforesaid provisions, the land owners have no right to claim any compensation even if they are deprived of some portion of their holding for reasons which have already been stated.

9. In both the appeals reservation had been made for income to the Gram Panchayat, for extension of the abadi of the non-proprietors including Harijans, for Panchayat Ghar and for manure pits. It has also been stated that reservation had been made for village Paths. There can be no doubt, and, indeed, it has not been disputed, that all these purposes would be covered by Section 18(c) if the Act, read with the definition of "common purpose" given in Section 2(bb) of the Act, as amended. Gosain, J., had upheld the reservation for all the purposes except the one relating to the area for providing income to the Gram Panchayat. In view of all the Full Bench decisions as also the provisions which now exist in the Act, the State appeal (L. P. A. 182 of 1960) is allowed and the order of Gosain, J., is set aside, with the result that the writ petition shall stand dismissed. There will be no order as to costs. L. P. A. 131 of 1960 is dismissed but there will be no order regarding costs.

10. P. D. SHARMA, J. :- I agree.

11. D. FALSHAW, C. J. :- I agree.

Order accordingly. AIR 1964 PUNJAB 424 (Vol. 51, C. 131) "Punjab State v. Chander Bhan"

PUNJAB HIGH COURT

Coram : 1 H. R. KHANNA, J. ( Single Bench )

Punjab State and another, Petitioners v. Chander Bhan Harbhajan Lal and another, Respondents.

F.A.P.O. No. 154 of 1962, D/- 13 -12 -1963. from order of Sub. J., 1st Class, Ambala, D/- 16 -12 -1961.

(A) Arbitration Act (10 of 1940), S.15, S.17, S.30 and S.33 - ARBITRATION - MISCONDUCT - Award - Setting aside of an award for misconduct - Award by arbitrator leaving open a question referred to him to be decided by a stranger to the contract is bad in law - Such conduct of the arbitrator amounts to judicial misconduct within S.30.

The award of the arbitrators leaving a matter in dispute to be decided by a third person is invalid as it is not open to the arbitrators to delegate their authority to a stranger. Even a partial delegation of authority vitiates the award if the defective part cannot be separated from the rest. Delegation of his authority and functions by an arbitrator amounts to judicial misconduct. Such an award suffers from a serious infirmity and as such is liable to be set aside. AIR 1916 Cal 806 and AIR 1935 Lah 113, Foll. (Paras 4, 5)

A dispute between a contractor and the State respecting mutual payments under a contract was referred to an arbitrator who gave his decision on the claim of the Contractor for extra payment but left the question of the claim of the State against the Contractor to be decided by the Chief Engineer. On the question of the validity of the award :

Held, as the arbitrators in the present case did not decide a vital matter themselves but left it for decision to the Chief Engineer the award given by them suffers from a serious infirmity and as such is liable to be set aside. (Para 5)

(B) Arbitration Act (10 of 1940), S.16 - ARBITRATION - Power of Court to remit an award - Invalid award - Remission undesirable.

Before the Court actually decides to remit an award, the facts of the particular case must not be ignored. Where the arbitrators themselves have taken a position in the award already given by them that the decision of a third person would be binding upon the parties, it would not be desirable to remit the award to them. (1863) 33 Beav 213, Ref. (Para 6)

Cases Referred : Courtwise Chronological Paras

(16) AIR 1916 Cal 806 (V 3) : 22 Cal LJ 237, Juggobundhu Sahu v. Chand Mohan Saha 5

(35) AIR 1935 Lah 113 (V 22) : 37 Pun LR 18, Sheo Karan v. Kanhaya 5

(1863) 33 Beav 213 : 55 ER 349 In re, Tidswell 6

T.S. Doabia and H.S. Doabia, Additional Advocate-General, for Petitioners; V.N. Bhatnagar and Kuldip Singh, for Respondents.

Judgement

This appeal filed by the State of Punjab and the Executive Engineer, Arrear Division, Patiala, is directed against the order of learned Subordinate Judge, 1st Class, Ambala, whereby he set aside the award of the arbitrators.

2. The brief facts of this case are that Messrs. Chander Bhan Harbhajan Lal contractors, who are the respondents in this appeal and are hereinafter referred to as the contractors, entered into a contract with the Punjab State through the Executive Engineer to supply boulders for construction of Siswan super passage vide work orders dated 26th August, 1952 and 2nd November, 1954. Clause 5 of the work orders provided that any dispute arising between the parties should be referred to the arbitration of the Superintending Engineer of the Circle. This clause was subsequently substituted by an agreement between the parties according to which the dispute was to be referred to the Settlement Committee, Patiala, instead of the Superintending Engineer. The contractors made a claim for Rs. 33,019/2/- against the State with respect to the work done under the contract. This claim was denied by the State of Punjab which in its turn made a claim for recovery of Rs. 18,691/-against the above contractors. The matter was, accordingly, referred to the arbitration of the Settlement Committee. The Settlement Committee on 28th February, 1961, gave a conditional award for payment of Rs. 9,812/- by the State of Punjab to the above-mentioned contractors. The claim with respect to this amount, it may be stated, was admitted by the Executive Engineer. So far as the claim made by the State of Punjab for the recovery of Rs. 18,691/- against the contractors was concerned, the arbitrators in their award observed as under :-

"They have also claimed a recovery of Rs. 18,691/- on account of cost and carriage of boulders. It seems that the recovery was ordered by the Superintending Engineer in February, 1957, as he considered the record entries regarding 40570 cft. as suspicious. It now appears that the Chief Engineer made certain enquiries from the Superintending Engineer which he has now been able to submit to the Chief Engineer. The matter being, still sub judice, it will not be proper for us to order this recovery till the Chief Engineer has finally decided the matter. Since the representative of the department has already admitted the claim of the contractors for a certain amount, we make a conditional award in favour of the contractors for an amount of Rs. 9,812/- only (Rs. Nine thousand eight hundred and twelve only) subject to the condition that in case the Chief Engineer upholds the recovery, the same will be adjusted against this amount. Since the contractors have got only a period of 90 days to make the award a rule of Court, the department is advised to obtain the final orders of the Chief Engineer in this case within the stipulated time."

3. On 6th April, 1961, the contractors filed an application under Section 14(2) of the Arbitration Act in the Court of Subordinate Judge, Ambala, praying that the Settlement Committee be directed to file the award made by it in Court so that further proceedings might be taken by the contractors. The award was thereafter filed and on 4th July, 1961, the contractors filed an application under Sections 15, 17, 30 and 33 of the Arbitration Act. It was prayed by the contractors that the award given by the arbitrators be modified and the condition regarding the adjustment of a sum of Rs. 18,691/- if found due by the Chief Engineer against the amount awarded by the arbitrators be wiped off. In the alternative, the prayer made by the contractors was that second part of the award relating to the observations regarding recovery of Rs. 18,691/- be set aside. According to the contractors, the conditional award was imperfect in form and contained an obvious error inasmuch as the question of the recovery of Rs. 18,691/- had been left open to be decided by the Chief Engineer who was a stranger to the contract. The arbitrators were, accordingly, stated to have been guilty of misconduct.

4. The above application of the contractors was resisted by the State of Punjab and the following issue was framed :

"Whether the award is liable to be set aside or modified as per objection para No. 7 of the application ?"

The learned Subordinate Judge held that the arbitrators did not themselves decide the question about the recovery of Rs. 18,691/- regarding which claim had been made by the State of Punjab but left it open for decision by the Chief Engineer. According to the learned Subordinate Judge, the arbitrators could not do so and they were guilty of judicial misconduct inasmuch as they delegated their functions to the Chief Engineer. It was further observed that the portion of the award regarding claim for recovery made by the State could not be separated from the claim of the contractors. The award was, accordingly, set aside as a whole.

5. Mr. Tejinder Singh Doabia learned counsel for the appellants has at the outset, argued that the Court below was in error in setting aside the award. According to the learned counsel, the arbitrators did not leave the decision about the claim of the State of Punjab with regard to the amount of Rs. 18,891/- to the Chief Engineer but they only invited his opinion about that matter. This contention is wholly devoid of force because in the award it is distinctly stated that the award in favour of the contractors for the amount of Rs. 9,812/- was subject to the condition that in case the Chief Engineer upheld the claim of the Punjab State, the same would be adjusted against the amount awarded in favour of the contractors. The above words in the award leave no manner of doubt that according to the arbitrators the decision of the Chief Engineer about the claim for recovery of Rs. 18,691/- made by the State of Punjab was final and was not one which was liable to be reviewed by the arbitrators. The question as to whether the award of the arbitrators is invalid because of their having left a matter in dispute to be decided by a third person, was considered in English cases and the dictum laid down in those cases has been reproduced on page 231 of Russells book on the Law of Arbitration, Sixteenth Edition, and reads as under :-

"An award is bad if the arbitrators, instead of deciding the matter submitted, award that the parties shall abide by the award of a third person whom they name; or that the defendant shall account before such auditors as the plaintiff shall assign, and if he be found in arrears, shall pay the amount. A partial delegation of authority equally vitiates the award if the defective part cannot be separated from the rest."

In case Juggobundhu Sahu v. Chand Mohan Saha, AIR 1916 Cal 806, a Division Bench of that Court observed as under :-

"As regards the first ground, it appears that when the award had been submitted, objection thereto was taken by the petitioner on the allegation that the arbitrator had delegated his authority to a stranger and that the award was in essence, not the act of the arbitrator, but of that person. This was a serious charge of judicial misconduct, and, if established, would invalidate the award for it cannot be disputed that an arbitrator has no authority to delegate his functions, except possibly the performance of what are called "ministerial acts."

The matter was also considered in Sheo Karan v. Kanhaya, AIR 1935 Lah 113 and it was observed that an arbitrator could not abdicate his functions in favour of a third party, and that if the parties desired the arbitrator to take the opinion of some third person he could do so, but he acted illegally when he undertook to abide by the decision of the third person and to give his award in accordance with the wishes of the third person. I would, therefore, hold that as the arbitrators in the present case did not decide a vital matter themselves but left it for decision to the Chief Engineer the award given by them suffers from a serious infirmity and as such is liable to be set aside.

6. The other contention, which has been raised by the learned counsel for the appellants, is that the Court below should have remitted the award to the arbitrators and should not have merely set aside the award. It is, however, not disputed that no prayer was made on behalf of the appellants in the Court below that the award should be remitted to the arbitrators. Awards can be remitted to the arbitrators under Section 16 of the Arbitration Act but before the Court actually decides to remit an award, the facts of the particular case must not be ignored. In the present case I find, that the arbitrators themselves have taken a position in the award already given by them that the decision of the Chief Engineer with regard to the claim made by the State of Punjab against the contractors would be binding upon the parties. It would appear from the letter dated 15th May, 1961 sent by the Executive Engineer to the Chairman, Settlement Committee, that after the award dated 28th February, 1961 the Chief Engineer has already upheld the claim of the State of Punjab against the contractors for the recovery of Rs. 18,691/-. As the arbitrators already stand committed to the position that the decision of the Chief Engineer about the claim of the Punjab State against the contractors would be binding upon the parties, it may be difficult for them to get dislodged from that view. In the circumstances, even if no charge of partiality or dishonesty may be levelled against the arbitrators, it would still be not desirable to remit the award to them. I may in this context refer to the observations of Romily, M.R. in Re : Tidswell, (1863) 33 Beav 213, which have been reproduced on pages 285 and 286 of Russells book on the Law of Arbitration, and read as under :

"The objection is, in my opinion, one which would make it inexpedient to (remit the award), because notwithstanding the perfect honesty and bona fides of an arbitrator, it is impossible, where an award has been set aside and sent back upon such grounds, that there should not be, in spite of himself, some disposition to favour one side and a disposition to make it appear that the objection to the award were useless and that the sending it back was productive of no good."

I am, therefore, of the view that if the relief to be granted to the contractors is to be real and not illusory, the award in the present case should not be remitted to the arbitrators.

7. The appeal, accordingly, fails and is dismissed with costs.

Appeal dismissed.