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Ram Bahadur Jha v. Sree Kant Jha

Patna High Court
Oct 8, 1942
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Case Summary

Factual and Procedural Background

One Nena Jha had four sons: Palakdhari, Dhanusdhari, Srikant (plaintiff no. 1) and Radhakant. Radhakant died in 1302F leaving his widow Sardha Ojhain. Palakdhari died in 1338F leaving a son (defendant no. 1). Plaintiff no. 1, defendant no. 1 and Dhanusdhari agreed to partition their joint family properties and on 24 March 1938 executed a registered ekrarnama appointing four arbitrators (Chandrakant Jha, Devnarain Chaudhuri, Anirudh Chaudhuri and Babuji Rai). The arbitrators made an award on 16 October 1939 which was registered on 22 December 1939.

Plaintiff no. 1 and his sons brought a suit seeking an order that the award be filed and a decree drawn up in its terms. The learned Subordinate Judge of Darbhanga dismissed objections raised by defendant no. 1 and directed the award to be filed and a decree prepared in accordance with it. Defendant no. 1 (the present appellant) appealed against that order. A preliminary objection that no appeal lay was taken by respondents' counsel and rejected by the Court.

Legal Issues Presented

  1. Whether an appeal lies from an order filing an award made under the Second Schedule to the Code of Civil Procedure and section 104(1)(f) as applicable at the time of the arbitration.
  2. Whether the reference to arbitration was illegal or the application to file the award was not maintainable because persons not parties to the reference had been impleaded.
  3. Whether the arbitrators were guilty of misconduct because they did not take evidence and kept no minutes or order-sheet.
  4. Whether parts of the properties (money bonds, sudbharnas, mortgages, moveable and immoveable properties) were left joint contrary to the ekrarnama and rendered the award invalid.
  5. Whether the carving of pattis and allocation of money bonds by the arbitrators was improper or outside their discretion.
  6. Whether the allotment of pattis by drawing lots (a lottery) amounted to legal misconduct invalidating the award, particularly if done without the parties' consent.
  7. Whether objections raised for the first time on appeal (specifically the lottery allotment point) could be entertained.

Arguments of the Parties

Appellant's Arguments

  • The reference to arbitration was illegal.
  • The application for filing the award was not maintainable because persons not parties to the reference had been impleaded.
  • The award was illegal because the arbitrators did not attend sittings together and defendant no. 1 was not informed of sittings.
  • Certain movable and immovable properties, including sudbharnas and mortgages, were left joint despite the ekrarnama directing a partition of the entire properties.
  • The arbitrators committed misconduct by not taking evidence and by keeping no minutes or order-sheet of proceedings.
  • The arbitrators made decisions based on confidential/private inquiries without recording evidence and in collusion with one arbitrator (Babuji Rai).
  • The award was allegedly given after the death of Dhanusdhari, a party to the reference.
  • The pattis were allotted by lot (lottery), which the appellant contended amounted to legal misconduct.

Respondents' Arguments

  • A preliminary contention that no appeal lay from the order filing the award (raised by Mr. B.N. Mitter).
  • Reliance on the case Mariam Bibi v. Amna Bibi to support their position (the Court distinguished that precedent on its facts).
  • Reliance on a single-Judge case, Puran Chand v. Ram Nath, which expressed the view that deciding questions by lot would not amount to misconduct; respondents relied on this to counter the lottery objection.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Mariam Bibi v. Amna Bibi Distinguished on the basis that the reference in that case was made through the Court and did not fall under section 104(1)(f) (appeal from order filing an award without Court intervention). The Court held this precedent was not in point and therefore did not preclude an appeal in the present case, where the arbitration was governed by the Second Schedule and section 104(1)(f).
Cassell, In re Principle that appointment (or decision) must be the act of will and judgment and a matter of choice and not of chance unless the parties consent or acquiesce in another mode. The Court applied this principle to pattis allotment, holding that allotment should be by choice not chance unless parties consent; here the parties had consented to a lottery, so no misconduct.
Tunno and Bird, In re Rule that if parties agree beforehand or afterwards acquiesce in a mode of appointment (e.g., choosing an umpire by lot), they are precluded from later objecting to that mode as invalidating proceedings. The Court used this authority analogously to conclude that consent/acquiescence to a lottery precludes objection that the allotment was by chance.
James v. Attwood (Tindal, C.J. quoted) Observation that a party cannot object to an umpire chosen by lot if he expressly agreed to or acquiesced in that mode of choice. The Court relied on the same reasoning to support that consent or acquiescence by the parties defeats an objection to selection/allotment by lot.
Puran Chand v. Ram Nath Single-Judge view that an umpire deciding questions by lot would not amount to misconduct invalidating an award. The Court stated disagreement with the reasoning in this case (observing it overlooked the principle that decisions must be by will and judgment), but noted the point was immaterial here because defendant had consented to the lottery.

Court's Reasoning and Analysis

The Court first addressed appealability. It concluded that an appeal lies from an order filing an award because the arbitration in this case was governed by the Second Schedule to the Code of Civil Procedure and section 104(1)(f) as they stood at the time (1939), and the Arbitration Act, 1940 (which repealed that Schedule and section) did not govern this arbitration. The Court distinguished Mariam Bibi v. Amna Bibi because that reference had been made through the Court and so did not fall under section 104(1)(f).

Turning to the substantive objections raised by defendant no. 1, the Court treated the various complaints in sequence:

  • On the allegation of misconduct for not taking evidence: the ekrarnama (the document referring matters to arbitration) did not require the arbitrators to take evidence. The arbitrators were relatives familiar with the properties; there was no suggestion they refused to hear evidence. The Court held that failure to take evidence where not required by the reference does not amount to misconduct.
  • On the failure to keep minutes or an order-sheet: although courts advise arbitrators to keep minutes as protection against allegations, the ekrarnama did not require such records; therefore the absence of minutes did not constitute misconduct in this case.
  • On leaving certain bonds and properties joint: the arbitrators expressly stated in the award that some properties were left joint due to practical difficulties in partitioning them. The Court found this explanation acceptable and held that leaving properties joint did not render the award illegal.
  • On alleged improper allotment of certain money bonds and the carving of pattis: the Court observed that the formation and carving of pattis was a matter within the arbitrators' discretion; the allotment decisions did not, in themselves, give rise to a viable challenge.
  • On the allotment of pattis by lot (lottery): the award expressly stated that pattis were formed and then allotted by lot with the consent of the parties in a temple. The Court noted that the appellant had not complained about this mode of allotment in the lower Court or in the grounds of appeal and only raised it at argument. Even considering the point on the merits, the Court found credible evidence from arbitrators that the lottery took place in the presence of and with the consent of all parties. Applying the principle from Cassell, Tunno and Bird, and James v. Attwood — that selection or decision should be by choice and not by chance unless parties consent or acquiesce — the Court concluded that the allotment by lot did not constitute misconduct because of the parties' consent and acquiescence.
  • On precedent Puran Chand v. Ram Nath: the Court expressed disagreement with the reasoning in that decision (which held that deciding by lot would not amount to misconduct) because it overlooked the principle that arbitrators' decisions should be acts of will and judgment; however, the Court held the disagreement to be immaterial here because defendant-appellant had consented to the lottery.

The Court therefore rejected each of the appellant's contentions and concluded there was no basis to set aside the award or to prevent it from being filed and made the basis of a decree.

Holding and Implications

Appeal dismissed; order of the Subordinate Judge affirmed.

Implications and direct effects:

  • The Subordinate Judge's order directing that the award be filed and that a decree be prepared in terms of the award is confirmed.
  • The appellant's objections (including allegations of misconduct for lack of evidence or minutes, leaving certain properties joint, and allotment by lot) were rejected. Because the Court found the parties had consented to the allotment by lot, that method did not invalidate the award.
  • The appeal was dismissed with costs. Manohar Lall, J. concurred with the result.
  • The opinion does not purport to announce a novel legal precedent beyond applying established authorities; the decision affirms the validity of this particular award and the filing/decree order rather than establishing a new rule of law.

Disposition in the opinion: Appeal dismissed. (Harries, C.J. delivered the principal opinion; Manohar Lall, J. agreed.)

Show all summary ...

Harries, C.J:— This is an appeal by defendant no. 1 from an order of the learned Subordinate Judge of Darbhanga directing that a certain award should be filed and a decree prepared in terms of the award.

One Nena Jha had four sons, namely, Palakdhari, Dhanusdhari, Srikant (plaintiff no. 1) and Radhakant. Radhakant died in 1302F, in a state of jointness with his brothers leaving surviving him only his widow Sardha Ojhain. Palakdhari died in 1338F., leaving surviving him his son, defendant no. 1. Plaintiff no. 1, defendant no. 1 and Dhanusdhari desired to separate and partition their properties, and on the 24th of March, 1938, they executed a registered deed by which they appointed Chandrakant Jha, Devnarain Chaudhuri, Anirudh Chaudhuri and Babuji Rai as arbitrators to divide their joint properties. The arbitrators made their award on the 16th of October, 1939, which was registered on the 22nd of December, 1939. The plaintiff no. 1 together with his sons who constituted one branch of the family thereupon brought the suit out of which this appeal arises for an order that the award should be filed and a decree passed in its terms.

The main contesting defendant was defendant no. 1 (the present appellant) who raised all kinds of objections to oppose the filing of this, award. His main contentions were that the reference to arbitration was illegal and that the application for filing the award was not maintainable as persons not parties to the reference had been impleaded in it. He also contended that the award was illegal as the sittings of the arbitrators were not attended by all of them and that he was not informed of the sittings held by them. He also alleged that properties, both moveable and immoveable were left joint and that the pattis were carved out without any raibandi having been fixed. He further alleged that the arbitrators came to a decision without recording evidence on the basis of confidential and private inquiries made by them. There was also an allegation that the award was given by the arbitrators in collusion with Babuji Rai and further that it was given after Dhanusdhari, one of the parties to the reference had died.

The learned Subordinate Judge rejected all the contentions of defendant no. 1 and held the award to be good. He directed it to be filed and ordered that a decree be prepared in its terms.

A preliminary objection was taken by Mr. B.N Mitter on behalf of the respondents that no appeal lay in this case; that in my view this objection is without substance.

This arbitration took place in the year 1939 and at that time the procedure was governed by the provisions of the Second Schedule to the Code of Civil Procedure. section 104(1)(f), Code of Civil Procedure, in terms provided for an appeal from an order filing an award. It was conceded by the parties that the arbitration in this case was governed by the provisions of the Second Schedule to the Code of Civil Procedure and not by the Arbitration Act, 1940, which repealed that Schedule and section 104(1)(f), Code of Civil Procedure.

Counsel for the respondents relied upon the case of Mariam Bibi v. Amna Bibi. That case, however, is not in point as the reference to arbitration in that case was made through the Court and, therefore, did not fall within section 104(1)(f), Code of Civil Procedure, which applied only to orders filing an award in an arbitration without the intervention of the Court. In my judgment, an appeal does lie in this case.

Mr. S.N Bose who appeared on behalf of the appellant did not press most of the contentions which his client had put forward in the Court below. He contended, in the first place, that the arbitrators had been guilty of misconduct because they had taken no evidence and had kept no minutes or order-sheet of the proceedings. The parties referred the matter to arbitration by an ekrarnama (Exh. 1) dated the 24th of March, 1938. It is clear from that document that the arbitrators were relatives of the parties and would, therefore, know the properties intimately. There is nothing in the ekrarnama which requires the - arbitrators to take evidence, and there is nothing on the record to suggest that they refused to hear any evidence tendered on behalf of defendant no. 1. The arbitrators were obviously chosen, because they knew the parties and the properties, and taking of evidence in such a case would in all probability have been a useless formality. As the ekrarnama did not require them to take evidence the fact that they partitioned the property without taking such evidence cannot amount to misconduct.

It is also true that the arbitrators kept no minutes of the proceedings or anything in the nature of an order-sheet. The ekrarnama did not require them to keep such minutes, and that being so, their failure to do so does not, in my view, amount to misconduct. Courts have frequently stated that it is advisable for arbitrators to keep minutes of their proceedings in their own interest. Wild allegations are frequently made against arbitrators, and in the absence of minutes or proceedings it is often difficult for them to meet such allegations. Though it is advisable that arbitrators should keep such minutes, the fact that such have not been kept would not, in my view, amount to misconduct, where the reference to arbitration did not require the keeping of such a record. That being so, there is no force whatsoever in the first contention of the appellant.

Mr. Bose next contended that certain sudbharnas and mortgages had not been partitioned and had been left joint. He pointed out that in the ekrarnama the parties had agreed that their entire moveable and immoveable properties should be partitioned and that, urged Mr. Bose, had not been done. Frequently it is impossible to partition all properties, and such often have to be left joint. The arbitrators in their award state that they had left these properties joint owing to the difficulties which would be encountered if they were partitioned.

That being so, the fact that these bonds were not partitioned does not, in my view, render the award in any way illegal or render the arbitrators liable to a charge of misconduct.

Next it was argued that certain money bonds had been allotted improperly. It must be remembered that the carving of pattis was a matter entirely for the arbitrators, and if in their discretion they allotted certain bonds to one patti and not to another no complaint can be made against them.

The only serious allegation made on behalf of the defendant-appellant was that the pattis had actually been allotted to the respective parties by lot. That, it was urged, amounted to legal misconduct on the part of the arbitrators. That such was done is clear from paragraph 11, of the award which is in these terms:—

“Excepting the properties aforesaid we have also formed three pattis of equal shares in respect of all other properties belonging to the joint family, viz., brahmottar and inamat lands, milkiat right, zerait, bakasht and kasht land, keeping in view the income and value of the property, and have allotted a patti to each of the three parties separately, which are given in three schedules nos. 1, 2 and 3 below the three pattis of equal value, capacity and status have separately been formed for the three parties by lot with the consent of the parties before Thakurji installed in mauza Kasauthar. The three parties should remain in possession of their respective pattis and appropriate the income and produce thereof. Accordingly we the executants have put the three parties in separate possession of their respective pattis and so there is and will be no necessity of delivery of possession by Court.”

Mr. Bose concedes on behalf of his client that the actual pattis were formed by the arbitrators after a consideration of the nature and extent of the family properties and his complaint is solely this that the pattis were actually allotted by drawing Jots in the presence of the Thakurji.

Mr. B.N Mitter has objected to the appellant taking this point on appeal. According to him, the point was never taken in the Court below, and there is no reference to it in the grounds of appeal to this Court.

I have carefully considered the judgment of the Court below, and it is clear from it that no objection was taken by the appellant against the mode of allotment. He had taken all kinds of objections, mostly frivolous, but he had not complained against the award on this ground.

The grounds of appeal to this Court number thirty-one, and nowhere is there the slightest reference to the point now made. It seems clear that until the case came to be argued here the defendant had never objected to the mode of allotment adopted by the arbitrators. For these reasons I should be very loath to allow the appellant to take this point in this Court.

We have, however, considered the point on its merits, and in my view there is no substance in it.

The award makes it abundantly clear that the allotment was made in the temple in the presence of the parties and with their consent. It was, therefore, known to the defendant-appellant that the arbitrators had stated that this was done with his consent, yet he never alleges the contrary. It is true that in his evidence he states that he was not present; but even so, he does not allege that there was anything illegal about the allotment or that an allotment in this way constituted misconduct on the part of the arbitrators.

In my view, it is clear that the allotment by lot was agreed to by all the parties. The defendant-appellant called one of the arbitrators, namely, Anirudh Chaudhuri (d.w 1). His evidence is in these terms:—

“The three pattis were equal and were made known to the parties. They had approved of the three pattis prepared by us. The lottery as regards the allotment of the pattis was drawn in the temple of the village where parties live and all the parties and arbitrators were present at that time. The lottery was drawn by a boy of ten or twelve years.”

He also stated that defendant no. 1 was displeased from the time of allotment made by lottery and that he had not accepted the award. It is to be observed that he does not say that defendant no. 1 ever objected to the allotment being made by lottery. He objected to the result, namely, the patti which he received as a result of the lottery. From a fair reading of this arbitrator's evidence, it is clear that there was nothing secret about this lottery and that it took place in the presence of all the parties and with their full concurrence.

Chandrakant Jha (p.w 1), another of the arbitrators, only makes one reference to the allotment. He merely stated that the patti was allotted by lottery at another sitting of the arbitrators. He was not cross-examined any further as to this. The third arbitrator, who was called, namely, Babuji Rai (p.w 2) made no reference to the lottery and was not cross-examined about it. The course the trial took makes it clear that at that time it was never suggested that the statement made in the award, namely, that the lottery took place with the consent of the parties was untrue. In my judgment, it is established that the factual allotment was made by the arbitrators in a manner approved of and agreed to by the parties to the reference. In such a case can it be alleged that this lottery amounted to misconduct on the part of the arbitrators? It must be remembered that the difficult work in this arbitration was the formation of three pattis of equal size and value. Once the pattis had been decided upon, the arbitrators would have very little material to assist them in actual allotment, and that being so, it is not strange to find that they resorted to lottery or chance.

Normally the allotment of pattis should be the act of the will and judgment of the arbitrators and should be a matter of choice and not of chance. This was clearly laid down in the case of Cassell, In re. That was a case where an umpire had been chosen by the two arbitrators by lot, and at page 628 Lord Tenterden, C.J, observed:—

“The appointment of the third person must be the act of the will and judgment of the two, must be a matter of choice and not of chance unless the parties consent to or acquiesce in some other mode.”

The observation applies with equal force to allotment of pattis, and such should be a matter of choice and not of chance unless the parties consent to or acquiesce in some other mode. In the present case the parties did actually consent to and acquiesce in another mode, namely, a lottery, and that being so, the defendant-appellant cannot now complain that the pattis were allotted in that manner.

A similar rule was laid down in Tunno and Bird, In re, in which it was laid down that if the parties to a reference either agreed beforehand to the method of appointment of an umpire or afterwards, acquiesced in the appointment made with full knowledge of all the circumstances, they would be precluded from objecting to such appointment as invalidating subsequent proceedings. There the arbitrators chose an umpire by lot with the full knowledge of everyone concerned, and it was held that no objection to the award could be raised on that ground. A similar view was taken in James v. Attwood.

Tindal, C.J observed:—

“Now the grounds relied upon here are, first, that the umpire was decided by lot. Undoubtedly the mind, and understanding of the two arbitrators should concur in the selection of the person who is, to act as umpire, but it appear to me that the case falls within that of Tunno and Bird, In re, where it was held that a party to an arbitration cannot object, to the award that the arbitrators chose an umpire by lot, if he expressly agreed to or acquiesced in that mode of choice.”

I can see no reason why the same principle should not be applied to arbitrations in this country. Had the lottery taken place without the consent and acquiescence of defendant no. 1 such method of allotment would, in my view, amount to misconduct; but as the method was adopted with the express consent and acquiescence of the defendant, he cannot now object to it.

The respondents relied upon a single Judge case of Puran Chand v. Ram Nath in which Pullan, A.J.C expressed the view that where an umpire decided questions in an arbitration by lot such would not amount to misconduct invalidating the award. I must confess that I am unable to agree with this view, because it overlooks the principle that the decisions of arbitrators or umpires must be the act of their will and judgment and must be a matter of choice and not of chance. However, in the present case as the defendant-appellant clearly consented to the mode of allotment his contention that such amounts to misconduct fails. Even, therefore, if we allow the defendant-appellant to take this point, which I am reluctant to do, his appeal is bound to fail.

For the reasons which I have given, I would affirm the order of the Court below and dismiss this appeal with costs.

Manohar Lall, J.:— I entirely agree.

H.R.K
Appeal dismissed.