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Sanyasi Rao v. Venkata Rao

Madras High Court
Oct 11, 1922
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Summary of the Legal Opinion

Factual and Procedural Background

The dispute concerns competing claims to be the adopted son of Chintalapudi Sanyasayya. The plaintiff is a minor, represented by his natural father, who sued to establish that he was the adopted son of Sanyasayya. The defendant is the natural (aurasa) son of Sanyasayya and is represented by his mother, Ammanna, who denied the adoption and refused to maintain the plaintiff.

The parties executed a submission to arbitration (a "muchilika" or Yeka Panchayat submission). The defendant's mother, acting as guardian, consented in the submission to be bound by the arbitrator's decision and agreed that the arbitrator might decide on his own information or other information known in the village, or by examining witnesses of both parties if he thought fit.

The arbitrator, Boddu Appanna Doragaru, conducted private enquiries and examined some witnesses in the absence of the parties. He later awarded that the plaintiff was the adopted son of the deceased and entitled to a one-fifth share of the estate. The plaintiff applied under paragraph 20 of Schedule 2 of the Civil Procedure Code to have the award filed in Court; the Subordinate Judge ordered the award to be filed and pronounced judgment according to the award.

The defendant (through his guardian/mother) contested the award on the ground that the arbitrator had examined witnesses in the absence of the parties and had made private enquiries and based his decision on information so obtained. This led to further judicial consideration on whether the award was invalid.

Legal Issues Presented

  1. Whether an arbitrator may lawfully act upon information obtained by private enquiries or on his own knowledge (including interviewing or obtaining admissions from one side) in the absence of the parties, and whether an award founded on such information is invalid.
  2. Whether a guardian acting on behalf of a minor can validly consent to a submission that empowers an arbitrator to decide on his own knowledge or to receive information in the absence of the parties, thereby precluding the minor from later impeaching the award.
  3. Whether the procedural irregularity of the arbitrator examining witnesses or obtaining information in the absence of the parties constitutes legal misconduct sufficient to vitiate an award, even when the arbitrator acted honestly and the parties (or a guardian) had agreed to broaden his powers in the submission.

Arguments of the Parties

Appellant's Arguments (Defendant / Guardian)

  • The award is not binding on the defendant because the arbitrator examined witnesses in the absence of the parties, made private enquiries, and based his decision on information obtained in that manner.
  • The defendant (a minor) should be able to object to irregular procedure adopted by the arbitrator, and the guardian's consent to such procedure cannot validly waive the minor's rights.

Respondent's Arguments (Plaintiff / Plaintiff's Guardian)

  • The submission (muchilika) expressly authorized the arbitrator to act on his own information or other information known in the village, or to examine witnesses if he thought it necessary; therefore the arbitrator's conduct was justified by the terms of the submission.
  • Under precedents such as Lachmi Narain v. Sheonath Pande, if parties agree that the arbitrator need not take evidence and may decide on his own knowledge, no misconduct can be imputed.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Lachmi Narain v. Sheonath Pande (1920) I.L.R. 42 All. 185 That if parties agree the arbitrator need not take evidence and may decide on his own knowledge, no misconduct can be imputed. The court acknowledged the proposition as sound when parties are sui juris, but distinguished it because the party objecting in this case is a minor represented by a guardian, and therefore the guardian's consent cannot automatically validate such broad powers.
Re an arbitration between Gregson and Armstrong (1894) 70 L.T. 106 That it is improper for an arbitrator to obtain information from one side in the absence of the other. Used to support the general principle that arbitrators should not gather or rely on information obtainable only by private enquiries or interviews behind the parties' backs.
Harvey v. Shelton (1844) 7 Beav. 455; 49 E.R. 1141 An award may be set aside where an arbitrator interviewed one party in the absence of the other; a judge/arbitrator must not permit one side to influence the decision by means unknown to the other. The court relied on Lord Langdale's statement of principle to hold that awards founded on information received in the absence of a party are invalid, and used this as a foundational authority for setting aside the award in the present case.
Dobson v. Groves (1844) 6 Q.B. 637; 115 E.R. 239 The arbitrator should not receive information in the absence of the parties unless he has express power or the parties agree; a possibility of bias suffices to impeach an award. The court cited Lord Denman's observations to show that even a possibility that the arbitrator's mind may have been biased by private information is sufficient to vitiate an award.
Swamirao v. The Collector of Dharwar (1893) I.L.R. 17 Bom. 299 Authority indicating a guardian cannot waive certain procedural rights of a minor to object to irregular procedure; follows Rhodes v. Swithenbmk. Applied as support for the proposition that the defendant's guardian could not waive the minor's right to object to the arbitrator's irregular procedure.
Rhodes v. Swithenbmk (1889) 22 Q.B.D. 577 English authority on the limits of acceptable arbitrator conduct and related procedural protections. Referenced via Swamirao as part of the English authorities supporting the protection of parties (and minors) from arbitrators receiving private information.
Lakshminarayana Tantri v. Ramachandra Tantri (1918) 34 M.L.J. 71 Gross negligence on the part of a next friend or guardian entitles a minor to impeach an award or a judgment passed against him. The court relied on this authority to characterize the guardian's conduct (consenting to the wide submission) as gross negligence that entitles the minor to impeach the award.
Chandur Punnayyah v. Rangam Viranna (1922) 42 M.L.J. 429 Similar holding that gross negligence by a next friend or guardian allows a minor to impeach an award. Used alongside Lakshminarayana Tantri to support the proposition that a guardian's gross negligence can vitiate the binding effect of a submission on a minor.
Daya Kishen v. Dharam Das (1907) 4 A.L.J. 159 Example of Indian High Courts accepting the English view that privately received information by an arbitrator can vitiate an award. Relied on to show the English principle has been accepted in Indian High Courts and to support setting aside the award for improper procedure.
Ganes Narayan Singh v. Malida Koer (1911) 13 C.L.J. 399 Another Indian case accepting the English authorities on arbitrator misconduct via private enquiries. Referenced as part of Indian authorities adopting the English principle disallowing private information to influence awards.
Hari Singh v. Kankinarah Co. Ltd. (1921) 34 C.L.J. 39 Further Indian authority recognizing the rule against arbitrators acting on private information in the absence of parties. Used alongside other Indian cases to show consistency in applying the principle and to support the decision to set aside the award.
Walker v. Forbisher (1801) 6 Ves. J. 70; 31 E.R. 943 Even if an arbitrator honestly states that private information had no effect, a judge must not speculate on that; awards tainted by improperly admitted evidence cannot be supported on principle. Quoted to underscore that an arbitrator's honesty does not cure the legal defect caused by the irregular procedure; the award must be set aside regardless of asserted absence of prejudice.

Court's Reasoning and Analysis

The court undertook a step-by-step analysis starting from the text of the submission, the conduct of the arbitrator, and established legal principles from English and Indian authorities.

1. The court first examined the submission (the muchilika), which expressly authorized the arbitrator to act "either on your own information or upon other information known in the village or by examining the witnesses of us both parties should you think it necessary." The Subordinate Judge had relied on that clause to justify the arbitrator's conduct.

2. The court then posed the general law question: apart from any covenant in the submission, is an arbitrator entitled to act on information received in the absence of the parties or on his own knowledge? The court stated the law is "perfectly clear" that an award based on such information or knowledge is invalid.

3. The court reviewed authorities (Harvey v. Shelton, Dobson v. Groves, and others) establishing the principle that arbitrators must not receive or act upon information in the absence of one party because doing so permits one side to influence the decision by means unknown to the other; such awards have been set aside in numerous cases.

4. The court acknowledged the corollary principle: if parties who are sui juris expressly agree that the arbitrator may decide on his own knowledge or that no evidence need be taken, then no misconduct can be imputed (as in Lachmi Narain). However, that concession applies only to competent parties.

5. Turning to the facts, the court emphasized that the defendant was a minor and the submission was executed by his mother as guardian. The court held that a guardian's consenting to empower an arbitrator with such wide powers that derogate from natural justice is, in general, not in the interests of the minor and cannot be treated the same as the agreement of parties sui juris.

6. The court observed that the arbitrator admitted to making enquiries and obtaining an admission from the defendant's mother without noting them down, and that the arbitrator did not reduce witness evidence to writing nor examine them in the presence of the parties. The award did not purport to rest on any specific admission recorded, and the circumstances or content of any such admission were not known.

7. Applying the authorities, the court concluded that the arbitrator's private enquiries and reliance upon information obtained in the absence of the parties vitiated the award. The court also relied on authorities that gross negligence by a guardian entitles a minor to impeach an award or judgment, and characterized the guardian's conduct as gross negligence.

8. The court additionally relied on the principle that a judge (or court) must not attempt to determine whether improperly received evidence had or had not affected the arbitrator's mind; the mere possibility of bias is sufficient to invalidate the award.

9. Although the court accepted that the arbitrator acted honestly and there was no suggestion of bad faith, it concluded that the procedure adopted was illegal and amounted to legal misconduct, and therefore the award could not stand.

Holding and Implications

HOLDING: The appellate court ALLOWED THE APPEAL, set aside the arbitrator's award, and thereby invalidated the judgment entered in accordance with that award.

Implications:

  • The direct effect on the parties is that the award in favor of the plaintiff is vitiated and cannot be enforced; the appeal was allowed and the award set aside.
  • The court emphasized settled legal principles rather than establishing a novel precedent; it applied existing English and Indian authorities to conclude that arbitrators must not act on private information received in the absence of one of the parties, and that guardians cannot validly waive certain procedural protections for minors when such waiver amounts to gross negligence.
  • No broader new rule was announced beyond the court's application and reaffirmation of established principles: (a) parties sui juris may agree to dispense with ordinary evidentiary procedure, (b) but where a minor is concerned a guardian's consent to such a waiver will be scrutinized and may be disregarded if it amounts to gross negligence, and (c) private enquiries by an arbitrator that create a possibility of bias are sufficient to vitiate an award even if the arbitrator acted honestly.
Show all summary ...

1. The plaintiff, a minor represented by his natural father, sued to establish 'that he was the adopted son of Chintalapudi Sanyasayya. The defendant who is the minor aurasa son of the said Sanyasayya, represented by his mother, opposes the suit. There was a reference to arbitration without the intervention of the Court. The defendant's mother agreed to the dispute being referred to be settled by a single arbitrator and in the much like that was drawn up she consented to be bound by and act according to the decision the arbitrator might give either on his own information or upon other information known in the village or by examining, the witnesses of both parties should he think it necessary. The agreement to refer goes on.

We shall not, before you give a decision regarding the said disputes between us, cancel this muchilika executed by us, by one of us alleging among others that you are doing injustice, or that you are partial and that your arbitration is not necessary and that you should not give decision. We shall agree to your decision itself as the final decision. We shall not contend for any reason and in any manner either in Courts or in any other places that your decision is not proper and that it cannot bind us.

The arbitrator admits that he enquired of witnesses behind the back of the parties and that "he collected information and obtained an admission from the defendant's mother without noting them, down in writing. The question is whether the minor defendant is bound by such a surrender by his guardian of his legal right that the witnesses should be examined in. the presence of the parties and whether such procedure makes the award" otherwise invalid" within the meaning of Section 15 of the second schedule, Civil Procedure Code.

2. The Subordinate Judge quotes Lachmi Narain v. Sheonath Pande (1920) I.L.R. 42 All. 185 and observes:

If the parties agreed that there was no need for him to take any evidence and that the arbitrator should decide the disputes between them on his own knowledge, no misconduct could be implied if he decided accordingly.

3. That is a perfectly sound proposition provided that the parties are sui juris. But the question here is whether it was a reasonable and prudent act on the part of the guardian of a minor thus to commit the interests of her ward into the absolute power of a single person whom she permits to follow a procedure opposed to natural justice. It "is improper on the part of an arbitrator to get information from one side in the absence of the other or to utilize information not accessible to others--vide Re an arbitration between Gregson and Armstrong (1894) 70 L.T., 106, Harvey v. Shelton (1841) 7 Beav. 455 at 462 (49 E.R. 1141) and Dobson v. Groves (1844) 6 Q.B. 637 115 . E.R. 239. The arbitrator examined by the Court admits that he acted thus and it also appears from the statement of plaintiff's guardian that the arbitrator acted on information obtained' before the reference. I am of opinion that his. procedure vitiated the award given in the present case and that the defendant's guardian could not waive her son's right to object to irregular procedure--vide Swamirao v. The Collector of Dharwar (1893) I.L.R. 17 Bom. 299 which follows Rhodes v. Swithenbmk (1889) 22 Q.B.D. 577. I would go further and characterize her conduct as gross negligence on the part of a guardian; and it has been held by this Court in Lakshminarayana Tantri v. Ramachandra Tantri (1918) 34 M.L.J. 71 and Chandur Punnayyah v. Rangam Viranna (1922) 42 M.L.J. 429 that gross negligence on the part of a next friend or guardian entitles a minor to impeach an award or a judgment passed against him. The appeal is allowed and the suit is dismissed. No costs.

Venkatasubba Rao, J.

4. The appellant attacks the judgment pronounced by the Subordinate Judge giving effect to an award made in favour of the plaintiff. The facts of the case may be very briefly stated. One Sanyasayya died leaving the defendant, his natural son, and his widow Ammanna, the mother of the defendant. The plaintiff claimed that he was adopted by Sanyasayya and stated that the defendant was born subsequent to the adoption and that Ammanna denied the adoption and refused to maintain the plaintiff. The disputes were then referred to the arbitration of a gentleman by name Boddu Appanna Doragaru and the submission was executed by the natural father of the plaintiff acting on behalf of the latter, and by Ammanna acting on behalf of the defendant. The arbitrator was to decide whether the plaintiff was the adopted son of Sanyasayya and to what rights he was entitled. The arbitrator made an enquiry and passed an award declaring that the plaintiff was the adopted son of the deceased Sanyasayya and awarded to him a fifth share of the estate. The plaintiff then made an application under paragraph 20 of Schedule 2 of the Civil Procedure Code that the award be filed in Court and the application was numbered and registered as a suit and the Subordinate Judge ordered the award to be filed and pronounced judgment according to the award. The defendant contended that the award was not binding upon him for the reason inter alia that the arbitrator examined witnesses in the absence of the parties and instituted private enquiries and passed his judgment upon information so obtained. The Subordinate Judge refers to this contention in the following passage in his judgment:

The arbitrator does not pretend that he reduced the evidence of the witnesses he examined to writing nor did he examine them in the presence of the parties.

5. This conduct on the part of the arbitrator is justified by a reference to the terms of the submission. The part of the submission material for this purpose is as follows:

Therefore we have executed this Yeka Panchayat Muchilika agreeing to be bound by and act according to the decision you might give either on your own information or upon other information known in the village or by examining witnesses of us both parties should you think it necessary. We shall not, before you give a decision regarding the said disputes between us, cancel this muchilika executed by us alleging that you are doing injustice or that you are partial and that your arbitration is "not necessary. We shall agree to your decision itself as the final decision.

6. The first question that arises is, apart from any covenants in the Submission, is an arbitrator under the general law entitled to act on information received in the absence of the parties or on his own knowledge of the facts in regard to the matters in issue between the parties?

7. The law is perfectly clear on the point that an award based on such information or knowledge is invalid. In. Harvey v. Shelton (1844) 7 Beav. 455; 49 E.R. 1141, an award was set aside on the ground that the arbitrator interviewed one party in the absence of the other. Lord Langdale, M.R., says:

In every case in winch matters are litigated, you must attend to the representation made on both sides and you must not, in the administration of justice in whatever form, whether in the regularly constituted courts or in arbitrations, whether before lawyers or merchants, permit one side to use means of influencing the conduct and the decisions of the Judge which means are not known to the other side.

8. The Master of the Rolls also observes:

There is no proof, nor in such a case do I apprehend there could be proof, that the result to which Mr. Wakefield came was in any way prejudicial to Mr. Harvey.

9. Still the award was set aside on the ground that:

it is an ordinary principle in the administration of justice that no party can be allowed to use any means whatsoever to influence the mind of the Judge which means are not known to and capable of being resisted by the other party.

10. This view was acted upon in numerous other cases in England and was accepted in several decisions of the Indian High Courts. See Daya Kishen v. Dharam Das (1907) 4 A.L.J. 159, Lachmi Narain v. Sheonath Pande (1920) I.L.R. 42 All. 185 Ganes Narayan Singh v. Malida Koer (1911) 13. C L.J. 399 and Hari Singh v. Kankinarah Co. Ld. (1921) 34 C.L.J. 39.

11. It is also settled that if the parties agree that the arbitrator shall decide the dispute on his own knowledge or that there is no need for him to take any evidence, no misconduct can be imputed. See Lakchmi Narain v. Sheonath Pande (1920) I.L.R. 42 All. 185. Lord Denman, C.J., observes in Dobson v. Groves (1844) 6 Q.B. 637 (115 E.R. 239) that no information ought to be received by the arbitrator in the absence of the parties unless the arbitrator has an express power reserved for that purpose or the parties agree that he shall "exercise it. If the parties to this reference were sui juris the arbitrator would have been justified in acting as he did and his award would not be liable to be set aside on the ground of misconduct. But on behalf of the defendant who is a minor his mother and natural guardian consented to the terms contained in the reference and it cannot be held that the act of the mother is beneficial to the defendant. Such covenants are sometimes found in submissions executed by parties who are sui juris. But when a guardian is acting on behalf of a minor I do not think it, can be said that in any case it will be in the interests of the minor for the guardian to consent to the arbitrator possessing such wide powers. However no special grounds have been shown to exist in this particular case which would justify the empowering of the arbitrator to depart from the usual rules of procedure indispensable to the impartial administration of justice.

12. There is one matter to which I must advert. It has been said that the arbitrator after making enquiries of other persons, interviewed the defendant's mother herself and that she admitted the plaintiff's adoption. In regard to this, it is necessary to point out that the arbitrator in his award does not refer to this incident and does not profess to base his judgment upon this admission. What the actual statement made by the mother, if any, was, there is no means of knowing because it has not been recorded. In what circumstance the admission was made we are not in a position to say. Whether the admission was, qualified or absolute does not appear. Whether she admitted the factum of adoption or the validity of the adoption we have no means to find out. It must be remembered that the so-called admission is not a statement by one of the parties to the suit but only a statement made by the guardian of one of the parties. Such a statement could not be conclusive against the defendant as an admission. In any event, it is settled law that if evidence is improperly admitted the courts will not consider the question whether such evidence had or had not an effect upon the arbitrator's mind, and in this case the arbitrator having made private enquiries and obtained information, his award is there by vitiated. In Dobson v. Groves (1844) 6 Q.B. 637; 115 .E.R. 239 Lord Denman, C.J., observes:

When once the case is brought within the general principle by a possibility that the arbitrator's mind may have been biassed, there is a sufficient objection.

13. In Walker v. Forbisher (1801) 6 Ves. J. 70; 31 E.R. 943, the arbitrator swore that though he heard certain persons in the absence of one of the parties, the information had no effect upon his award. Lord Chancellor Eldon said:

I believe him. He is a most respectable man. But I cannot from respect for any man do that which I cannot reconcile to general principles. A Judge must not take upon himself to say whether evidence improperly admitted had or had not an effect upon his mind. The award may have done perfect justice but upon general principles it cannot be supported.

14. I am constrained for these reasons to set aside the award and allow the appeal. Prom the judgment of the Subordinate Judge it is clear that the arbitrator acted honestly and no prejudice or desire to do wrong can be imputed to him. But nevertheless, the procedure adopted by him is illegal and his acts amount to legal misconduct and his award is therefore bad. I agree with the order proposed by my learned brother.