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AMICUS AI
Citation Codes
Equivalent Citations
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Case Number
Attorney(S)
  • S.M Mullick, G.N Mukherji, N.C Ghosh, for the appellant.
  • C.C Das (with him S.C Mazumdar), for the respondents.
Judges
  • Adami
  • Allanson, JJ.
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • S.M Mullick, G.N Mukherji, N.C Ghosh, for the appellant.
  • C.C Das (with him S.C Mazumdar), for the respondents.
Judges
  • Adami
  • Allanson, JJ.
See more information ...
Smart Summary

Summary of Opinion — Adami, J.

Factual and Procedural Background

The opinion reviews an appeal against an award made by arbitrators pursuant to a reference (a deed of reference). The appellant (referred to as Jnanendra Nath / Janendra Nath / Babu Jnanendra Nath Bagchi in the opinion) raised four objections to the award; one of these objections (that a suit in the High Court had been dismissed prior to the filing of the award) was withdrawn by the appellant's counsel, Mr. Sushil Madhab Mullick. The Court was required to consider the remaining three objections: (1) that the arbitrators had not decided the question of costs; (2) that the arbitrators had failed to divide all the properties by metes and bounds, rendering the award incomplete; and (3) that the arbitrators had disregarded directions in a will (relating to postponement of possession until a beneficiary attained 35 years and obtained his brothers' consent), thereby acting beyond their powers. The arbitrators had issued correspondence showing they considered costs and had left certain properties' partition to be dealt with later at the parties' request. The Court heard argument and dismissed the appeal, with costs.

Legal Issues Presented

  1. Whether the award was invalid because the arbitrators did not decide the question of costs.
  2. Whether the award was incomplete and therefore could not be filed or enforced because the arbitrators failed to divide all the properties by metes and bounds (i.e., left matters undetermined).
  3. Whether the reference and the award were invalid because the arbitrators purportedly opposed or altered the terms of the testator's will (specifically a direction postponing possession until a beneficiary reached age 35 and obtained consent), such that the arbitrators acted beyond their authority.

Arguments of the Parties

Appellant's Arguments (as presented by Mr. Sushil Madhab Mullick)

  • Withdrew the objection that the suit in the High Court had been dismissed prior to the award.
  • First objection: Argued that the question of costs was not decided by the arbitrators and thus the award was defective.
  • Second objection: Argued that because the arbitrators left some matters (partition by metes and bounds of specific properties) undetermined, the award could not be filed; relied on paragraph 21 of Schedule 2 and the court's power under paragraph 14 clause (a) to remit awards where matters are undetermined, and cited a decision in Kunjlal v. Banwari Lal.
  • Third objection: Contended the reference was bad because it opposed or altered the terms of the will (postponement condition) and therefore the award was bad; relied on Soudamani Ghosh v. Gopal Chandra Ghosh to argue that executors / those making the reference cannot authorize arbitrators to modify the will.

Arbitrators' / Respondents' Position (as shown in the opinion)

  • Regarding costs: The arbitrators replied that the question of costs was to be decided by them and that costs would be paid out of the estate; they considered and allowed a travelling allowance claim submitted by Janendra Nath.
  • Regarding partition by metes and bounds: The arbitrators acted in accordance with the parties' letters (notably a letter of 19 March 1924) requesting postponement of partition for certain properties and a staged partition; they followed the parties' directions, but were unable themselves to perform the further work of partitioning the remaining properties in a separate award.
  • Regarding the will: The arbitrators examined the will, construed it and found that the interest vested absolutely in Dhirendra Nath; they concluded the testator did not intend that Dhirendra's share should vest in the brothers if Dhirendra died before 35, and held that Dhirendra's interest was vested and that he could claim possession.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Kunjlal v. Banwari Lal Authority referenced for the proposition that where arbitrators in an arbitration without court intervention leave matters undetermined or determine matters not referred, the court must refuse to file the award. The court considered the principle but found it inapplicable because the parties had expressly agreed to a staged partition and had requested postponement of partition for certain properties; therefore the alleged omission was due to the parties' direction and did not invalidate the award.
Makund Ram Sukal v. Saliq Ram Sukal (Privy Council) Held that an implied condition that an award shall dispose of all matters referred may be waived by the consent of the parties; parties can agree to staged divisions and make each partial division final. The court relied on this decision to conclude that because the parties agreed to partition by stages and asked for a further award on the remaining properties, the arbitrators were entitled to make a partial award and such a staged award was valid.
Soudamani Ghosh v. Gopal Chandra Ghosh Stated that executors cannot make a reference to arbitrators with the avowed purpose of modifying or substituting provisions of the will so as to alter the testator's directions; arbitrators cannot be empowered to make a new will. The court distinguished the present reference from that case: here the arbitrators were empowered to construe the will (not to make a new will) and they construed it to find that the interest vested in Dhirendra Nath; consequently the award did not amount to an impermissible alteration of the will.
Venkata v. Parthasarathi Principle cited (via Judicial Committee) that construction of a will does not permit additions to the terms of the will; arbitrators are not empowered to alter terms. Used to frame the limitation on what arbitrators may do (i.e., they may construe but not add to or alter the will). The court found the arbitrators remained within constructive powers, as they construed the will and found the interest vested.
Halsbury's Laws of England, Vol. 28, para 1161 (authority) States that where a donee's enjoyment is postponed by will to a specified age, the court may strike out such postponement if the donee is entitled to give a discharge for the gift or those deriving under him apply; cites Gosling v. Gosling for support. The court relied on the stated rule (and Gosling v. Gosling) to explain that a direction postponing enjoyment can be struck out in appropriate circumstances and to support the arbitrators' construction that the interest vested.
Gosling v. Gosling Cited as supporting authority for the proposition (from Halsbury) that a court may strike out a direction postponing enjoyment where appropriate. Referred to by the court in explaining the legal principle under which a postponement direction in a will might be disregarded where the interest is vested or where the donee (or those deriving through him) can give discharge.
Staff v. Andrews; Ching v. Ching Young v. Walter; Mathew v. Davis; Gulam Jilani v. Mohammed Ahmed Husan These authorities were cited for the general proposition that pure questions of law may be referred to arbitrators. The court cited them in the passage discussing the permissible scope of arbitrators' powers to decide questions of law (i.e., construction of a will) and used the general proposition to support the conclusion that the arbitrators could validly construe the will.

Court's Reasoning and Analysis

The Court dealt with each of the outstanding objections in turn, applying the law to the factual record (notably the correspondence between parties and the arbitrators).

  1. Costs: The Court examined the correspondence and the arbitrators' response (dated 9th August) that the question of costs was to be decided by them and that costs would be payable out of the estate. The arbitrators also considered and allowed a travelling allowance claim. The Court found that the arbitrators had considered costs and decided them insofar as they could, and that any lack of a more definite decision resulted from a letter from the appellant asking arbitrators not to decide costs. On these facts, the Court held the appellant had no cause for complaint.
  2. Partition by metes and bounds / completeness of award: The Court recognized the general rule (as in Kunjlal and expressed in paragraph 21 of Schedule 2) that an award leaving matters undetermined may be refused filing. However, the Court relied on the Privy Council's ruling in Makund Ram Sukal that parties may impliedly or expressly waive the condition that the award must dispose of all matters, and may agree to staged partitioning such that partial divisions are final. The Court found that the parties had agreed to a staged partition by their letter of 19 March 1924 and had requested the arbitrators to postpone partition of certain properties. The arbitrators followed that direction but were unable to complete the further partitioning themselves; therefore the omission did not amount to failure to carry out duties under the agreement.
  3. Validity of the reference in relation to the will / arbitrators' powers: The Court addressed whether the arbitrators impermissibly altered the will. It distinguished the present case from Soudamani Ghosh (where executors were held not to be able to empower arbitrators to substitute new provisions for a will). The Court noted that under the present reference the arbitrators had the power to construe the will. Citing authorities (including Halsbury and Gosling), the Court explained the circumstances under which a court may strike out a postponement in a will and observed that the arbitrators had concluded the interest vested absolutely in Dhirendra Nath. The Court accepted the arbitrators' construction: that the testator did not intend the share to vest in the brothers if Dhirendra died before 35, and that in fact Dhirendra's interest vested (the arbitrators even held he could have claimed possession immediately). The Court also noted that the appellant had been party to the reference and had consented that Dhirendra's conduct fitted him to get the share, and that Dhirendra was now over 35 (fulfilling the age condition). Given these facts and the arbitrators' lawful power to construe the will, the Court concluded there was no ground to set aside the award on this basis.

After analyzing these points, the Court found no sufficient ground to set aside the award and concluded the appeal should fail. Allanson, J. agreed with Adami, J.'s reasoning.

Holding and Implications

HOLDING: The appeal is DISMISSED WITH COSTS.

Immediate consequences: The award made by the arbitrators stands and the appellant's objections were rejected by the Court. Costs are awarded against the appellant in respect of the appeal.

Broader implications: The opinion applies existing authorities (including the Privy Council decision in Makund Ram Sukal and principles stated in Soudamani Ghosh and Halsbury) to the facts, but it does not purport to establish a new legal principle. The decision affirms that (a) arbitrators may decide questions of costs and their consideration of costs will not be set aside where the record shows consideration and decision within the scope of the reference; (b) parties may agree to staged partition such that an award that does not dispose of every item immediately is valid; and (c) arbitrators empowered to construe a will may determine whether a beneficiary's interest is vested and such a construction will not be invalid merely because it results in immediate enjoyment, provided the arbitrators have acted within the authority of the reference and the parties' consent.

Show full summary ...

    Jnanendra Nath Bagchi v. Sures Chandra Roy

    Adami, J.:— (After stating the facts set out above, proceeded as follows): With regard to the last objection, Mr. Sushil Madhab Mullick, on behalf of the appellant, withdraws the objection admitting that the suit in the High Court had been dismissed previous to the filing of the award.

    We have to consider the three other objections.

    With regard to the first objection that the question of costs was not decided by the arbitrators, I have cited above both the clause in the reference and the decision of the arbitrators thereon. It appears that the appellant Jnanendra Nath wrote to the arbitrators asking them not to come to a decision upon the costs in his letter dated the 16th July, 1924. Babu Jnanendra Nath Bagchi on the 21st July, 1924, a short time before the award was signed, wrote to the arbitrators complaining that he had not yet been paid his costs in the High Court and demanding that the arbitrators should pay to him the sum of Rs. 1,300 with interest at 12 per cent, per annum from the date of the signing of the deed of reference. He threatened that, if he were not paid this amount within 24 hours, he would move the court for an injunction directing the arbitrators to refrain from giving their award. The arbitrators replied on the 9th August, that the question of costs was to be decided by them and that the costs would be paid out of the estate in the first instance. The arbitrators did consider a certain travelling allowance bill submitted for journeys by Janendra Nath to Calcutta and his claim for travelling allowance was allowed. It is clear that the arbitrators were considering the question of costs and decided that the costs were to be paid out of the estate. If no more definite decision was come to it is clear that it was due to the letter written by the appellant on the 10th July, 1924. Under the circumstances I do not think that Babu Jnanendra Nath had any cause for complaint; the arbitrators decided the question so far as they could.

    The next objection is that the arbitrators failed to divide all the properties by metes and bounds, and, therefore, the award was not complete. Mr. Sushil Madhab Mullick points out that in the case of an arbitration without the intervention of a court if the arbitrators leave undetermined any of the maters referred to arbitration or determined any matter not referred to arbitration, the court must refuse to file the award. He refers us to the wording of paragraph 21 of Schedule 2 and points put the difference between an award without the intervention of the court and an award made in a suit. Under clause (a) of paragraph 14 the court may remit the award for reconsideration where a matter has been undetermined or there is the determination of a matter not referred to arbitration. He relies on a decision of this court in Kunjlal v. Banwari Lal and contends that in the present case this Court is bound to find that the award could not be filed since matters had been left undetermined. The matter left undetermined is the partition by metes and bounds of the north Bhagalpur properties and the house in Calcutta. The arbitrators have given their reason for leaving this partition undetermined, the reason being that all the parties' including the appellant, by their letter dated the 19th March, 1924, to which I have referred above, requested the arbitrators to postpone the partition of those properties and to first pass an award as to the partition of the other properties. In Makund Ram Sukal v. Saliq Ram Sukal their Lordships of the Privy Council ruled that the ground for holding an award to be invalid on account of its not disposing of all the matter referred appears to be that there is an implied condition in the submission of the parties to the arbitration that the award shall dispose of all; this condition may be waived by the consent of the parties before the arbitrators. Where the partition of a joint estate consisting of different properties had been submitted to arbitration and the parties agreed to a division being made by steps and that each division should be final without any condition that the award should not be final while a part remained undivided, it was competent to the parties to agree before the arbitrators to the division being made as it had been and the partition as to the property divided was final.

    It is quite clear that in the present case the parties did agree to the partition by stages and asked that the properties remaining undivided should be the subject of a further award to be made by the same arbitrators. The arbitrators followed the direction of the parties but were unable themselves to perform the further work of partitioning the remaining properties in a separate award.

    In the present case, I do not think that, under the circumstances, the arbitrators failed to carry out the duties imposed as agreed to by the parties in their letter of March, 1924.

    The last objection seems to be a more serious one. Though the will is not before us, it appears that the testator directed that Dhirendra Nath should not have possession of his share until he reached 35 and only then if the brothers consented that he was of good behaviour and conduct.

    Under the terms of paragraph 8 of the reference, it is quite clear that the parties to the reference, including the appellant, agreed that the wishes of the testator with regard to the postponement of the bequest should not be observed. It is contended by Mr. Sushil Madhab Mullick that the reference was bad by reason of this opposition to the terms of the will and that the award must also be bad. He relies on the case of Soudamani Ghosh v. Gopal Chandra Ghosh. In that case it was found that the executors authorised the arbitrators to substitute for the provisions of the will which might seem to them indefinite or illegal other provisions agreeably to what might have been imagined to have been the intention of the testator: in other words the executors in their submission authorised the arbitrators to make a new will for the testator. It was there laid down—“But it is equally plain that an executor cannot make a reference to arbitration with the avowed purpose that the terms of, the will may be modified and arrangements made for the management and distribution of the estate contrary to the directions of the testator…………………. The arbitrators are no doubt asked to construe the will; and it need not be disputed that pure questions of law may be referred to the decision of an arbitrator [Staff v. Andrews Ching v. Ching Young v. Walter, Mathew v. Davis(4) and Gulam Jilani v. Mohammed Ahmed Husan(5)]. But the arbitrators are here authorised to do something more than a construction of the will which as their Lordships of the Judicial Committee said in Venkata v. Parthasarathi(6) does not mean an addition to the terms of the will; they are not empowered to alter the terms of the will. This plainly was not within the competence of the executors.”

    Now, under the reference, the arbitrators had power to construe the terms of the will. Where there is a direction in the will, that a donee is not to enjoy a vested gift in full until he attains a particular age, then unless there is in the will, or some codicil to it a clear indication of intention not only that the donee is not to have the enjoyment of the gift until attaining that age but that some other person is to have that enjoyment, or unless the property is so clearly taken away from the donee up to the time of attaining that age as to induce the court to hold that as to the previous income there is an intestacy, the court on the application of the donee, if he is entitled to give a discharge for the gift, or the person deriving title under him, will strike that direction out of the Will” [Halsbury's Laws of England, Volume 28, paragraph 1161]. The case of Gosling v. Gosling is relied on.

    Mr. Sushil Madhab Mullick does not deny that an interest vested in Dhirendra Nath under the will, but he contends that he had not an absolute interest subject as it was to the condition that a certain age was reached and the brothers gave their consent.

    Now the executors evidently knew the law and they examined the will to find out whether the interest granted was an absolute one or not. The arbitrators' finding on the matter shows that they held that it could not be conceived that the testator meant that if Dhirendra Nath died before reaching the age of 35 his share was to vest in his brothers. They held that the testator meant that if Dhirendra had a wife or children and died before the age of 35, the share would belong to his wife and children. They found definitely that the interest vested in Dhirendra absolutely. The reference gave them power to find this construction. They found indeed practically that in spite of the terms of the will Dhirendra could have claimed possession of his share at once. That being so, in my opinion, the award cannot be found to be invalid by reason of the arbitrators directing that Dhirendra should get his share at once. It has to be remembered that the appellant himself was a party to the reference and that he consented that Dhirendra's conduct fitted him to get the share. Further Dhirendra is now over 35 years of age and the condition of his reaching that age has been fulfilled and it will be idle now to set aside the award on the ground that the property was given into his possession before he reached the age of 35.

    I cannot find in any of the grounds put forward by Mr. Sushil Madhab Mullick any reason why the award should be set aside, and I would therefore dismiss the appeal with costs.

    Allanson, J.:— I agree.

    Appeal dismissed.

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    Comments

    Jnanendra Nath Bagchi v. Sures Chandra Roy
    (Feb 11, 1927)