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  • R.L Anand, J.
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  • Section 16(2) of the Arbitration Act, 1940.
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Citation Codes
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citation codes
Case Number
Judges
  • R.L Anand, J.
Acts
  • Section 16(2) of the Arbitration Act, 1940.
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Smart Summary

Factual and Procedural Background

The judgment disposes of three civil revisions (Nos. 3123, 3124 and 3481 of 1994) arising from three suits instituted by Ram Parkash (plaintiff/respondent) in 1986: Civil Suit No. 101 of 1986 (permanent injunction), Civil Suit No. 389 of 1986 (declaration) and Civil Suit No. 676 of 1986 (permanent injunction). All suits concerned shares in land allegedly purchased by Ram Parkash, Tulsa Ram, Om Parkash and others under sale deeds dated 5.8.1981, and alleged clerical errors in recording the respective shares (notably that Ram Parkash's share was wrongly entered).

While the suits were pending, an application for reference to arbitration was moved in the trial Court and the matter was referred to three arbitrators. An award dated 4.1.1989 was filed in Court on 5.1.1989. Objections to the award were filed by defendant Om Parkash challenging validity on grounds including delay beyond the prescribed period, lack of opportunity to parties, requirement of registration and that the award was not a majority award because one arbitrator did not sign.

The trial Court (Subordinate Court) dismissed objections and made the award rule of the Court by judgment dated 25.2.1992. Three appeals to the Additional District Judge, Sonepat (CAs 92, 93 and 94 of 1992) were dismissed by judgment and decree dated 5.4.1994. The appellants then filed the present revisions. The revisional court (R.L. Anand, J.) heard counsel and has allowed the revisions on the grounds explained below, set aside the judgments of the Courts below and remanded the suits to the trial Court.

Legal Issues Presented

  1. Whether the arbitration award dated 4.1.1989 could be set aside on the ground that it was given beyond the prescribed period for making awards (beyond four months) and whether such delay invalidated the award.
  2. Whether the award or the agreement dated 23.7.1983 required registration to be valid or enforceable.
  3. Whether an award signed by two of three arbitrators, when the third participated in proceedings but refused to sign, can be treated as a valid majority award.
  4. Whether a counsel or a signatory (e.g., one heir or an advocate) could competently bind other co-defendants by signing an application or statement referring the dispute to arbitration.
  5. Whether the reference to arbitrators was valid where only some of the interested parties moved for reference—i.e., whether an application moved by only some parties renders the reference and consequent award void ab initio.
  6. Whether the plaintiff's claims fall within the definition of a Benami transaction and, if so, whether the suits were maintainable.

Arguments of the Parties

Appellants' (Defendant Om Parkash and others) Arguments

  • The arbitrators misconducted themselves: the award was made much after the expiry of the prescribed period and after the four-month limit.
  • The arbitrators failed to give parties opportunity to file claims and led to procedural unfairness.
  • The award and the agreement dated 23.7.1983 required registration because immovable property of value exceeding Rs. 100 was involved.
  • The award was signed only by one or two arbitrators and not by the third arbitrator (Dr. Satyadev), so it could not be held to be a valid majority award.
  • Some heirs of Tulsa Ram (deceased) were not parties or signatories; Om Parkash could not bind other heirs and thus reference lacked authority.
  • The claims of Ram Parkash were allegedly Benami, and if so the suits were not maintainable.
  • Objections to the award filed long after the award was filed (i.e., in November 1993) were raised; appellants contended various procedural defects that warranted setting aside the award.

Respondent's (Plaintiff Ram Parkash) Arguments

  • The award given by the arbitrators was legal and valid; arbitrators had not misconducted themselves.
  • The trial Court had extended time for submission of the award from time to time; parties had been given opportunity to lead evidence and submit claims.
  • The award in a pending case need not be registered; agreement dated 23.7.1983 did not itself create any right and therefore did not require registration.
  • Where a third arbitrator participated in proceedings but refused to sign the award, the award of the two arbitrators amounted to a majority award; the third arbitrator's refusal to sign was insufficient to invalidate a majority decision.
  • The objections in November 1993 were time-barred because objections ought to have been filed within 30 days of filing of the award (filed on 5.1.1989) and the trial Court had already made the award rule of the Court on 25.2.1992.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court (as stated in the opinion)
State of Punjab v. Hardayal, (1985) 2 SCC 629 : AIR 1985 SC 929 Arbitrator cannot extend prescribed time limit beyond four months; only Court can extend such time. The first appellate Court observed that this ruling could not help the appellants because in that case the trial Court, with the consent of parties (by granting adjournments), effectively extended time and parties participated with knowledge.
S.D. Ghai & Co. v. Punjabi University, AIR 1973 P&H 410 Court can be requested (even orally) to enlarge time for making an award. Appellate Court relied on this principle to support the view that extension of time was permissible where parties participated and the Court granted adjournments.
FCI v. Kartar Kaur, 1991 (1) LJR 295 (Punjab & Haryana High Court) Where parties continue to participate in arbitration after expiry of prescribed period, extension may be deemed and the award can be treated as given in time. Appellate Court cited this case to support the proposition that continued and willing participation can justify treating an award as within time.
Chanderkant Maganlal Patel v. Ishwar Lal Gholabhai Choksey, AIR 1981 Bombay 248 An award made by arbitrators in reference by Court in pending proceedings is not compulsorily registrable (referring to Section 16(2) of the Arbitration Act, 1940); such awards, unless made a decree of Court, cannot by themselves create or assign rights in immovable property. Appellate Court relied on this to overrule the objection that the award or the agreement required registration.
Amar Nath v. Uggar Sen, AIR 1949 Allahabad 399 Where parties agree to be bound by majority decision of arbitrators, an award by two out of three arbitrators may not be invalidated merely because the third refuses to sign; absence of signature is at most an irregularity. Appellate Court treated the award signed by two arbitrators as a majority award and held the lack of signature by the third arbitrator to be a mere irregularity not vitiating the award.
Hart Shanker v. Mr. Amraoti, AIR 1944 Lahore 280 A pleader need not obtain express authority from client before referring the case to arbitration; the pleader has an implied authority to refer the case. Appellate Court cited this to support the proposition that an advocate's signing could bind parties/heirs for the purpose of reference to arbitration.
Bidyadar Mohanty v. Ananta Hots, AIR 1956 Orissa 83 A suit for declaration of title and possession is maintainable where property is alleged to have been wrongly described due to fraud or mistake; Court can grant relief without forcing plaintiff to file a separate suit for rectification of sale deed. Appellate Court relied on this to reject the contention that the plaintiff should be driven to a rectification suit and to hold the substantive suit maintainable (rebutting the Benami contention).
Firm Khetu Ram Bashamber Dass v. Kashmiri Lal Rattan Lal, AIR 1959 Punjab 677 If an application for reference is moved only by some of the interested parties, the order of reference and award made on such reference is void ab initio and cannot be validated by subsequent acquiescence or rectification. The revisional Court relied on this authority to hold that, in Suit No. 389, reference was invalid because there was no valid consent on behalf of other defendants; thus the award had to be set aside as void ab initio.
Deep Narain Singh v. Dhaneshwari, AIR 1960 Patna 201 Supports the principle that a reference moved only by some interested parties may be invalid. Revisional Court cited this case to support its conclusion that the foundation of the reference was bad and the award could not survive.
Jagannath Kapoor v. Premier Credit and Instalment Corporation (P) Ltd., AIR 1973 Allahabad 49 Authority supporting the invalidity of references founded without proper authority of all interested parties. Revisional Court cited this case as further support for the view that an award based on a defective reference must be set aside.
Sukalu Ram Gond v. State of M.P., (1994) 5 SCC 570 : 1994 (3) RCR (Civil) 283 (SC) (As cited in the opinion; the opinion notes this authority was invited to be relied upon by counsel.) The revisional Court noted this decision could be taken for the advantage of the petitioners, as observed in the reproduced appellate paragraphs; the opinion records the citation without elaborating further application.

Court's Reasoning and Analysis

The revisional Judge (R.L. Anand, J.) examined the record, the orders of the trial Court and the first Appellate Court's judgment (paras 10–17 reproduced) and concluded that the revisions should succeed on technical grounds. The core analytical steps were:

  1. Review of appellate findings: The appellate Court had addressed multiple objections — delay beyond four months, registration, majority signature and counsel authority — and disposed of those objections by relying on authorities permitting time enlargement by the Court or by deeming parties' continued participation as validating delay; holding that awards made in Court references need not be registered; treating two-arbitrator signatures as a valid majority award; and upholding implied authority of counsel to refer.
  2. Independent re-examination of the record for Suit No. 389: The revisional Judge scrutinized the trial Court record for Suit No. 389 and found that the application for reference to arbitration was signed only by the plaintiff (Ram Parkash), defendant No. 1 Om Parkash, and the plaintiff's and defendant's counsel. There was one memo of appearance for a counsel for defendant No. 5 but no power of attorney on record.
  3. Finding absence of valid consent for reference: The revisional Judge held that there was no valid consent on behalf of defendants 2–5 (and other heirs of Tulsa Ram) to refer their interests to arbitration. The arbitrators themselves did not give notice to defendants 2–5 in the arbitration proceedings, and therefore the foundational agreement to refer the dispute to arbitration was invalid for those parties.
  4. Application of precedent on defective references: Relying on Firm Khetu Ram Bashamber Dass v. Kashmiri Lal Rattan Lal and similar authorities, the revisional Judge held that where an application for reference is moved only by some interested parties, the order of reference and award on such reference is void ab initio and cannot be validated by later acquiescence.
  5. Consequence for all three suits: Because the same question — validity and effect of Tulsa Ram's agreement and related rights — permeated all three suits and the award(s) were grounded on the defective reference, the revisional Judge found he could not treat any award as severable; once the arbitrators had assumed jurisdiction which they never possessed, that amounted to misconduct and the awards had to be set aside.
  6. Relitigation and directions: The revisional Judge directed that the suits be remanded to the trial Court to proceed as if there had been no arbitration agreement at the stage when applications for reference were moved. The trial Court was to proceed by taking written statements, framing proper issues and deciding the suits on merit. The Court also clarified that if all parties subsequently agree, the Court may refer the matter to arbitration afresh.

Holding and Implications

Holding: All three revisions are allowed; the impugned judgments are set aside and the matters are remanded to the trial Court for fresh proceedings.

Direct consequences and practical implications (as stated in the opinion):

  • The awards made by the arbitrators are set aside because the reference was not validly founded as to all interested parties (void ab initio where applied only by some parties), and arbitrators thereby assumed jurisdiction that was never vested in them.
  • The three suits (Civil Suits Nos. 101, 389 and 676 of 1986) are remanded to the trial Court to be proceeded with from the stage when applications for reference to arbitrators were moved, as if no arbitration agreement existed at that stage.
  • The trial Court is directed to take written statements, frame proper issues and try to dispose of the suits expeditiously — the revisional Judge suggested disposal within one year, noting the suits date back to 1986.
  • The Court made clear that if at any later stage all parties agree to reference, the trial Court remains free to refer the matter to arbitration afresh; presently, however, the decision is that there was no valid arbitration.
  • The opinion does not announce that it creates any new binding precedent beyond the application of existing authorities to the facts; the remedy ordered is the setting aside of the awards and remand for trial proceedings.
Revisions allowed.
Show full summary ...

    Om Parkash v. Ram Parkash

    R.L Anand, J.:— By this judgment, I dispose of three civil revisions bearing Nos. 3123, 3124 and 3481 of 1994 titled as Om Parkash v. Ram Parkash, Om Parkash v. Ram Parkash and Om Parkash v. Ram Parkash respectively as in my opinion all these revisions can be disposed of by one judgment.

    2. It is necessary for us first to refer the facts of each case. Ram Parkash is the respondent before us in all the cases. He filed 3 suits. First suit filed by him on 24.9.1986 bearing No. 101 of 1986 against Om Parkash and Ram Kishan. It was a suit for permanent injunction in which it was alleged by the plaintiff-Ram Parkash that he along with Tulsa Ram, Om Parkash and Multani Lal purchased 47 kanals 8 marlas of land out of 101 kanals 7 marlas of land from Vasdev through registered sale deed dated 5.8.1981 Each of them were having 800/2027 shares, 1147/2027 share and 133/2027 share respectively. The share of Tulsa Ram was wrongly described as 1600/2027 and that of plaintiff-Ram Parkash was similarly described as 147/2027. When the mistake was discovered, Tulsa Ram executed an agreement on 23.7.1983 admitting the share of the plaintiff-Ram Parkash in the land so purchased from his 947/2027 share and his own share as 800/2027 instead of 1600/2027 and also admitted that the plaintiff-Ram Parkash is in actual physical possession of 947/2027. Tulsa Ram was the father of Page: 364Om Parkash. Subsequently, Tulsa Ram died and on account of dishonesty in the mind of Om Parkash, he wanted to enter into his possession forcibly and illegally in his 47 kanals 7 marlas share which was in actual cultivation of the plaintiff-Ram Parkash. Request of the plaintiff-Ram Parkash to get it corrected was declined by Om Parkash. Hence the suit was filed by Ram Parkash against Om Parkash and Ram Kishan for injunction.

    3. Ram Parkash filed the second suit bearing No. 389 of 1986 on 26.7.1986 It was a suit for declaration on similar facts relating to another sale deed dated 5.8.1981 through which he allegedly purchased 947/2027 share and Tulsa Ram purchased 800/2027 share but his share was wrongly entered as 147/2027 and that of Tulsa Ram was entered as 1627/2027. Subsequently, Tulsa Ram also executed an agreement for correction of the share of the plaintiff-Ram Parkash.

    4. The third suit was instituted by Ram Parkash on 8.11.1986 bearing civil suit No. 676 of 1986 for permanent injunction against Om Parkash and his brother and sisters and mother relating to one more sale deed dated 5.8.1981 and in that case also Tulsa Ram executed an agreement dated 23.7.1983 for correction of his share as 947/2027 instead of 147/2027 share and share of Tulsa Ram was to be corrected from 1600/2027 to 800/2027.

    5. When these 3 suits were pending in the trial Court, joint applicant was moved. The Civil Court on the basis of that application, referred the matter to 3 Arbitrators, namely, Bhagat Roshan Lal, Haqim Rai and Satya Devi Chaudhary whose awards unanimous or by majority will be binding on the parties. To the agreement and to the statements for referring the matter to the Arbitrators, some of the parties were signatories and on behalf of others the counsel signed the application as well as the statement. Thereafter, the award dated 4.1.1989 was filed in the Court on 5.1.1989 On 3.2.1989, the defendant Om Parkash filed the objections to the award dated 4.1.1989 Challenging the validity of the award on the ground that Arbitrators had misconducted themselves as the award was given by them much after the expiry of the period. The Arbitrators were required to ask the parties to file their claims but they did not give any opportunity to the parties. The award and the alleged agreement dated 23.7.1983 were required to be registered. Award was not filed by majority as the same had been signed only by one or two Arbitrators. Dr. Satyadev was not joined. Therefore, the award given by the two Arbitrators cannot be held to be award by majority.

    6. The objector pleaded that in view of these objections and that the Arbitrators have misconducted the proceeding and the award in question was required to be set aside and that it may not be made the rule of the Court. The plaintiff Ram Parkash filed reply to the objections in each of these cases submitting that the award given by the Arbitrators was perfectly legal and valid; Arbitrators had not misconducted themselves; the date of submission of the award has been extended from time to time by the orders of the Court and that the Arbitrator gave the time to both the parties to submit their claims and they were given ample opportunities to lead all evidence and that the award in a pending case needs no registration. Since agreement dated 23.7.1983 does not create any right and that was yet to be implemented on the basis of the necessary rectification was got made in the 3 sale deeds. So agreement dated 23.7.1983 also does not require registration. The award given by the two Arbitrators Bhagat Ram and Haqim Rai was pleaded by the plaintiff to be an award by the majority inasmuch as the third Arbitrator Dr. Satyadev Chaudhary who participated in the award proceedings refused to sign the award.

    7. Videjudgement dated 25.2.1992, the objections of the objectors were dismissed and the award dated 4.1.1989 was made rule of the Court. Not satisfied with the judgment and decree of the trial Court, three appeals were filed namely, CAs 92, 93 and 94 of 1992 titled as Om Parkash v. Ram Parkash, Om Parkash v. Ram Parkash and Om Parkash v. Ram Parkash respectively. The learned Court of Additional District Judge, Sonepat, vide judgment and decree dated 5.4.1994 dismissed all the 3 appeals. The appellants were not satisfied with the decision of the Courts below. Hence these revisions.

    8. I have heard Mr. Gopi Chand, Advocate, for the petitioners and Mr. Vinod Sharma, Advocate, for the respondents and with their assistance I have gone through the record of the case.

    9. I am of the considered opinion that these revisions deserve to be accepted and the decisions of the Courts below require reversal on account of technical reasons. Before I give my own reasons and reverse for reversal, it will be appropriate for me to reproduce paras 10 to 17 of the judgment of the first appellate Court:—

    10. Arguments in the three appeals were heard for a number of days and when the arguments had been concluded, the learned counsel representing the appellants filed written arguments reply of which had to be obtained from the opposite side. It also requires mention that during arguments it not concerned with the (sic) had been brought to my notice by the counsel for the respondent Ram Parkash that the proceedings had been recorded by the arbitrators and photo copies were given to the contesting parties and one such photo was shown to the Court by Shri J.C Bhagat Advocate representing Ram Parkash plaintiff-respondent. In order to appreciate the arguments properly and in order to avoid remand of the case to the trial Court I thought it expedient that notice be given to arbitrators Sarvshri Bhagat Roshan Lal and Hakim Rai to produce in the appellate Court record of the proceedings conducted by them in arbitration matters between the parties and in view of that order of mine passed on 9.10.1993 the record of arbitration proceedings was got produced in the Court. Simply for the purpose of proper appreciation of arguments. When the proceedings of the arbitrators Page: 365recorded by them were received in this Court, defendant-appellant Om Parkash filed objections on 16.11.1983 against the proceedings of the arbitrators. We are not concerned with the details of objections filed by said Om Parkash. Suffice it to say that plaintiff-respondent Ram Parkash contested those objections against the award and the main objection taken by him is that objections at this belated stage are barred by limitation because the award had been filed in the trial Court on 5.1.1989 and filing of objections on 16.11.1983 after about 5 years is hopelessly time barred because objections can be filed only within 30 days of the award having been filed in the Court.

    11. I have heard the counsel for the parties not only on the merits of the appeals but also regarding objections against the award of the Arbitrators many many years after the award having been filed in the Court.

    12. Coming to the objections against the award filed on 16.11.1993, when the award had already been filed in Court on 5.1.1989 and that award was made rule of the Court by the learned Sub Judge as far back as on 25.2.1992, objections against that award filed in November, 1993, are hopelessly barred by limitation and the objections cannot be taken into consideration. So the objections against the award filed by objector Om Parkash are dismissed as having no force, being time barred.

    13. Coming to the objections regarding the judgement of the trial Court the first objection is that the arbitrators were appointed on 23.4.1988 but the award was filed in Court on 5.1.1989 i.e beyond 4 months and on that account the award in each of the three suits cannot be made a rule of the Court. An effort has been made to draw strength from State of Punjab v. Hardayal, (1985) 2 SCC 629 : AIR 1985 SC 929, wherein it was held that the arbitrator cannot extend the prescribed time limit beyond 4 months and it is the Court alone which can extend such time. 1 am afraid that this ruling cannot help the defendant-appellants in any way because in the present case time beyond 4 months was not extended by the Arbitrators but with mutual consent of the parties or their counsel the trial Court went on giving adjournments in the wait of the award. In this way, the two parties were consenting parties to the extension of time. Had any of the parties been not a consenting party to such implied extension of time in giving the award, that party could very easily tell the Court that it had objection in such adjournments and no extension should be given in wait of award. Moreover, in view of what has been held in S.D Glial and Co. v. Punjabi University, AIR 1973 Punjab and Haryana 410, Court can be requested even orally to enlarge the time for making the award. It has also been argued on behalf of the plaintiff-respondent that where the parties have been willing by taking part in arbitration proceedings even after expiry of the prescribed time limit of 4 months, extension of time can be subsequently granted. FCI v. Kartar Kaur, 1991 (1) Latest Judicial Reports 295, aruling of our own High Court, can be read with advantage in this regard. In that case reference to arbitrator was made in 1978 and award was given in 1982. Parties continuously and willingly participated in the proceedings and each party took a chance for award being in his favour. No serious objection to the conduct of impartiality of arbitrator was raised by any party. It was held by our Hon'ble High Court that it was a fit case for extension of time and that award was to be deemed to have been given in time in view of extension of time. So, the objection that since the award was not given within 4 months by the arbitrators and on that account it is invalid has no force and it is over-ruled.

    14. The next objection of defendant-appellants is regarding registration of the award dated 4.1.1989 or the agreement dated 23.7.1983 executed by Tulsa Ram deceased in his life time, the contention of the counsel for the appellants is that since immoveable property more than Rs. 100/- is involved so the award requires registration. I am afraid that this objection has also no force because the award was made by the arbitrators in reference by Court in pending proceedings and such an award is not compulsorily registrable. Reliance can be placed on Chanderkant Maganlal Patel v. Ishwar Lal Gholabhai Choksey, AIR 1981 Bombay 248, wherein it was held that such an award is not compulsorily registrable because such award, unless made a decree of Court, is incapable of operating or purporting to create, declare, assign etc. any right in or to an immovable property as indicated by Section 16(2) of the Arbitration Act, 1940. Similar is the fate of objection raised by the appellants regarding the agreement dated 23.7.1983 because that agreement also did not per se create or extinguish any right in the suit land. So, this objection on behalf of the appellants regarding registration of the award or agreement is overruled, and finding of the trial Court in this regard is affirmed.

    15. The next objection raised is that the award given by two of the arbitrators out of the 3 cannot be considered to be a majority award inasmuch as Dr. Satyadev the third arbitrator, did not join the proceedings and did not sign the award. This objection is also not impregnated with force. Proceedings recorded by the Arbitrators have been requisitioned from them for the sake of facility and for appreciating the arguments of the parties. Proceedings were recorded by the three arbitrators but unfortunately the award was not signed by all the three arbitrators and one of them Dr. Satyadev for one reason or the other did not think it proper to sign the award but this does not mean that the award given by two out of the three arbitrators willingly and voluntarily appointed by the parties cannot be held to be majority award. A similar situation came up for consideration in Amar Nath v. Uggar Sen, AIR 1949 Allahabad 399. In that case parties had agreed to abide by decision of majority of Arbitrators and one of the Arbitrators refused to prepare award and sign that at the instance of one part. The award was held not invalid for want of signatures of one of the arbitrators. It was further observed that at the most it was a mere irregularity which did not vitiate the Page: 366award of the majority.

    16. It has further been argued on behalf of the appellants that Tulsa Ram died leaving a number of heirs all of whom were not parties in civil suit No. 101 of 1986 and simply because Om Parkash, one of the heirs of Tuisa Ram agreed to appoint arbitrators it does not mean that other heirs of Tulsa Ram also agreed to appoint arbitrators. It has further been argued that in the other defendants other than Om Parkash were not signatories to the application and the statement made in Court for appointment of arbitrators. The learned counsel for the appellants has further argued that on that account the reference to arbitrators is without any basis and consequently the award given by the arbitrators is meaningless and without authority. I am afraid that here again the argument is devoid of force. Applications for appointing arbitrators and the statements made in Court in the three cases were signed by some of the defendants and by the counsel representing all the defendants. At no stage in civil suit No. 101 of 1986 heirs of Tulsa Ram other than Om Parkash, came forward to raise objection regarding the award. In other suits they were represented by a counsel. It has been held in Hart Shanker v. Mr. Amraoti, AIR 1944 Lahore 280 that a pleader need not obtain express authority from client before referring the case to arbitration and that he has an implied authority to refer the case to arbitration in this way, when the counsel representing the heirs of Tulsa Ram other than Om Parkash signed the statement for referring the dispute to arbitration along with one of the heirs Om Parkash, reference to arbitrators cannot be held to be without authority. So this objection is also overruled.

    17. One more objection has been raised not only in the grounds of appeal but at the time of arguments in the appeal also and that objection is that the claim put forth by Ram Parkash in the suits clearly falls in the definition of Benami transaction within the meaning of Act No. 45 of 1988 and since a man cannot acquire or hold property Benami in the name of another person, so the suits were not maintainable. I am afraid that this objection has also no force because this is not at all the case of Ram Parakash in any of the suits that he was the real owner of 947/2027 share and 800/2027 share was held by Tulsa Ram Benami on his behalf. His case is that he purchased 947/2027 share but through error his share was entered as 147/2027 and that of Tulsa Ram as 1600/2027 instead of 800/2027. The prayer of the plaintiff was for rectification in the sale deeds. There are two methods of rectification. One is through subsequent sale deed which is required to be got registered in case the value of the immoveable property exceeds Rs. 100/-. The other method is to bring a suit for rectification. In Bidyadar Mohanty v. Ananta Hots, AIR 1956 Orissa 83, it has been held that a suit for declaration of title and possession of property conveyed under sale deed on the allegations that property was wrongly described due to fraud or mistake is maintainable and Court has power to grant relief without driving the plaintiff to file a suit for rectification of sale deed. So, in view of this, this objection has also no force and it is over-ruled.”

    10. As I have just said above, 3 suits were instituted i.e Civil Suits Nos. 101, 389 and 676 of 1986. First of all, I may refer to the parties of Suit No. 389. The suit was instituted by Ram Parkash against Om Parkash and others. The record of the trial Court shows that the suit was pending. Plaintiff Ram Parkash and defendant No. 1 Om Parkash made an application for referring the matter to the Arbitrators and it was agreed upon by these two persons only that let the matter be referred to the 3 Arbitrators whose unanimous decision would be binding upon the decision of the majority. All the three awards shall be binding between the parties. There is no valid consent on behalf of other 4 defendants. From the side of the plaintiff, his lawyer signed and from the side of the defendant, only Om Parkash (defendant himself) and his counsel Mr. J.P Jain signed. The record of the trial Court further shows that there is one memo of appearance of Mr. J.P Jain, Advocate, on behalf of defendant No. 5 but there is no power of attorney in favour of Mr. J.P Jain. Resultantly, it has to be held that the agreement, if any, was between Ram Parkash and Om Parkash. Om Parkash had no power of attorney in his favour binding the interest of his co-defendants. Even the matter of defendant No. 5 had no validity to refer itto the Arbitrators. Even the award of the Arbitrators shows that they did not give any notice to the other defendants 2, 3, 4 and 5 in the arbitration proceedings. When the very basis of the agreement to refer the matter to the Arbitrator is invalid, any award given by the Arbitrators on the basis of invalid reference has to go. Since there is only one award, it has a direct bearing on the decision of other 2 suits i.e Suit Nos. 676 and 101 of 1986. I am not in a position to make the award separable because in all the 3 suits, the point was the same as to whether the agreement which was executed by Tulsa Ram was a valid one or not and what are the rights, title and interests of Tulsa Ram in the land in dispute. The learned counsel for the respondent Mr. Vinod Sharma submitted that Om Parkash was signatory to the agreement and the rights of other co-defendants are similar with that of Om Parkash, therefore, the reference is valid. I am not in a position to subscribe the arguments of the learned counsel for the respondent for the simple reason that Om Parkash was never in a position to join the interest of others. Each party to the suit was invidually entitled to get a separate notice from the Arbitrator. It has been held in Firm Khetu Ram Bashamber Dass v. Kashmiri Lal Rattan Lal, AIR 1959 Punjab 677 that if an application is moved only by some of the interested parties, order of reference and award made on such reference is void ab initio and cannot be validated by the subsequent acquiescence or rectification. This judgement is fully applicable to the facts in hand. Similar view was taken in Deep Narain Singh v. Dhaneshwari, AIR 1960 Patna 201. Further, my view is supported by Jagannath Kapoor v. Premier Credit Page: 367and Instalment Corporation (P) Ltd., AIR 1973 Allahabad 49. Yet my attention was invited to Sukalu Ram Gond v. State of M.P, (1994) 5 SCC 570 : 1994 (3) RCR (Civil) 283 (SC). This judgement can also be taken for the advantage of the petitioners. Faced with this difficulty, the learned counsel for the respondents relies upon Messrs S.D Ghai & Co.… v. Punjabi University…., Patiala, AIR 1973 P&H 410 and Chanderkant Maganlal Patel v. Ishwar Lal Ghelabai Choksey, AIR 1981 Bombay 248. In all the judgements, the point for determination is whether there was a valid reference or not. 1 have already said by giving the history of Civil Suit No. 389 of 1986 that neither Om Parkash nor J.P Jain Advocate could join for reference of defendants 2 to 5. Similarly, in other two suits, the power of attorney of Mr. J.P Jain Advocate does not give him the power to refer the matter to the Arbitrator. Thus, when very foundations of the reference are bad, the award cannot survive and has to go and once the Arbitrators have taken jurisdiction, which was never vested in them, it amount to misconduct on their part.

    11. In this view of the matter, I allow all the 3 revisions, set aside the judgments of the Courts below and remand the case to the trial Court with the directions to proceed with the suits as if from the stage when the applications were moved for making references to the Arbitrators by assuming as if there was no arbitration agreement between the parties. The findings should be given after taking into account the written statements and after framing proper issues. I may also make it clear that there will be no bar on the part of the Court if all parties to the suit agree for referring the matter to the Arbitrator afresh. In such a situation, it will always be open to the Court to again refer the matter to the Arbitrator. Till today the decision is that there was no valid arbitration. The Arbitrators have assumed the jurisdiction which was never vested in them which amounts to misconduct.

    12. Resultantly, these 3 revisions are allowed. Impugned judgments are set aside. Parties are directed to appear before the trial Court and directions are also given to the trial Court to expedite the suit and try to dispose of the same within one year because the suits are of the year 1986. The Registry is directed to send the records of the trial Court forthwith.

    Revisions allowed.

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    Comments

    Om Parkash v. Ram Parkash
    (Apr 27, 2000)