Tulsiram v. Jhanaklal

1. When Jhanaklal, defendant 1, and his brother Gorelal, the father of the plaintiffs, separated in estate, part of the family property remained undivided and in the possession of Jhanaklal. On 16th July 1926 Jhanaklal exeouted a receipt (Ex. D-1), acknowledging that some property which had been left undivided was in his charge and undertaking to divide the amounts thereafter recovered by him by halves as they were recovered. The receipt contains a list of the property, which consists mainly of debts due to the family and moveables. On 17th April 1929 Jhanaklal and the sons of Gorelal appointed arbitrators to divide “the remaining moveable property and debts due to the undermentioned sahukars,” and at the bottom of the document was a list of the debts due from the family to certain creditors, amounting to Rs. 960. In that document (Ex. D-2) it is stated that the previous receipt (Ex. D-1) contained the particulars of the property to be divided. The arbitrators, after enquiry, gave an award dated 5th October 1931, by which they directed Jhanaklal to pay Rs. 1,677 to the sons of Gorelal and allowed him time for payment up to 1st November 1931 with the condition that thereafter interest should run at 12 per cent per annum. The arbitrators arrived at this figure by adding together half the amount of the debts, which Jhanaklal had recovered or should, in their opinion, have recovered, to the value of a half-share of the moveable property, after giving Jhanaklal credit for Rs. 960 which he had paid to the creditors of the family as mentioned above; and for certain other items. The plaintiffs applied to have the award filed in Court and the Court of first instance ordered that the award should be filed, but on appeal the learned District Judge held that the arbitrators had gone beyond the scope of the reference and that the award should therefore not be filed. The plaintiffs have now applied to this Court for revision.

2. Under para. 21, Sch. 2, Code of Civil Procedure, the Court shall order the award to be filed unless one of the grounds mentioned in para. 14, or para. 15, of that schedule is proved.

3. It has not been suggested that any of the grounds mentioned in para. 14 apply, but the defendants alleged that there had been misconduct of the arbitrators and that the award was invalid because they had gone beyond the scope of the reference. The learned District Judge did not decide whether the arbitrators had been guilty of misconduct, but he held that they had gone beyond the scope of the reference by dividing the property in the way that they did. Item 1 was a 1 decree for Rs. 1,998 and costs Rs. 285-6-0 obtained in the name of Jhanaklal's son, Lalsingh, defendant 2, against Deochand Gond on 8th October 1925. The arbitrators held that this was a decree due to the family as a whole and that the defendants must pay half the amount to the plaintiffs. The learned District Judge remarked that the decretal amount had not been realized, that its recovery might be impossible, and that it was most unjust to hold Jhanaklal responsible for the full amount and to make him pay half to the plaintiffs. Item 2 was a decree obtained by the family against Gendalal on 28th November 1922 for Rs. 128 and costs Rs. 24-12-0. The learned District Judge held that this amount had not been realized in full and that the conduct of the arbitrators was improper in awarding half the decretal amount to the plaintiffs. Item 4 was another decree obtained by the family against Maria Gondin on 25th January 1926 for Rs. 94 and costs Rupees 29-2-0. Out of this amount Jhanaklal admitted that he had recovered Rs. 100 and the learned District Judge held that Rs. 23-2-0 had not been realized and that it was unfair to award half of the full amount to the plaintiffs. There seems to be no plea in the first Court that the first two of these decrees had not been realized, and Jhanaklal in para. 6 of his written statement, at p. 10 of the paper-book, did not object to this division of the first two of these decrees. His objection to the division of the third of these decrees was that Rs. 50 had been realized before the reference to the arbitration and had already been divided, but this plea was not put forward before the arbitrators. Even assuming that these decrees have not been fully realized, the arbitrators cannot be said to have exceeded the scope of reference by dividing them in this way, and the learned District Judge has acted with material irregularity in deciding the case before him as if it were an appeal. In 42 All 277 1920 All 45 , 58 IC 585 , 42 All 277 , 18 ALJ 241, Walsh, J. remarked:

I deplore the tendency to arrogate to themselves, as I think the lower Concts are too fond of doing, the functions of a Court of appeal from the arbitrator and he went on to cite the dictum of Lord Halsbury in (1891) AC 31 (1891) AC 31:

Where the parties have selected their judge, in such cases you have to show a great deal more than mere error on the part of the arbitrator in the conclusion at which he has arrived before the Court can interfere with his award. The parties had agreed to accept the arbitrator's decision upon the question of law as well as his decision upon facts,

and the dictum of Lord MacNaghten in 29 Cal 167 (1902) 29 Cal 167 , 29 IA 51 , 8 Sar 154 (PC):

They (arbitrators) may have erred in law, but arbitrators may be judges of law as well as judges of fact, and an error in law certainly does not vitiate an award.

4. Walsh, J. concluded:

A fortiori an error in fact, and therefore an error in arithmetic, cannot vitiate an award.

5. In that case the arbitrators had to divide a quantity of cloth between the parties. The arbitrators awarded a larger quantity of cloth to one party and in order to equalise the division awarded a cash payment to the other, but miscalculated the cash payment necessary to make the division equal with the result that the final division between the parties was unequal. It was held that this did not vitiate the award. In the case now before me the arbitrators had to divide the decrees, moveables and cash between the parties, and they were not bound to award half the decrees to one and half to the other, half the moveables to one and half to the other and half the cash to one and half to the other. Their duty was to divide the entire property into two shares which they considered equal, and, even though the shares were not equal, that would not give the learned District Judge power to interfere. The parties had agreed to accept the decision of the arbitrators and were bound by that decision, even if there were mistakes in it, though it is possible that a mistake so palpable and gross as would afford strong evidence of misconduct, as was suggested in 42 All 277 1920 All 45 , 58 IC 585 , 42 All 277 , 18 ALJ 241.

6. Item 5 was described in Ex. D. 1 as a receipt executed by Gondusha Fakir. Before the arbitrators made their award a 1-anna share in Mauza Shahpura had been taken by Janaklal from Gondusha in satisfaction of the debt, and the arbitrators declared that the plaintiffs had a half-share in this property subject to their paying Rs. 100 to Jhanaklal as their share of the costs incurred by Jhanaklal in acquiring the property. That is the finding of the learned District Judge, and he held that the arbitrators had no power to divide the property. His view apparently was that if the debt had been satisfied in this way the plaintiffs were not entitled to a share either in the debt or in the property given in satisfaction of the debt. In the argument before me it was suggested that this village share had been sold in satisfaction of the debt and purchased by Jhanaklal on his own account, and that the plaintiffs were therefore entitled to a half-share in the sale-proceeds and not to a half-share in the property. Before the arbitrators Jhanaklal merely contended that if the plaintiffs wanted a share in the property they should be made to contribute towards the cost of acquiring it, and the arbitrators accepted this contention. In his written statement in the first Court Jhanaklal raised no objection to the division of the village share in this way.

7. Item 6 was a debt of Rs. 175 due to the family from Pemu Seth which, according to Jhanaklal, had become barred by limitation and irrecoverable. The arbitrators held that Jhanaklal was responsible for this mistake and that the plaintiffs were entitled to a half-share of this amount. In this evidence Jhanaklal stated that Pemu Seth had become insolvent, but that apparently was never pleaded. If the arbitrators were of opinion that Jhanaklal ought to have recovered this amount, they were entitled to divide it in this way. Item 22 was described in the receipt (Ex. D. 1) as ‘cows and calves.’ The arbitrator found from the patwari's papers for the year 1925-1926 that Jhanaklal was in charge of 22 cattle consisting of 6 cows, 8 calves, 3 buffaloes and 5 padias, of the total value of Rs. 232, and directed Jhanaklal to pay half the value to the plaintiffs. The plea had been taken that the buffaloes had been divided before the reference to arbitrators and that the arbitrators had no power to divide the buffaloes. That plea was apparently not taken before the arbitrators. In item 22, as it appears in Ex. D. 1, osars mean buffalo-calves, so that if buffalo-calves remained undivided in 1926, there would presumably have been buffaloes to divide in 1931. The learned District Judge did not discuss this point.

8. As I have remarked above, the arbitrators had power to divide the entire property in such way as they thought fit, and if they thought it fair to award most of the cash to one party and most of the property to the other in such a way as to give an equal share to each party, they were entitled to do so and acted within the terms of the reference. It has been urged that the award required registration because it affected the title in the village share in Shahpura which exceeded Rs. 100 in value. There is no pleading or evidence that the value exceeded Rs. 100 and the arbitrators merely declared that the plaintiffs had a half-share in this property. I therefore hold that the award did not require registration on this ground. The defendants alleged that Lal Singh, defendant 2, was not a consenting party to the reference, that two of the arbitrators had taken no part in the deliberations, and that the award was the award of one arbitrator alone. Lalsingh was a minor on the date of the reference and was therefore represented by his father in the arbitration proceedings, and cannot repudiate them. There is no evidence to show that the award was the award of one arbitrator alone, except that of Jhanaklal himself, and his evidence is quite insufficient to prove the point.

9. Lastly, it has been urged that the arbitrators had no power to award interest. No authority has been cited for this proposition, and the contrary view was taken in 46 Cal 534 1920 Cal 143 , 54 IC 285 , 46 Cal 534 , 28 CWN 704. I therefore hold that there was no misconduct on the part of the arbitrators, and that they did not exceed the terms of the reference. The learned District Judge misconceived his position and his decision therefore cannot stand. The application for revision is accordingly allowed, and the order of the first Court ordering the award to be filed and the decree passed in terms of the award are therefore restored. The defendants must pay the costs of all parties in all three Courts. Counsel's fee in this Court Rs. 30.

V.B/R.K

10. Application allowed.