Judgment:
S.M. Jhunjhunuwala, J.
1. By this petition, the petitioner seeks to set aside the Award dated 17th January, 1984 made by the sole arbitrator in the reference to his arbitration made by consent of the parties in Suit No. 1388 of 1976 filed in this Court, which Award has been filed in this Court and numbered as Award No. 25 of 1984.
2. In the Suit Bearing No. 1388 of 1976 filed by the respondents against the petitioner in this Court to recover the sum of Rs. 1,63,259.65 together with interest on the principal amount of - Rs. 1,37,284.75 at the rate of 12% per annum from the date of the suit till the date of decree and at the rate of 6% per annum from the date of decree till payment and the costs of the suit, by consent of the petitioner and the respondents the disputes and difference therein were referred to sole arbitration of Mr. Satish Gandhi, learned Counsel practicing in this Court, on 10th August, 1983 as per consent terms filed therein. The arbitrator was to have summary powers and entitled to call for such papers and documents from the parties as might be deemed fit and proper by him. The arbitrator entered upon the reference on 12th August, 1983 and time for making and publishing the Award by him was extended till 12th February, 1984. Before the arbitrator, the parties appeared through their respective advocates, filed pleadings, led documentary evidence and advanced arguments. The arguments before the arbitrator were concluded on 22nd December, 1983 and the reference was closed. On 17th January, 1984, the arbitrator made his award directing the petitioner herein to pay to the respondents herein the sum of Rs. 1,37,284.75 together with interest thereon at the rate of 12% per annum from the date of the award till the date of the decree or payment whichever is earlier and further sum of Rs. 5,000/- towards costs. The said Award was published on 18th January, 1984 by the arbitrator addressing letter dated 18th January, 1984 to the parties and their advocates and forwarding along therewith copies of the said award. The said award is an unreasoned award. It has been filed in this Court and numbered as Award No. 25 of 1984.
3. Dr. Jaisinghani, learned advocate appearing for the petitioner, has submitted that the said Award is liable to be set aside on the following grounds :
(a) that the arbitrator is guilty of legal misconduct in not deciding all the disputes referred to him under the reference made on 10th August 1983;
(b) that by not deciding all the disputes referred to him under the reference dated 10th August, 1983, the arbitrator has failed to exercise the jurisdiction vested in him and as such, there is an error of law apparent on the face of the Award, and
(c) that the claim of the respondents against the petitioner was barred as on the date of the suit and the arbitrator committed an error of law by awarding time barred claim in favour of the respondents which error of law is apparent on the face of the award.
In support of his aforesaid submissions, Dr. Jaisinghani has relied upon the case of Administrator, Hindusthan Cables Employees Co-operative Multipurpose Society Ltd. and another v. Jatindra Kumar Das Choudhary and others, reported in : AIR1968Cal146 . In that case six headings of disputes were referred to the arbitrator. The arbitrator decided four but left out the other items for future determination. Immediately upon the award being made, it was sought to be executed as a decree. Later on, a notice was given that arbitration would take place with regard to one of the heads viz., canteen account. The Calcutta High Court held -
'The general principle is that an award must be final decision in all matters referred for determination'.
There are, however, exceptions to this rule. For example, if the submission itself can be construed to mean that there should be more than one award then several awards may be justified. It may also be done by consent of the parties.
4. Dr. Jaisinghani has then relied upon the case of Government of Kerala and another v. V.P. Jolly, reported in : AIR1992Ker187 , where it has been held -
'It is to be noted that section 16 of the Act deals with remission of an award. It says that the Court may, from time to time, remit an award or any matter referred to arbitration, to the arbitrators or umpire for reconsideration upon such terms as it thinks fit,
(a) where the award has left undermined any of the matters referred to arbitration or where it determines any matter not referred to arbitration and such matter cannot be separated without effecting the determination of the matters referred or
(b) where the award is so indefinite as to the incapable of execution, or
(c) where an objection to the legality of the award is apparent upon the face of it'.
5. Reliance has also been placed by Dr. Jaisinghani on the case of The Indian Minerals Co. v. The Northern India Lime Marketing Association, reported in : AIR1958All692 where it has been held -
'An award which does not dispose of all the matters referred to arbitration is incomplete and consequently it is invalid in law. The Court may in such a case either remit the award under section 16(a) or set it aside under section 30. The ground for so holding is that when the parties agree to refer the matter to arbitration there is an implied condition in the submission of the parties that the arbitrator shall dispose of all the matters'.
6. Dr. Jaisinghani has also placed reliance on the case of Jhanda Ram v. Musa, reported in A.I.R. 1928 Lah 874 where it has been held -
'In my opinion the learned Judge of the Court below has acted with material irregularity in not remitting the award to the arbitrator on the erroneous ground that if an arbitrator does not decide some of the points referred to him, he must be deemed to have decided them against the party who had urged them. I can find no warrant for this proposition and in my judgment the order of the trial Court filing the award is vitiated by this unwarranted assumption.'
7. In the submission of Dr. Jaisinghani, since this Court had no jurisdiction to entertain and try the suit, this Court had no jurisdiction to make Order of Reference to arbitration and as such, the reference was a nullity and the said Award is vitiated. Dr. Jaisinghani has further submitted that the claim of the respondents against the petitioner being barred by law of limitation when the said suit was instituted, the arbitrator could in law not allow the same and since the arbitrator has allowed the time barred claim, there is an error of law apparent on the face of the said Award and the said Award is liable to be set aside. He has further submitted that since the respondents having committed breach of their obligation under the Deed of Dissolution dated 22nd October, 1968 had no cause of action against the petitioner and as the claim has been allowed by the arbitrator, there is error of law on the face of the said Award and liable to be set aside.
8. Before I deal with the submissions made on behalf of the petitioner, it is necessary to point out that the law is well settled that the arbitrator's adjudication is generally considered binding between the parties for he is a tribunal selected by the parties and the power of the Court to set aside the award is restricted to cases set out in section 30 of the Arbitration Act, 1940 (for short, `the said Act', viz., (a) if the arbitrator has misconducted himself, or the proceedings, or (b) when the award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35, or (c) when the award has been improperly procured or is otherwise invalid. Under Clause (c) of section 30 the Court can set aside an award which suffers from an error on the face of the award. However, an award is not vulnerable to any challenge thereto. While considering objection under section 30 of the said Act, the Court does not set as an appellate Court. It is not open to the Court to speculate, where no reasons are given by the arbitrator as to what impelled the Arbitrator to arrive at his conclusion.
9. For recovery of payments of Rs. 45,000/-. Rs. 45,000/- and Rs. 47,284.65 made by the respondents on 1st February 1975, 4th February 1975 and 11th April, 1975 respectively, aggregating to Rs. 1,37,284.65 to one Jamnadas Jadhavji Gandhi, in discharge of the liability of the petitioner and interest and costs, the respondents filed the suit bearing No. 1358 of 1976 against the petitioner in this Court. The petitioner disputed his liability to pay to the respondents the amount claimed in the said suit and in the written statement filed therein, contended that this Court had no jurisdiction to entertain and try the suit, the claim of the respondents in the suit was barred by limitation, and that the respondents had no cause of action to file the said suit. Admittedly, all questions of law and fact in the said suit were by consent of the parties thereto referred to arbitration under Order of Reference made by this Court in the said suit on 10th August 1983 as per consent terms dated 10th August, 1983 filed therein and the arbitrator has held meetings before him for adjudication thereof on 24th August, 1983, 9th September, 1983, 19th September 1983, 30th September, 1983, 8th October, 1983, 15th October 1983, 22nd October 1983, 26th November 1983, 6th December 1983, 10th December 1983, 21st December, 1983 and 22nd December 1983 and after considering the pleadings, documents and material produced before him and the arguments advanced by the advocates appearing for the parties before him, made his said award on 17th January, 1984. The said Order of Reference did not require the arbitrator to give reasons in support of the decision reached by him. It is a non-speaking award. It is not open to the Court, while exercising jurisdiction under section 30 of the said Act, to go into the question of law and fact referred to the arbitrator. Court can look into the said Award only and cannot consider any other document which is not incorporated therein.
10. Error of law on the face of the award means that one can find in the award or in document incorporated thereto stating the reasons for his judgment some legal propositions which is the basis of the award and which is erroneous. It is well settled that when the parties choose their own arbitrator to be the Judge in dispute between them, they can not, when the award is good on the face of it object to the decision either upon law or on facts. As held by the Supreme Court in the case of State of Orissa v. Daudasi Sahu, reported in A.I.R. 1958 S.C. 1971-
'When arbitrator commits a mistake either in law or in fact in determining the matters referred to him, where such mistake does not appear on the face of the award and the document appended to or incorporated so as to form part of it, the award will neither be remitted nor set aside.'
11. No legal proposition has been stated by the arbitrator in the said award which is the basis thereof and is erroneous. The Court has no jurisdiction to investigate into the merits of the case and to examine the documentary and oral evidence for the purpose of find out whether or not the arbitrator had committed an error of law or fact. Since all questions of law as well as fact were referred to arbitration the decisions of the arbitrator thereon is final, conclusive and binding on the parties thereto. It was not obligatory for the arbitrator to frame issues as is done in trial of a suit. Nor the arbitrator was required to record separate findings on each of the contentions raised by the petitioner before him. In law, the arbitrator was entitled to make a lump sum award and the lump sum award made by him suffers from no infirmity. Since the arbitrator has awarded certain amount without indicating why he has done what he has done, it cannot be said that he did not decide all matters in dispute referred to him. There is nothing to show that the arbitrator did not consider or decide all the disputes raised to him or that there is failure on his part in exercising jurisdiction vested in him. The claim of the respondents against the petitioner as on the date of the said suit was not barred by limitation. The arbitrator has not misconducted himself. In the absence of any reasons for making the Award, it is not open to the Court to interfere with the Award. There is no error of law apparent on the face of the said award.
12. In the instant case, since the said Award finally decides all matters referred for determination, the arbitrator has not attempted to make several awards nor he has left undetermined any of the matters referred to his arbitration nor has determined any matter not referred to him. The said Award disposes of all the matters referred to arbitration. As such, none of the authorities cited by Dr. Jaisinghani has any applicability to the facts of the present case.
13. Mr. Thakor, learned Counsel appearing for the respondents, has justifiably submitted that the petition filed by the petitioner is false, frivolous and vexatious and that the same is liable to be dismissed with costs. Mr. Thakor has further submitted that the petition as framed has been filed to set aside the said Award and not for remittance thereof under the provisions of section 16 of the said Act as sought to be argued by Dr. Jaisinghani across the bar. Mr. Thakor has further submitted that the petitioner having joined in making consent Order of Reference to arbitration and participated in proceedings before the arbitrator, is not entitled to turn round and say, after the award was filed in this Court, that - - - the reference made by this Court was void and that the said Award made by the arbitrator is a nullity. In support of his this submission, Mr. Thakor has rightly relied upon the case of Ram Chandra Prasad Tewari v. Kailashpati Dwivedi and another, reported in : AIR1960Pat416 , where it has been held:
'Where there was no inherent lack of jurisdiction in a particular Court to try the suit but its jurisdiction was challenged by the defendant by pleading a question of fact, namely, that no part of cause of action had arisen within the jurisdiction of this Court, and later on the defendant joined in the petition for reference to arbitration and further took part in the proceeding before the arbitrator, it is not open to him to turn round and say, after the award was filed in the Court, that the Court had no jurisdiction to try the suit and that the reference made by it was void and that the award given was a nullity.'
In the instant case also, in the Written Statement filed by the petitioner in the said suit, the petitioner has denied the jurisdiction of this Court to entertain and try the said suit by pleading a question of fact by him, namely, that no part of the cause of action had arisen within the jurisdiction of this Court as the Deed of Dissolution dated 22nd October, 1968 was executed outside Bombay and parties to the suit resided in the State of Gujarat. In the facts of the case, it is manifest that this contention of the petitioner was given a go-bye by the petitioner by being a consenting party in this Court making the said Order of Reference to arbitration on 10th August, 1983 and further by taking part in the proceedings before the arbitrator. It is now not open for the petitioner to say that the said reference to arbitration made by this Court was void and that the said Award made by the arbitrator is a nullity.
14. In the result the petition is dismissed with costs.
15. Mr. Thakere, the learned Counsel for the respondents states that since the petition to challenge the Award stands dismissed, under the amended rules of this Court as applicable to the Original Side, the respondents have become entitled for judgment and decree in terms of Award and applies for the same.
16. Judgment and decree in terms of Award dated 17th January 1984 which is filed in this Court and numbered as Award No. 25 of 1984.
17. Dr. Jaisinghani applies for stay of execution of Decree. Since it is a money decree, on petitioner depositing in this Court entire decretal amount within two weeks from today, execution of decree be stayed for six weeks thereafter.