(1) This is a first appeal against an order of Shri K. S. Sidhu, Sub-Judge 1st Class, Delhi, dated 31st August, 1959 refusing to set aside an award.
(2) By means of an agreement of sale entered into between Shri R. B. Sen and Shri A. S. Bhargava on 15-4-1952, the latter was to purchase a plot of land situate in Darya Ganj, belonging to the former, for a sum of Rs. 4,50,000/-, out of which Rs. 50,000/- were paid as earnest money and the balance was to be paid at the time of registration of the agreement. Clause 11 of the agreement provided for the settlement of all disputes regarding this agreement by two arbitrators, one to be no nominated by each party, and in case of difference between the arbitrators, by the Umpire nominated by them. The sale did not go through and each party charged the other with the breach of agreement. Ultimately it was decided between the parties that the matter should be referred to arbitration in pursuance of clause 11 of the agreement. Shri Sen nominated Mr. Sardar Bahadur, Advocate, as his arbitrator and Mr. Bhargava nominated Shri P. D. Bhargava, Advocate, as his arbitrator. Before entering on the arbitration, the aforesaid two arbitrators appointed Mr. Bishen Chand, Advocate, as an Umpire.
The arbitrators took pretty long time in deciding the matter and although they entered upon arbitration in 1954, they were able to give an award only on 19-10-1957. This award was unanimous and by means of if the arbitrators awarded a sum of Rs. 42,665/- to Shri A. S. Bhargave along with interest at the rate of three per cent per annum from the date of the award till the date of realisation of the amount. Notice of the filing of this award was given to the parties and Shri Sen then made an application to the learned Subordinate Judge, under section 30 of the Indian Arbitration Act, for setting aside of the award. In this application a large number of objections were taken against the award. The learned Subordinate Judge has observed in his judgment as under :--
'There are as many as 22 grounds taken up by Mr. R. B. Sen for the purpose of avoiding this award. In fact he has not left anything which he could possibly catch hold of from the provisions of the Arbitration Act and the cases decided thereunder and which, if proved, may give him a chance of getting the award set aside.'
The learned Subordinate Judge, in his final order, negatived all the said objections and refused to set aside the award.
(3) Feeling aggrieved against the aforesaid decision of the learned Subordinate Judge, Shri R. B. Sen has come up to this Court in first appeal. Mr. Sastri, the learned counsel for the appellant, has, however, pressed only four objections before me and it is wholly unnecessary under the circumstances to go into the other objections. The objections pressed by Mr. Sastri are as under :--
1. that the award is outside the terms of the reference and the arbitrators have not decided the real and crucial issue between the parties;
2. that the amount awarded to Shri Bhargava is an arbitrary one and that the arbitrators have given no basis for fixing the same.
3. that Shri P. D. Bargava, arbitrator, was nearly related to Shri Bhargava, respondent, and it was a misconduct on his part not to have disclosed the said relationship to the present appellant at the time of his appointment as an arbitrator; and
4. that the arbitrators have no jurisdiction at all to award future interest from the date of the award till the date of the realisation.
In support of the first two contentions Mr. Sastri has drawn my attention to the statements of claims, Exhibits P-2 and P-3, filed respectively by Shri Bhargava and Shri Sen. In the statement P-2 Shri Bhargava claimed the refund of the earnest-money, i.e., Rs. 50,000/- with 6 per cent interest and also claimed a sum of Rs. 20,000/- more as damages. In P. 3 Shri Sen repudiated the said claim and himself claimed an amount over a lac of rupees as damages to him. These issues were framed by the arbitrators on 20th of October, 1955, which are at page 45 of the record. The first issue related to the point as to which of the parties was guilty of the breach of the contract and the other two issues related to the relief to which each of the parties will be entitled in case the issue is decided one way or the other.
Mr. Sastri's argument is that the arbitrators have given no clear finding with regard to the first issue and if they found that the vendor was guilty of the breach of the contract they had no option but to award the vendor at least an amount of Rs. 50,000/- which he had paid as the earnest money, with or without interest as the arbitrators had decided. The arbitrators, however, awarded and odd sum of Rs. 42,664/- and this showed that they had not directed their attention to the real point at issue as to which of the parties was in breach. In case the breach had not been committed by the vendor and had on the other hand been committed by the vendee, no amount could possibly be awarded against the vendor. After giving my careful consideration to the matter, I regret, I cannot accept this contention. It is true that the arbitrators have not given any reasons in the award and have not dealt with the matter issue by issue, but the very fact that the arbitrators have awarded a sum of Rs. 42,665/- presumably shows that they had come to the conclusion that the vendor was not guilty of the breach of the contract. If he had been so, no amount could possibly have been awarded to him.
It is not for me to conjecture how the arbitrators arrived at the amount of Rs. 42,665/- and the mere fact that this amount is seven to eight thousands less than the earnest-money actually paid does not given rise to any presumption that the arbitrators did not direct their attention to the question of breach of the contract by one or the other party. Shri Sen did not examine his own arbitrator as a witness and did not put any question to the other arbitrators, when he came into the witness-box, as to how the amount of Rs. 42,665/- was arrived at. The arbitrators are neither bound to record detailed reasons for coming to any particular conclusion nor are they bound to decide the case on the basis of the issues framed by them. There is no sufficient ground to come to the conclusion that the arbitrators had not applied their mind to the point covered by the first issue. Mr. Sastri drew my attention to some reported cases, which are Thawardas Pherumal v. Union of India, 1955-2 SCR 48: ((S) AIR 1955 SC 468); Alopi Parshad and Sons, Ltd. v. Union of India, AIR 1960 SC 588; Union of India v. Bakhshi Ram, (1957) 59 Pun LR 572; and Sherbanubai Jafferbhoy v. Hooseinbhoy Abdoolabhoy, AIR 1948 Bom 292. I have carefully gone through the facts of these cases and find that non of these has any real bearing on the facts of the present case.
(4) With regard to the third contention that Shri P. D. Bhargava, arbitrator, was nearly related to Mr. Bhargava, respondent, and did not disclose his relationship at the time of his appointment, it is enough to say that no near relationship has at all been proved. All that is proved on the record is that one Shri Hari Krishna Bhargava is the uncle of respondent's wife and that arbitrator's sister is married to him (Shri Hari Krishan Bhargava). It has to be bore in mind that Shri P. D. Bhargava is a leading Advocate and it is difficult to believe that his award may have been influenced by a relationship of this type. It is also difficult to believe that Shri Sen was not award of this relationship at the time when Shri P. D. Bhargava was appointed as an arbitrator. The award is not of a single arbitrator and the arbitrator appointed by Shri Sen himself has concurred in the same.
(5) The fourth contention of Mr. Sastri, however, seems to have a good deal of force. Under section 34 of the Civil Procedure Code the Courts have specifically been given powers to award future interest. An arbitrator, however, is not a Court and evidently the power given by section 34 to the Courts cannot be exercised by an arbitrator interest to the abitrators and they had, in my opinion, no jurisdiction to award future interest from the date of the award till the date of realisation of the awarded amount. This is an obvious error on the face of the award but the award in this respect can be amended by modifying this part without affecting the other part of it. I would, therefore, modify the award to the extent that the clause with regard to the future interest will be taken out of the same and will have no operation. Under section 29 of the Act, however I would award interest as 3 per cent per annum to Shri Bhargava, respondent, from the date of the decree of the learned Subordinate Judge till the realisation of the amount.
(6) This appeal is allowed only to the extent referred to above and is dismissed in all other respects. In view of the divided success I leave the parties to bear their own costs in this Court.
(7) Order accordingly.