Ashim Kumar Banerjee, J.
Amarendranath Dhar established a business of paper by the name of “Imperial Paper House”. He took his nephew Kamal Kumar Dhar in his business to assist him. His sons were minor, hence he got assistance from his nephew. Amarendranath executed a registered Deed of Gift on August 12, 1961 in favour of Kamal Kumar as also his two sons by which all the three became the owner of the said business that was converted into a partnership. Since then, three partners carried out the business. Pertinent to note, within a few months of such partnership being entered into Amarendranath died leaving him surviving his two sons name above. At that time Rajat was a minor. His interest was being looked after by Kamal Kumar as claimed by him. Kamal Kumar claimed, he arranged marriage of the daughters of Amarendranath out of the business income as also brought up Rajat and Adhar as guardian of the family. According to Kamal Kumar, he was running the show in absence of Amarendranath at the relevant time. On Rajat becoming major the farm was reconstituted by admitting him into the partnership. In course of time Kamal reached the advanced age and was ailing. On October 20,1983 Kamal Kumar wrote a letter in Bengali addressed to Adhar making serious allegations against two brothers as to the functioning of the farm to his exclusion. If we go through the letter in detail we would find the same as an emotional out-burst rather than a business letter. In the letter Kamal Kumar expressed his inability to take active part in the business for last three years because of his advanced age and ailment. At the end he expressed his intention to quit without making any claim. He also observed, the said letter should be treated as a notice expressing intention to resign. He, however, asked the Dhar brothers to react to his letter and communicate their version. It is nobody’s case, Dhar brothers replied to the same. Kamal Kumar died after about five years. He died on January 7, 1988 leaving him surviving his three daughters being the appellant and the Respondent No. 6 and 7. The appellant also claimed that during this five years period Kamal Kumar was treated as a partner. He used to sign the Balance Sheet, Income Tax Returns and other statutory documents on behalf of the farm. Even a notice of demand from the Income Tax department demanding a sum of Rs. 3064 for the assessment year 1987-1988 was served on March 21, 1988 on Kamal Kumar as a partner.
After the death of Kamal Kumar, his daughters claimed share in the partnership farm in accordance with the provisions of the Deed of Partnership. Rajat and Adhar being the surviving partners, however, declined on the ground that Kamal Kumar had resigned from the partnership by the said letter dated October 8, 1983. Hence, his daughters were not entitled to any share in the partnership, far to speak of their inclusion. Rajat and Adhar filed a suit being No. 428 of 1991 inter-alia claiming for a declaration that they were the only partners of Imperial Paper House and the daughters of Kamal Kumar did not have any right to claim share in the said farm. The daughters of Kamal Kumar applied under Section 20 of the Arbitration Act 1940 inter-alia praying for referring the dispute of Arbitration. On their application along with their mother, under Section 34 of the said Act of 1940, the learned Single Judge stayed the hearing of the suit. Shri Joy Saha, an advocate of this Court, was appointed arbitrator. Before the arbitrator the claimants being the daughters of Kamal Kumar produced records to show, Kamal Kumar acted as a partner till his death.
The arbitrator published his unreasoned award appearing at pages 114-119 of the paper book. The arbitrator, by his award dated July 27, 1998, directed Rajat and Adhar to pay a sum of Rs. 86258 to Rina, Jagatdhatri and Alpana three daughters and their mother. The arbitrator also awarded interest at the rate of 6% per annum on and from January 8, 1988 until payment of the awarded sum. The arbitrator also held, the heirs of Kamal Kumar would be jointly entitled to 1/3rd share in the tenanted shop room of Imperial Paper House and if it was not possible, they would be entitled to Rs. 4 lacs in lieu of such possession. The arbitrator also held that heirs of Kamal Kumar would be entitled to the ownership of the Ambassador car being WBA6600.
Rajat and Adhar filed an application under Section 30 and 33 of the said Act of 1940 inter-alia challenging the award. The learned Single Judge dismissed the application. The Court of appeal set aside the order and remanded the application for setting aside to the learned Single Judge for being heard afresh. The learned Judge heard the matter afresh and ultimately allowed the said application by setting aside the award by His Lordship’s judgement and order dated December 23, 2004 appearing at pages 172-182 of the paper book. Hence this appeal by one of the daughters Rina Dhar. Pertinent to note, Jagatdhatri and Alpana did not contest the proceeding before the learned Single Judge. They initially appeared, however, disappeared subsequently.
The appeal appeared from time to time before various Division Benches wherein attempts were made to resolve the dispute amicably as we find from the records. The Division Bench, by judgment and order dated February 23, 2007, recorded that Dhar brothers were agreeable to pay of Rs. 5 lacs to the heirs of Kamal Kumar in full and final settlement of their claim. The learned counsel appearing for the heirs of Kamal Kumar accepted such offer, however expressed his inability to finally accept the same in absence of the other two daughters being not available. We are told, Pay Orders were prepared in the name of the three daughters (their mother died in the meantime). The issue could not be finally resolved despite Dhar brothers applying before the Division Bench for recording of such settlement. They, in fact, revalidated the Pay Orders from time to time. We also adjourned the appeal from time to time when Mr. Ali, learned senior counsel appearing for the appellant expressed his inability to resolve the controversy in absence of other two sisters. We passed an order on September 17, 2012 asking the other two sisters to appear before us. Accordingly, Alpana and Jagatdhatri appeared. Jagatdhatri supported Rina and declined to accept the offer whereas Alpana took her share of Rs. 166667 and gave valid discharge to her sisters and Dhar brothers as well, leaving us with two heirs of Kamal Kumar being Rina and Jagatdhatri claiming 2/9th share in the farm. We heard the appeal on the above mentioned dates.
Mr. Amzad Ali, learned senior counsel appearing for Rina, strenuously contended before us, the arbitrator published an unreasoned award that was not available for judicial scrutiny under the said Act of 1940. In any event, the application for setting aside was barred by the laws of limitation that the learned Judge failed to appreciate. On the settlement, Mr. Ali contended, appellant was interested in a portion of the shop room as awarded by the arbitrator. He referred to the letter of consent given by the landlord appearing at page 100 of the supplementary paper book. He claimed, appellant was entitled to appropriate share of tenancy. Learned counsel appearing for Jagatdhatri supported Mr. Ali.
Elaborating his contentions, Mr. Ali demonstrated before us, notice under Section 14(2) said Act of 1940 was served upon Rajat and Adhar on August 19, 1998 whereas the application was filed on September 22, 1998, admittedly after 30 days of receipt of the notice. Hence, the application was barred by laws of limitation. On factual matrix, he referred to Clause 14, 15 and 17 of the Deed of Partnership to show, in case of death or retirement of any partner his heirs would be entitled to be admitted into the partnership. He referred to Section 32, 56 and 63 of the Partnership Act to contend, the letter dated October 8, 1983 could not be construed as resignation within the meaning of the said Act of 1932. According to him, the letter of resignation must be addressed to all the partners and a personal letter to Adhar could not be construed as resignation. He referred to the decision in the case of Sankar Das Naraindass Vs Sita Ram Jawala Parshad reported in All India Reporter 1956 Pepsu Page - 83 to support his contention that the application being barred by time, could not be entertained that too, without being supported by an application for condonation of delay. He referred to Article 119 of the Limitation Act to say, the application for setting aside could only be made within 30 days from the date of receipt of the notice under Section 14(2) of the said Act of 1940. According to him, Section 5 of the Limitation Act would have no application. In any event, no such application was made.
Mr. Jishnu Chowdhury, learned counsel also appearing for the appellant argued on non-speaking award. According to him, the award was a non-speaking one and the learned Judge could not have interfered with the same. He referred to the judgement and order impugned to show, His Lordship perhaps overlooked the fact that no formal counter claim was ever forwarded to the arbitrator hence, the award could not be faulted on the ground of non consideration of the counter claim. He took us to the counter statement of fact to show, there was no prayer for counter claim made although a passing reference was made to the extent that they had suffered loss to the extent of Rs. 7 lacs approximately in view of siphoning off funds by Kamal Kumar. Regarding the comments of the learned Judge on the amendment of statement of claim, Mr. Chowdhury would contend, the amendment was made for abundant caution. The award was well within the scope of the original statement of claim if one would look at the prayers of the statement of claim at the pre-amendment state and compare it with the award. He referred to the order passed by the learned Single Judge subsequent to the judgement and order impugned wherein the learned Judge passed order observing that the arbitration agreement ceased to have any effect. According to him, the learned Judge after delivering the judgement and order impugned could not have passed such order that too, without bringing the same in the list and upon notice to the appellant.
Mr. Haradhan Banerjee, learned counsel appearing for Dhar brothers contended, the controversy stood resolved before the Division Bench as recorded in the order dated February 23, 2007 hence, there could be no further argument of the issue.
On the issue of limitation, Mr. Banerjee contended, the learned Single Judge disposed of the application on merit that was remanded back to the learned Single Judge to be heard afresh on merit. The order of the Division Bench sending it on remand on merits, attained finality, as the appellant did not challenge the same before the Apex Court hence, it would be too late in the day to contend, the application was barred by limitation.
On the factual matrix, Mr. Banerjee contended, Court dealt with the issue and ultimately found the award perverse. The Court of appeal should not interfere. He referred to his counter claim made before the arbitrator. He referred to page 69 wherein the issues were set out. He referred to his counter statement of fact to show, claim was duly made as would appear from page 90 hence the arbitrator must consider the same. Having not done so, he mis-conducted himself. He referred to the decision of the Apex Court in the case of K. V. George Vs Secretary To Government, Water and Power Department, Trivandrum and Another 1989 Volume IV Supreme Court Cases Page- 595. He referred to paragraph 12 where Apex Court observed, the counter claim should have been considered by the arbitrator. On the transfer of tenancy, Mr. Banerjee contended, it was barred by law. In any event, the appellant was siding with the landlord who filed an eviction suit as against Dhar brothers on the ground of default and reasonable requirement. The award was thus perverse allotting a portion of the tenancy in favour of the appellant and her relations. On the amendment, Mr. Banerjee would contend, the damage not being contemplated in the application under Section 20, the arbitrator should not have allowed the amendment. He referred the Apex Court decisions in the case of Rajasthan State Mines and Minerals Limited Vs Eastern Engineering Enterprises and Another Reported in 1999 Volume IX Supreme Court Cases page- 283 And M. Premlatha Vs S. Sivram reported in 2004 Volume- 4 Current Civil Cases page – 140 (Supreme Court). He prayed for dismissal of the appeal.
While replying, Mr. Ali referred to the prayers of the statement of claim appearing at page 74 to show that the original prayers would support the award.
We have considered the rival contentions. We have carefully perused the award and the order of the learned Single Judge setting aside the award. If we look at the award we would find it as an unreasoned one. The said Act of 1940 would permit an arbitrator to publish an unreasoned award. Once the arbitrator would choose to publish an unreasoned award it would be too difficult for the Court to interfere with the same. The Court of law was not the Court of appeal over the award of the arbitrator. It could only be interfered with when it was patently perverse. The present award would not satisfy such test. The arbitrator published a money award for Rs. 86258 along with interest at the rate of 6% per annum. What would be the basis of the said award, is unknown to us. Hence, we are not competent to examine the same. The second part of the award would justify allotment of a portion of the tenancy. Our tenancy law would not permit any such allotment without the consent of the landlord. Page 100 of the supplementary paper book would show, the landlords gave their consent to have proportionate transfer of tenancy in favour of the appellant. The said letter did not speak of the other heirs of Kamal Kumar. Moreover, the landlord already filed ejectment suit as we are told, as against the tenants being the partnership farm. The arbitrator anticipated these problems, initially the allotment was made in favour of appellant as also the other heirs of Kamal Kumar jointly. In the alternative, he awarded a sum of Rs. 4 lacs. Today, in the changed circumstance allotment might not be possible. The alternative award would make it pragmatic. In any event, the heirs of Kamal Kumar did not challenge the award. Dhar brothers could not have made any grievance with regard to 1/3rd allotment on the ground that it was not permissible in law. The arbitrator made alternative provision that would take care of the absurdity, if any, in the award. The learned Single Judge observed, Kamal Kumar resigned in 1983 without considering the assertions of his heirs to the extent that he had acted as partner for next five years until his death. The documents filed before the arbitrator were not considered. In any event, learned Judge also observed that the award was bad in view of allotment of tenancy that was not permissible under the tenancy law. We fail to appreciate, as observed herein before, the arbitrator having published an alternative award by giving money compensation in lieu of such allotment would remove the legal obstacle, if any, on that score. Hence the award could not be faulted on that ground.
His Lordship observed, the arbitrator should not have awarded interest that would be de hors the contract. We fail to appreciate. In the decision in the case of Secretary, Irrigation Department, Government of Orissa Vs G.C. Ray reported in 1992 Volume- I Supreme Court Cases page-508 the Apex Court already held, the arbitrator would be well within his right to award interest. The arbitration agreement as contained in the Deed of Partnership, did not specifically debar awarding of interest. In absence of such Clause, the award could not be faulted on that ground.
The learned Judge observed, the amendment would make the award fatal as it was beyond the scope of reference. Even if we give full credence to such view we would find, the award of the learned arbitrator was well within the scope of the original statement of claim.
The counter claim not being made specifically, the arbitrator could not have considered the same. A passing reference in a paragraph that Kamal Kumar had siphoned off money to the extent of Rs. 7 lacs approximately, was not sufficient. No formal prayer was made to implicate the heirs of Kamal Kumar with a specific claim. Hence, the order of the learned Single Judge could not be sustained.
On the limitation, we are however, unable to accept the contention of Mr. Ali. We have gone through the finding of the learned Judge appearing at paragraph 10 of the judgment to show, there was stamp of Court on September 19, 1998. Hence it was within the period of limitation. Even if it was not so, the order of remand would make it specifically clear that the Division Bench referred the issue back to the learned Single Judge for being heard afresh. Once it was so the plea of limitation would not be applicable. In this regard, we may quote the relevant extract of the judgment and order of the Division Bench dated April 24, 2001 appearing at pages 231-232 of the paper book. The relevant extract is quoted below:
“In that view of the matter, without expressing any opinion on the merit of the said challenge, this Court cannot uphold the judgement under appeal. The judgement under appeal is set aside purely on the ground that it does not deal with the challenge to the award which has been recorded in the judgement itself.
It is however made clear by us that any observation made in this judgement will not be construed his expression of opinion on the merits of the application.”
The extracts quoted (Supra) would have a combined feeling, Their Lordships desired that the application would be considered on merit.
Hence, we reject such contention.
Appeal succeeds and is allowed. The judgment and order of the learned Single Judge is set aside.
The appeal is disposed of without any order as to costs.
Urgent certified copy of this order, if applied for, be given to the parties, on priority basis.
Shukla Kabir (Sinha), J.
I agree.