Gaddam China Kondaiah Vs. Gaddam Pedda Kondaiah - Court Judgment

Excerpt:
civil - award - schedule to article 12 of stamp act, 1899 - petition filed for recovery of amount allotted to petitioner as share in joint family business by arbitrator - matter decided by arbitrator in writing but without any written reference - document taken as evidence by petitioner - respondent contended that document is award and required to be stamped - being not stamped liable to be penalized - from contents of document it appeared to be a family arrangement reached with help of some elders of village - cannot not be considered as award within the meaning of section 12 and not required to be stamped. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed to contest the claim of the injured or heirs of the deceased on other grounds, which are available to the insured. if insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer and will be negation of the intention of the legislature and annihilate mandate of the provisions of sections 170 and 149 of the act. the insured can pursue appeal only after giving up the insurer as the appellant and not otherwise. in the instant case, the insurer has not withdrawn from party array but has remained prosecuting the appeal with the insured on the grounds which are available only to the insured. therefore, the joint appeal as filed by the insured and the insurer is not maintainable. section 166: [v. gopala gowda & jawad rahim, jj] claim for compensation accident due to mechanical defect in the vehicle held, it is not in dispute that the claimant suffered injuries in an accident, which occurred during the course of his employment, albeit due to his negligence but law does not render him remediless. statutory right is conferred on him, accruing by virtue of his employment under insured to claim compensation under workmens compensation act. the insurer is statutorily duty bound to discharge the liability of the owner of the vehicle, to pay such compensation to the employee, as mandated under the provisions of section 149 of the act. the right of an injured employee or his dependents as the case may be to be compensated, when injury is suffered or death occurs during his employment, is recognised not only under workmens compensation act, but also under benevolent provisions under section 166 and 167 of the m.v. act. the right of driver to seek compensation is not restricted only to the workmens compensation act, it has been enlarged to enable such person to seek just compensation (sections 166 and 168), conferring upon him the right of election engrafted under section 167 of the act to choose either of the two forum. the only defence which the insurer could take is limit of its liability as enumerated under section 147 of the act, leading to contest, inter alia, only between insured and insurer and does not impact claimants right to recover the compensation determined by the tribunal which crystallizes into enforceable right against both. in the instant case, the claimant/driver has exercised right of election under section 167 of the act to seek compensation under section 166 of the act resulting in award passed by the tribunal. therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the vehicle with mechanical defects, the owner would be the tortfeasor and the claimant can maintain a petition seeking compensation under the provisions of the act, instead of seeking compensation under the workmens compensation act. on facts, held, the material evidence on record, particularly, with regard to the income of the claimant, his age, medical evidence and the evidence relating to pecuniary loss has not been considered by the tribunal in the correct perspective, which has resulted in passing of the impugned award, disproportionate to the pecuniary loss and the loss of future income of the victim. the settled principles governing determination of compensation has been given a go-bye. compensation of rs.4,15,150/- awarded by the tribunal was enhanced to rs.8,20,000/-. - 10,828/- on the foot of a family arrangement evidenced by an unstamped and unregistered document dated october 2 ,1965. when the document was filed into the court, it was treated as an agreement and stamp duty as well as penalty were levied on that basis. the expression 'award' used in article 12 must be given the same meaning as under the arbitration act .in order to hold a particular document to be an award within the meaning of article 12 of the stamp act, the following requisite conditions must be satisfied (i) there should be a decision by an arbitrator or umpire ,(ii) such decision must be in writing but not oral, (iii) it should not be an award directing a partition ,(iv) the decision of the arbitrator of umpire must be on a reference made in writing by the parties outside the court. in my considered opinion, the latter part of article 12 is applicable to 'any decision in writing by an arbitrator or umpire' but not only to 'an award directing a partition' is referable to 'any decision in writing by an arbitrator or umpire' as well as 'an award directing a partition.order1. this civil revision petition gives rise to a short question of law, whether a decision in writing by the arbitrators without a written reference, directing the allotment of a family business asset to one of the two brothers and in lieu of it, ordering the payment of a sum of rs. 10,000/- to the other brother is an 'award' within the meaning of article 12 of the indian stamp act.2. in order to appreciate the scope of the question it is necessary to state the material facts which lie in a short compass. the petitioner filed o. s. no. 22 of 1967 on the file of the sub-court, kavali, now renumbered as o. s. no. 45/1971 sub-court, kandukur , against the respondent , his elder brother , for the recovery of rs. 10,828/- on the foot of a family arrangement evidenced by an unstamped and unregistered document dated october 2 , 1965. when the document was filed into the court, it was treated as an agreement and stamp duty as well as penalty were levied on that basis. but, however , in the course of the trial and when the document was sought to be marked and exhibited, the defendant took an objection that it is an award passed by arbitrators and, therefore, liable to stamp duty and penalty. the contention advanced on behalf of the plaintiff that the suit document relates to only a family arrangement, but it is not an award did not find favour with the trial court. it was found that the document is a decision given by the elders chosen by the parties to the suit and, therefore ,it is an award within the meaning of article 12 of the indian stamp act and it is liable to stamp duty and penalty. hench this civil revision petition.3. mr. a. venkata ramana, the learned counsel for the petitioner, contended that the suit document is not an award within the meaning of article 12 of the stamp act , as it is not a decision of the arbitrators on a reference in writing and, in any event , it comes under the exception as it is award directing the partition of family trade or business (an item of property of the joint family). this claim of the petitioner is resisted by mr. b. srinivasa murty, the learned counsel for the defendant , contending interalia that the document is not an award directing partition of any family property but it is only a decision directing one party to pay a decision directing one party a specified sum of money on relinquishment by the other party of his right in the defendant's business and, therefore , the court below has rightly held the document to be an award libale to stamp duty and penalty.4. in order to appreciate the respective contentions of the parties, it is necessary to refer to article 12 of the indian stamp act.'award, that is to say, any decision in writing by an arbitrator or umpire , not being an award directing a partition, on a reference made otherwise than by an order of the court in this course of a suit.'the expression 'award' is not defined under the indian stamp act, we have, therefore , to look to the arbitration act , 1940. section 2(a) of the arbitration act defines 'arbitration agreement' as 'a written agreement to submit present or future differences to arbitration. whether an arbitrator is named therein or other an arbitrator is named therein or not.' under section 2(b) , 'award' means 'an arbitration award'. section 47 read with sections 2(a) and 2(b) defining 'arbitration agreement' and 'award' respectively, makes it abundantly clear that any arbitration proceeding is governed by the provisions of the act. there can be no award within the meaning of section 2(b) without an agreement in writing, any decision given by the arbitrators cannot strictly be termed as an arbitration award within the meaning of section 2(b). to put it differently, for any decision of the arbitrators or umpire to be called an arbitration award, there must have been an agreement in writing referring the matter in dispute between the contending parties, to the arbitrators , in other words, every decision of an arbitrator or umpire would not become an arbitration award.5. i shall not advert to the provisions of article 12 of the indian stamp act. the expression 'award' used in article 12 must be given the same meaning as under the arbitration act . in order to hold a particular document to be an award within the meaning of article 12 of the stamp act, the following requisite conditions must be satisfied (i) there should be a decision by an arbitrator or umpire , (ii) such decision must be in writing but not oral, (iii) it should not be an award directing a partition , (iv) the decision of the arbitrator of umpire must be on a reference made in writing by the parties outside the court. any decision in writing made by an arbitrator or umpire on a reference made by an order of the court in the course of a suit, is not an award within the meaning of article 12. the submission of mr. srinivasa murthy that the expression 'on a reference made other wise than by an order of the court' used in article 12 does not apply to a decision in writing by an arbitrator or umpire, but it governs only 'an award directing a partition', cannot be acceded to. the submission of the counsel that no reference is contemplated in the case of a decision in writing of an arbitrator or umpire and it is enough if the document in question is a decision in writing by an arbitrator is without substance. in my considered opinion, the latter part of article 12 is applicable to 'any decision in writing by an arbitrator or umpire' but not only to 'an award directing a partition' is referable to 'any decision in writing by an arbitrator or umpire' as well as 'an award directing a partition.' the reference that is contemplated is one made otherwise than by an order of the court in the course of a suit. i do not find any difficulty to reject the interpretation sought to be placed by mr. srinivasa murthy.6. the further contention of mr. srinivasa murthy that the reference contemplated under article 12 need not necessarily be in writing and it is enough, if there is oral reference to an arbitrator or an umpire for the settlement of the dispute, cannot be given effect to. the stamp act being a special act, the definition of the word 'award' used in section 2(b) apply according to the respondent's counsel. as pointed out earlier, there is no definition of the word 'award' as given in the arbitration act .7. in the light of the foregoing discussion, i shall examine the contents of the documents , in order to find out whether it is an award within the meaning of article 12 of the stamp act or not. for construing any document, the terms thereof have to be looked into. normally, no extraneous or oral evidence can be entertained in construing the nature of he document. the document in question reads that the plaintiff and the respondents have agreed to accept the meditation of the seven named elders of the village for the partition of their family property and the mediators have effected the partition of the family properties four months prior to the date of that document and the parties have been following and the parties have been following the settlement arrived at by the mediators. as the respondent herein has been carrying on ghee and butter business and other business at madras since 25 years and the plaintiff has no capacity to carry on business, the mediators have settled that the respondent should have the business and in lieu of it, the plaintiff should be paid a consolidated sum of rs. 10,000/- by the respondent. the mediators have advised for the registration of the partition deed at the expense of both the individuals. a reading of the document shows that the dispute was referred for arbitration, but it does not disclose that the reference was made by the parties in writing. it may be an oral reference. i am unable to agree with the submission of mr. venkata ramana that as the document has been signed by the parties, it cannot be held to be an award. there may be awards passed by arbitrators in which parties affixed their signatures or thumb impressions to show their acceptance of the terms of the awards. hench, the mere signing of the document by the parties does not destroy the effect of an award. if it is otherwise, a valid award. for all the reason stated , i hold that the document in question in only a family arrangement, but not an award within the meaning of article 12 of the indian stamp act and it is not liable to stamp duty and penalty.8. in the result, the revision petition is allowed but, in the circumstances, without costs.9. revision allowed .

Judgment:
ORDER

1. This civil revision petition gives rise to a short question of law, whether a decision in writing by the arbitrators without a written reference, directing the allotment of a family business asset to one of the two brothers and in lieu of it, ordering the payment of a sum of Rs. 10,000/- to the other brother is an 'award' within the meaning of Article 12 of the Indian Stamp Act.

2. In order to appreciate the scope of the question it is necessary to state the material facts which lie in a short compass. The petitioner filed O. S. No. 22 of 1967 on the file of the Sub-Court, Kavali, now renumbered as O. S. No. 45/1971 Sub-Court, Kandukur , against the respondent , his elder brother , for the recovery of Rs. 10,828/- on the foot of a family arrangement evidenced by an unstamped and unregistered document dated October 2 , 1965. When the document was filed into the Court, it was treated as an agreement and stamp duty as well as penalty were levied on that basis. But, however , in the course of the trial and when the document was sought to be marked and exhibited, the defendant took an objection that it is an award passed by arbitrators and, therefore, liable to stamp duty and penalty. The contention advanced on behalf of the plaintiff that the suit document relates to only a family arrangement, but it is not an award did not find favour with the trial Court. It was found that the document is a decision given by the elders chosen by the parties to the suit and, therefore ,it is an award within the meaning of Article 12 of the Indian Stamp Act and it is liable to Stamp duty and penalty. Hench this civil Revision Petition.

3. Mr. A. Venkata Ramana, the learned counsel for the petitioner, contended that the suit document is not an award within the meaning of Article 12 of the Stamp Act , as it is not a decision of the arbitrators on a reference in writing and, in any event , it comes under the exception as it is award directing the partition of family trade or business (an item of property of the joint family). This claim of the petitioner is resisted by Mr. B. Srinivasa Murty, the learned counsel for the defendant , contending interalia that the document is not an award directing partition of any family property but it is only a decision directing one party to pay a decision directing one party a specified sum of money on relinquishment by the other party of his right in the defendant's business and, therefore , the Court below has rightly held the document to be an award libale to stamp duty and penalty.

4. In order to appreciate the respective contentions of the parties, it is necessary to refer to Article 12 of the Indian Stamp Act.

'Award, that is to say, any decision in writing by an arbitrator or umpire , not being an award directing a partition, on a reference made otherwise than by an order of the court in this course of a suit.'

The expression 'award' is not defined under the Indian Stamp Act, We have, therefore , to look to the Arbitration Act , 1940. Section 2(a) of the Arbitration Act defines 'arbitration agreement' as 'a written agreement to submit present or future differences to arbitration. Whether an arbitrator is named therein or other an arbitrator is named therein or not.' Under Section 2(b) , 'award' means 'an arbitration award'. Section 47 read with Sections 2(a) and 2(b) defining 'arbitration agreement' and 'award' respectively, makes it abundantly clear that any arbitration proceeding is governed by the provisions of the Act. There can be no award within the meaning of Section 2(b) without an agreement in writing, any decision given by the arbitrators cannot strictly be termed as an arbitration award within the meaning of Section 2(b). To put it differently, for any decision of the arbitrators or umpire to be called an arbitration award, there must have been an agreement in writing referring the matter in dispute between the contending parties, to the arbitrators , in other words, every decision of an arbitrator or umpire would not become an arbitration award.

5. I shall not advert to the provisions of Article 12 of the Indian Stamp Act. The expression 'award' used in Article 12 must be given the same meaning as under the Arbitration act . In order to hold a particular document to be an award within the meaning of Article 12 of the stamp Act, the following requisite conditions must be satisfied (I) there should be a decision by an arbitrator or umpire , (ii) Such decision must be in writing but not oral, (iii) It should not be an award directing a partition , (iv) The decision of the arbitrator of umpire must be on a reference made in writing by the parties outside the court. Any decision in writing made by an arbitrator or umpire on a reference made by an order of the court in the course of a suit, is not an award within the meaning of Article 12. The submission of Mr. Srinivasa Murthy that the expression 'on a reference made other wise than by an order of the Court' used in Article 12 does not apply to a decision in writing by an arbitrator or umpire, but it governs only 'an award directing a partition', cannot be acceded to. The submission of the counsel that no reference is contemplated in the case of a decision in writing of an arbitrator or umpire and it is enough if the document in question is a decision in writing by an arbitrator is without substance. In my considered opinion, the latter part of Article 12 is applicable to 'any decision in writing by an arbitrator or umpire' but not only to 'an award directing a partition' is referable to 'any decision in writing by an arbitrator or umpire' as well as 'an award directing a partition.' The reference that is contemplated is one made otherwise than by an order of the Court in the course of a suit. I do not find any difficulty to reject the interpretation sought to be placed by Mr. Srinivasa Murthy.

6. The further contention of Mr. Srinivasa Murthy that the reference contemplated under Article 12 need not necessarily be in writing and it is enough, if there is oral reference to an arbitrator or an umpire for the settlement of the dispute, cannot be given effect to. The Stamp Act being a Special Act, the definition of the word 'award' used in Section 2(b) apply according to the respondent's counsel. As pointed out earlier, there is no definition of the word 'award' as given in the Arbitration Act .

7. In the light of the foregoing discussion, I shall examine the contents of the documents , in order to find out whether it is an award within the meaning of Article 12 of the Stamp Act or not. For construing any document, the terms thereof have to be looked into. Normally, no extraneous or oral evidence can be entertained in construing the nature of he document. The document in question reads that the plaintiff and the respondents have agreed to accept the meditation of the seven named elders of the village for the partition of their family property and the mediators have effected the partition of the family properties four months prior to the date of that document and the parties have been following and the parties have been following the settlement arrived at by the mediators. As the respondent herein has been carrying on ghee and butter business and other business at Madras since 25 years and the plaintiff has no capacity to carry on business, the mediators have settled that the respondent should have the business and in lieu of it, the plaintiff should be paid a consolidated sum of Rs. 10,000/- by the respondent. The mediators have advised for the registration of the partition deed at the expense of both the individuals. A reading of the document shows that the dispute was referred for arbitration, but it does not disclose that the reference was made by the parties in writing. It may be an oral reference. I am unable to agree with the submission of Mr. Venkata Ramana that as the document has been signed by the parties, it cannot be held to be an award. There may be awards passed by arbitrators in which parties affixed their signatures or thumb impressions to show their acceptance of the terms of the awards. Hench, the mere signing of the document by the parties does not destroy the effect of an award. If it is otherwise, a valid award. For all the reason stated , I hold that the document in question in only a family arrangement, but not an award within the meaning of Article 12 of the Indian Stamp Act and it is not liable to stamp duty and penalty.

8. In the result, the revision petition is allowed but, in the circumstances, without costs.

9. Revision allowed .