Sh. Madan Lamba vs Shri Jagdish Lamba And Ors.
- Citation2002(63)DRJ732
Ratio decidendi
The rule this decision rests on
An arbitration agreement need not be formally signed by all parties; it may be evidenced by the tenor and intent reflected in various communications and meetings between the parties, and may be formed during arbitration proceedings or before or after reference to arbitrators, provided the parties are ad idem as to the specific disputes to be decided. Where an arbitration agreement is made between family members representing their respective families, and all family members were aware of and participated in the arbitration proceedings through their appointed representatives, the requirement of giving reasonable opportunity of being heard is satisfied, and family members cannot later contend they were denied a hearing merely because individual family members did not personally appear. Where arbitrators have consulted and deliberated together and their award states it is made jointly by both arbitrators, the award is valid even if the arbitrators signed it at different times and places, provided the documentary evidence shows they made it as a joint decision. An award is not rendered null and void merely because it was made beyond the prescribed statutory period; the court must exercise discretion by scrutinizing the facts of each case, considering whether parties have acted upon the arrangement without objection and whether they continued such arrangement for a long period, to determine whether to set aside the award on grounds of delay. Where parties have expressly agreed in the arbitration agreement that arbitrators shall proceed summarily without recording claims, replies, or formal evidence, and that the award shall be binding and not challengeable except for fraud, collusion, or apparent error on the face of the award, the scope of judicial interference with a non-speaking award is almost non-existent and extends only to vitiating vices of perversity or apparent error on the face of the award. Multiple references arising from disputes and businesses that are so inextricably inter-connected may properly be heard and decided together, and this does not constitute improper "clubbing" where the parties participated in the proceedings without objection.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
JUDGMENT
J.D. Kapoor, J.
1. These are eight suits arising out of eightawards made by the learned Arbitrators Sh.D.V. Taneja,Ex. Chairman of Central Bank of India and Sh.D.M. Harish, aleading advocate of Bombay on taxation side in respect ofvarious properties. These awards pertainto familydisputes between four brothers namely S/Shri Madan Lamba,Jagdish Lamba, Harish Lamba, Kailash Lambaand theirfamily members who were carrying on various businessesunder different names and style.
2. The learned Arbitrators entered into referenceby virtue of agreement dated January 1982 and made theirawards on 25.10.1986.These are non-speaking awards. Itis alleged by the respondents that the parties havealready taken possession of their businesses andproperties in accordance with the consent award dated21.10.1983 passed during arbitration proceedings. It isfurther alleged that except objector Madan Lamba all thethree brothers namely Jagdish Lamba, Harish Lamba andKailash Lamba and their family members have accepted allthe awards.
3. Petitioners here in are Madan Lamba and membersof his family namely his wife Sneh Lamba and two sonsRaman Lamba and Suman Lamba. They have challenged theawards on multifarious grounds including the awardinSuit No.3371/1991 which, according to them, has been madewithout there being any "written agreement" between theparties.
4. Main attack of Mr.K.K. Jain, learned counsel forthe petitioners/objectors to the award in S.No. 3371/1991is that the Arbitrators have misconducted themselvesin as much as there was no agreement at all for decidingthe disputes as to properties (i) Hotel Diplomat at 9/39,Sardar Patel Marg, Chanakyapuri, New Delhi and (ii) VolgaHouse, Mahalaxmi, Clerk Road, Bombay but still theArbitrators went into these disputes and gave the award;that the arbitrators have wrongly stated in the awardthat written agreements including these properties wereexecuted in January, 1982 whereas the fact remains thatthere has been no agreement at all between the parties inrespect of aforesaid properties much less the writtenagreement.
5. According to Mr.Jain unless and until there isa written agreement between the parties for submittingthemselves to arbitration the award is a nullity andsince in respect of properties viz. Hotel DiplomatatSardar Patel Marg and Volga House at Bombay there was nowritten agreement between the parties, the award given bythe Arbitrator is liable to be set aside on account ofnon-jurisdiction as according to Section 2(a) of theArbitration and Conciliation Act, 1996, "arbitrationagreement" means a written agreement to submit present orfuture differences to arbitration whether anarbitratoris named therein or not.
6. Mr. Jain has placed reliance on Union of IndiaVs. G.S. Atwal & Co.(Asansole) wherein itwas held that the arbitrability of the controversy of theclaim being a jurisdictional issue the Arbitrator cannotclo the himself with jurisdiction to conclusively decidewhether or not he had power to decide his ownjurisdiction. It was further observed that to constitutean arbitration agreement there must be an agreement, thatis to say that the parties must be ad idem.
7. In order to appreciate the contention ofMr. Jain in the correct perspective and to get teeth moredeeply into reality relevant extracts of the proceedingsculminating in Consent Award dated 21.10.1983 duly signedby all the parties need to be reproduced. These areasunder:-
"3.Hotel Diplomat New DelhiMr. Madan Lamba will take over 12.5%share and Mr. Kailash Lamba will takeover37.5% share out of the 25% share each ofMr. Harish Lamba & Mr. Jagdish Lamba on thebasis of valuation of Rs.80 lakhs (Rs.Eightylakhs only) for hundred percent share andpay the amount due to them within sixmonths.
The immovable property, namely, theland & building of the Hotel will continueto belong to the present co-owners and theywere continue to be paid a rental ofRs.10,000/- per month. The firm will beconverted into a Ltd. company when theshareholders will have proportionalrepresentation in management & benefits.Major expenditure will be incurred inconsultation with Mr. Madan Lamba and in caseof difference matter will be referred toarbitration."
. Clinching para of these proceedings which ispenultimate para is as under:-
8. Accounts All the accounts betweenthe parties will be settled on the aforesaidbasis and after taking into considerationthe various credit and debit balances by31st December 1983. The net amounts founddue to or by the parties will carry interestat the rate of 12% p.a. The documents ofassignment, sale, reconstitution ordissolution of firms will be handed over tothe parties taking over the business only ontheir making full payment. Mr.Kailash Lambawill make available his accountant for thepurpose of working up the accounts solongas his services are found necessary.
The cut off date will be taken asw.e.f. 22nd October, 1983 in all theconcerns covered by this award.
All disputes arising at any time willbe referred to the arbitrators whosedecision will be final. However,Mr.D.M. Harish will decide issues whereparties do not consider reference toMr. Taneja necessary. Mr. Jagdish Lamba willbe paid a sum of Rs. one lac each byMr. Kailash Lamba in November and December1983. He will alsobe paid a sum ofRs. 50,000/- each by Mr. Madan Lamba inNovember and December, 1983."
8. It is contended by Mr. Jain that since theaforesaid two properties were not referred to theArbitrators, any agreement made between the parties forreferring the disputes arising between the parties to theArbitrators does not amount to an "agreement in writing"
and as such the parties cannot be said to have been adidem and the award rendered by the Arbitratoris,therefore, a nullity.
9. It is further pointed out by Mr. Jain that theaforesaid terms of the Consent Award do not come withinthe meaning of "written agreement" as the said awardhastill date not been sought to be made rule of the Court.. In support of the proposition that in theabsence of written agreement any award rendered by theArbitrator is a nullity Mr.Jain has relied upon Sheo duttVs. Pandit Vishnudatta and another AIR 1955 Nagpur 116wherein the application of the applicant under Section 33of the Arbitration for declaring that reference toarbitration made on 19.7.1945 was a nullity and the awardgiven in pursuance thereto was also a nullity was rejectedby the learned trial Judge.It was held that where theparties are not `ad idem' about the dispute to be decidedby the Arbitrators, there is novalidarbitrationagreement and if the agreement is uncertain as to theexactdispute referred to arbitration, the award is bad.The award on the basis of an invalid reference is anullity and can be challenged in an appropriateproceeding.
10. While refuting the contention of Mr. Jain thatthe award in respect of the properties at Sardar PatelMarg and Volga House in Bombay is not a result of awritten agreement, Mr.V.P. Singh, the learned seniorcounsel appearing for the respondents has contended thatthe parties were ad idem with regard to the referenceregarding these properties as would be evident from theproceedings of 21.10.83 signed by all the four brothersand to say that any agreement between the parties effectedduring the arbitration proceedings does not fall withinthe definition of "agreement in writing" contemplated bySection 2(a) of the Act is wholly unacceptable. Mr.Singhalso placed reliance upon letters dated 27.9.84 from Mrs.Sneh Lamba wife ofMr.Madan Lambato the Arbitratorwherein she has acknowledged the fact that the disputeswith regard to Hotel Diplomat at Sardar Patel MargandVolga Restaurant at Bombay are pendingbeforetheArbitrators.Similar letters were also written by RamanLambaand Suman Lamba, both sons of Madan Lamba totheArbitrators.Mr.Singh has also referred to letter dated28.12.84 written by their lawyer to the Arbitrators whichis to the same effect.
. Relevant extracts of the letter sent by SnehLambawhich are more or less representative in nature areas under:-
" You willrecollect that thequestion of partnership into a privatelimited company was never either the subjectmatterof the disputes or the reference toarbitration, the terms of which are embodiedin the Arbitration Agreement by all thepartners of Hotel Diplomat in January, 1982.
The Arbitration Agreement was enteredinto in terms of Clause 15 of the Deed ofPartnership of Hotel Diplomat dated 6.12.81.The said clause permits arbitration ofdifferences and disputes only in so far asthey relate to "any disputes, doubt ordifference" regarding"the construction ofthese presents or the saidpartnership'sproperty, rights, credits, effect or to anyof the partnership account, business ortransaction".
In fact, the conversion of thepartnership into a private limited company isthe very antithesis of a partnership andaccordingly beyond the scope of reference toarbitration and I have nointention ofentering into such arrangements with any ofmy partners or outsiders. I would thereforerequest that further proceedings in thearbitration concerning M/s.Hotel Diplomat betaken only within the framework of thepartnership and not with reference to anyother framework."
11. Mr.Singh contends that above-referred series ofcommunications exchanged between the parties manifestlydemonstrate that the parties were ad idem in respect ofthese properties besides other properties.
12. On the contrary, it is contended by Mr.Jain thatthe letters written by Sneh Lamba and her two sons were intheircapacity as partners in business and not as ownersin the property as the ownership of the premises vested inthe four brothers and notin the partners ofthepartnership firm and therefore any letter written by themto the Arbitrators does not make the owners ofthepremises as parties ad idem.
13. I am afraid the posture adopted by Mr.Jain isself-defeating. Award dated 21.10.1983 wasa proposedConsent Award between the parties. It manifestlydemonstrates that the parties were not only ad itembutalso agreed to settle their disputes with regard totheaforesaid two properties by way of arbitration.Contention of Mr.Jain is difficult to ram down the throat.It was on the basis of this document that the parties hadbeen participating in the arbitration proceedings bywayof number of meetings at various places and, therefore,the award in question does not suffer from the vice ofnon-jurisdiction. There isnot aniota of substancewhatsoever in the contention of Mr.Jain that the award inrespect of the properties at Sardar Patel Marg and VolgaHouse at Bombay is not a result of written agreement.
14. There is no gainsaying the fact thatthearbitration agreement must be in writing. The writtenagreement shows that the parties are ad idem whereas oralagreement does not fulfill the requirement of Section2(a).Unless and until the parties are at ad item by wayof written agreement the Arbitrator cannot arrogate thejurisdiction and any such award made by an Arbitrator isvoid ab initio. The Arbitrator is an instrument of theagreement and its existence stems from the arbitrationagreement which should necessarily be a writtenagreement. Such an award stands on the same pedestal asthe decision of a court which has no jurisdiction to tryand decide the suit as any decree passed by a court thatlacks jurisdiction is a nullity.
15. The interpretation of the words "writtenagreement" in Section 2(a) of the Act goes to the extentthat such an agreement may not necessarily be signed bythe parties. It is the tenor and intent reflected invarious communications and the meetings betweentheparties that becomes the determining criteria to find outwhether there is written agreement between the parties tosettle their disputes by way of arbitration or not. Suchan agreement can even be made by the parties either duringthe arbitration proceedingsor meetings between thembefore or after reference of their disputes totheArbitrators.If the parties agree for decidingthedisputes by way of arbitration and such observationsaremade by the Arbitrators in their proceedings this has tocome within the meaning and ambit of "written agreement"
as contemplated by Section 2(a) of the Act.
16. Again unless the parties are ad idemtheagreement even if it is written agreement is not invokableor applicable by way of arbitration.Dictionary meaningof the word `ad idem' is "the same point inagreement".The agreement has to be with respect to the question to bedecided and not a general agreement for any dispute. Tosay that the proceedings of the Arbitrator referred by therespondents do not reflect that the parties were ad idemso far as the properties at Sardar Patel Marg and VolgaHouseat Bombay were concerned asit was a generalobservation of the Arbitrator that any disputes arisingbetween the parties shall preferably be adjudicated bythem is an ostrich like approach. Aforesaid paras of theproposed Consent Award speak for themselves. They haveremoved air of uncertainty as to the controversy whetherthe parties were ad idem or not or whether there wasanywritten agreement vis-a-vis properties viz. HotelDiplomat at Sardar Patel Marg and Volga House, Bombay.
17. Further, to say that these observations weremade only when the parties were settling their disputes byway of arbitration in respect of properties other than thesaid two properties is wholly wrong as by no stretch ofimagination the parties can be called not ad idem sofaras the written agreement executed between them during thearbitration proceedings is concerned.
18. Needless to say that unless and until there isan assertion on the part of one party and the refutationon the part of the other party the matter cannot be heldto be a subject matter of reference for arbitration.Merely because the document is titled as Award doesnotmean that it has lost its character of "written agreement"
or consent terms. These very terms have been referred inall the awards and have been acted upon. Had it been sothe question of reference of all disputes arising atanytime to the Arbitrators would not have arisen. The veryfact that the parties agreed for reference totheArbitrators all disputes arising at any time withthestipulation that Mr.D.M.Harish will decide issues whereparties do not consider reference to Mr.Taneja necessaryshowsthat these were nothing but consent terms thoughhave been couched in the title `Award'. Had boththeparties taken theseterms as an Award not onlytheArbitrators would have filed them in the Court buttheparties too would have taken steps for making the awardrule of theCourt.Thus, as per these documents,allkindsof disputes arising at any time were to be referredto the Arbitrators and in these documents the aforesaidtwo properties namely Hotel Diplomat at Sardar Patel Margand Volga House at Bombay formed part of the consent termsand disputesarising there from were referrable totheArbitrators.
19. Next the validity of the award has beenchallenged by Mr.Jain on the premise that the arbitratorsare guilty of misconduct by not taking proceedings jointlyand also without consulting each other as on 29.09.2002only one ofthe arbitrators viz. Shri D.V.Tanejawaspresent and, therefore, the award has been passed withoutdue process of law. On 23.12.1984also only Sh.D.M.Harish was present. This, according to Mr. Jain, showsthat both the arbitrators heard the parties if any,independentlyand not jointly and the decision taken bythem is nota joint decision and is, in fact, amisconduct.
20. This objection has no substance whatsoever as itwas agreed between the parties in the deed of referencethat the arbitrators shall have the power to proceed in asummary manner and will not be bound to refer or requirefiling of claims or reply in writing or maintain any notesof the meetings or receive or record any formal evidenceincluding perusing such documents and papers as they thinkfit and including oral submission of the partiesandwitnesses, if any, and without any technical or legalformalities.This is apparent from clause 9 of the Deedof Reference of January 1982. It reads thus:-
"9. The Arbitrators shall havethepower to proceed in a summarymannerandwill not be bound to record or requirethefiling of claims or replies in writing ormaintain any notes or meeting or receive ormark any formal evidence and are authorisedto conduct the proceedings with all summarypowers including perusing such documents andpapers as they think fit and including oralsubmission of parties and witnesses, if any,and without any technical or legalformalities."
21. Further no such objection was taken before theArbitrators or otherwise. It amounts to waiver of rightto take objection. Recording ofminutes by twoArbitrators is of no consequence whatsoever particularlyin reference to clause 9 and moreover effective hearingsdid not take place on those dates. Counsel has failed topoint out any other minutes or dates when the Arbitratorsheardthe parties individually. It is notobligatoryupon the Arbitrators to record the minutes of themeetings if they have to proceed in summary manner.Almost a similar situation arose in RamnathMisra Vs.Ramranjan Mishra 1922 Calcutta 181 wherein there werefive Arbitrators who were acting jointlyunder theresolution. On one day, one of the personsheard thearguments while the other heard arguments for short time.Therewas also no evidence to show that the Arbitratorshad signed the award. It was held that if a party to anarbitration proceedings fails to take an objection to theabsence of one out of several arbitrators, he willbedeemed to have waived his right to take objection to thewholeof the irregularity caused thereby and the awardmust be filed.
22. Thus the objection that the awards were notsigned, pronounced and made by both the Arbitratorsatone time is not sustainable because it is clear from therecord that the Arbitrators made a joint award after duedeliberations and consultations. The award itself states" WeD.N. Harish and D.V. Taneja do make and publishthe following awards ....". After the awards werereturned by the Bombay High Courtvide order dated11.9.1990; the awards were filed by both the ArbitratorsAlong with their letter dated 1.11.1991 in each caseinthis Court.The opening word in each letter is " ....in the above case we the co-arbitrators gave the award on25.10.1986." In the context of above statement of theArbitrators it was immaterial and of no consequence evenif the Arbitrators had signed the awards on differentdates and at different places.
23. Sustainability of the award stems from thejointdeliberations and decision. Such deliberationsneednot be at one place and at joint sitting.Deliberationscan be through any mode of communication.However proceedings in the presence of the parties haveto be held in the joint sitting as there is distinctionbetween proceeding and deliberation.Merely because thearbitrators sign the award on different dates and even atdifferent places does not mean that they did notdeliberate jointly.The only requirement is that theaward should be based upon thecommon decision.Signatures of Arbitrators without any reservation connotejoint deliberations and decision.
24. In Mukundalal Pakrashi Vs. Prakash ChandraPalrashi andanother one of thearbitrators signed one day later, it was held that thedecision of the arbitrators was arrived atafter thejointdeliberations and the award was preparedinaccordance with the said decision the mere fact that oneof them signed one day later cannot renderthe awardillegal.
25. Another concomitant objection Mr.Jain hasraised is that since no Umpire was appointed beforeentering into reference as required under the ArbitrationAct, arbitration proceedings are bad in law.In supportof this contention, Mr.Jain has placed reliance upon RamKishore Vs.Raj Narain Dubey and others AIR 1963 Allahabadwherein it was held that in the absence of appointment ofumpire which is mandatory provision of Schedule I of theArbitration Act, 1940 the award is rendered invalid.
26. I do not find any substance in this contentionas in this regard clause 2 of the First Schedule of theAct is not mandatory. At the most it is an irregularitywhichmay be curable but not inexcusable. Clause 2provides as under:-
"If the reference is to an even number ofarbitrators, the arbitrators shall appoint anumpire not later than one month from the latestdate of their respective appointments.:
27. If a party continues participating even beforethe Arbitrators anddoes not take objection as totheabsence of the Umpire it is presumed that the partyhaswaived his right to take objection as to the whole of theawardbeing irregular because of the non-appointment ofthe Umpire.
28. In M/s.Chowdhary and Gulzar Singh vs. M/s.FrickIndiaLtd 1978(2) 2nd 753 (Delhi) it was held thatthescheme of the ArbitrationAct is thatwheretwoarbitrators are appointed they are to appoint an Umpirebut in case the arbitrators fail to appointan Umpire,powers are given to the Court to appoint an Umpire at theinstance of the parties under Section 8(1)(c) of theArbitration Act. The period of one month mentioned inclause 2 ofthe First Schedule is, therefore, of noconsequence.Section 8 of the Actprovides thattheparties may serve the arbitrators with a written notice infilling the vacancy of an Umpire and if thearbitratorsfail to comply with the written notice, the parties have arightto approach the court for supplying the vacancy ofthe Umpire. In these circumstances, clause 2 of the FirstSchedule of the Arbitration Act is not mandatory and,therefore, the failure of the arbitrators to appoint anUmpire in accordance with the clause 2 of the FirstSchedule of the Act does not invalidate thearbitrationproceedings or the Award.
29. Admittedlyin respect of remaining awardswritten agreements were executed between the parties inJanuary, 1982 forreferring the disputes totheArbitrators.
30. Sofar these awards are concerned,thecontention of Mr.Jain in short is that objectors were notgiven reasonable hearing during thearbitrationproceedings inspite of written request made by Suman Lambato the Arbitrators vide letters dated 27.9.1984 totheeffect that they do not consider themselves to be bound byany arrangement as may have been entered into by Sh.MadanLambawho is not a party to the dispute. Similar letterswere also written by Sh.Rajeev Sawhney, Advocate of heirsof Smt.Vidyawati to the effect that no notice has beenreceived by any of the heirs though they are partners inVolgaRestaurant. In the letter it was specificallymentioned that copies of all the proceedings that havetaken place till date be furnished and next date fixed forhearing be intimated.
31. According to Mr.Jain without givingthereasonable opportunity to the parties of being heardanyaward made by the Arbitrators is bad in law as it violatesthe principles of natural justice. The statement oftheArbitrators in the award that the parties have been heardis incorrectand wrong statement as the actual fact isthat the parties were not heard and only the brothers whorepresented themselves as head of the families were heardwhereas the award has been rendered effecting the rightsof the members of each family including the objectors. Itis contended with vehemence by Mr.Jain that the allegationthat the objectors Sneh Lamba, Raman Lamba and Suman Lambaafterhaving taken advantage of the award dated 21.10.83cannot raise any objection is not correct as in the awardSumanLamba Mrs.Sneh Lamba and Raman Lamba were evenousted from the partnership of Hotel Diplomat whereas inthe award it is mentioned that the shareholders will haveproportional share in the Hotel Diplomat to be convertedinto a Private Limited Company and will have a share inthe management and benefit of the Hotel Diplomat but thiswas not done.
32. Correct position as reflected by severaldocuments and award is like this. On 21.10.1983 allthefour brothers agreed for division of the assets ofthepartnership business, partnership firms andtheproperties. On that day in respect of Hotel Diplomatwhichis a partnership firm it was decided that the samebe converted into a private limited company and if this isdone then Mr. Madan Lamba will have 12.5 per cent share.This was objected to by the partners, namely, Sneh Lamba,SumanLamba and Raman Lamba vide their letter dated27.09.1984. The relevant excerpts are as under:
"The conversion of the partnershipinto a private limited company is the veryantithesis ofthe partnership andaccordingly beyond the scope of referenceto arbitration and I have no intention orentering into such an agreement with any ofmy partners or outsiders. I would,therefore, request that further proceedingsin the arbitration consisting M/s hotelDiplomatbe taken only within theframe-work of the partnership and not withreferenceto any other frame-work. Ishould also like to make it clear that I donot consider myselfboundby anyarrangement as may have been entered intoby my husband in this connection who isneither a party of reference nor a partnerof hotel Diplomat nor has been authorisedby me to enter into any such arrangement."
33. To the same effect are letters written by RamanLamba, Suman Lamba and the notice dated 28.12.1984 sent bytheirAdvocate. Keeping in view the above objectionthearbitrators proceeded with the matter as per the deed ofreference that is to decide the disputes ofthepartnership firm of Hotel Diplomat and did not considerthe arrangement regarding conversion of partnership firminto a private limited company.This is the onlyobjection by Sneh Lamba and Suman Lamba. Otherwise theydid not have any objection to the proceedings beingconducted in terms of the reference and Mr. Madan Lamba'srepresenting them before the learned arbitrators.
34. It is evident that the objectorswere fullyawarethat the proceedings were being conducted bythearbitrators and they were being represented by Shri MadanLamba. Thatis the reason that after this letter nofurther letter was written by them till the award was madeon 25.10.1986. Thus by no stretch of imagination itcanbe presumed that the objectors did not know aboutthearbitration proceedings nor that they did not participatenor that no notice was issued to them in regard tothearbitration proceedings particularly after having takenadvantage of each and every aspect of the award and makingrepresentation to the arbitrators that they would not beboundby the decision based upon the statements made bytheir representative Shri Madan Lamba.
35. Each brother was representing all members of hisfamily and to say that they were working adverse totheinterests ofthe members of their family is far fetchedallegation. Moreover all membersof the respectivefamilies were throughout aware of the continuance ofthearbitration proceedings. It appears that the heads offamily discussed the proceedings with the respectivemembers who reacted to the role played by their heads ofthe familiesand this reaction is demonstrated intheaforesaid letters dated 27.9.84 and letter dated28.12.1984.
36. Three branches of the family have acceptedtheawards and it is only Madan Lamba and his family memberswho have filed the objections.
37. Admittedly members of the respective families ofthe four brothers signed the agreement to referthedisputes to arbitration wherever they were involved in aparticular business.Four branches of families asked forand appointed the head of the family to representthefamily interest before the Arbitrators which was dulydone. Notices of all proceedings were given to allthebrothers andnumberof proceedings were signed bytheheadsof the respective families. This position has beenaccepted by three brothers who have accepted the award.Significantly since all the members of the family of MadanLambahave been acting upon the internalarrangementreflected in the consent terms with regard to the variousbusinesses of the family after 1983, it is no more open tothem to say that they were not heard and they werenotgiventhe reasonable opportunity of being heard inthearbitration proceedings.
38. As regardsthe Volga Frozen Food property atBombay letters dated 27.10.1983 and 6.3.1984 written byMadan Lamba to the Arbitrators itself demonstrate the factthat the parties were also ad idem in respect of thisproperty. Following relevant extracts of annexure R-1 andannexure R-2 need to be reproduced:
Annexure R-1
" This is in reference to thediscussion on two points in respect of changeover arrangements of M/s.Volga Frozen Food &Ice Cream Company, Bombay with effect from22nd October,1983. We had discussed andagreedthat separate books of accounts haveto be maintained and separate Bank Account inthe name of the firm is to be opened withauthority in favor of Mr.Harish Lamba andMr.Rakesh Lamba for operation of accounts.
With regard to the situationwhichmight arise in case of some suppliers for notcrediton account of non-payment of old orrunning dues,this was agreed that the newparty may make the payment on behalf of theold party and adjust in final payment."xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Annexure R-2
I was in receipt of your letter dated20thFebruary, 1984, addressed toMr.D.M.Harish,copy to me stating "kindlyrefer to the meeting held on 21.10.1983 at13, CCI Chambers inconnection with thedisputes between us as per the award Mr.MadanLamba had to pay a sum of Rs.50,000/- (Rupeesfifty thousand only )to me by 31.10.1983. Iregretto inform that the amount hasstillnot been paid.
Herewith, I am enclosing two draftsof Rs.25,000/- each, one from Mr.Raman Lamba,DraftNo.0308178/6 dated 3.3.1984 forRs.25,000/- and theother from Mr.SumanLamba,Draft No.0308179 dated 3.3.1984 foRs.25,000/- as partpayment towards thepurchase ofyourinterest inVolgaRestaurant, New Delhi."
39. As is apparent from the aforesaidletterthefamily of Madan Lamba was a beneficiary of the arrangemententered intoby the respective families as reflected inthe consent terms of 21.10.83. Madan Lamba and his familymembers got all the advantage of the consent terms asnotice and subsequent letters suggest as to howtheparties should manage the accounts after newarrangementcame into existence.The letter further shows that MadanLambahad already opened separate books of accountsforM/s Volga Restaurant New Delhi since 22.10.83. So much soMadanLamba also vide above referred letter suggested toKailash Lamba to open separate books of accounts as wellas separate bank account in favor of Hotel Diplomatforoperation of accounts.
40. Allthese facts lead to mostineluctableconclusion that Mr.Madan Lamba took charge of VolgaRestaurant New Delhi business completely as undertheconsent terms this restaurant was to be run by him.Similarly because Hotel Diplomat was tobe run byMr.Kailash Lamba and his family, Madan Lamba suggestedmaintenance of separate accounts for Hotel Diplomat sothat no liabilities are fastened after 22.10.83 on otherfamilies.
41. The final award by the Arbitrators was made muchlateri.e. on 25.10.86 and till then they did not raiseany objection and rather availed of the benefit and actedupon the terms of consent award and to rake up the issueat this stage is not only an after thought but a feebleand unscrupulous attempt to scuttle and stultify the awardand dig out the hatchet that was burried long ago.
42. The very fact that the objectors did not come upwith the plea of not being served with the notice prior orsubsequently till the filing of the objections shows thatthis plea is desperate attempt to wipe out the awardemanating from the consent terms of the parties effectedon 21.10.1983.
43. Theprinciples of natural justice are not to beinterpreted in the manner as the counsel forthepetitioner seeks to. Once the parties appoint theirrepresentatives and not only participate intheproceedings but also act upon the terms agreed before theArbitrators and particularly when the relationship of thehead of the family so appointed is that of the husband andthe father who is in a better position to look afternotonly his but their interests also, the allegations ofviolation ofprinciples of natural justice inasmuch asthat they were not given notices by the Arbitrators at thetime of proceedings do not stick at all.
44. Next objection isa legal objection and iscommon to all awards. According to Mr.Jain, the award iscompulsorily registrable asit creates a right intheimmovable property of more than rupees one hundred valueand in theabsence of registration the award isinadmissible and cannot be made a rule of the court. Inthis regard, he referred to Section 17 of the RegistrationAct. Relevant provisions are as under:-
17. Documents of which registration iscompulsory. (1)The following documentsshall beregistered, if the property towhich they relate is situated in a districtin which, and if they have been executed onor after the date on which, Act No.XVI of1864, or the Indian Registration Act, 1866,or the Indian Registration Act, 1871, orthe Indian Registration Act, 1877 or thisAct came or comes into force, namely:-
(a). instruments of gift of immovableproperty;
(b) other non-testamentary instrumentswhich purport or operate to create,
declare, assign,limitor extinguish,whether in present or in future, any right,title or interest, whether vested orcontigent, of the value of one hundredrupees and upwards, to or in immovableproperty.
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(2) Nothing in clauses (b) & (c) ofsub-section (I) applies to-
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(v) any document not itself creating,declaring, assigning, limiting orextinguishing any right, title or interestof the value of one hundred rupees andupwards to or in immovable property, butmerely creating a right to obtain anotherdocument which will, when executed, create,declare, assign,limit or extinguish anysuch right, title or interest; or
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45. Extracts of the award in respect of HotelDiplomat andVolga House germanefor deciding thiscontroversy need to be reproduced as other awards are alsoplaced in similar moulds. These are:-
S.No.3371/1991"1. S/Shri Jagdish Lamba, Madan Lamba,Harish Lamba and Kailash Lamba as holders of thelease hold rights of premises No.9/39,SardarPatel Marg, (Kitchner Road), Chanakyapuri, NewDelhi and owners of the super structure builtthereon shall grant to M/s. Hotel Diplomat, aPartnership firm with Shri Kailash Lamba andShri Sanjiv as the Continuing Partner alease/tenancy as per draft hereto annexed asAnnexure`A' and initialled by us for thepurpose of identification.
2. S/Shri Jagdish Lamba, Madan Lambaand Harish Lamba andKailash Lambashallcontinue as owners of superstructure andleasehold rights of 9/39, S.P.Marg (3) ShriMadan Lamba Shri Jagdish Lamba and ShriHarishLamba shall also execute a Power of Attorney infavor of Shri Kailash Lamba/Shri Sanjiv Lambato effectuate the purposes of the lease as perthe draft hereto annexed and marked Annexure `B'and initialledby us for the purpose ofidentification."
46. Mr.Jain contends that the arbitrators have byawarding that the owners of the super-structure buildingin the property at Sardar Patel Marg shall grant toM/sHotel Diplomat, a partnership firm with Shri Kailash Lambaand Shri Sanjiv Lamba as the continuing partner a leasetenancy as per draft hereto annexed and Shri Madan Lamba,Jagdish Lamba and Harish Lamba shall also execute a powerof attorney in favor of Kailash Lamba and Sanjiv Lamba toeffectuate the purpose of the lease havecreated aninterest in the immovable property.
47. Mr.Jain has tried to draw strength from LachhmanDass Vs. Ram Lal and another whereinSupreme Court held that the real purpose of registrationis to secure that every person dealing with the property,wheresuch document requires registration, may rely withconfidence upon statements contained in the register as afull and complete account of all transactions by whichtitle may be affected. Section 17 of the said Act being adisabling section, must be construed strictly. Therefore,unless a document is clearly brought within the provisionsof the section, its non-registration would be no bar toits being admitted in evidence.........
48. It is beyond the pale of controversy thatanydocument creating interest or right in immovable propertyhas to be compulsorily registered. Otherwise it isneither admissible nor receivable in evidence. Every suchdocument needs to be scanned and scrutinized minutely assometimes the covenants or titles of the documentaremisleading as on surface it may create an impression thatit has created an interest or right in the propertybutits closer perusal may lead to the conclusion that inactuality the adjudicated rights do require execution ofan independent document through which alone interest orrightshall be created that mayrequire compulsoryregistration.
49. Objection in this regard appears to be brewdwith confusion. On the face of the award it is apparentthat by no stretch of imagination the award createsanyinterest in the immovable property nor does it create anyleasehold rights in the property in question. It onlydirects certain parties to create such leasehold rights infavor of the continuing partners and for that purposestates that rights be created by executing documentsenclosed with the award and annexed by the arbitrators asAnnexure `A'. It is only Annexure `A' that will createthe lease hold rights in favor of the continuing partnersand that document alone shall be compulsorily registrable.An apt instance of the like nature may be cited.
50. In Mrs.Tehmi P.Sidhwa and others Vs. ShibBanerjee & Sons Pvt. Ltd. anarbitration award relating to the partition of immovableproperty of the value exceeding Rs. 100/- directed someof the parties to execute certain documents as may benecessary for declaring shares and for transferringtheproperty. Supreme Court held that such an award itselfdoes not create or declare any right, title or interest inthe immovable property but it merely created a right toobtain another document which will, when executed, createsuch right, title or interest. Such award was held to befalling under Section 17(2)(v) and not under Section17(1)(b) and, therefore, was not registrable.
51. Thebasic judgment relied upon by the SupremeCourtin the aforesaid case is of Privy Council renderedin Rajangam Ayyur Vs. Rajangam Ayyar AIR 1922 PC266wherein the partiesagreed to divide their propertiesaccording to certain specified shares. The award was tothe effect: " A partition deed Exhibit AY in terms hereofshallbe executed and registered in the office oftheSub-Registrarof the place as also at Tinnevelly as earlyas possible; that until then this shall be itself inforce." The Privy Council observed "Exhibit AY is not adocument by itself creating assigning, limiting orextinguisihing any right, title or interest in immovableproperty; it merely creates a right to obtain any otherdocument which will when executed create a right intheperson claiming thereliefand onthat ground theirLordships held that Exhibit AYdid not requireregistration and accordingly was admissible in evidence.
52. This view was fortified in Sheonarain Lalvs.Rameshwari Devi,(CA 296/1960 decided by the Supreme Courton 6.12.1962 by the Bench of five Judges. Clause 5 of thedocument under determination was as follows:
"Shri SheoNarainLal and his heirs shouldexecute as early as possible a registered document inrespect of the shop let out on rent to Beli Sao SukhdeoPrasad, in favor of Prabhu Chand for which Shri PrabhuChandwill have to pay nothing as consideration. He willpay only cost of stamp etc."
. It was held that such an award merely providesthat some right in the shop should be created inthefuture by means of a document to be executed by SheonarainLal and hisheirs.That document when executed wouldcertainly operate to create a right in favor of PrabbhuChandin immovable properties and extinguish the right ofSheonarain Lal and his heirs in the same properties.Theposition would have been otherwise if the arbitratorhaddirected by the award that the property would go to PrabhuChand without any further document.
53. As regards the objection that the covenant thatMadanLamba and Jagdish Lamba shall relinquish theirproperty rights in favor of Harish Lamba has created theinterest of property in favor of Harish Lamba, therefore,the documentwas necessarily registrable, this pleahasbeen taken care of in the subsequent portion of the awardwhich is to the following effect.
"The lessee shall execute at the costof Shri Harish Lamba such documents as may benecessary for conferring on Shri Harish Lambathe rights as an exclusive Lessee/tenant ofthe premises under the Shaikhali Trust.S/Shri Madan Lamba, Jagdish Lamba and KailashLamba will execute in favor of Shri HarishLamba Deed of Relinquishment as per ......"
. As is apparent from the aforesaid covenantthedocuments conferringthe rights as exclusive lesseewasaloneregistrable as the said document creates a right inthe immovable property andnot the direction ofthearbitrator that Madan Lamba and Jagdish Lamba shallrelinquish their property right in favor of Harish Lamba.
54. At this stage I deem it appropriate particularlyto avoid repetition to refer to the remaining awards as inthe opinion of Mr.Jain, these awards also create right inthe immovable property. Relevant extracts of the Awardsare as follows:-
"I. Suit No.3367/1991M/s.Volga Ice Cream, Poona
Partners
(i) Smt.Swaran Lamba
(ii) Shri Sanjiv Lamba
(iii) Shri Raman Lamba
(iv) Shei Suman Lamba
(v) Smt.Kamlesh Lamba
(i) & (iv) shall retire from businessas of 31.3.84, Smt.Kamlesh Lamba will takeover the running business w.e.f. 1.4.1984.
II. Suit No.3368/1991M/s.Volga Restaurant, Bombay.
Partners
(i). Smt.Sneh Lamba W/o Shri Madan Lamba
(ii). Shri Jagdish Lamba
(iii) Shri Harish Lamba
(iv). Smt.Kammi Lamba W/o Shri Kailash
Lamba.
The partnership firm shall bedissolved w.e.f. 31.3.1986.
III. Suit No.3369/1991
M/s.Hotel Diplomat
Partners
(i) Shri Jagdish Lamba
(ii) Shri Harish Lamba
(iii) Shri Kailash Lamba
(iv) Shri Sanjiv Lamba S/o Sh.Kailash
Lamba
(v) Smt.Sneh Lamba W/o Sh.Madan Lamba
(vi) Sh.Suman Lamba S/o Sh.Madan Lamba
(vii) Sh.Raman Lamba S/o Sh.Madan Lamba
(viii) Sh.Rakesh Lamba S/o Sh.Harish Lamba
S/Shri Jagdish Lamba, Harish Lamba,Raman Lamba, Suman Lamba, Smt.Sneh Lamba andSh. Rakesh Lamba shall retire from thepartnership firm of M/s.Hotel Diplomat as onthe close of business on 31.3.85. ShriKailashLamba and Shri SanjivLamba willtake over the running business w.e.f.1stApril, 1985 and shall be responsible for allthe liabilities of the firm and shall beentitled to all the assets, properties, bookdebt, permits, licenses and goodwill of thefirm.
IV. Suit No.3370/1991
M/s.Volga Frozen Food & Ice CreamCompany
Partners
(i) Shri Madan Lamba
(ii) Shri Jagdish Lamba
(iii) Shri Harish Lamba
(iv) Shri Kailash Lamba
S/Shri Madan Lamba, Jagdish Lamba andKailash Lamba shall retire from the
partnership firm on the close of business asof 31.3.84. Shri Harish Lamba shall takeover the business w.e.f. 1.4.84 and shallbe responsiblefor all the liabilities ofthe firm and shall be entitled to alltheassets,properties, book debts, permits,licenses and goodwill of the business.
V. Suit No.3372/1991
M/s.Volga Restaurant, New Delhi
Partners
(i) Shri Madan Lamba
(ii) Shri Jagdish Lamba
(iii) Smt.Kammi Lamba w/o Sh.Kailash Lamba
(iv) Sh.Ashok Lamba
(v) Shri Vijay Lamba
(vi) Shri Raj Lamba
(vii) Shri Deepak Lamba
(viii) Beneficiaries of Smt.Ananti DeviTrust
The above partners except Shri MadanLamba shall retire from the partnership firmon the close of the business as of 31.3.86.Shri Madan Lamba will take over the runningbusiness w.e.f. 1.4.86 and shall beresponsible for all the liabilities of thefirm and shall be entitled to alltheassets,properties, book debts, permits,license and goodwill of the business.
VI. Suit No.3373/1991M/s.Volga Catering Services
Partners
(i) M/s.Harish Lamba (HUF)
(ii) Shri Kailash Lamba
(iii) Smt.Sneh Lamba W/o Madan Lamba
(iv) Sh.Raman Lamba S/o of Madan Lamba
(v) Smt.Swaran Lamba Wo Jagdish Lamba
Except Smt.Swaran Lamba all otherpartners will retire from thepartnershipfirm on the close of business as of 31.3.84.Smt.Swaran Lamba will take over the businessof thefirm w.e.f.1.4.84 and shall beresponsible for all the liabilities ofthefirm and shall be entitled to alltheassets,properties, book debts, permits,license, goodwill of the business.
VII. Suit No.3374/1991Plot No.97-102, Kirti Nagar WarehousingScheme
Lessees of the plot are S/Shri MadanLamba, JagdishLamba, Harish LambaandKailashLamba. According tothe awardS/Shri Madan Lamba, Jagdish Lamba and HarishLamba has to relinquish their shares in theaforesaid plotin favor of Shri KailashLamba."
55. Theabove awards manifestly demonstrate thatfrivolity iswrit large on the face of theobjection.None of the awards has created such interest or right inthe immovable property ascontemplated by Section17(i)(b) of the Registration Act requiringcompulsoryregistration. It appears this challenge is by a loosingperson in the hope that by stroke of fluke it may findfavor at some forum or the other and result in therejection of the award wholly.
56. Another objection Mr.Jain has tried to bludgaonwith the puff of his argument is thatsince theArbitrators have made the awards after nearly 57 monthsfrom entering the reference and at no stage they soughtany extension of time either from the court or throughmutual consent of the parties the award is renderednullity. According to Mr.Jain, the Arbitrator becomesfunctus officio if the award is not made within theprescribed period unless either the parties with mutualconsent extend the time for making theawardorpermission is sought and granted by the court and anyawardmade beyond the prescribed period is non-existentand nugatory.
57. In the instant case, the Arbitrators enteredinto reference in January 1982 and made the award on 25thOctober, 1986. Though respondents havefiledanapplication (I.A.1173/2001) under Section 28 of the Actseeking extension of time detailing the reasons andgrounds for extension of time yetin reply to theobjections the respondents not only took the pleaofwaiver but also requested for extension of time in thefollowing words:-
"It is stated that by the conduct of thepartiesthey are deemed to have given theirconsent even though no formal extension of timewas requested for or recorded. It isstatedthat even otherwise this Hon'ble Court haspower and jurisdiction to extend the time underSection 28 of the Arbitration Act."
58. It is contended by Mr.Singh, learned counsel forthe respondents that conduct of the partiesshows thatthey had given their consent though no formal extension oftime was requested or recorded.
59. While canvassing the proposition that a party isnot estoppedeven by its conduct from challengingtheawardon the ground that it was made beyond time,Mr.Jain has placed reliance upon State of Punjab vs. Hardyalwherein it was held that the parties arenot stopped by their conduct from challenging the award onthe ground that it was made beyond time merely because oftheirhavingparticipated in the proceedings beforethearbitrator after the expiry of the prescribed period.
60. In the aforesaid case the arbitrator gavetheawardagainst the respondent on April 28, 1961 but afterthe expiry of the prescribed period.It was admitted bythe respondent that he participated in theproceedingseven after the expiry of the statutory period. The issuesraised before the Supreme Court were - whethertheobjections were premature; whether the arbitratormisconducted himself or the proceedings or; whethertheawardwas against the natural justice and whethertheaward was made after inordinate delay.
61. In the words of the Supreme Court the policy ofthe law seems to be that the arbitrationproceedingsshould not be unduly prolonged and, therefore,thearbitrator has to give the award within the prescribedtime or in its discretion Court may extend the time as theCourthas been given the power to extend the timeforgiving the award. Obviously the discretion of the Courtin this regard has to be exercised in a judicial manner,so much so this power can be exercised even bytheappellate Court. The appeal in the aforesaid caseremained pending in the Supreme Court since 1970 andwasdecided on April 10, 1985.
62. In the conspectus of aforesaid facts, itwasheld that no useful purpose would be served in determiningwhether the time should be enlarged in the circumstancesof the case. It was in the face of inordinate delay indeciding theappealand making of the award aftertheexpiry of the prescribed period that the Supreme Courtheld that in view of the policy of the law thatthearbitration proceedings should not be unduly prolonged andin view of the fact that the parties having agreed toparticipate in the proceedings before the arbitratorwithout a demur it will be a fit case for extension oftime.
63. Similar view was taken in Union of IndiaVs.M/s.Associated Producers Company 1991 (3) Delhi Lawyer191 wherein Mr.Hardy had entered on the reference onSeptember 12, 1972 and made the award on February21,1973.Admittedly no application was made under Section 28of the Act seeking extension of time. So much so duringarguments norequest was made even orally. It was heldthat though there is a discretion that the courtmayextend the time suo moto but it depends upon each case tofind out whether discretion for extending the timesuomoto is exercised judiciously or not. Neither any formalapplication seeking extension of time need to be made noris there any provision for making such a request eitherduring the proceedings or during the arguments.
64. There is unvarying current of unanimity that theawardis not liable to be set aside merely because it hasnot been rendered within the prescribed period. Limit oftime has been prescribed in order to avoid undueprocrastination as is usually occasioned in the courtproceedings because of multifarious reasons, chief beingthe over-crowded dockets, complex legal proceduresandseeking redressal against the adverse orders at everystep.This itself is a time consuming process.
65. Object of the law of alternative disputeresolution is to decide the disputes as expeditiously aspossible. That is why the arbitration proceedingsareneither subjected to nor governedby the rigors ofprocedural codes or law of evidence. But it does not meanthat the award if made beyond the prescribed period has tobe declared as null and void.Facts of every case have tobe scanned and scrutinizedwith a view to exercisediscretion in favor of making of the award so thatthedisputes do not remain in limbo for ever and aggrievedpartyis not left in the lurch. Otherwise the wholeobject of alternative process of resolving conflicts wouldget frustrated.
66. Conduct of the parties in participating intheproceedings without any objection or demur is definitelyone of the factorspropelling the discretion to beexercised in favor of award.If an application either inwriting or orally is made at any stage by any oftheparties for condoning the delay, discretion should beexercised in the affirmative rather than in the negative.Even if no such application is made, the court intheinterests ofthe parties and justice and toupholdtheobject of arbitration should exercise the discretionsuomotu. Section 28 confers wide and inherent powers tocondone the delay. It provides as under:-
28. Power to court only to enlarge timefor making award-(1) The Court may, if itthinks fit, whether the time for making theaward has expired or not and whether the awardhas been made or not, enlarge from to time formaking the award.
(2) Any provision in an arbitrationagreement whereby the arbitrators, or umpiremay, except with theconsent of all theparties to the agreement, enlarge the time formaking the award, shall be void and of noeffect."
67. To exercise the discretion in judicious and fairmanner, facts need to be surveyed. The instantarbitration proceedings commenced in August 1982 andtheaward was made on 25.10.1086. Adjournments afteradjournments were taken mainly by the Objectors ononeground or the other. The award was first filed intheBombay High Court in November 1986 itself. However, as aconsequence of objections and counter objections as to thejurisdiction of the Court, the Bombay High Court ruled on11.9.1986 that the award has to be returned for beingpresented before the appropriate Court at Delhi for makingit arule of the Court. The awards were filed in thisCourton 1.11.1990. Till date, awards are awaitingdecisions ofthis court. The application for extendingthe time was made on 5.2.2001. The fact that parties toarbitration proceedings have acted upon thearrangementmutually made by them without any demur or objectionandsuch an arrangement continued for a long period is also animportant factor for extending the time.
68. Having subjected the parties to the painfulrigours of participating in the proceeding, waitingforexamining the awards for the purpose of making them ruleof the Court for 15 long years it would be too late in theday to tell them to go back to the arbitrator or declarethe awards as nullity. It wouldoccasion monstrousinjustice particularly in view of the fact thattheobjecting party had participated in the proceedingsnotonly till their conclusion but till adjudication and eventhereafter at no stage had raised objection as tothedelayoccasioned in the proceedings.Moreover the blameof delaying the proceedings mainly lies at the door of thepetitioners.
69. Even otherwise it is well acknowledged that theCourtcan exercise powers to extend time under Section 28of the Arbitration Act suo moto or even on oral request ofa party. This proposition is supported by the followingjudgments.
(i)F.A.C.T.Ltd. Vs. Industry Side (P) LTD.1988 Vol.I KLT 845
(ii) M/s.G.S.D.Construction Vs. State of Biharand others AIR 1999 SC 1576
(iii) Nagar Palika, Mirzapur Vs. The MirzapurElec.Supply Co. Ltd.
(iv) Stateof Punjab Vs. Hardyal
70. In M/s.M.K.Shah Engineers & Contractors VersusState of Madhya Pradesh 1999(1) RAJ 437(SC), Supreme Courtreferred to Halsbury's Laws of England (Fourth Edition)Volume 2, paras 652, 654, wherein clause requiring acertain act to be completed within a specific periodandif that act is not done either the claim or the ability tocommence an arbitration is barred is known as `AtlanticShipping' clauses. SupremeCourt has said thattheconsequences of the expiry of a contractual limitationperiod may be avoided in three circumstances: (i) if thecourt exercises its discretion statutorily conferred on itto extend the period to avoid undue hardship;(ii) if thearbitration clause confers a discretion on the arbitratorto extend the period and the exercises it; (iii) If theconduct of either party precludes his relying on the timebar against the claimant.
71. Thus it cannot be gainsaid that the Courthasthe power to extend the time of making the award atanystageof the proceedings including the appellate stage.Such extension of time is made on sufficient cause beingshownby the party. The conduct of a party on whoseaccount the proceedings have been delayed is one oftherelevant considerations. The participation of the partyopposing the extension of time in thearbitrationproceedings is another relevant factor. As a last resortavoidance ofundue hardship becomes the sole groundforextending the time suo moto.
72. In the instant case, the reasons for extensionof time in short are that the parties throughoutparticipated in the arbitration proceedings withoutanydemuror objections which shows their implied consent inextending the timefor making the award bytheArbitrators.The letters mentioned in para 5 oftheapplication show that the objectors had been seekingadjournments on number of occasions.This also resultedin delay of proceedings. From any angle we may hold upthe matter, the extension of time is the crying need, maybe firstly by exercising the discretionstatutorilyconferred by Section 28 of the Act;secondly to avoidunduehardship to the parties and thirdly because conductof the petitioners/objects precludes them from raisingsuch an objection.
73. In my view therecan be no better case ofexercising discretion for extension of time than this. Inno way exercise ofsuch a discretion would verge onunjudiciousness. Though a formal application was made inFebruary 2001 but in reply dated 28.3.1994 totheobjections the respondents had in para 6 requestedforextension oftime. Keeping in view the conduct oftheparties particularly the objectors before the arbitrators,it should be deemed that they have given their consenteven though no formal extension of time was requested foror recorded.
74. There are few more objections which are commonto all the awards. Firstly themisconduct oftheArbitrators is, according to Mr.Jain further demonstrateddemonstrated from the following facts: (i) That onreceipt of notices of the awards dated 25.10.1986theobjectors filed an application under Section 14(2) of theArbitration Act, 1940( in short the "Act") to file awardsin this court and telegram was given to the Arbitrators tothis effect on 15.11.1986. Letters of confirmation werereceived on 16.11.1986. On 17.11.1986, this court issuednotice to them to file the award. However,the awardswere not filed in this court but filed in Bombay HighCourton 21.11.1986; (ii) That filing of the award inBombay High Court was challenged on the ground thattheawards should have been filed before this court and not atBombay High Court. Matter was heard and Arbitrators weredirected to file the same in this court;(iii) Thattaking advantage ofthe fact that the matter has beenpending in Bombay High Court, the respondents made changesin the partnership deeds and other documents when awardswere being made rule of the court. Not onlypartnershipdeedswere changed by the opposite party even beforetheaward was signed on 25.10.1986, the partnership deeds werechanged in 1985 itself as if respondents knew that awardswere going to be made in their favor.
75. I do not find any substance or merit intheallegations of misconduct on the part of Arbitrators asfiling of the award in Bombay High Court in no way couldsuit to Kailash Lamba. Rather written requests were madeon 31.10.1986 by Harish Lamba and his family for filing ofthe awards in the Bombay High Court and accordingly theseawards were filed in Bombay High Court. The telegramreceived by Mr.Madan Lamba did not show if any applicationwas filed by him in this court. There was no misconducton the part of Arbitrators in filing of award in BombayHigh Court particularly when they had received writtenrequests from Mr.Harish Lamba and others in this regard.Before notice couldbe sent by this court totheArbitrators they had already filed awards in Bombay HighCourt.
76. Another objection which appearsto be anafter-thoughtis that theArbitrators held privatemeetings and enjoyed the hospitality of Sh.Kailash Lamba,for instance Mr.D.V.Taneja met Sh.Kailash Lamba and tookhis help in constructing house at Delhi and have thereforemadethemselves disqualified tobe appointed asArbitrators.The allegations are palpably false ashisname was suggested by S/Sh.Madan Lamba, Jagdish Lamba andaccepted by others. Sh.Kailash Lamba had only commentedon the placement and lay out of furnitures in the planprepared by the Architects ofSh.D.V.Tanejaandrecommended a revised lay out. This is nothing but afriendly advice being given by the Arbitrator. Conduct ofthe objectors rather exuded the confidence they reposed inthe integrity of the Arbitrators.
77. Concomitant with this objection is the objectionin Suit No.3369/1991 that the factum of Kailash Lambahaving constituted a firm with his son Sanjiv Lamba showeda collusion betweenhim and the Arbitrators, it iscontended that Mr. D.M.Harish was disqualified to act asan arbitrator ashe had been working as aconsultant/advisor of Kailash Lamba and Harish Lamba.Objection is not sustainable and is wholly groundless inview of the fact that this allegation has not only beendenied in the respondents' reply but the name of ShriD.M.Harish for appointment as an arbitrator was proposedby Madan Lamba and was accepted byJagdish Lambaandothers. During the proceedings no objection regardingbias was raised by the objectors. The fact that Shri D.M.Harish was known to the family i.e. all the four brothersand had their confidence and as such was appointed as theArbitrator cannot be lost sight of. It rather showstheunstinted acceptanceof Sh.D.M.Harish, as Arbitrator bythe parties. Letter dated 9.12.1983 sent by Mr.D.M.Harishto three brothers i.e. Madan Lamba, Jagdish LambaandKailash Lamba with a copy to Mr. D.V. Taneja andMr.Harish Lambashows that they asked for the settlementamongst the brothers and also to implement a part ofthesettlement consented on 21.10.1983.
78. Similar letters for giving effect tothesettlement of 21.10.1983 were written by Madan Lamba toMr. D.M. Harish, Arbitrator and his other brothers on27.10.1983. Moreover on 6.3.1984 Madan Lamba himselfwrote to the Arbitrator that he would have no objection ifthe arbitrator asked theparties to implementthesettlement though in the absence of the pronouncement ofthe award. It is nothing but an attempt to clutch aflimsy straw by a drowning person.
79. It is further contended that theArbitratorshave erroneously and wrongfully proceeded to club togetherthe reference of Suit No.3314/1991 with othersixreferences which have no connection except S.No.3371/91and further there are separate arbitration agreements foreach reference and there are different parties in eachreference, the parties were not presentbeforetheArbitrators and at no stage desired joint reference. Inthe opinion of Mr.Jain the effect of clubbing of allthereferences together is that the amount which is requiredto be paid under one of the awards to a party is not beinggiven. The said amount is tried to be adjusted againstthe amounts payable to another party and such a situationcannot be countenanced at all.
80. The objection holds water like a sieve.Arbitrators have given set offs and advantages to eachbranch keeping in view the businesses of the branches ofthe family. For example, as per award Shri Madan Lamba asthe continuing partner shall pay on or before 31stDecember 1986 certain amounts to a retiring partner.These are nothing but adjustments made keeping in view thevarious factors in the family businesses. For instanceMr. Madan Lamba has to be given the Volga restaurant atDelhiand he shallpay to the retiring partnerstheamounts mentioned in para 2. Thus, the referencesareinterlinked and have connection with each other. This isso as stated in para 4 of the award in Suit No. 3372/1991itself. Para 4 reads as under:
"The partiesare required to makepayment underthis award and the other sevenawardsshall be entitled to set offs theamounts receivable by them or by the members oftheir respective families against the amountpayable by them and make payment of only thenet amount due to a party or to hisor herfamily members."
81. This does not amount toclubbing. As isapparent from the disputes and differences relating to thepartnership firm businesses were sointractablyinter-connected that those have to be taken togetherandsuch a procedure was never objected to by the objectorsand others and rightly so as this objection is nothing butan after-thought and is of no material relevanceandsubstance. The references were with regard to the familyaffairs and businesses of the parties and, therefore, thequestion of clubbing does not arise. Initially there weresevenreferences but in the meeting held in October 1993the parties conformed to the award with regard to all thedisputes and differences.
82. Next objection isthat Shri Harish Lamba inanticipation of the award had sold/leased the machinerybelonging toM/s Volga Frozen Food Bombay and Ice Creamcompany and this shows collusion of the Arbitrators withHarish Lamba and Kailash Lamba. Objection stands onthesandyfoundation and is without any basis because asperthe consent terms all the brothers took charge oftherespective businesses which they had agreed in the consentterms. In this context Shri Madan Lamba- the objectortook over M/s Volga restaurant since 1983 and has beenrunning the same to the exclusion of all others as isbornefrom the above referred letters. Notonly that,afterthis had been done by the parties in 1983,theobjectors continued to participate in thearbitrationproceedings and didnot at any stage object tothearrangement that was being enforced.
83. Allother objections filed in different suitsarising fromdifferent awards were not pressed. Evenotherwise, these are en face sans substance and frivolous.
84. Proverbal last straw is the nature of awards.Theseare non-speaking awards settling the disputesamongst members of the family who chose their confidantesin whose integrity and impartiality, they had unflinchingfaith.
85. Non-speaking award stands on different pedestalthan the reasoned award.
86. Thescope of challenge of non-speaking award isvery limited. In a reasoned award one can know as to thereasons for accepting or rejecting the claims and counterclaims of the parties. In a non speaking award it isdifficult togauge the mental process of the Arbitratorwhichguided him to allow or reject a particular claim orcounter claim. But it does not mean that non-speakingawardis immune from scrutiny or challenge. If the erroror omission to consider a vital or material document orobjection that hits at the very fount of theproceedingsis pronounced and apparent on the face, the award isliable to be setaside or tobe remittedforre-consideration. Similarlyif theArbitrator travelsbeyond the terms of the agreement he renders his award notonly as a nullity but nugatory and tautologous.
87. However, where the parties agree thattheArbitrators shall have the powers to proceed in a summarymanner and will not be bound to record or requirethefiling of claims or replies in writing or maintainanynotesof meeting or receive or mark any formal evidenceand are authorised to conduct the proceedings withallsummary powers including perusing such documentsandpapers as they think fit and including oral submissions ofparties and witnesses, the scope of interference of suchan award isalmostnon-existent. It is the vice ofperversity or apparent error on the face of award whichalone makes non-speaking award bad in law.
88. In this regard, I deem it needless to refer to catena of authorities supporting the above view and refer to the observations made by the Supreme Court in Arosan Enterprises Ltd. Vs. Union of India & Another to the effect that in the event of there being no reasons in the award, question of interference ofthe courtwould not arise at all and even in the event there are reasons, the interference would still be not available within the jurisdiction of the court unless of course thereexist total perversity in the award or judgment is based on wrong proposition of law.
90. Another relevant observation made by the Supreme Court in State of Rajasthan Vs. Puri Construction Co.Ltd. wherein decision of the Supreme Court in Sudarshan Trading Co. Vs. Govt. of Kerala was relied upon, is quote worthy and is as under:-
"Since the arbitrator is a judge by choice of the parties, and more often than not, a person with little or no legal background, the adjudication of disputes by an arbitration by wayof an award can be challenged only within the limited scope of several provisions of the Arbitration Act and the legislature in its wisdom has limited the scope and ambit of challenge to an award in the Arbitration Act. Over the decades, judicial decisions have indicated the parameters of such challenge consistent with the provisions of the Arbitration Act. By and large the courts have disfavored interference with arbitration award on account oferror of law and fact on the score of misappreciation and misreading of the materials on record and have shown definite inclination topreserve the award as far as possible.
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It is necessary, however, to put a note of caution that in the anxiety torender justiceto the party to arbitratin, the court should notreappraise the evidences intrinsically with a clost scrutiny for finding out that the conclusion drawn from some facts, by the arbitrator is, according to the understanding of the court, erroneous. Such exercise of power which can be exercised by an appellate court with power to reverse the findingof fact, is alien to the scope and ambit of challenge of an award under the Arbitration Act."
91. In Raipur Development Authority Vs. Chokhamal Contractors the Constitution Bench took
the view that unless the parties expresslyagree the arbitrator is not required to give any reasons in support of his award.
92. In the instant case, the parties by virtueof clause 9 had expressely agreed that the Arbitrators shall have the powers to proceed in a summary manner and will not be bound to record or require the filing of claims or replies in writing or maintain any notes or meetingor receive or mark any formal evidence and are authorised to conduct the proceedings with all summary powers including perusing such documents and papers as they think fit and including oral submissions of parties andwitnesses. They also agreed by virtue of clause 14 that the award passed by the arbitrator shall be binding on them, their executors, administrators, legal representatives and successors in interest and shall not be challenged on any ground except fraud or collusion or error apparent on the face of theaward.This clause itself precludes the objectors from challenging the award as they do not suffer from any factual or legal infirmity nor have the Arbitrators acted contrary to the agreement or bargain between the parties.They admit no interdiction either on any factual or any legal issue.
. As a consequence, objections prove damp squib and are dismissed. Awards are made rule of the court. All the suits are decreed in terms of the awards. Decree sheet be drawn up accordingly.
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