Athelli Swamy and Others vs Athelli Eshwariah

Alladi Kuppuswami

This revision petition is directed against an order dismissing an application to examine four arbitrators who passed an award, as witnesses in a suit to enforce the award. The respondent herein filed a suit, O.S. 162/74, under Sec. 20 of the Arbitration Act on the file of the Third Additional Judge, City Civil Court, Secunderabad, against the petitioners herein requesting the court to refer the subject-matter of the suit to arbitration and to direct the arbitrators to make their award. The case of the plaintiff was that the first defendant was the father of the plaintiff and defendants 2 and 3 are the brothers of the plaintiff. The plaintiff after referring to some marked partnerships, ultimately stated that a deed of partnership was executed on 16-3-1970 between the plaintiff and defendants 1 to 3. Under the said deed of partnership which related to the business of running of a picture house called, Ajanta Talkies in Secunderabad, the plaintiff was to be in-charge of maintenance of accounts. The second defendant was to be in-charge of incomings and out goings of the firm and he should have the custody of the collections and receipts of the firm. The Second defendant was not furnishing the details of the incomings and out goings and was retaining the entire income from the theatre for himself According to the plaintiff he was to get a sum of over Rs. 1,20,000/- towards his share of profits. The defendants were colluding to deprive him of the income of the firm and rendering it impossible to run the partnership. Hence it was not reasonably practicable for the plaintiff to carry on the business in partnership with the defendants. Under clause 13 of the deed of partnership if any dispute arises out of the partners relating to the partnership business the same should be referred to the arbitration of four arbitrators named therein. The plaintiff therefore prayed that the partnership agreement which contained an arbitration clause should be filed and order of reference to the arbitrators should be made and the arbitrators should be directed to make their award. By an order d/12-8-1975 the Court appointed M/s. M. Rammohan Rao, Advocate, V.V.L. Narasimha Rao, Advocate and Sri Gowni Ramakrishtaiah and Sri D.P. Sanyal as arbitrators to decide the dispute between the plaintiff and the defendants. During the course of the arbitration proceedings Sri Ramakishtaiah died and thereafter Sri L. Lingisetty was appointed in his place. The arbitrators passed an award on 8-9-1978 which was duly engrossed on stamp papers. The arbitrators issued a notice of making and signing the award to the parties. The respondent herein thereupon filed a suit O.S. 137/78 on the file of the Addl. Chief Judge, City Civil Court, Secunderabad directing the arbitrators to file the award into court and make the award a rule of the court and pass a decree in terms of the award.

In the above suit, the defendants filed I.A. No. 154/79 requesting that the arbitrators should be summoned as witnesses for the purpose of cross-examination by the defendants. In the affidavit in support of the petition it was stated that the arbitrators are necessary witnesses in the suit and the defendants should have an opportunity to cross-examine them. No reasons were given as to why the arbitrators should be produced for cross-examination. During the arguments however the defendants seem to have contended that the cross-examination of the arbitrators was necessary to substantiate the two objections raised by the defendants in the suit, namely, that in the award, the arbitrators had granted amounts barred by limitation, and made the defendants liable for profits in respect of the period anterior to the date of deed of partnership. The Court below dismissed the application holding that the period for which the profits were awarded and the question whether any profit so awarded was barred by limitation are matters which can be ascertained with reference to the available record and it is wholly unnecessary to call the arbitrators as witnesses and submit them to cross-examination by the defendants. In the result it dismissed the application as misconceived and devoid of merits The revision petition is preferred as against the said order.

The only question for consideration in this revision petition is whether having regard to the circumstances of the case the petitioners are entitled to ask the arbitrators be summoned as witnesses for being cross-examined by them?

The circumstances under which and purpose for which the arbitrators can be called as witnesses have been laid down in a number of decisions and it would be useful to refer to some of them in order to ascertain the principles governing the examination of arbitrators as witnesses.

The leading decision on this matter is that of Duke of Buccleuich vs. Metropolitan Board of Works 5 House of Lords P. 418. The pros and cons of calling arbitrators as witnesses are clearly stated in the judgment of Baron Martin, J, at page 449, He observed as follows:

I am of opinion that the evidence given by the umpire was admissible, and I see no limit as to its purpose and extent beyond the ordinary one, that evidence is to be confined to the matter in issue. The object of calling him was to prove the seventh plea, viz., that the sum awarded by him included damages and compensation for matters in respect of which he bad no power of right to award or assess compensation. Now if this matter is to be the subject of judicial inquiry, there is no person who possesses the same means of proving the truth as the Umpire. He must know in respect of what he awarded, and to exclude him would seem like excluding the truth. At the same time I cannot but feel that if he be an admissable witness, there will be very great difficulty in excluding a juryman who has assessed compensation in a case under the Lands Clauses Act.........Now if the arbitrator or umpire is competent to give evidence that he exceeded his authority, and so to annul and defeat his award, what reason is there why a juryman is not competent to give evidence to prove that the jurors included in their verdict compensation in respect of a latter which is without the 49th Section? I find a difficulty in assessing the question. There can be no doubt as to the inconvenience and uncertainty which will arise if jurymen are permitted to give evidence to do on their verdicts......I can find no authority against the umpire''s admissibility.

Lord Chelmsford in his judgment at page 457 observed as follows:

The umpire being a competent witness, the only question is, to what extent the defendants were entitled to examine him as to the particulars of his award. They had an undoubted right to know from him whether in his estimate of the compensation he took into consideration any matters not included in the reference, and therefore not within his jurisdiction. To prevent the defendants from questioning him so far would have been to deprive them of information to which they were entitled, by shutting them off from the only source of it in the breast of the umpire. He alone could tell what subjects he included under the general terms of his award. But this having been ascertained, the defendants were not at liberty to go further, and to ask the umpire what were the elements which entered into his consideration in determining the quantum of compensation. Within the limits of the reference the amount to be awarded was entirely in the discretion and judgment of the umpire.

In O. Rourke vs. Commissioner of Railways 15 A.O. p. 371 it was observed as follows :

He (i.e., the arbitrator or umpire) was properly asked that had been the course which the argument before him had taken what claims were made and what claims were admitted; so that we might be put in possession of the history of the litigation before the umpire upto the time when be proceeded to make his award. But there it appears to me the right of asking questions of the umpire ceased.

In Mr. Amir Begam vs. Syed Badr-ud-din AIR 1914 PC 105 their Lordships observed :

An arbitrator comes within the general obligation of being bound to give evidence, and where a charge of dishonesty or partiality is made, any relevant evidence which he can give is without doubt properly admissible.

They added:

It is, however, necessary to take care that evidence admitted as relevant on a charge of dishonesty or partiality, is not used for a different purpose; namely, to scrutinize the decision of the arbitrator on matters within his jurisdiction, and on which his decision is final. The limitation applicable to the evidence of an arbitrator as witness in a legal proceedings to enforce his award are stated in the case of Bucclench vs. Metropolitan Board of Works 1871 SNL 148 but where charges of dishonesty are made the court would reject no evidence of an arbitrator which could be of assistance informing itself whether such charges were established.

In Khub Lal and Others Vs. Bishambhar Sahai and Others, it was pointed out that an arbitrator is not in the position of an ordinary witness. A judge ought not to submit an arbitrator to a roving commission by way of examination by the parties uncontrolled by the judge himself. The judge ought to exercise the serverest possible control. The practice of calling arbitrators indiscriminately as though they were witnesses to the issues of fact is not only an unreasonable burden upon the arbitrators and certain to lead to a great deal of irrelevant evidence, but it also tends unfortunately to lead the Judge unconsciously into a kind of re-hearing of the arbitrator. Any question of fact upon some evidence, or allegation tending to establish or disprove his own misconduct may no doubt be put to him if he is charged with misconduct. In short an arbitrator may be examined upon the course of procedure which he has adopted the material which he has utilised in arriving at his decision and all matters affecting the award itself, that is to say, the drawing up of the award, the piece of paper and so forth. The slightest attempt to get to the back of his mind, and to examine him as to why and how he arrived at a particular decision should be immediately and ruthlessly excluded as undesirable.

Bearing these principles in mind it is to be seen whether the petitioners have made out a case for calling the arbitrators as witnesses. As stated at the outset the affidavit in support of the petition does not contain any reason whatsoever for requiring the arbitrators to be called as witnesses. It is merely stated that the arbitrators are necessary witnesses in the above suit. No allegation of misconduct or bias is made against the arbitrators. In the counter-affidavit filed to the suit, the main objections that were raised were that the arbitrators had granted amounts which were barred by limitation and amounts related to matters not covered by the partnership deed which was the subject matter of the suit, O.S. 162/74. The court below rightly pointed out that these matters can be ascertained from the record and it is not necessary to examine the arbitrators. In this connection it is also to be borne in mind that unless the arbitrator is guilty of misconduct it is within his discretion and authority either to act on his own knowledge, inspection or examination or to obtain information from any other source which in his opinion he may deem proper. It is not incumbent upon him to state how he has acted and it is impossible for the Court to ascertain what considerations have affected his judgment, vide Attorney General for Manitoba vs. Kelly, In N. Chellappan vs. Kerala S.E. Board it was held that where the umpire as the sole arbitrator has awarded a sum to the contractor on account of certain claims made by him without expressly adverting to the question of limitation, the award is not vitiated on account of mistake or error apparent on the award. The umpire was not bound to give a reasoned award and if in passing the award be makes a mistake of law or of fact that is no ground for challenging the validity of the award.

The learned counsel for the petitioners relied upon the decision in Tejibai vs. Coumal, in which it was held that for determining whether an arbitrator has misconducted himself in arriving at a certain valuation of the property in question the arbitrator should be examined as a witness. This decision has no relevance as there is no allegation of misconduct.

Another decision relied on was Dutton Massey & Co. vs. Jamndas Harparsed, where it was held that an arbitrator can be examined as a witness where an award it challenged for misconduct or want of jurisdiction or for its being improperly procured. For the same reasons stated above this decision also has no application to this case. It was pointed out in the above decision that the examination of the arbitrator cannot be extended to scrutinise the reasons of his decision on matters within his jurisdiction and which his decision is finally and evidence to explain or to add or to contradict the award is not admissible. In in the Matter of vs. Arbitration Act, the parties were at variance on the question as to what took place before the arbitrator. It was held that in such circumstances the proper course was to take a statement of the arbitrator as to the facts as prima facie representing the true state of affairs as to what took place at the time of the enquiry. For all the reasons above stated I am of the view that the court below was right in rejecting the application to call the arbitrators as witnesses and there is no reason to interfere in this revision. The revision petition is dismissed with costs.