Harbans Singh vs Tej Singh and Another

H. Hardy, J.

(1) This Civil Revision is directed against the order made by a Subordinate Judge, Delhi, dismissing the petitioner''s application u/s 8 of the Arbitration Act, 1940.

(2) The petitioner ''and respondent No. 1 are brothers. their father left behind certain properties'' in W. Pakistan at the time of partition of the Country. Respondent No. 1 filed a claim with regard to the immovable property left by the family in Pakistan. The petitioner objected to compensation bring paid to respondent No. 1 alone. It was alleged by the petition cr that it was then agreed between the two brothers that whatever compensation was received by respondent No. 1 the same would be divided between him and the petitioner and that in case of any dispute the matter would be referred to the sole arbitration of one Shri Gulab Singh. The petitioner farther alleged that respondent No. 1 received the entire compensation but failed to give the petitioner his share. The petitioner also alleged that he gave a notice to the arbitrator to decide the dispite between the parties but the arbitrator refused to act.

(3) The petitioner there upon made an application u/s 8 of the Arbitration Act praying that some other arbitrator be appointed to decide the dispute between the parties. The application was resisted by respondent No. 1 on various grounds but in this Revision petition I am concerned with only two grounds as all the other grounds have been decided in favor of the petitioner.

(4) The trial Court has held that there was a valid and subsisting arbitration agreement between the parties appointing Shri Gulab Singh as the arbitrator. The trial Court has also held that the application was well within time. The application has, however, been dismissed on the ground that Shri Satnam Singh and Shri Jaswant Singh are the brothers of the parties who are also interested in the compensation alleged to have been obtained by respondent No. l and since they had not been imp leaded as parties, the application was had for non-joinder of necessary parties. The second ground on which the application has been dismissed is that the petitioner did not give any notice to arbitrator requesting him to decide the matter in dispute. There was Therefore no question of the arbitrator having neglected or refused to act as arbitrator in the case.

(5) Mr. P. L. Sood, who appears on behalf of the petitioner has argued that Shri Satnam Singh and Shri Jaswant Singh ware admittedly not parties to the arbitration agreement. They could not Therefore, be links as a parties to the present proceedings. I find merit in the arguments of the learned counsel. It is quite possible that Shri Satnam Singh and shri Jaswant Singh have soma interest in the compensation allegedly received by respondent No. 1 from Rehabilitation authorities. But if are not parties to the arbitration agreement they can hardly be treated as necessary parties to the present proceedings which are by the "Nature of things confined to the persons who have signed the arbitration agreement. The application could not Therefore be dismissed on the ground of non-joinder of necessary parties.

(6) The next argument of the learned counsel is that the trial Court failed to attach due weight to the notice Exhibit P3 served by the petitioner on the arbitrator and the arbitrator''s reply Exhibit P 5 to that notice It appears that Shri Gulab Singh who had been nominated by the parties as arbitrator had also agreed to hold himself personally liable for payment of the amount of compensation to the petitioner in case respondent dent No. 1 failed to pay the same. He was thus both surety and an arbitrator in the case. The notice Exhibit P 3 to which Exhibit P 5 was sent by the arbitrator as a reply did not call upon the arbitrator to enter upon the reference as a dispute had arisen between the parties. On the other hand. by Exhibit P. 3 the petitioner had called upon the arbitrator to pay l/3rd share of the compensation to the petitioner on the ground that he the arbitrator, had stood surety for the payment of th3 said amount. To this demand, the arbitrator sent a reply Exhibit P 5 whereby h denied his liability for payment of any compensation as a surety on behalf of the respondent. It is apparent that neither Exhibit P 3 could be treat he ed as a request from the petitioner calling upon the arbitrator to enter upon the reference, nor could the arbitrator''s reply Exhibit P 5 be regarded as a refusal on his part to act as an arbitrator. Mr. Sood has next contended that although the agreement of arbitration was entered into between the parties as far back as 19th January, 1955 and the disputes between the parties has also arisen long time back the arbitrator had neglected to enter upon the reference. In the circumstances, the trial Court has erred in holding that the petitioner''s application u/s 8 was not competent. In my opinion the question of arbitrator''s refusal or neglecting to act as an arbitrator can only arise if he is requested by one of the parties to the arbitration agreement to enter upon the reference. When no such request has been made on the arbitrator by either of the parties there can be no question of any neglect or refusal to act on his part.

(7) Mr. Sood has also argued that the trial Court has wrongly held that the document marked A could be admitted in evidence after payment of Rs. 15.00 as penalty and Rs. 1.50 as stamp duty. As the document purports to be only a copy of the agreement of which the original is alleged to be in the possession of the arbitrator himself no question of levying any stamp duty or penalty on the document can, Therefore, arise. I agree with the learned counsel and hold that the document marked A is admissible in evidence without payment of any stamp duty or penalty. The order of the trial Court is apparently wrong to that extent and is, Therefore, set aside. The main petition is, however, dismissed and the order of the trial Court holding that the present application filed by the petitioner u/s 8 of the Arbitration Act is not competent is maintained. It will be open to the petitioner to make a formal request to the arbitrator to enter upon the reference and even to ask for his removal on the ground that he has a personal interest in the subject matter of dispute and is, Therefore, not a fit person to act as arbitrator, in case such a course is still open to him under the law.