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Judgment
S. Thangaraj, J.—O.P. No. 571/1994 is filed By the Arbitrator for filing the award in Court. O.P. No. 675/94 is filed by Hajani
Rahimunnissa Begum and 2 others u/s 30 of the Arbitration Act, 1940, to set aside the award dated 12.9.1994.
O.P. No. 694/1994 is filed by Abdullah Sheriff u/s 30 of the Arbitration Act, 1940 to set aside the award dated 12.9.1994.
O.P. No. 731/1994 is filed by Fathima Bi and Noorunissa Anwar u/s 30 of the Arbitration Act, 1940 to set aside the award dated 12.9.1994.
The main averments found in O.P. No. 675/1994 are as follows:
The petitioners and the respondents 2 to 5 are the legal representatives of Janab Hajee S. Khader Sheriff Saheb and the 1st respondent is the
Arbitrator. On .27.4.1989 the 1st respondent was unanimously appointed as the sole arbitrator, to partition the properties of the estate of Khader
Sheriff Saheb by metes and bounds. The learned Arbitrator passed his award on 12.9.1994. The 3rd respondent. Mrs. Badurunnissa Begum is the
old client and a family .friend of the Arbitrator. Hence he was biased in favour of Badurunnissa Begum, which resulted, in the arbitrator allotting
most valuable property at No.25, Cathedral Garden Road, Nungambakkam, Chennai-34 to Badurunnissa Begum, thereby causing loss to others
in the partition. The arbitrator ought to have divided and allotted equal shares in the property to the petitioners and other respondents. Allotting the
most valuable property to one party and giving directions to receive owelty, by all others, is not a justifiable method of partition. The allotment of a
big bus shed and land to the extent of two acres in Arcot exclusively to the 5th respondent is unacceptable. The vacant site to the extent of seven
grounds opposite to Arcot Municipality which has got high potentiality of further demand and worth more than Rs. 15 lakhs was allotted to
Abdullah Sheriff towards his share. The Arbitrator ought to have divided the said property by metes and bounds according to their shares, in
favour of each party. The properties valued more than Rs.3 lakhs should have been divided equally between the parties and properties valued less
than Rs.3 lakhs could have been sold in private auction and the amount be distributed, between the parties. The value of the properties fixed by the
Engineer is very low and not in conformity with the valuation prevailing in that locality. For these reasons the award has to be set aside.
In the counter filed by the 3rd respondent Badurunnissa Begum she has denied each and everyone of the averments found in the petition and
had stated that during the arbitral proceedings, each party has agreed to allot the house property at No.25, Cathedral Garden Road,
Nungambakkam, Madras, to one of the legal heirs of late S. Khader Sheriff. When others were not forthcoming to purchase the said property, it
was allotted to the 3rd respondent Badurunnissa Begum who was willing to pay the share amounts from the value of the said property to the other
legal heirs. Therefore, the averments in the petition that the arbitrator is biased because the 3rd respondent is a family friend and a longstanding
client and therefore, the learned Arbitrator has allotted the property in her favour is ill-founded. The allotment of Bus shed at Arcot in favour of the
4h and 5th respondents is reasonable and the discretion of the arbitrator in allotting the properties to the shares of the parties, cannot be questioned
u/s 30 of the Arbitration Act, 1940. So also"" the allotment of the vacant land near Arcot Municipality. The Engineer, Lodd Narendradoss was
appointed with the concurrence of all the parties, the valuation of properties given by him are correct. This application has been filed with a view to
cause unnecessary delay and to prevent finality being reached in the proceedings.
In the reply, the contentions raised in the counter filed by the 3rd respondent were denied. The fact that the learned arbitrator is a close friend
and Badurunnissa Begum is a longstanding client of the Advocate/Arbitrator came to be known to the petitioners only after the passing of the
award and not earlier. No such request was ever made to the arbitrator to allot the property at No.25, Cathedral Garden Road, Madras to
anyone of the Legal Representatives leaving others. It is evident that the 3rd respondent had made such requests to the arbitrator behind the back
of other sharers. The mode of division is not the discretion of the arbitrator as contended by the 3rd respondent in her counter. The arbitrator was
biased and the allotment of the properties to few of the parties leaving others, is not proper and the same is liable to be set aside.
The main averments found in O.P. No. 694/95 are as follows:
The arbitrator was biased towards the petitioner and therefore, the petitioner had sent many letters to the arbitrator not to proceed with the award.
Application No. 3010/1992 filed for extension of time was not taken up and the prayer in that application became infructuous by 31.10.1992 and
the award passed thereafter is not maintainable in law. The award is bad for non-joinder of necessary parties, i.e. for not impleading the
grandchildren of Mahaboob Bee who were entitled to 20/144 shares alongwith Rahimunnissa and Hajani Malikunnissa. The other legal
representatives of Dawood Sahib namely Zahidunnissa, Abidunnissa, Kareem Shariff, Hakim Sheriff and Kannez Fathima are entitled to their
respective shares in the property and they are not impleaded. Kulsum Bee died on 12.1.1992 and her Legal Representatives are not impleaded on
record and therefore, the award is bad for non-joinder of necessary parties. The parties have stated the value of the Bungalow at Cathedral
Garden Road, Madras at Rs. 1,25,000/- and the said property has been valued at Rs.57 lakhs would go to show that the arbitration award is not
fair. For these reasons the award has to be set aside.
7a. The main averments found in the counter filed by Badurunnissa Begum are as follows:
The arbitrator Mr. Hidayatullah-Advocate was known to all the parties and he was appointed as sole arbitrator by all the parties unanimously. In
Application No.3010/1992 order was passed by the Court granting three months time to pass the award and the arbitrator has passed the award
within that time. The Legal Representatives of Mr. S.K. Dawood Shariff are already parties in this proceeding. The valuation submitted by parties
regarding property at door No.25, Cathedral Garden Road, Madras, was ranging from Rs.45 lakhs to Rs.60 lakhs and only one party gave the
exaggerated value of Rs. 1,25,000/- and the arbitrator has fixed the proper value for the said property.
The main averments found in O.P. No. 731/94 are as follows:
The arbitrator has misconducted himself and the proceedings. The arbitrator has committed misconduct and was biased against the petitioners.
When the partition Deed dated 29.8.1986 was produced before the arbitrator, he promised to consider the same, but has failed to do so. The
award cannot be enforced as it is passed beyond the statutory period of limitation. The arbitration agreement stipulates for the division of
properties into eight shares, but the arbitrator has applied different formulae and fixed shares without looking into personal law of the parties or the
terms of agreement. The valuation adopted by the learned arbitrator is unfair and prejudicial to the interest of the petitioner and other claimants.
The allotment of Madras property to Badurunnissa with direction to pay owelty to others, is a clear case of misconduct by the arbitrator. Hence
the award has to be set aside.
The main averments found in .the counter filed by Badurunnissa Begum are as follows:
The arbitrator was unanimously appointed as the sole arbitrator. Abdullah Sheriff, who had documents in his possession, failed to produce the
same inspite of specific directions given by the arbitrator and also failed to cooperate with the arbitrator. The allegation of misconduct and
misconduct in conducting the arbitration proceedings are untrue and unsustainable in law. The award has been passed within the time extended by
the Court. The partition Deed dated 29.8.1986 was not produced by the petitioners before the learned arbitrator. The properties were valued
properly and the award passed by the arbitrator is proper and valid.
Different serial numbers are assigned to each party in everyone of these four Original Petitions and as such O.P. No. 571/1994 filed by the
arbitrator is taken as the basis and hereinafter the parties referred to either in their names or in the serial number assigned to them in the said
Original Petition.
One Late S. Khader Sheriff Sahib had two wives Mrs. Mahaboob Bee the first wife Sahib born to his two wives. For better appreciation a
genealogical tree is given:
Late Haji S. Khader Sheriff Sahib left behind properties in Madras City and Arcot (now in Vellore District). When dispute arose between the
descendants of Late Khader Sheriff Sahib and the parties entered into an agreement dated 27.4.1989 appointing Mr. M.K. Hidayathullah,
Advocate Madras as the sole Arbitrator for an equitable partitioning of the properties. He was authorised to appoint a qualified Engineer and
valuer to value the estate and the individual properties. The Learned Arbitrator has filed his award dt.12.9.1994 and filed O.P. No. 571/1994 for
receiving the award in Court. The parties have filed O.P. Nos. 675/94, 694/94 and 731/94 to set aside the award dated 12.9.1994 passed by the
learned arbitrator.
The main contention of the petitioners, who have filed O.P. Nos. 675/94, 694/94 and 731/94 u/s 30 of the Arbitration Act, 1940, is that the
award cannot be looked into by the Court to pass a decree in terms of the award as prayed for by the arbitrator in O.P. No. 571/94 u/s 14 of the
Arbitration Act, 1940, on the ground that since the award is not registered as required u/s 17(1)(b) read with Section 49 of the Indian Registration
Act, 1908.
17(1)(b) says -""17.(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if have
been executed on or after the date on which, Act, No. XVI of 1864, or the Indian Registration Act, 1866 (XX of 1866), or the Registration Act,
1871 (VII of 1871), or the Indian Registration Act, 1877 (III of 1877), or this Act came or comes into force, namely:
(a).............
(b) other non-testamentary instruments which purport or operate to create, declare assign, limit or extinguish, whether in present or in future, any
right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;
It was argued on the side of the petitioners that the award passed by the learned Arbitrator is a non-testamentary instruments which squarely falls
u/s 17(1)(b) of the Registration Act, as it creates, declares or assigns immovable properties to the value of Rs. 100 or upwards to each one of the
sharers who are the parties in the award.
To substantiate the said contention, the parties have relied on a catena of decisions.
In ( Satish Kumar and Others Vs. Surinder Kumar and Others, t was held -
If the award is final and binding on the parties it can hardly be said that it is a waste paper unless it is made a rule of the Court.
While dealing with the question of the award Their Lordships held that any registration is necessary that whenever the award is passed in respect of
the immovable properties, to the value of Rs. 100 or upwards, it is liable to be registered u/s 17(1)(b) of the Registration Act. At para. 19 of the
said Judgment one of Their Lordships though agreed with the view regarding the registration has held:-
The award does create rights in that property but those rights cannot be enforced until the award is made a decree of the Court. It is one thing to
say that a right is not created, it is an entirely different thing to say that the right created cannot be enforced without further steps. For the purpose
of Section 17(1)(b) of the Registration Act, all that we have to see is whether the award in question purports or operates to create or declare,
assign, limit or extinguish whether in present or future any right, title or interest whether vested or contingent of the value of one hundred rupees and
upwards to or in immovable property. If it does, it is compulsorily registrable.
This decision emphasises Section 17(1)(b) of the Registration Act and for registration of the award if the properties concerned in the said award
are of value of Rs. 100 or upwards.
In ( Lachhman Dass Vs. Ram Lal and Another, while-dealing with Section 17(1)(b) in para. 15 the Supreme Court held:-
It is not in dispute that the said property is immovable property and it is not merely a declaration of the pre-existing right but creation of new right
of the parties. It is significant to bear in mind that the section enjoins registration wherever the award ""purports or operates to create, declare,
assign, limit or extinguish"" whether in present or in future any right, title or interest of the value of Rs. 100 or upwards in immovable property.
In para. 17 it was held-
It would require accordingly registration u/s 17 of the Act. As the award was un-registered, the Court could not look into it. The award being
inadmissible in evidence for want of registration the Court could not pronounce judgment in accordance with it.
In the said judgment Their Lordships have held in unequivocally terms that the award requires registration if it purports or operates to create or
declare, assign, limit or extinguish whether in present or future any right, title or interest of the value of one hundred rupees and upwards in
immovable property.
Their Lordships of the Supreme Court had an opportunity to consider the above decision in Lachhman Dass Vs. Ram Lal and Another, in S.V.
Chandra Pandian and Others Vs. S.V. Sivalinga Nadar and Others, and held that since Lachhman Dass apart from his 72 share in the immovable
property shall be now owned, the other 72 share of Ram Lal in those lands requires registration: Therefore it is clear that the decision of Lachhman
Das v. Ram Lal was once again confirmed by the Supreme Court in the abovesaid decision of Chandra pandian v. Sivalinga Nadar. The Apex
Court has once again emphasised the need for registration of any non-testamentary instrument if it affects any immovable property to the value of
Rs. 100 or upwards. The above decision in S.V. Chandra Pandian and Others Vs. S.V. Sivalinga Nadar and Others, was followed by the
Supreme Court in Gangadhar Madhavrao Bidwai (Dead) by Lrs. Vs. Hanmantrao Vyankatrao Mungale, . In that case the question arose
regarding an immovable property (valued Rs. 100 or more) shown in the deed of dissolution was a partnership property, and it was held that there
was no need for registration. However, in the instant case the properties concerned in the award passed by the learned arbitrator are the
properties of the deceased predecessor and the parties herein as his descendants are entitled to the share in the suit property. While declaring and
assigning their shares, the award requires registration. While considering the decisions of the Apex Court, it is clear that the present award which
deals with immovable properties valued at Rs. 100 or more while declaring and assigning the shares of the parties herein, requires registration as
per Section 17(1)(b) of the Registration Act, 1908.
Section 49 of the Registration Act says-
No document required by Sec. 17 (Added by Act 21 of 1929, Sec. 10 ) (or by any provision of the Transfer of Property Act, 1882 (4 of 1882))
to be registered shall:
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:
While dealing with Section 49, the Apex Court in Lachhman Dass Vs. Ram Lal and Another, held-
Section 49 of the Act enjoins that the award cannot be received as evidence of any transaction affecting immovable property or conferring power
to adopt, unless it is registered. In that view of the matter, no judgment upon the award could have been pronounced upon the unregistered award.
From this decision it is clear that no judgment upon the award could be pronounced if the same is not registered.
Learned counsel appearing for Badurunnissa Begum has relied on certain decisions to show, though registration is necessary it can be done
while passing a decree in terms of the award. For this proposition, the learned counsel has relied upon Champalal Vs. Mst. Samrath Bai, wherein it
was held that there is no prohibition u/s 17(1)(b) of the Registration, Act for filing of the unregistered award in the Court and the Court cannot look
into the unregistered award which affects immovable property to the value of Rs. 100 or upwards when a decree has to be passed u/s 14 of the
Arbitration Act in terms of the award. The next decision in Satish Kumar and Others Vs. Surinder Kumar and Others, one of their Lordships has
held-
It is one thing to say that a right is not created, it is an entirely different thing to say that the right created cannot be enforced without further steps.
Learned counsel has argued that the award can be registered at the time of passing of decree in terms of the award. The arguments cannot be
accepted. Even in the next sentence, His Lordship has emphasised Section 17(1)(b) and held any document which purports or operates to create
or declare, assign, limit or extinguish whether in present or future any right, title or interest whether vested or contingent of the value of one hundred
rupees and upwards to or in immovable property is compulsorily registerable. The later decision of the Supreme Court in Lachhman Dass Vs. Ram
Lal and Another, considered the decision Satish Kumar and Others Vs. Surinder Kumar and Others, held-
The learned Judge made it clear that for the purpose of Section 17(1)(b) of the Act, all that had to be seen was whether the award in question
purported or operated to create or declare, assign, limit or extinguish whether in present or future any right, title or interest whether vested or
contingent of the value of Rs. 100 and upwards in the immovable property. If it does, it is compulsorily registrable. A document might validly
create rights but those rights might not be enforced for various reasons. The Court found that the award in that case created right in immovable
property and it required registration.
Their Lordships of the Supreme Court have already considered Satish Kumar and Others Vs. Surinder Kumar and Others, and held that even in
that case the Court found that the award created right in immovable property and it required registration. In such circumstances the arguments
advanced on the side of Badurunnissa Begum, cannot be accepted.
Learned counsel has also relied on certain decisions of the High Courts in support of his contention. When the Supreme Court has already
considered the said decision (Satish Kumar v. Surinder Kumar), in the later decision of (Lachhman Das v. Ram Lal) we are not here to give any
different interpretation and we are bound to follow the decision in (Lachhman Das v. Ram Lal). As stated supra, the said decision was considered
by the later decisions and confirmed by Their Lordships of the Supreme Court. In such circumstances the arguments advanced on the side of
Badurunnissa Begum cannot be accepted. In the instant case, the learned Arbitrator has passed the award declaring or assigning the shares of each
party to the proceedings in respect of immovable properties valued Rs. 100 or upwards and therefore the award required registration.
Another distinction which Their Lordships of the Supreme Court made in the decision of Satish Kumar v. Surinder Kumar is that when the
arbitrator files a petition u/s 14 of the Arbitration Act for passing decree in terms of the award, it requires registration and it was further held that
the filing of an unregistered award u/s 49 of the Registration Act was not prohibited. What was prohibited was that it could not be taken into
evidence so as to affect immovable property falling u/s 17 of the Registration Act.
In (Lachhman Das v. Ram Lal) their Lordships have considered the same in para 16 and finally held in para 22:
Therefore, in our opinion, though it may not be possible to take the point that the award is bad because it is unregistered as such it could not be
taken into consideration in a proceeding u/s 30 or 33 of the Arbitration Act, but can be taken in the proceedings u/s 14 of the Arbitration Act
when the award is sought to be filed in the Court and the Court is called upon to pass a decree in accordance with the award. As the Court, as
mentioned hereinbefore, could not look into the award, there is no question of the Court passing a decree in accordance with the award and that
point can also be taken when the award is sought to be enforced as the rule of the Court.
Learned counsel appearing for Mrs. Badurunnissa Begum has pleaded for passing of decree in terms of the award. When the award is not
registered as contemplated u/s 17(1)(b) of the Registration Act, no decree can be passed u/s 14 of the Arbitration Act, 1940.
It was again argued on the side of Mrs. Badurunnissa Begum that the award can be registered now as the award has been filed in the Court
within three months i.e. 24.9.1994 from the extended period of time as per the order passed by this Court in Application No.3610/1992 and
thereafter, the award is pending consideration before this Court in view of the applications filed by the Arbitrator as well as three other parties and
as such the period for registration is not yet over and the party can register the award even now and on that ground it cannot be held that no
decree can be passed u/s 14 of the Arbitration Act, The arbitration agreement was entered into between the parties on 27.4.1989 and the award
has to be passed within four months from 27.4.1989. However, Mrs. Badurunnissa Begum filed Application No.3610/1992 and got time
extension for the passing of the award till 24.9.1994 and the learned Arbitrator has passed the award on 12.9.1994 within the extended period by
the Court and the award was also filed in the Court before the said period. These facts pointed out by the learned counsel for Mrs. Badurunnissa
Begum, cannot attract our consideration as the real question is that of registration of the award. We have already pointed out the relevant portion
of the decision in (Lachhman Das v. Ram Lal) wherein Their Lordships have categorically held that no decree can be passed in terms of the award
when it is not registered as contemplated u/s 17(1) (b) of the Registration Act, 1908.
Section 23 of the Registration Act, 1908, says-
Subject to the provisions contained in Sees. 24,25 and 26, no document other than a Will shall be accepted for registration unless presented for
that purpose to the proper officer within four months from the date of its execution:
Provided that a copy of a decree or order may be presented within four months from the day on which the decree or order was made, or, where it
is appealable, within four months from the day on which it becomes final.
As per the Section the document has to be registered within four months from the date of its execution. The date of passing of the present award is
12.9.94. So, it should have been registered within four months i.e. 12.1.1995. At this stage, it was contended on the side of Mrs. Badurunnissa
Begum that since the award was pending in Court, in view of four Original Petitions, the time when the was pending in the Court has to be
excluded.
Mrs. Badurunnissa Begum has relied on a decision of the Apex Court in Raj Kumar Dey and Others Vs. Tarapada Dey and Others, : wherein it
was held that the two legal maxims ""Actu Raj Kumar Dey and Others Vs. Tarapada Dey and Others, s Curiae Neminem Gravabit"" An act of the
Court shall prejudice no man (In Broom''s Legal Maxims, 10th edition, 1939 at page 73) and other maxim ""Lex Non Cogit Ad Impossibilia
(Broom''s Legal Maxims P. 162) the law does not compel a man to do that which he cannot possibly perform, would apply to facts of the case
and the award which was pending registration during the period between 26th July, 1978 and 20th December, 1982 because, of subsisting
injunction preventing the arbitrators from taking any steps in relation to the award should be taken into account and the presentation of the award
before the Sub-Registrar on 25.11.1983 the very next day of getting possession of the award from the Court, was in time and valid. In the said
case the Civil Court granted an injunction and therefore, the arbitrator was prevented from taking the award for registration and therefore Their
Lordships have excluded that period. In the instant case, there was no such injunction passed by any competent Court against the registration of
the award in time, and the filing of the award in the Court by the learned Arbitrator for passing a decree in terms of the award cannot be taken as
an injunction against the arbitrator from taking the award for registration. Therefore, that decision cannot be applied to the instant case. Above all,
the decision in Raj Kumar Dey and Others Vs. Tarapada Dey and Others, was considered by Their Lordships in Lachhman Dass Vs. Ram Lal
and Another, and held -
Learned counsel for the respondent drew our attention to certain observations of this Court in Raj Kumar Dey and Others Vs. Tarapada Dey and
Others, where registration was permitted by the Court after the lapse of four months as enjoined by Section 23 of the Act. But the facts and the
circumstances and the grounds upon which registration was permitted, were entirely different from the present case.
As held by Their Lordships, the grounds upon which registration was permitted in the case of (Raj Kumar Dey v. Tarapada Dey) were entirely
different from the instant case also. Hence the said decision is not applicable to the present case and therefore, the arguments advanced on the side
of Mrs. Badurunnissa Begum that the award can be registered even now is totally devoid of merits and does not attract our consideration at all.
The next argument that the award was not passed within four months and therefore the award is not in time has been considered supra.
However, Section 28 of the Arbitration Act, 1940 is very clear that the Court has got power to ""enlarge from time to time for making the award.
The parties have also moved Application No. 3610/92 before this Court and got extension of time for passing the award till 24.9.1994. Learned
Arbitrator has passed the award on 12.9.1994. Therefore, the award has been passed within time.
In (State of Punjab v. Hardyal) AIR 1985 SC 920 923 the Supreme Court held-
The policy of law seems to be that the arbitration proceedings should not be unduly prolonged. The arbitrator therefore has to give the award-
within the time prescribed or such extended time as the Court concerned may in its discretion extend and the Court alone has been given the
power to extend time for giving the award. As observed earlier, the Court has got the power to extend time even after the award has been given or
after the expiry of the period prescribed for the award. But the Court has to exercise its discretion in a judicial manner. The High Court in our
opinion was justified in taking the view that it did.
When this Court has extended the time for passing the award and the learned arbitrator has passed the award within the time extended, it can be
said that the award has been passed in time. Therefore, the argument advanced on the side of the petitioners cannot be accepted.
It was argued on the side of the petitioners that the arbitrator a family friend of Badurunnissa Begum and an Advocate appeared on her behalf
in many cases earlier, is biased and therefore the award passed by the learned Arbitrator has to be set aside on the ground of ''bias''.
From the records, it is clear that the arbitrator has been a family lawyer of all the parties when the members lived jointly. Each party has
voluntarily signed the arbitration agreement and appointed the learned arbitrator for the purpose of partitioning the properties by metes and bounds
and further had stated that ""they agreed to abide by the decision of the sole arbitrator whose award shall be final"". Without knowing the person, the
parties would not have signed the agreement appointing Mr. M.K. Hidayatullah Advocate as the Arbitrator to divide the properties. All the parties
have appeared before the arbitrator and everyone has given his/her view regarding the division of the properties and at that time nobody has raised
any objection regarding the impartiality of the learned Arbitrator. It is only after passing the award, these objections have been raised by the parties
with a view to set aside the award on that ground.
The Apex Court in (International Airport Authority of India v. K.D. Bali) AIR 1988 SC 1099, 1103 & 1104 held-
But we agree with the learned Judge of the High Court that it is equally true that it is not every suspicion felt by a party which must lead to the
conclusion that the authority hearing the proceedings is biased. The apprehension must be judged from a healthy, reasonable and average point of
view and not on mere apprehension of any whimsical person ......................... Vague suspicions of whimsical, capricious and unreasonable people
are not our standard to regulate our vision. It is the reasonableness and the apprehension of an average honest man that must be taken note of.
In the instant ''case when all the parties unanimously agreed for the appointment of the arbitrator and signed the agreement saying that his award
shall be final, they cannot go back and accuse the arbitrator of bias especially when they came to know that the award passed, is not in their
favour. Therefore, the argument advanced on the side of the petitioners that the learned arbitrator was biased, cannot be accepted.
It was argued by the petitioners that the arbitrator has not impleaded all the parties in the arbitral proceedings and especially the Legal
Representatives of the deceased parties. To substantiate this argument it was pointed out that the Legal Representatives of Dawood Sherif are not
impleaded as parties in the arbitration. A perusal of records would go to show that Kaneez Fathima and her five children are included as parties
and their names have been stated in the award dated 12.9.1994. Therefore the argument advanced on the side of the petitioners that the Legal
Representatives of the deceased Dawood Sherif have not been included, is not well founded.
One of the main arguments advanced on the side of the petitioners is that the learned arbitrator has failed to divide the properties in an
equitable manner, that the allotment done by the arbitrator is totally unjustifiable and therefore, the award is ''otherwise invalid.
The arbitral agreement says -
All the parties hereby unanimously agree that they are hereby appointing Mr. M.K. Hidayatullah, Advocate, 79, Muthiah St., Madras-86 as their
sole arbitrator for the purpose of partitioning the properties by metes and bounds and they agree to abide by the decision of the sole arbitrator
whose award shall be final.
The arbitrator is hereby authorised to appoint qualified Engineer and valuer to value the estate and make an equitable partitioning of the property as
aforementioned.
From the arbitral agreement it is clear (i) that the arbitrator was unanimously appointed, (ii) for the purpose of partitioning the properties by metes
and bounds, (iii) arbitrator was authorised to appoint a qualified Engineer and valuer to value the estate, (iv) to make an equitable partitioning of the
property. Accordingly the learned Arbitrator has appointed one Mr. Lodd Narendra Das, a Civil Engineer as the Chartered Engineer cum valuer
who submitted his report to the learned arbitrator. According to the award of the learned arbitrator the total value of the entire estate was Rs.
1,18,91,700/-. Learned Arbitrator in his award has made six divisions of the, properties and allotted each one of those divisions to six co-owners.
Accordingly Mrs. Rahimunnissa Begum, who was entitled to 24/144 shares was entitled to a sum of Rs. 19,81,950/- and the total value of the
properties allotted to her is Rs.9,78,000/- and the balance payable to her by way of owelty was Rs. 12,23,050/-. Likewise, Mrs. Mallikunnissa
Begum, who was also entitled to 24/144 shares and the total value of properties allotted was Rs. 10,28,900/- and the balance payable to her by
way of owelty money is Rs.9,53,050/-. The 3rd branch Kanneez Fathima and her children, who were entitled to the same 24/144 shares were
allotted properties valued at Rs.9,21,400/-and the owelty payable to them was Rs. 10,60,550/-. For Janab Abdulla Sheriff for their total shares of
34 1/2/144 shares the total value allotted to him is Rs. 18,00,800/-and the owelty amount payable to him was Rs. 10,48,250/-. All these four
sharers were allotted with properties less than 50% of the shares entitled by them and the remaining amount which is more than 50% of the shares
were to be paid to them by way of owelty. On the contrary for Mrs. Fathima Bi the total entitlement of 11 1/4/144 shares the properties allotted
was in excess of Rs. 84,800/- and the said amount represents more than 9% of the shares due to her. One can understand that such allotment was
made to Mrs. Fathima Bi in order to get the properties contiguously or not to make any small division in the properties allotted to her. Whereas in
the case of Mrs. Badurunnissa Begum, she was entitled to 26-1/4/144 shares a total sum of Rs.21,67,750/- and the properties allotted to her was
to the tune of Rs.61,47,850/- which was in excess to the sum of Rs.39,80,100/- and the said amount represents 83.6% more and above her
share. Such a partition is neither equitable nor justifiable. It seems from the Arbitrator''s notice as well as the award that Late Janab Khader Sherif
was a philanthropist and a popular citizen of Arcot, who was Member of Legislative Assembly twice, and he was respected not only by the people
of that community, but people at large of that area, and therefore, his descendants thought fit not to sell his properties to 3rd parties. This sentiment
was in the minds of his descendants especially in respect of property at Door No.25, Cathedral Garden Road, Nungambakkam, Chennai-34. The
report given by the Chartered Engineer-cum-Valuer Mr. Narendra Das shows the value of the said property at Rs.57 lakhs. The extent of the
property is 4 acres 2100 sq.ft. The built-up area and the ground floor is 3000 sq.ft., first floor 2753 sq.ft. and the outhouse is 1100 sq.ft. From
that it is clear that the vacant land is almost three grounds. The valuation submitted before the Arbitrator regarding that Bungalow along with the
land was Rs.45 to 50 lakhs by Mrs. Rahimunnissa and Dawood Sheriff; Rs.50 to 60 lakhs by Badurunnissa and Malikunnissa and Rs. 125 lakhs
by Noorunnissa who gave the maximum value, later refused to purchase it at that rate. We are not much concerned about what had happened and
we are concerned about the equitable division of the property. The explanation that the property should not go to the hand of any third party is
reasonable while considering the prestige of its original owner Janab Khader Sherif. However, allotting the property to one of the descendants of
the original owner, leaving others is not justifiable. It was argued that in the main building the ground portion could have been allotted to one, that
the upstairs to another, that the out-house to the third branch and the vacant land to one or two of the branches. If such division has been effected
by the learned Arbitrator, that would have been more equitable in the circumstances of the case. We are conscious of the well founded principle
that the award of the learned Arbitrator cannot be set aside on the ground that an alternative view of the matter is possible. However, in the instant
case, the division effected by the learned Arbitrator whose duty was to divide the properties by metes and bounds and to make an equitable
partition has not been fulfilled in a justifiable manner. The award passed by the learned arbitrator by making such a division is ''otherwise invalid'' as
contemplated u/s 30(c) of the Arbitration Act, 1940 and the above-mentioned principle will not come to the rescue of the arbitrator for the
inequitable and unjustifiable partition, effected by him. The explanation offered on the side of the arbitrator that to keep up the prestige of the
original owner the property was allotted to one party cannot be accepted in the circumstances of the case. No original owner will feel happy in
allotting the entire property situate in a posh locality to one of his descendants leaving all other descendants. Therefore, the allotment of the entire
property to one of the parties viz. Mrs. Badurunnissa Begum leaving all others, is inequitable and unjustifiable and therefore the award passed in
such terms is ''otherwise invalid'' as contemplated u/s 30(c) of the Arbitration Act, 1940. The allotment of property near Arcot Municipality and
also the bus-shed and the land near Vellore Main Road without effecting a partition by metes and bounds will also fall under the same category of
''otherwise invalid''.
In M/s. Chahal Engineering and Construction Co. Vs. Irrigation Department, Punjab, Sirsa, the Supreme Court held-
The misconduct of the Arbitrator referred to in Section 30(a) and the expression ""is otherwise invalid"" in Section 30(c) would include an error
apparent on the face of the record. Where the award suffers from several patent errors, a party could raise objections for getting it set aside u/s
30.
From this decision it is clear that the division and allotment made by the learned Arbitrator was an error apparent on the face of the record and the
same will fall under ""otherwise invalid"". One more reason which would also fall under the class ""otherwise invalid"" is the non-registration of the
award as contemplated u/s 17(1) (b) of the Registration Act, 1908 which we have stated supra. For these two reasons the award of the learned
Arbitrator is liable to be set aside.
From the foregoing reasons it is clear that the award of the learned Arbitrator dated 12.9.94 is liable to be set aside.
In the result, O.P. Nos. 675, 694 and 731 of 1994 are allowed, and O.P. No. 571/1994 and Application No.7068 of 1994 are dismissed, the
award passed by the learned Arbitrator dated 12.9.1994 is set aside and in the circumstances of the case the parties do bear their respective
costs.