{"id":32320,"date":"2010-03-04T00:00:00","date_gmt":"2010-03-03T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/kallalathil-sekharan-vs-kallalathil-sreedharabn-on-4-march-2010"},"modified":"2018-10-27T14:36:23","modified_gmt":"2018-10-27T09:06:23","slug":"kallalathil-sekharan-vs-kallalathil-sreedharabn-on-4-march-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/kallalathil-sekharan-vs-kallalathil-sreedharabn-on-4-march-2010","title":{"rendered":"Kallalathil Sekharan vs Kallalathil Sreedharabn on 4 March, 2010"},"content":{"rendered":"
Kerala High Court<\/div>\n
Kallalathil Sekharan vs Kallalathil Sreedharabn on 4 March, 2010<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nArb.A.No. 12 of 2003()\n\n\n\n1. KALLALATHIL SEKHARAN\n                      ...  Petitioner\n\n                        Vs\n\n1. KALLALATHIL SREEDHARABN\n                       ...       Respondent\n\n                For Petitioner  :SRI.K.P.DANDAPANI (SR.)\n\n                For Respondent  :SRI.SAJEEV KUMAR K.GOPAL\n\nThe Hon'ble MR. Justice A.K.BASHEER\nThe Hon'ble MR. Justice P.Q.BARKATH ALI\n\n Dated :04\/03\/2010\n\n O R D E R\n                   A.K.BASHEER & P.Q.BARKATH ALI, JJ.\n          - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -\n            Arb. Appeal Nos.12, 13, 14, 16, 18 and 19 OF 2003\n           - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -\n                        Dated this the 4th day of March 2010\n\n                                         JUDGMENT\n<\/pre>\n
Basheer, J.\n<\/p>\n
      These six appeals which have been filed under Section 39 of the<\/p>\n
Arbitration Act, 1940 (for short ‘the Act’), are being disposed of by this<\/p>\n
common judgment since the parties and the issue involved in them are the<\/p>\n
same.\n<\/p>\n
      2. The question that arises for consideration in these cases can be<\/p>\n
posed thus:\n<\/p>\n
      Is not an Arbitrator appointed under the Act entitled and empowered<\/p>\n
to pass an award recording the terms of settlement reported by the parties<\/p>\n
and their respective counsel before him, orally?<\/p>\n
      To put it differently;\n<\/p>\n
      Is an Arbitrator bound to insist on the parties to file a formal petition<\/p>\n
for compromise as provided under Rule 3 of Order XXIII of the Code of<\/p>\n
Civil Procedure in order to make his award valid and legally binding on the<\/p>\n
parties?\n<\/p>\n
                             Or<\/p>\n
      Are the powers of an Arbitrator circumscribed by the provisions<\/p>\n
contained in Order XXIII of the Code of Civil Procedure?<\/p>\n
      3.    Before we deal with the above issue, relevant facts may be<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                         :: 2 ::\n<\/p>\n
briefly noticed.\n<\/p>\n
       4.      These appeals arise from a common order passed by the<\/p>\n
Subordinate Judge’s Court, Thalassery in a batch of Interlocutory<\/p>\n
Applications in three original suits, which were instituted for dissolution of<\/p>\n
partnership, rendition of accounts and other allied reliefs. The applications<\/p>\n
were filed under Sections 15 and 33 of the Act by some of the defendants<\/p>\n
in the suits to modify the award passed by the Arbitrator after conducting<\/p>\n
an enquiry regarding its validity.            One of the defendants, who was<\/p>\n
apparently happy with the award, prayed in his applications that a decree<\/p>\n
may be passed in terms of the award. The court below refused to interfere<\/p>\n
with the award and held that it was not liable to be modified or set aside.<\/p>\n
On the contrary, the Court ordered that the award be made rule of the<\/p>\n
Court. Hence, these appeals.\n<\/p>\n
       5.      The suits were instituted by one of the four brothers, who had<\/p>\n
built up a small business empire in Kannur District and in parts of<\/p>\n
Karnataka State. It appears that “inevitable discord” developed after some<\/p>\n
time and one of the brothers, namely Sreedharan, instituted the three suits<\/p>\n
referred to above before the Subordinate Judge’s Court, Thalassery in<\/p>\n
OS.Nos.516\/1994, 177\/1995 and 178\/1995. The defendants were the other<\/p>\n
two brothers, namely Sekharan and Narayanan, and the widow and<\/p>\n
children of deceased brother Lakshmanan.\n<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                         :: 3 ::\n<\/p>\n<\/p>\n
       6.      The primary prayer in the three suits which related to three<\/p>\n
partnership        concerns,      namely   M\/s.Cannanore    Central  Oil Mills,<\/p>\n
M\/s.K.Sreedharan and brothers and M\/s.Ramananda Textiles, was for<\/p>\n
dissolution of partnership and rendition of accounts.<\/p>\n
       7.      To cut a long story short, when one of the orders passed in the<\/p>\n
suits came up for consideration before the Apex Court, the Court appointed<\/p>\n
Mr.Justice K.P.Radhakrishna Menon, a retired Judge of this Court, as the<\/p>\n
sole Arbitrator. The learned Arbitrator passed an award on 28th November,<\/p>\n
2001, effecting partition of the three items of immovable property referred<\/p>\n
to hereunder:-\n<\/p>\n
       “(i)    Property where the Cannanore Central Oil Mills is
\n       situated and the Cannanore Central Oil Mills;<\/p>\n<\/blockquote>\n
       (ii)    Property where the Ramananda Textiles is situated and
\n       the Ramananda Textiles(the property lies both in the Kannur
\n       Municipality and Puzhathi Panchayat); and<\/p>\n<\/blockquote>\n
       (iii)   Talap property.”<\/p><\/blockquote>\n
       It may at once be noticed that there is no dispute that these were the<\/p>\n
only three items which were agreed to be partitioned among the parties.<\/p>\n
       8.      For the sake of convenience, the operative portion of the award<\/p>\n
is extracted below:-\n<\/p>\n
                       ” It is agreed that the first item shown above<\/p>\n
               is allotted to the share of Party No.4(Sreedharan);<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                         :: 4 ::\n<\/p>\n
               the property shown above as Item No.2 is allotted<\/p>\n
               to Party No.2(Narayanan); and Item No.3 shown<\/p>\n
               above is allotted jointly to the share of Parties 1 & 3<\/p>\n
               who are having equal shares. It is also agreed that<\/p>\n
               for equalisation of shares Party No.4 shall pay<\/p>\n
               Rs.10 lakhs to Party No.3, who represents the heirs<\/p>\n
               of deceased Lakshmanan.          Similarly, Party No.2<\/p>\n
               shall pay to Party No.1 Rs.10 lakhs.               The<\/p>\n
               equalisation amounts shall be paid by the respective<\/p>\n
               parties at the time of passing the final decree for<\/p>\n
               partition in terms of this Award.\n<\/p>\n
                       The liabilities of the firms, if any, will be<\/p>\n
               borne by the parties who have taken over them.\n<\/p>\n
                       The Schedule and the Plan which the parties<\/p>\n
               have agreed to produce before the Court, will form<\/p>\n
               part of this Award. ”\n<\/p>\n
       9.      Mr.Sekharan, who is the common defendant No.1 in the three<\/p>\n
suits, and party No.1 referred to in the award, took exception to the<\/p>\n
division and allotment of the properties made by the Arbitrator. According<\/p>\n
to him, the division and allotment were not in terms of the consensus<\/p>\n
arrived at by the parties before the Arbitrator and were totally inequitable,<\/p>\n
arbitrary and heavily loaded in favour of defendant No.2 (Narayanan), who<\/p>\n
was shown as party No.2 in the award.\n<\/p>\n
       10.     Therefore, Mr.Sekharan filed three applications (one each in<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                         :: 5 ::\n<\/p>\n
the three suits) with a common prayer to modify the award as provided<\/p>\n
under Sections 15 and 33 of the Act. Similar applications were filed by<\/p>\n
defendant Nos.3 to 6(widow and children of deceased Lakshmanan) with<\/p>\n
identical prayers as made by Mr.Sekharan.            These defendants made a<\/p>\n
further prayer to conduct further enquiry regarding the validity of the<\/p>\n
award and to set aside or modify the same. Mr.Sreedharan, the common<\/p>\n
plaintiff in the three suits, apparently seemed satisfied with the allotment<\/p>\n
made in his favour and, therefore, did not file any application as had been<\/p>\n
done by Mr.Sekharan or the legal heirs of Lakshmanan.<\/p>\n
       11.     Defendant No.2, Mr.Narayanan, came up with a prayer before<\/p>\n
the Subordinate Judge to pass a decree in terms of the award of the<\/p>\n
Arbitrator. Thus, all the nine applications in the three suits came up for<\/p>\n
consideration before the court below.\n<\/p>\n
       12.     The learned Subordinate Judge, after considering the rival<\/p>\n
contentions of the parties, held that no ground had been made out either to<\/p>\n
modify or set aside the award. It was further held that no further enquiry<\/p>\n
need be held in the arbitration proceedings. Consequently, the learned<\/p>\n
Judge allowed the prayer made by Mr.Narayanan to pass a decree and<\/p>\n
judgment in terms of the award.\n<\/p>\n
       13.     In this context, it may be noticed that an application for passing<\/p>\n
a final decree is pending consideration before the court below.              The<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                         :: 6 ::\n<\/p>\n
Advocate Commissioner appointed by the court has already submitted his<\/p>\n
report, share list, valuation account, plan, etc. But, no final decree has<\/p>\n
been passed in view of the order of stay passed by this Court in these<\/p>\n
appeals.\n<\/p>\n
       14.     We have heard learned counsel for the parties at length and<\/p>\n
perused the entire materials available on record, including the proceeding<\/p>\n
papers of the learned Arbitrator which form part of the record.<\/p>\n
       15.     As indicated earlier, the main grievance of the appellants, who<\/p>\n
are defendant Nos.1 and 3 to 6 in the three suits, is that the Arbitrator had<\/p>\n
proceeded to pass the award as though the parties had agreed among<\/p>\n
themselves to divide and allot the properties on the terms as referred to or<\/p>\n
indicated in the award. According to the appellants, the parties had in fact<\/p>\n
agreed upon certain other terms in the matter of division and allotment;<\/p>\n
but those terms have not been incorporated in the award at all.<\/p>\n
       16.     For instance, the appellants point out that it was agreed among<\/p>\n
the parties that item No.2 be divided into two shares and one such share<\/p>\n
along with the factory building of Ramananda Textiles and the appurtenant<\/p>\n
land having an extent of 47 cents with the running business, be allotted to<\/p>\n
defendant No.2. The remaining 40 cents of land which falls within the<\/p>\n
limits of Puzhathi Panchayat was agreed to be allotted to the share of<\/p>\n
defendant Nos.1 and 3 to 6 jointly. The appellants have a further case that<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                         :: 7 ::\n<\/p>\n
the parties had further agreed that item No.3 be alloted jointly to the share<\/p>\n
of defendant Nos.1 and 3 to 6.\n<\/p>\n
       17.     In this context, it may be pertinent to notice that the Arbitrator<\/p>\n
allotted item No.2 in its entirety to the share of defendant No.2. In other<\/p>\n
words, defendant Nos.1 and 3 to 6 have been denied any share in item<\/p>\n
No.2 though the specific case of the appellants is that it was agreed by all<\/p>\n
concerned that 40 cents of land in item No.2, with the old dilapidated<\/p>\n
building therein, would be allotted to them. It is also pointed out by the<\/p>\n
appellants that contrary to the agreement among the parties, item No.3<\/p>\n
was divided into two, one share being allotted to defendant No.1 and the<\/p>\n
remaining portion to defendant Nos.3 to 6, though the agreement was that<\/p>\n
the said item (item No.3) would be allotted to the share of defendant Nos.1<\/p>\n
and 3 to 6 jointly without division.\n<\/p>\n
       18.     Learned counsel submits that the appellants do not intend to<\/p>\n
make an issue out of the allotment of item No.3 at this stage. But, it is<\/p>\n
vehemently contended by the learned counsel that the allotment of entire<\/p>\n
item No.2 to the share of defendant No.2 is wholly arbitrary, inequitable<\/p>\n
and illegal. While trying to highlight the inequity in the allotment of the<\/p>\n
above item, learned counsel for defendant No.1 has raised his primary<\/p>\n
contention based on Rule 3 of Order XXIII of the Code of Civil Procedure.<\/p>\n
He has also advanced arguments seeking support from Sections 15, 16, 30,<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                         :: 8 ::\n<\/p>\n
33 and 41 of Act, 1940. We will deal with the above contentions a little<\/p>\n
later.\n<\/p>\n
       19.     The short question that arises for consideration is whether the<\/p>\n
Arbitrator had proceeded to pass the impugned award contrary to the<\/p>\n
terms reported before him by the parties and their counsel. The other<\/p>\n
question for consideration is whether the Arbitrator had acted with bias, or<\/p>\n
shown any favouritism to one sharer or the other.<\/p>\n
       20.     Before we deal with those aspects, it will be profitable to take a<\/p>\n
glance at the award itself.\n<\/p>\n
       21.     The award starts with the statement that the parties to the<\/p>\n
proceedings had agreed that the Firms, of which dissolution and<\/p>\n
accounting were sought for, can be ordered to be dissolved. They further<\/p>\n
agreed to effect partition of the immovable properties into four equal<\/p>\n
shares, without insisting for settling the accounts. The Arbitrator further<\/p>\n
stated that there was unanimity with regard to the three items of<\/p>\n
properties, which were agreed to be partitioned. The parties undertook to<\/p>\n
produce the plan before the court, in case they failed to produce the same<\/p>\n
before the Arbitrator on or before 11th December, 2001.<\/p>\n
       22.     It was thereafter that the learned Arbitrator incorporated the<\/p>\n
description of the three items of property in the award, which, according to<\/p>\n
him, was intended only to make it abundantly clear that there was no<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                         :: 9 ::\n<\/p>\n
ambiguity with regard to the identity of the properties. Thereafter, the<\/p>\n
learned Arbitrator indicated as to how the three items of property were to<\/p>\n
be divided among the four sharers (the operative portion has already been<\/p>\n
extracted in the earlier part of the judgment).<\/p>\n
       23.     It may be noticed that the dispute or bone of contention is only<\/p>\n
in respect of item No.2. The appellants have not raised any demur or<\/p>\n
protest as regards the allotment made in favour of the plaintiff. Similarly,<\/p>\n
they have no objection with regard to the allotment of item No.3 to their<\/p>\n
joint share. Further, the appellants seem to be happy about the payment<\/p>\n
of Rs.10 lakhs to be made to each of them (party Nos.1 and 3). According<\/p>\n
to the appellants, the only mistake committed by the Arbitrator is that he<\/p>\n
ignored the terms of settlement arrived at among the parties in respect of<\/p>\n
item No.2.\n<\/p>\n
       24.     In this context, appellants place strong reliance on the<\/p>\n
valuation account prepared by the Advocate Commissioner in the final<\/p>\n
decree proceedings.           According to the appellants, item No.2 is a very<\/p>\n
valuable property worth approximately Rs.1,60,00,000\/-(Rupees one crore<\/p>\n
sixty lakhs), whereas item No.3, going by the valuation made by the<\/p>\n
Advocate Commissioner, is worth only about Rs.71 lakhs. Learned counsel<\/p>\n
would submit that the appellants had never bargained for such an<\/p>\n
inequitable division and they had not agreed that item No.2 be alloted to<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                        :: 10 ::\n<\/p>\n
the share of defendant No.2 exclusively. It is also contended by them that<\/p>\n
the learned Arbitrator ought to have given an opportunity to the parties to<\/p>\n
reduce the terms of compromise into writing so that there would not have<\/p>\n
been room for any confusion or misunderstanding at a later stage. This<\/p>\n
omission on the part of the Arbitrator is cited as a misconduct.<\/p>\n
       25. In this context, learned counsel for the appellants has invited our<\/p>\n
attention to Section 41 of the Act which deals with procedure and powers<\/p>\n
of court in arbitral matters.          The provisions contained in Section 41<\/p>\n
postulate that subject to the provisions of the Act and the Rules made<\/p>\n
thereunder, the provisions of the Code of Civil Procedure shall apply to all<\/p>\n
proceedings before the Court and to all appeals, under the Act. Learned<\/p>\n
counsel contends that if Section 41 is read alongwith Section 47, it will be<\/p>\n
abundantly clear that the proceedings before the arbitrator are governed<\/p>\n
by the provisions of the Code.\n<\/p>\n
       26. In this context, learned counsel also invites our attention to Rule<\/p>\n
14 of the Kerala Arbitration Rules 1977. These rules which have been<\/p>\n
framed by the High Court of Kerala in exercise of powers vested in it under<\/p>\n
Section 44 of the Act deal with the procedure to be followed in court in the<\/p>\n
matter of presentation and registration of application, issue of notice and<\/p>\n
other procedural aspects. Rule 10 deals with the manner in which an<\/p>\n
arbitrator or Umpire has to file the award before the court. The above rule<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                        :: 11 ::\n<\/p>\n
postulates that an arbitrator or umpire causing the award or a signed copy<\/p>\n
thereof to be filed in court under Section 14(2) of the Act shall do so in the<\/p>\n
manner prescribed by Rule 29 of the Kerala Civil Rules of Practice.<\/p>\n
       27. The thrust of the argument of the learned counsel is based on<\/p>\n
rule 14 which provides that in cases not provided for in the foregoing Rules<\/p>\n
the provisions of the Code of Civil Procedure, 1908, the Kerala Civil Rules<\/p>\n
of Practice, 1971 and the Circulars\/Orders issued by the High Court of<\/p>\n
Kerala from time to time shall mutatis mutandis apply to all proceedings<\/p>\n
before the court. It is contended by the learned counsel that the provisions<\/p>\n
of the Code are applicable to all proceedings before the Arbitrator also.<\/p>\n
He submits that the above statutory provisions in the Act and the Rules will<\/p>\n
make it abundantly clear that the arbitrator ought to have followed the<\/p>\n
procedure prescribed under the Act              while recording the so called<\/p>\n
consensus arrived at among the parties. In short the contention of the<\/p>\n
appellants is that the arbitrator ought to have insisted on the parties to file<\/p>\n
a formal application incorporating the terms of settlement or agreement.<\/p>\n
According to the appellants, the failure of the arbitrator in following this<\/p>\n
procedure would amount to misconduct also.\n<\/p>\n
       28. We are afraid, the above contentions are too far fetched and<\/p>\n
untenable.\n<\/p>\n
       Rule 3 of Order XXIII Code of Civil Procedure reads thus:<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                          :: 12 ::\n<\/p>\n
                “3. Compromise of suit:–Where it is proved to<\/p>\n
                the satisfaction of the Court that a suit has been<\/p>\n
                adjusted wholly or in part by any lawful<\/p>\n
                agreement or          compromise    in writing and<\/p>\n
                signed by the parties, or where the defendant<\/p>\n
                satisfied the plaintiff in respect of the whole or<\/p>\n
                any part of the subject matter of the suit, the<\/p>\n
                Court shall order such agreement, compromise<\/p>\n
                or satisfaction to be recorded, and shall pass a<\/p>\n
                decree in accordance therewith so far as it<\/p>\n
                relates to the parties to the suit, whether or not<\/p>\n
                the     subject      matter   of   the agreement,<\/p>\n
                compromise or satisfaction is the same as the<\/p>\n
                subject matter of the suit.\n<\/p>\n<\/p>\n
       29. Rule 3 postulates that where it is proved to the satisfaction of<\/p>\n
the Court that a suit has been adjusted wholly or in part by any lawful<\/p>\n
agreement or compromise in writing and signed by the parties, or where<\/p>\n
the defendant satisfied the plaintiff in respect of the whole or any part of<\/p>\n
the subject matter of the suit, the Court shall order such agreement,<\/p>\n
compromise or satisfaction to be recorded and shall pass a decree in<\/p>\n
accordance therewith. The words “in writing and signed by the parties” in<\/p>\n
the above Rule were introduced by Amendment Act 104\/1976 with effect<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                        :: 13 ::\n<\/p>\n
from February 1, 1977.\n<\/p>\n
       30.     The argument that the Arbitrator was not bound to act on the<\/p>\n
basis of the oral submissions made before him by the parties cannot be<\/p>\n
countenanced at all. Going by the Scheme of the Act itself, it is evident<\/p>\n
that the Arbitrator is vested with abundant powers to resolve the dispute<\/p>\n
among the parties. The provision contained in the Act and the Rules do not<\/p>\n
put any fetters on the powers of the Arbitrator.           The Arbitrator will be<\/p>\n
entitled to act on the basis of the submissions made before him by the<\/p>\n
parties or their authorised representatives. Rule 14 of the Rules does not<\/p>\n
have any application to the proceedings pending before the Arbitrator.<\/p>\n
       31. Section 41, as has been noticed already, deals with procedure<\/p>\n
and powers of court in arbitral matters. The Kerala Arbitration Rules<\/p>\n
framed by the High Court in exercise of the power vested in it by virtue of<\/p>\n
Section 44 are also for the purpose of regulating the proceedings in court.<\/p>\n
On that short ground alone, the above contention raised by the appellants<\/p>\n
is liable to be rejected.          We do so.    It is held that the power of the<\/p>\n
Arbitrator to record compromise reported by parties is not circumscribed<\/p>\n
or curtailed by the provisions contained in Order XXIII of the Code of Civil<\/p>\n
Procedure.\n<\/p>\n
       32. In Byram Pestonji Gariwala v. Union Bank of India (AIR<\/a> 1991 SC<\/p>\n
2234) it has been held by the Apex Court that the counsel representing<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                        :: 14 ::\n<\/p>\n
the parties would be competent to sign the compromise even on implied<\/p>\n
authority of the parties. The Court reiterated that introduction of the<\/p>\n
words “in writing and signed by the parties” in Rule 3 cannot mean to have<\/p>\n
watered down the authority of the counsel or recognised agent. But the<\/p>\n
Court cautioned that it would be prudent for the counsel not to act on<\/p>\n
implied authority, except when warranted by exigency of circumstances.<\/p>\n
       33. As has been noticed already, the bone of contention in these<\/p>\n
appeals is only as regards item No.2.          Appellants would contend that the<\/p>\n
agreement among the parties was to divide the said item into two portions<\/p>\n
and allot one such portion\/share to the appellants in these appeals.<\/p>\n
Arbitrator has recorded in the award in no uncertain terms that the parties<\/p>\n
agreed before him that the firms, of which dissolution and accounting were<\/p>\n
sought for, can be ordered to be dissolved. They further agreed before the<\/p>\n
arbitrator that the three items of properties referred to in the award be<\/p>\n
partitioned in lieu of settlement of the accounts of the firms.<\/p>\n
       34. After recording the above statements made by the parties who<\/p>\n
were admittedly represented by their respective counsel, the arbitrator<\/p>\n
proceeded to set out the manner in which the parties had agreed to divide<\/p>\n
the three items of properties. The Arbitrator also directed, as agreed by<\/p>\n
the parties, that plaintiff shall pay Rs.10,00,000\/- to defendant Nos.3 to 6<\/p>\n
and defendant No.2 shall pay Rs.10,00,000\/- to defendant No.1. Even at<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                        :: 15 ::\n<\/p>\n
the risk of repetition, we may state that appellants have no grouse or<\/p>\n
complaint about allotment of item No.1 to the share of plaintiff. Similarly,<\/p>\n
they have no complaint with regard to the allotment of item No.3 jointly to<\/p>\n
their share. Appellants have also not raised any demur or protest about<\/p>\n
the direction to the plaintiff and defendant No.2 to pay Rs.10,00,000\/- each<\/p>\n
to both of them. Their grouse appears to be only with regard to item No.2<\/p>\n
which has been ordered to be divided. Appellants contend that the parties<\/p>\n
had agreed and decided to divide item No.2 as well in a manner as<\/p>\n
indicated in the earlier part of the judgment.\n<\/p>\n
       35. We find it difficult to accept the above contention, particularly,<\/p>\n
since the appellants do not have a case that the arbitrator was actuated by<\/p>\n
any ill motive, bias or prejudice against them. The appellants have not<\/p>\n
made any such allegation at all against the arbitrator. What they have<\/p>\n
indicated in the course of arguments is that such an error or mistake might<\/p>\n
have crept in because of hurry, since the arbitrator had taken up another<\/p>\n
engagement on that day.\n<\/p>\n
       36.Yet again we are not persuaded to countenance such an argument<\/p>\n
or contention. We do not propose to assign our own reasons or rationale to<\/p>\n
the decision taken by the arbitrator in the matter of division and allotment<\/p>\n
of the properties. Evidently, the arbitrator had completed the exercise in<\/p>\n
terms of the agreement arrived at among the parties. In the absence of<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                          :: 16 ::\n<\/p>\n
any material to indicate otherwise, we do not find any reason to interfere<\/p>\n
with the award. In our view, the court below has adverted to the above<\/p>\n
aspect in its right perspective.\n<\/p>\n
       37. Coming to the question whether the arbitrator was bound to<\/p>\n
insist on the parties to reduce the terms of agreement in to writing, our<\/p>\n
answer is in the negative.            It is unnecessary to delve deep into the<\/p>\n
amplitude of the powers of an arbitrator appointed under the Arbitration<\/p>\n
Act, both old and new.            The scope of interference with the award of an<\/p>\n
Arbitrator is very well delineated in the Act and Rules. It has also been<\/p>\n
settled through a catena of decisions over the years as under what all<\/p>\n
circumstances the court can interfere with the award passed by an<\/p>\n
arbitrator. Learned counsel on either side have referred to a large number<\/p>\n
of decisions in support of their respective contentions.             In Kwality<\/p>\n
Manufacturing Corporation V. Central Warehousing Corporation<\/a><\/p>\n
[(2009) 5 SCC 142], it has been reiterated by their Lordships of the<\/p>\n
Supreme Court that the scope of interference by courts in regard to<\/p>\n
arbitral awards is limited. Their Lordships went on to observe thus:<\/p>\n
       “A court considering an application under Section 30 or 33 of<\/p>\n
       the Arbitration Act, 1940 does not sit in appeal over the findings<\/p>\n
       and decision of the arbitrator. Nor can it reassess or<\/p>\n
       reappreciate evidence or examine the sufficiency or otherwise<\/p>\n
       of the evidence. The award of the arbitator is final and the only<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                        :: 17 ::\n<\/p><\/blockquote>\n
\n
       grounds on which it can be challenged are those mentioned in<\/p>\n
       Sections 30 and 33 of the 1940 Act”.<\/p><\/blockquote>\n
       38. Yet again in Madhya Pradesh Housing Board V. Progressive<\/p>\n
Writers and Publishers<\/a> [2009 (5) SCC 678], the apex court after<\/p>\n
referring to a catena of earlier decisions in Ispat Engineering &<\/p>\n
Foundry Works V. Steel Authority of India Ltd. [(2001) 6 SCC 347],<\/p>\n
Arosan Enterprises Ltd. V. Union of India and Another<\/a> [(1999) 9<\/p>\n
SCC 449] etc. held that “the court as a matter of fact, cannot substitute its<\/p>\n
evaluation and come to the conclusion that the arbitrator had acted<\/p>\n
contrary to the bargain between the parties.” While agreeing with the<\/p>\n
observation made by the apex court in Union of India V. Bungo Steel<\/p>\n
Furniture (P) Ltd.<\/a> [AIR 1967 SC 1032] the court observed that “the<\/p>\n
court has no jurisdiction to investigate into the merits of the case and to<\/p>\n
examine the documentary and oral evidence on the record for the purpose<\/p>\n
of finding out, whether or not the arbitrator has committed an error of<\/p>\n
law”.\n<\/p>\n
       39. Coming to the question of alleged misconduct on the part of the<\/p>\n
arbitrator for his failure to ask the parties to file a formal petition reducing<\/p>\n
the terms of agreement into writing, we have no hesitation to hold that the<\/p>\n
arbitrator is not bound by any such procedural niceties or formalities. An<\/p>\n
arbitrator is well within his powers to follow his own procedure so long as<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                        :: 18 ::\n<\/p>\n
he does not transgress the well settled principles of equity and good<\/p>\n
conscience and does not travel beyond the four corners of the mandate<\/p>\n
given to him. The parties to arbitration have to be necessarily given equal<\/p>\n
opportunity to be heard. The materials that are placed for consideration<\/p>\n
ought to be considered by the arbitrator. His actions and decisions must<\/p>\n
be based on principles of fairness and natural justice. We are only trying<\/p>\n
to restate the rudimentary principles which govern arbitral process that<\/p>\n
have been settled through a catena of decisions rendered by various High<\/p>\n
Courts and the Apex Court.\n<\/p>\n
       40. Having carefully perused the entire materials available on record<\/p>\n
and also the proceedings papers of the arbitrator, we have not found any<\/p>\n
circumstance to indicate that the arbitrator had deviated from the terms of<\/p>\n
agreement. When it came to the question of division and allotment of item<\/p>\n
No.2 alone, the appellants, in hindsight, might have felt that they have<\/p>\n
been denied a chunk of a valuable property. But the fact remains that the<\/p>\n
award was passed way back in the year 2001. The Advocate Commissioner<\/p>\n
had valued the property much later. Land value has been sky-rocketing<\/p>\n
over the last few years. Therefore, there is no rhyme or reason to try to<\/p>\n
fall back upon the valuation shown by the Advocate Commissioner in his<\/p>\n
report and valuation statement. It may also be remembered that while<\/p>\n
allotting item No.1 to the share of plaintiff, he was asked to pay a sum of<\/p>\n
Arb.As.12, 13, 14, 16, 18 & 19 OF 2003<\/p>\n
                                        :: 19 ::\n<\/p>\n
Rs.10 lakhs to defendant Nos. 3 to 6.            Similarly, defendant No.2 was<\/p>\n
directed to pay Rs.10 lakhs to defendant No.1 while allotting item No.2 to<\/p>\n
the former.        Therefore, it cannot be said that the arbitrator had not<\/p>\n
considered all pros and cons and advantages and disadvantages of the<\/p>\n
division and allotment of the properties among the parties.<\/p>\n
       Having regard to the entire facts and circumstances of the case, we<\/p>\n
do not find any reason to interfere with the impugned order passed by the<\/p>\n
court below. The appeals fail and they are accordingly dismissed. But in<\/p>\n
the peculiar facts and circumstances of the case, we direct the parties to<\/p>\n
suffer their respective costs.\n<\/p>\n<\/p>\n
                                                        A.K.BASHEER, JUDGE<\/p>\n
                                                   P.Q.BARKATH ALI, JUDGE<\/p>\n
aks\/jes\/an<\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court Kallalathil Sekharan vs Kallalathil Sreedharabn on 4 March, 2010 IN THE HIGH COURT OF KERALA AT ERNAKULAM Arb.A.No. 12 of 2003() 1. KALLALATHIL SEKHARAN … Petitioner Vs 1. KALLALATHIL SREEDHARABN … Respondent For Petitioner :SRI.K.P.DANDAPANI (SR.) For Respondent :SRI.SAJEEV KUMAR K.GOPAL The Hon’ble MR. Justice A.K.BASHEER The Hon’ble MR. Justice P.Q.BARKATH ALI […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-32320","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nKallalathil Sekharan vs Kallalathil Sreedharabn on 4 March, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/kallalathil-sekharan-vs-kallalathil-sreedharabn-on-4-march-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Kallalathil Sekharan vs Kallalathil Sreedharabn on 4 March, 2010 - 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