JAGDISH CHANDER BHATIA

Versus
LACHHMAN DAS BHATIA (1993) 1 SCC 548

This case is an appeal from an initial order passed under section 145 of the
code of criminal procedure. The concerning issue in the case is the dispute between
close relatives in respect of their interests in certain properties. After the
appointment of the arbitrator, Jagdish Chandar Bhatiya did not deposit the
expenses with the arbitrator and raised objection in regard to the arbitration
proceedings on the plea that the property in dispute was proposed to be resumed by
the Union of India. Meanwhile, the arbitrator passed away and the new one named
Justice M.S. Gujral was appointed as the sole arbitrator and the court did not
approve of Jagdish Chandra Bhaitiya’s conduct in not depositing.

The arbitrator awarded Lachhman Das Bhatia and Jagdish Chander Chatia a 76-
24% share in one property (House no. 18) and the other property (house no. 17)
belonging entirely to Lachhman Das Bhatia. The parties were directed to bear their
own costs of the arbitration proceedings except that Jagdish Chander Bhatia had to
pay Rs. 4000 to Lachhman Das Bhatia as his share of the Arbitrator’s fees which
he had initially failed to deposit. Against this award, Jagdish Chandra Bhatia filed
objections under Section 30 of the Arbitration Act.

Sec 30 talks about Grounds for setting aside award. It says an award shall not be
set aside except one or more of the following grounds namely,

A) That an arbitrator or umpire has misconducted himself or the proceedings

B) That an award has been made after the issue of an order by the court
superseding the arbitration or after arbitration proceedings have become
invalid under section 35
C) That an award has been improperly procured or is otherwise invalid.

It was conceded by the learned counsil for the Objector that clause (b) would not
be attracted and his main submission being the Arbitrator misconducted himself.
He did not take into consideration several documents. So, he relied on clause (a)
and (b). The documents submitted by the learned counsel of objector’s mainly
related to the properties of different regions like Pakistan and claiming a sanction
in the name of Punnu Ram Lachman Das in respect of properties left behind by the
family. On that claim, house no.18 was purchased in the said name.

The arbitrator made a speaking award by concluding that the arbitrator did not go
into rights and interests of the parties including share in properties in different
region like Pakistan. That was unnecessary because the fact that the claim was
sanctioned in the name of Puru Ram Lachhman Das was never in dispute. the
arbitrator had his work emphasized on the subject regarding the title of the
properties house no.17 and house no.18 which were the subject-matter. On
conclusion, Arbitrator stated that on the death of Puru Ram inheritance opened
insofar as his share in the property was concerned and the objector, i.e. Jagdish
Chandra Bhatia was entitled to 1/7th out of the share of deceased. Since the
contribution made for the payment of the price was not equal, Arbitrator allotted a
larger share to Punnu Ram and consequently, Objector has got a share on the basis
thereof. Thus, the court was in the opinion of the arbitrator had not misconducted
himself by refusing to enumerate those documents in his award because he was
called upon to decide the interest of the parties in Houses numbered 17 and 18
alone which were the subject-matter and not the properties left behind in Pakistan
or other regions. Hence, the award sustained with Jagdish Chander Bhatia getting
a 24% share of house no. 18 and Lachhman Das Bhatia with a 76% share and the
complete share of House no. 17.

The court referred to the case Food Corporation of India v. Joginderpal

Mohinderpal which mentioned that the court must find out whether the arbitrator
has misconducted himself, any infirmity in the procedure or Arbitrator travelling
beyond his reference. It is not misconduct on the part of an Arbitrator to come to
an erroneous conclusion on a disputed issue. It must be demonstrated to the court
that the reasons given by the Arbitrator are so erroneous in law that they have
resulted in Arbitrator taking a view which cannot be sustained in law. Hence, with
the reference of the case, the court affirmed the Arbitrator’s award on the disputed
issue and declared no infirmity on the face of the award.