1979 (1) TMI 244 - HC - Indian Laws

Summary

Issues Involved:

1. Registration of the award.
2. Errors apparent on the face of the award.
3. Division of tenancy rights and compliance with the West Bengal Tenancy Act, 1956.
4. Arbitrator's competence to deal with the assets of the company.
5. Completeness of the award.
6. Valuation of shares.
7. Preparation and use of the annexed plan.
8. Limitation for filing the application to set aside the award.

Issue-wise Detailed Analysis:

1. Registration of the Award:

The award was challenged on the ground that it created or extinguished rights in immovable properties and was not registered. However, during the pendency of the application, the award was registered after obtaining an extension of time from the Registrar of Assurances. Consequently, the question of the award's validity due to non-registration was no longer relevant.

2. Errors Apparent on the Face of the Award:

The contention was that the arbitrator had divided the assets of the company, which he was not competent to do. The court noted that the company, a party to the arbitration agreement, was akin to a partnership in a private limited company. The arbitrator did not commit an error of law by distributing the assets in satisfaction of claims against the company. The court reiterated that it could not sit in appeal over the arbitrator's conclusions unless there was an error apparent on the face of the award.

3. Division of Tenancy Rights and Compliance with the West Bengal Tenancy Act, 1956:

It was argued that the award divided tenancy rights without proper consent from the landlords, violating the West Bengal Tenancy Act, 1956. The court found evidence of the landlords' consent in letters and testimonies presented before the arbitrator. The arbitrator's findings were based on this evidence, and thus, the award was not in violation of the Tenancy Act.

4. Arbitrator's Competence to Deal with the Assets of the Company:

The challenge was that the arbitrator was incompetent to divide the company's assets. The court held that in the context of a private limited company, where the company was a party to the arbitration and there were claims by shareholders against the company, the arbitrator did not violate any legal principles by distributing the assets. The company's participation in the arbitration agreement and the evidence of claims justified the arbitrator's actions.

5. Completeness of the Award:

The award was alleged to be incomplete as it did not address all disputed properties. The court observed that the properties not specifically dealt with by the award were to remain with the company. The arbitrator's omission to deal with certain properties did not render the award incomplete.

6. Valuation of Shares:

The arbitrator's valuation of shares at Rs. 250 each was contested. The court found that there was sufficient evidence on the company's assets to support the arbitrator's valuation. The arbitrator's decision on share valuation was thus upheld.

7. Preparation and Use of the Annexed Plan:

It was argued that the annexed plan, on which the award was based, was prepared without giving parties an opportunity to make submissions, violating natural justice principles. The court noted that the division of the shop room was discussed extensively, and rival submissions were made on various plans. The annexed plan represented the arbitrator's modifications based on these discussions. The court found no breach of natural justice in the arbitrator's reliance on the annexed plan.

8. Limitation for Filing the Application to Set Aside the Award:

The application to set aside the award was alleged to be barred by limitation. The court noted the relevant dates and the procedural aspects concerning the filing of the award. Despite the contention that the award was not properly filed until the stamp duty was paid, the court inclined to think the application was barred by limitation. However, given the decision on other aspects, the court did not rest its decision solely on this ground.

Conclusion:

The application to set aside the award was dismissed on all grounds. The court found no merit in the challenges raised against the award and upheld the arbitrator's decisions. The other applications challenging the award were also dismissed, with no order as to costs.