Madan Lamba And Smt. Sneh Lamba vs Jagdish Lamba And Ors.
2002 Latest Caselaw 1517 Del

JUDGMENT

Usha Mehra, J.

1. "Interminable, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led then to Arbitration Act, 1940 ('Act' for short). However, the way in which the proceedings under the Act are conducted and without an exception challenged in Courts, has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the Courts been clothed with 'legales' of unforeseeable complexity" so said the Supreme Court in the case of Guru Nanak Foundation v. Rattan Singh & Sons .

2. Above observation of the Supreme Court aptly describe the disgust by the court for the widespread abuse of arbitral process. At the same time we cannot ignore the fact that the process and norms which create confidence in arbitration proceedings must be maintained by the Arbitrator. They have to conduct the proceedings in such a way which should depict fairness and impartiality.

3. Dr. Abhishek M. Singhvi, Senior Advocate appearing for the appellant has assailed the impugned judgment and consequently the arbitration award dated 25th October, 1996 made and published by Shri D.V. Taneja and Shri D.M. Harish, inter-alia, on the grounds that Arbitrators were :- (i) Biased and misconducted the proceedings, (ii) they exceeded the scope of reference by adjudicating upon the properties, namely, (a) Hotel Diplomat at New Delhi and

(b) Volga House, Mahalaxmi, Bombay which did not form part of the reference. (iii) they deliberatedly filed the award at Bombay, though knowing fully well that the jurisdiction was that of the Delhi High Court; and finally (iv) they did not sign the award simultaneously rather signed at two different places.

4. In order to determine the challenge are raised by the appellant, we may have a quick glance to the facts giving rise to these objections. Admittedly, parties are related to each others. Appellant is the real brother of the respondents. A dispute arose between them regarding joint businesses as well as of immovable properties thereto. In order to resolve the dispute and differences they decided to seek the intervention of their close family friends. Accordingly, they appointed Shri D.V. Taneja and Shri D.M. Harish as the Arbitrators.

5. Consent terms were drawn in October, 1983 by the parties on their behalf and on behalf of their family members. All those disputes and differences were submitted to the Arbitrators so named. The said Arbitrators on the basis of the consent terms (called Award) dated October, 1983 as well as subsequent references made to them through the corresponding exchanged between the parties and after considering the oral submissions and documents produced by the parties made and published their award on 25th October, 1986. It is this Award which is under challenge. By the impugned order the Learned Single Judge dismissed the objections of the appellant and made the Award rule of the court. Dissatisfied with the same present appeal was preferred. lets examine the challenge ground wise;

- Biased and misconducted the proceedings

To determine as to whether the Arbitrators were biased and thus misconducted the proceedings, Dr. Abhishek M. Singhvi drew our attention to the conduct of Shri D.V. Taneja. According to him this Arbitrator sought consultation and advice from respondent Kailash Lamba. The fact of having given the advice has not been denied by the said Kailash Lamba as well as Harish Lamba in their reply affidavits. Therefore, once it is admitted that the Arbitrator obtained the advice with regard to his business, no impartiality could be expected of him. Because of the advice rendered to him, the Arbitrator could not act fairly. He would get bias. The relation between Shri D.V. Taneja and Kailash Lamba were much deeper than what meet the eyes. From the act of the respondents and Mr. Taneja the Arbitrator, a serious doubt is cast on his fairness in dealing with the dispute of the parties. To prove his contention that Shri D.V. Taneja the Arbitrator was biased and thereby misconducted the proceedings, Dr. Singhvi in particular referred to the affidavit filed by the appellant, Madan Lamba in May, 1995, wherein he specifically pleaded that Shri D.V. Taneja has stayed at Delhi and enjoyed the hospitality of Shri Kailash Lamba. That Kailash Lamba had private dealings with the said Arbitrator Shri D.V. Taneja. In fact Kailash Lamba made arrangements for drawing plans of the houses of Shri D.V. Taneja at New Delhi. That Shri D.V. Taneja was very friendly with Harish Lamba and Kailash Lamba. That Shri D.M. Harish another Arbitrator had been acting as Consultant Advisor to Harish Lamba and Kailash Lamba. These facts, Dr. Singhvi said have not been controverter by the respondents. Instead they have tried to explain it away by saying in their reply-affidavits dated 21st August, 1995, that it was only a friendly advice given by Shri Kailash Lamba. They could not deny that Harish Lamba and Kailash Lamba were having private dealings with the Arbitrators. The act of advice behind the back of the appellant to the Arbitrator amounts to misconduct. In order to wrigle out from their private dealings Kailash Lamba build up sham defense of friendly advice. This he did in order to save the Award from being declared invalid as having been procured by him. Friendly advice is an after thought defense raised by Kailash Lamba and Harish Lamba. From this, Dr. Singhvi wants us to infer that dealings between Kailash Lamba and Harish Lamba with the Arbitrator Mr. D.V. Taneja were much deeper than mere friendly. Such an Arbitrator cann't be expected to act independently. Presumption of bias is writ large. This raises serious doubt on the conduct of the Arbitrators.

6. Mr. Arun Jaitley, Senior Advocate appearing for the respondents refuted these allegations and while countering Dr. Singhvi's arguments contended that appellant has no where denied the factum of close family relation between Lamba brothers including the appellant and that of respondents with Shri D.V. Taneja, the Arbitrator. Because of close family relations Kailash Lamba commented on the layout of the furniture in the plan got prepared by Shri D.V. Taneja from his Architect. Advising on the layout of the furniture to the one who happens to be a close family friend, by no stretch of imagination, would amount to private dealing nor could lead to the inference that the Arbitrator acted in a bias manner. Moreover, had it been a private dealing between Kailash Lamba and Shri D.V. Taneja, appellant would not have got the wind of the same. Since it was a friendly advice openly given hence it was known to the parties. It has been clearly mentioned in the affidavit if Kailash Lamba as well as of Harish Lamba that this friendly advice was not given in a clandestine manner that is the reason this fact was known to the appellant. Giving of a friendly advice neither amounts to misconduct nor can attribute biasness on the part of the Arbitrator who happens to be close family friend and was chosen by the appellant himself. Respondents consented to their appointment as Arbitrator. Shri Kailash Lamba and Harish Lamba denied that Shri D.M. Harish acted as a Consultant Advisor to them.

7. The question for consideration is whether the so called advice given to the Arbitrator during the pendency of Arbitration proceedings amounts to "treating" the Arbitrator, and therefore, Arbitrator misconduct himself and the proceedings? Russel in his Book on Arbitration by Anthony Walton and Mary Vitoria 20th Edition at page 411 says that "Treating" the Arbitrator may be a form of procurement or may amount to a mere indiscretion. The court, will not, it would be seen, set aside an award on the ground of indiscretion unless either there was an intention to corrupt or influence the Arbitrator or he was in fact corrupted or influenced. Appellant in this case has not been able to refute that the Arbitrator Mr. D.V. Taneja and the Lamba family were close friends. Hence any comments made by the respondent on the placement of furniture on the layout plan could not be but a friendly advice. The said friendly advice given by Mr. Kailash Lamba in view of close family relation at best can be called indiscretion. It would not amount to corrupting the Arbitrator nor would mean influencing him who is otherwise closely known to the entire Lamba family. From the affidavits of Kailash Lamba and Harish Lamba, it gets clear that Shri D.V. Taneja got prepared his plan of the houses at New Delhi prepared from an architect. For that Kailash Lamba was neither associated nor consulted. Seeing the layout of furniture if Shri Kailash Lamba gave certain suggestions that by no means amounts to corrupting the Arbitrator or influencing him to render the Award invalid. Shri Taneja was not a stranger to the parties, therefore, if during the pendency of the proceedings he showed his plans to the respondent and sought his comments and the respondent as friend gave advice it cannot be but a friendly advice. Advising whereto place the furniture on the plan, Mr. Arun Jaitley rightly contended, cannot be called influencing and corrupting the Arbitrator with ulterior motive to win him over in order to get a favorable Award. Rather large parts of the dispute were settled by the parties between themselves and also implemented the same. The Arbitrators have only put their seal of approval by way of the Award. Allegations against the second Arbitrator Shri D.M. Harish were not pressed during the course of arguments. For the above reasons, we find no merits in the argument of Dr. Singhvi on this count.

- Whether Arbitrators exceeded the scope of reference?

The point for consideration is whether properties namely Hotel Diplomat at New Delhi and Volga House, Mahalaxmi, Bombay formed part of the reference? Let us have a glance at the consent reference of 1983 (which the parties termed as Award) is reproduced as under:-

"AWARD

1. Messers Volga Restaurant, New Delhi.

Mr. Madan Lamba will take over the share of every other partner in the firm excluding 4 Annas share of late Smt. Vidyawati. The accounts of the outgoing partners will be settled and the amounts found due to them will be paid by taking the value of the tenancy rights of the Restaurant in Connaught Place. The bakery and the subzimandi shop at Rs. 60,00,000/- (Rupees Sixty Lacs only) in place of the book value, if any. The difference will be credited to the account of the outgoing partners in accordance with their respective shares. The final amount found due to them will be paid by Mr. Madan Lamba within 6 months from the date hereof.

2. Kirti Nagar, New Delhi

Mr. Madan Lamba will take over the property for Rs. 20,00,000/- (Rupees Twenty Lacs only) & pay a sum of Rs. 5,00,000/- each to Mr. Madan Lamba, Mr. Jagdish Lamba and Mr. Harish Lamba within 6 months.

3. Hotel Diploma, New Delhi

Mr. Madan Lamba will take over 12.5% share and Mr. Kailash Lamba will take over 37.5% share out of 25% shares each of Mr. Harish Lamba and Mr. Jagdish Lamba on the basis of a valuation of Rs. 80,00,000/- (Rupees Eighty Lacs only) for 100% share and pay the amount due them within 6 months.

The immovable property, namely the land and building of the Hotel will continue to belong to the present co-owners and they will continue to be paid a rental of Rs. 10,000/- per month. The firm will be converted into limited Company when the share-holders will be proportional representation in management and benefits. Major expenditure will be incurred in consultation with Mr. Madan Lamba and in case of difference, matter will be referred to arbitration.

4. M/s Volga Frozen Food & Ice Cream Company, Bombay

Mr. Harish Lamba will take over the share of ever other partner in the firm. The accounts of the outgoing partners will be settled by taking the value of old plant, machinery and equipment at Rs. one Crore in place of the existing book value. The value of the newly added firm items will be taken at book value. Deduction for the liabilities will be allowed to the extent they are taken over and discharged. The difference arising from the aforesaid valuation of assets will be credited to the account of the partners in the following manner:-

   Mr. Madan Lamba            -          43%
Mr. Kailash Lamba          -          21%
Mr. Jagdish Lamba          -          18%
Mr. Harish Lamba           -          18% 

 

Mr. Harish Lamba will pay the amount found due to the
outgoing partners within 6 months.

 

However, the possession of the assets of the factory will be handed over to him by Mr. Madan Lamba from 22nd Oct. 1983 and any loss or profit made thereafter will be on account of Mr. Harish Lamba. The Colaba flat will be given to Mr. Jagdish Lamba for a sum of Rs. 6,00,000/- (Rupees Six Lacs only).

5. Lease of Volga House, Mahalaxmi, Bombay

Status-quo will be maintained. The existing lease will be taken over by Mr. Jagdish Lamba for a price of Rs. 30,00,000/- (Rupees Thirty Lacs only), out of which the share due to the outgoing partners will be paid to them within 6 months on the following basis:-

   Mr. Madan Lamba            -          43%
Mr. Kailash Lamba          -          21%
Mr. Harish Lamba           -          18% 

 

Mr. Jagdish Lamba will be entitled to recover a rent of Re. 1/- per sq. ft per month in respect of the area comprised in the ground floor and the first floor which is allotted to Mr. Harish Lamba for running an Ice Cream Factory.

Mr. Jagdish Lamba will also be entitled to recover the rental from M/s. Indian Oil Corporation in respect of second and third floor occupied by them. Mr. Jagdish Lamba will pay the lease money to Shainnali family trust as well as the property taxes.

6. M/s. Volga Restaurant, 46 Nariman Point, Bombay

Status-quo will be maintained in respect of this asset.

7. Volga Ice Creams, Pune

Mr. Harish Lamba will take over the business together with the assets and the tenancy rights at a value of Rs. 6,00,000/- (Rupees Six Lacs only) and settle accounts of the outgoing partners on that basis within 6 months.

8. Accounts

All the accounts between the parties will be settled on the aforesaid basis and after taking into consideration various credit and debit balances by 31st December, 1983. The net amounts found due to or by the parties will carry interest at the rate of 12% p.a. The documents of assignment, sale, reconstitution or dissolution of firms will be handed over to the parties taking over the business only of their making full payment. Mr. Kailash Lamba will make available his accountant for the purpose of working up the accounts so long as his services are found necessary.

The cut off date will be taken as 22nd October, 1983 in all the concerns covered by this Award.

All disputes arising at any time will be referred to the Arbitrators, whose decision will be final. However, Mr. D.M. Harish will decide issues where the parties do not consider reference to Mr. Taneja necessary.

Mr. Jagdish Lamba will be paid a sum of Rs. 1,00,000/- each by Mr. Kailash Lamba in Nov. & Dec. 1983. He will also be paid Rs. 50,000/- each by Mr. Madan Lamba in Nov. & Dec. 1983."

8. Perusal of the above clearly indicate that dispute pertaining to "Hotel Diplomat", New Delhi, existed between the parties. As regards lease of "Volga House", Mahalaxmi, Bombay, it did find mention in the consent reference but then it appears to have been scored of. Counsel for the parties have given different interpretation of the portion scored of. Admittedly Arbitrators have given Award pertaining to these properties also. Therefore, we have to see whether dispute pertaining to "Volga House", Mahalaxmi, Bombay and Hotel Diplomat, New Delhi were ever referred to the Arbitrators. According to Mr. Arun Jaitley, so far as lease of "Volga House", Mahalaxmi, Bombay parties wanted to maintain status quo, therefore while scoring of the reference pertaining to lease right of Volga House, Mahalaxmi, Bombay, the word "maintaining status quo" was not deleted. Only portion deleted pertains to the entitlement of lease right and share therein of Jagdish Lamba, meaning thereby the right which was conferred on Shri Jagdish was deleted and the dispute pertaining to Volga Hotel, Bombay was referred keeping in view status quo of the property as on the day of reference i.e. 1983. In this view of the matter, the Arbitrators were justified in dealing with the dispute pertaining to "Volga Hotel", Mahalaxmi, Bombay. This argument has been vehemently refuted by Dr. Singhvi when he contended that property of "Volga Hotel", Mahalaxmi, Bombay was not to form part of reference hence the whole clause in the consent reference was deleted. Once the parties were not ad-idem in referring dispute of this property, the question of Arbitrators adjudicating on the same did arise. Moreover Kailash Lamba knew as to what the Award was going to be pertaining to Hotel Diplomat. Though the consent reference nowhere mentions about the change of partnership regarding Hotel Diplomat, New Delhi, still the Arbitrators on instructions of respondents in their Award allowed the change in partnership. This can be illustrated from the fact that Shri Kailash Lamba intimated in the year 1995 to the Income Tax Authorities i.e. one year before the publication of the Award that Hotel Diplomat was his partnership concern consisting of himself an d his son and sought declaration of change in the partnership of this property bearing No. 9/39, Sardar Patel Marg, Chanakya Puri, New Delhi i.e. Hotel Diploma, New Delhi. Kailash Lamba in anticipation intimated in the year 1995 to the Income Tax Authorities of change of partnership whereas the Arbitrators declared Hotel Diplomat partnership concern of Kailash Lamba in October, 1996. This shows Kailash Lamba was in connivance with the Arbitrators. Arbitrators gave the same Award which Kailash Lamba wanted. These facts clearly indicate that the Arbitrators were biased and were acting at the behest of Kailash Lamba.

9. Mr. Arun Jaitley countered these arguments by drawing out attention to the letters exchanged between the parties. Parties had in fact mutually settled the status of these properties. It can be seen from the tenor of the letter written by the appellant dated 27th October, 1983 which is reproduced as under:-

ML-1036                                                                     October 27, 1983.

My Dear Harishji,

This is in reference to the discussion on two points in respect of change over arrangements of M/s Volga Frozen Food & Ice Cream Company, Bombay with effect from 22nd October, 1983. We had discussed and agreed that separate books of accounts have to be maintained and separate Bank Account in the name of the firm is to be opened with authority in favor of Mr. Harish Lamba and Mr. Rakesh Lamba for operation of accounts.

With regards to the situation which might arise in case of some suppliers for not giving credit on account of non-payment of old or running dues. This was agreed that the new party may make the payment on behalf of the old party and adjust in final payment.

With regard to M/s Volga Restaurant, New Delhi, I have already opened separate books of accounts since 22nd october, 1983.

With regards to M/s Hotel Diplomat, I have suggested to Mr. Kailash Lamba to open separate books of accounts as well as separate Bank account in the name of the firm with authority in favor of Mr. Kailash Lamba and Mr. Sanjeev Lamba for operation of accounts.

This is just for you kind information.

Your affectionately,

MADAN LAMBA

Reading of the above letter shows settlement arrived at between the parties regarding Volga Restaurant, New Delhi and Hotel Diplomat, New Delhi. This settlement took place in 1983 itself and the same stood implemented by the parties which is apparent from the bare reading of this letter. From the reading of this letter, it also gets clear that the parties had discussed and decided to take over the management of their respective business. Para 2 of this letter shows that new parties which emerged had a right to open separate Bank account in their firms name. The new parties were even asked to take responsibility of discharging old debts. The concluding para of this letter shows that "Hotel Diploma" New Delhi fell to Shri Kailash Lamba in partnership with Shri Sanjeev Lamba. Accordingly appellant authorised and consented that Kailash Lamba to open separate books of accounts as well as Bank account on behalf of his firm pertaining to "Hotel Diplomat", New Delhi. Pursuance to the mutual exchange of business and properties and the arrangements arrived at between them, Appellant on behalf of his son Mr. Raman and wife Smt. Suman Lamba sent the drafts of Rs. 25,000/- each to respondent Jagdish Lamba as part payment towards purchase of his interest in Volga Restaurant, New Delhi. Copy of the same was addressed to the Arbitrator. The letter written by the respondent Jagdish Lamba to Harish Lamba dated 20th February, 1984 fortifies this arrangement. The said letter is reproduced as under:-

20th February, 1984

"Mr Dear Harishji

Kindly refer to the meeting held on 21-10-83 at 13, CCI Chambers, in connection with the disputes between us as per the award Mr. Madan Lamba had to pay a sum of Rs. 50,000/- (Rupees fifty thousand only) to me by the 31-12-83. I regret to inform that the amount has still not been paid.

Further the accounts of Volga Restaurant, New Delhi, Hotel Diplomat, New Delhi, Volga Frozen Food and Ice Cream Co., Bombay, Volga Ice Creams Poona and Volga Restaurant, Bombay along with the accounts of all four of us and our wives and children were to be completed up to 21-10-83 within a fortnight. Mr. Kailash Lamba was to sent his accountant within a fortnight. The final date of settlement as per the terms of award is 21-4-84.

I would request you to follow it up and get the accounts completed latest by 15-3-84 as there is very little time for the final implementation of the award.

The amount payable by Mr. Madan Lamba should be paid to me immediately as it is already over due by almost two months.

Your truly,

(JAGDISH LAMBA)

C.C. 1) Mr. D.V. Taneja,

2) Mr. Madan Lamba

3) Mr. Kailash Lamba,

4) Mr. Harish Lamba."

These letters make it clear that parties had principally agreed as to how to divide their respective businesses and properties including Hotel Diplomat, New Delhi. Accounts were settled by the four brothers on their behalf and on behalf of their wives and children. Final date of settlement as per the terms of award was 21-4-84. The parties had been using the word 'Award' to mean term of reference. Copy of these letters invariably were sent to the Arbitrators. The implementation of the agreed term was impressed upon by Shri Kailash Lamba vide letter dated 26-11-84 Annexure R-7. Copy of the same was sent to Shri D.M. Harish, Arbitrator with the request to impress upon the parties for immediate finalisation and settlement of accounts. Copy of the same was also sent to Shri D.V. Taneja. Vide letter dated 28-11-84 Kailash Lamba intimated to his brother Harish Lamba under intimation to the Arbitrator, that he had taken over the management of Hotel Diplomat, New Delhi. He further impressed upon the fact that it was not possible for him to take out money from his hotel, instead asked the appellant to finalise the accounts. The cumulative effect of the reading of these letters establishes beyond doubt that parties had settled as to which business would fall in whose share and how much amount that party would pay to the other. The Hotel Diplomat, New Delhi, came to the share of Kailash Lamba and Sanjeev Lamba. The settlement made by the appellant pertaining to this property was on behalf of his son and wife as well. Pursuance to the settlement arrived at as indicated by the appellant himself in his letter dated 27th October, 1983 and vide letter Annexure R-7 dated 26th November, 1984, businesses were transferred to respective partners as per agreed terms and dates. Thereafter they started running their respective businesses under their respective partnership concerns. It is in this background that Kailash Lamba intimated to the Income Tax Authorities in 1985 that Hotel Diplomat had become his partnership concern. The Arbitrators merely put their seal of approval on the arrangements arrived at by the parties. In this backdrop it cannot be said that the Arbitrators misconducted the proceedings or exceeded their jurisdiction thereby adjudicating on a matter which was beyond the scope of reference. The matter was referred to them which is apparent from the subsequent letters exchanged between the parties and accordingly Arbitrators adjudicating upon the same. The appellant vide his letter dated 6th March, 1984 written to jagdish Lamba while paying the money for purchase of Volga Restaurant, New Delhi sent a letter to one of the Arbitrators Shri D.M. Harish. Had it not been part of reference, there was no necessity for the appellant to refer the copy of the letter to the Arbitrator. The conduct of the appellant as is apparent from the letters exchanged between the parties show that change in partnership pertaining to Hotel Diploma, New Delhi was also to be adjudicated by the Arbitrators.

10. The appellant vide his letter dated 27th August, 1985 written to Harish Lamba indicated that the partnership deed with regard to Volga Restaurant, New Delhi had to be changed. The Partnership Deed as on 1st April, 1964 consisted of Mr. Madan Lamba, Smt. Vidyawanti, Smt. Ananti Devi, Mr. Harish Lamba, Mr. Jagdish Lamba, Smt. Kammi Lamba. Smt. Vidyawanti expired on 30th September, 1981 leaving behind her share in favor of Deepak Lamba, Vijay Lamba, Raj Kumar Lamba, Ashok Lamba. Smt. Ananti Devi expired on 17th August, 1982 leaving behind her legal heirs. They also inherited the same. But on account of settlement arrived at between the parties the firm shall consist of only three partners, namely, Mr. Madan Lamba 50 Paise, Mr. Suman Lamba 25 Paise and Mr. Raman Lamba 25 Paise. He, therefore, changed the partnership of Volga Restaurant, New Delhi pursuance to the agreement arrived at between him and his brothers. Similarly, Kailash Lamba in pursuance to the settlement arrived at between him and the appellant applied for the change of partnership to the Income Tax Department in the same fashion as the appellant did with regard to the Volga Restaurant, New Delhi. The Arbitrators while giving the Award have mentioned about these changes of partnership which the parties had mutually agreed to. By no stretch of imagination it can be said that the Arbitrators were biased and misconducted themselves or the proceedings. In fact, the Award is reflective of manifestation of the intentions of parties which they mutually agreed. Hence, it cannot also be said that Arbitrator exceeded the terms of reference.

11. So far as property at Volga House, Mahalaxmi, Bombay is concerned, parties including the appellant had agreed and requested the arbitrators which request was acceded to by the arbitrators to adjudicate upon the dispute pertaining to premises at Volga House, Mahalaxmi, Bombay. This is so reflected from the proceedings held before the arbitrators where the parties produced their accounts for the perusal and consideration of the arbitrators and the payments made from time to time during the proceedings and the transactions and adjustment which took place between the parties pertaining to this property i.e. Volga House, Mahalaxmi, Bombay. It is only after the parties submitted to the jurisdiction of the arbitrators and produced the documents and the arrangement arrived at, that the arbitrators conceded to adjudicate upon the dispute pertaining to this property. The learned Single Judge rightly came to the conclusion that there was ad-idem between the parties in respect of this property to be adjudicated by the Arbitrators Along with other properties. The willingly submitted to the jurisdiction of the arbitrators. At no point of time the appellant raised any objection with regard to the dispute pertaining to Volga House, Mahalaxmi, Bombay. On the contrary he submitted to the jurisdiction of the arbitrator by producing the books of accounts and the transaction held during the pendency of the arbitration it is apparent that the arbitrators adjudicated with regard to these properties with the consent of the parties.

12. Be that as it may, in the consent reference of 1983 even if dispute as such of these two properties had not been referred but the term of reference left it open to the parties to refer any other dispute subsequently and that was to be adjudicated by the Arbitrator. The said term of reference reads as under:-

"All disputes arising at any time will be referred to the Arbitrators, whose decision will be final. However, Mr. D.M. Harish will decide issues where the parties do not consider reference to Mr. Taneja necessary".

It was term of the reference that all disputes arising at any time will be referred to the arbitrator whose decision shall be final. In this view of the matter it cannot be said that arbitrators' power to adjudicate were limited only to those disputes which were referred in the terms of reference. The parties mutually agreed, which is apparent from the letters exchanged by them, that they were ad-item in referring the disputes pertaining to these properties also to arbitration. It is because of this intention expressed by the parties that the Arbitrators adjudicated upon the same. Moreover parties willingly submitted to the arbitrators even pertaining to these two properties and argued on the same by producing their accounts before the Arbitrator.

For the reasons stated above we find no infirmity in the reasoning of the learned Single Judge on this count nor can we find any fault with the Award.

13. The next contention of Dr. Singhvi is that the Arbitrator misconducted by filing the Award at Bombay. We find no force in this submisison because filing of the Award at Bombay cannot be called misconduct of the proceedings nor will indicate biasness on the part of the Arbitrators. Since most of the arbitration proceedings were held at Bombay and even the terms of reference was also made at Bombay, therefore the Arbitrators mistaken belief filed the Award at Bombay thinking Bombay courts will have jurisdiction. Even otherwise filing of Award in Bombay Court cannot be said to have prejudiced the appellant in any manner. On Realizing that Delhi Courts have jurisdiction, the Award was filed at Delhi. We see nothing improper in it.

14. As regards the objection that the arbitrators held the proceedings separately or signed the award at two different places, we are in agreement with the reasoning given by the learned Single Judge, and therefore, find no force in the submissions of Dr. Singhvi on this count.

15. It has been rightly said that the modern tendency is to endeavor to preserve and uphold the award of the arbitrators whom the parties themselves selected to decide their disputes between them. Arbitrators in this case have acted within the terms of reference and the submissions made before them. In our view the arbitrators have not violated any rules or what is so often called rules of natural justice. In this view of the matter the Courts should be slow in setting aside such an award. In fact the Award of the arbitrators is based on the material placed before them. After all an arbitrator is a judge, in the words of Benjamin N. Cardozo, has to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to "the primordial necessity of order in the social life". Indeed reading the award of the arbitrators, one would say that they acted reasonably and rationally. Since the arbitrator is a judge by the choice of the parties, and more often than not a person with little or no legal background, the adjudication of dispute by an arbitrator by way of an award can be challenged only within the limited scope of the provisions of the Arbitration Act and the Legislature in its wisdom has limited the scope and ambit of challenge to an award in the arbitration Act. The scope for setting aside an award is limited to the grounds available under the Arbitration Act, which have been well defined by a long line of decided cases, and none of them is available here. It will not be out of place to mention that at no point of time the appellant objected before the arbitrator or raise any of these grounds before the arbitrators which is now urged before us. Having submitted to the jurisdiction of the arbitrators on all points including the immovable properties of Hotel Diplomat, New Delhi and Volga House, Mahalaxmi, Bombay, appellant cannot turn around now to challenge the award on this ground.

For the reasons stated above we find no merit in the appeal. Dismissed.