# [1992] Supp. 2 S.C.R. 118 - **Citation:** [1992] Supp. 2 S.C.R. 118 - **Court:** Supreme Court of India - **Decided:** 1992-10-22 - **Case number:** Civil Appeal No. 1763 of 1980 - **Bench:** S. Ranganathan, V. Ramaswami, B.P. Jeevan Reddy - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1992-supp-2-s-c-r-118-11593 - **Pages:** 35 ## Headnote Indian Artibitration Act, 1949 : Sections 14, 22, 23, 29, 30, 39 and 41--Reference of dispute to arbitration by Court in a suit pendinr-Aroitrator has all powers Court has in deciding issues in the suit. Interest pendente lite-Can be awarded where Agreement envisages payment. Interest for pre-reference period-Partnership finn--Dissolved-Dispute relating to valuation of assets of firm-Dissolution deed envisaging grant of Interest only from date of valuation of assets-Reference of dispute to arbitration prior to Interest Act, 19711---A ward of interest for pre-reference period-- Held not justified. Award relating to valuation of land of dissolved partnership fimiReports of Govemn1ent recognised valuer and expen valuer-Consideration of by arbitrator-Arbitrator-Whether entitled to accept report witho11t examining valuer as witness. Arbitrator-Misconduct of-Shifting of venue of arbitratiorr-Denying opportunity to witness to give evldence. Onus of proof-Onus of proving troth of entries in the acco11nts. Constitution of India, 1950 : Articles 134 and 136---Arbitration award-No interference with findings of arbitrator on questions of fact-Not the province of the Court to delve into details, e.r:an1ine genuineness or correctness of itenzs and whether they he accepted or not-Arbitrator free to go into the whole question and give his H award. 118 • JUG/\L KISH ORE 1·. VIJ/\ YEN DR/\ SHARMA 119 A business family consisting of a father and four sons carried on A business. Disputes arose in this family regarding the division of the business. P.P., the father, J.P., V.P., & G.P., the three sons were partners carrying on business under two names and styles viz. Variety Body Builders and Variety Engineers. It had two factories, the latter at Maneja and the former at Pratapnagar. The dispute between two groups P.P. & J.P. on the one hand, and 8.1'. & G.I'. on the other, was in regard to the equal division of the assets and liabilities of the two businesses on the retirement of P.P. & J.P. from the firm as per the terms of a "deed of dissolution" dated 31.12.1979 executed by and between the partners. B This dispute was the subject matter of three civil suits. When one of C the two interim orsolution itself stipulated that the assets should be got valued ## Text _Characters 0–39,967 of 80,712. This is a partial read: ask again with offset=39967 for what follows._ A JUGAL KISHORE PRABHATILAL SHARMA AND ORS. B c D E F G v. VIJAYENDRA PRABHATILAL SHARMA AND ANR. OCTOBER 22, 1992 [S. RANGANATHAN, V. RAMASWAMI AND B.P. JEEVAN REDDY, JJ.] Indian Artibitration Act, 1949 : Sections 14, 22, 23, 29, 30, 39 and 41--Reference of dispute to arbitration by Court in a suit pendinr-Aroitrator has all powers Court has in deciding issues in the suit. Interest pendente lite-Can be awarded where Agreement envisages payment. Interest for pre-reference period-Partnership finn--Dissolved-Dispute relating to valuation of assets of firm-Dissolution deed envisaging grant of Interest only from date of valuation of assets-Reference of dispute to arbitration prior to Interest Act, 19711---A ward of interest for pre-reference period-- Held not justified. Award relating to valuation of land of dissolved partnership fimiReports of Govemn1ent recognised valuer and expen valuer-Consideration of by arbitrator-Arbitrator-Whether entitled to accept report witho11t examining valuer as witness. Arbitrator-Misconduct of-Shifting of venue of arbitratiorr-Denying opportunity to witness to give evldence. Onus of proof-Onus of proving troth of entries in the acco11nts. Constitution of India, 1950 : Articles 134 and 136---Arbitration award-No interference with findings of arbitrator on questions of fact-Not the province of the Court to delve into details, e.r:an1ine genuineness or correctness of itenzs and whether they he accepted or not-Arbitrator free to go into the whole question and give his H award. 118 • JUG/\L KISH ORE 1·. VIJ/\ YEN DR/\ SHARMA 119 A business family consisting of a father and four sons carried on A business. Disputes arose in this family regarding the division of the business. P.P., the father, J.P., V.P., & G.P., the three sons were partners carrying on business under two names and styles viz. Variety Body Builders and Variety Engineers. It had two factories, the latter at Maneja and the former at Pratapnagar. The dispute between two groups P.P. & J.P. on the one hand, and 8.1'. & G.I'. on the other, was in regard to the equal division of the assets and liabilities of the two businesses on the retirement of P.P. & J.P. from the firm as per the terms of a "deed of dissolution" dated 31.12.1979 executed by and between the partners. B This dispute was the subject matter of three civil suits. When one of C the two interim orsolution itself stipulated that the assets should be got valued by a Government approved valuer. A perusal of the award shows that, though the arbitrator made references to the report of Patel - C the "Government" valuer - and its objectivity, he has indicated sufficient grounds for fixing the values in the manner he ha• done. He rejected the instances of sale cited by the applicants. So far as Jaiswal - expert witness - was concerned, he found that there was not much difference between the "base" value for lands in the Jo.:ality suggested by Patel (Rs. 25) and D Jaiswal (Rs. 30). He found that the ground given by Jaiswal for additions thereto were not tenable and as between the base value of Rs. 25 and Rs. 30, he had accepted the former. He has also given reasons for preferring Patel's valuation of Rs. 4.50 in preference of Jaiswal's valuation of Rs. 2 in respect of the Maneja lands. The arbitrator has, in the circumstances, acted on proper material in fixing the value of the lands at Pratapnagar E as well as Maneja and his award in this respect has to be upheld. (128-E-H, 129-H] (ii) The shifting of the venue to Baroda was acquiesced in by both parties and there is a record by the arbitrator to this effect. So far as the F request for the oral evidence is concerned it was made at a belated stage after the parties had agreed to have day to day proceedings and to avoid adjournments. If this situation and having regard to the fact that limitation for giving an award was drawing to a clOse, the refusal to grant an adjournment to enable V.P. to appeal and depose cannot be characterised G as misconduct. [129-C-D] (iii) The mere fact that J.P. relied upon the valuation given in Exhibit 71/2 for purposes of seeking an injunction from alienating any of the goods cannot be taken as an admission on his part as to their value. The arbitrator W'US free to go into the whole question and determine the H valuation independently. [130-G-H] • JUGAL KlSl!ORE 1·. Vl.IAYENDRA SHARMA 121 (iv) It is not the province of this Court to delve into the details and A examine whether the opponent's objections in various items thereof and their genuineness or correctness should have been accepted or not. [129-F] (v) The arbitrator has pointed out that, so far as the items in possession of the objectors are concerned, there was no rate mentioned in Ex. 576 and the figure of Rs. 14 per kg. was agreed tu by both parties. B Again, so far as the lead in possession of the applicants is concerned, the applicants themselves had valued it at Rs. 8 per kg. There is nothing to indicate the nature of the material in question and there is no explanation as to why the applicants who placed no value on the same item in the possession of the objectors valued the lead in their possession at Rs. 8. In C these circumstances there is no reason to interfere with the arbitrator's conclusions on these issues. [131-F] 2. INTERPRETATION (i) The dissolution deed dated December 31, 1979, is described as a o· "deed of retirement from partnership". The deed is a carefully thought out document with its clauses set out in a logical sequence, only, not apparently being a deed drafted by lawyers, its language in some places is not very felicitous. The grievance related to four items of apportionment· [131-B-C] (i) Bank liabilities; E (ii) Gratuity, bonus, P.L.. and medical facilities; (iii) Liability of advance against the order received from the Department of Atomic Energy; and [131-G-H] F (iv) Excise liability. [132-A] The last item was not pressed. (ii) Clause (11) of the deed of dissolution is very clear that the G responsibility of paying the dues of the Central Bank Is undertaken by the objectors merely because the liability of the said Bank is larger than the liability to the Bank of Maharashtra, the objectors cannot ask for a contribution of the excess from the applicants. A perusal of the various clauses of the deed of dissolution shows that various assets and li&bilities H 122 SUPREME COURT REPORTS l1992J SUPP. 2 S.C.R. A of the firm have been apportioned between the two groups of partners. B Clause (14) deals with Bank accounts. [134-F-G] (iii) The terms of the dissolution deed are very clear and the arbitrator was right in saying that the terms of clause (14) dearly govern the issue. [135-D] (iv) If Clause 22 is read as a general clause, clause (14), being a specific clause in respect of Bank debts, will certainly override clause (22). That apart, if the conclusion of arbitrator is consistent with a proper interpretation of clause (22), there can be no objection to upholding the C conclusion of the arbitrator, though on a different reasoning. [135-F] (v) The parties have agn:ed under clause (17), that, except for gratuity, all other payments to workers will be borne by the respective parties. This is a specific kind of liability towards workers for which D clause (17) makes provision in its first part and so clause (22) .does not enter into the picture at all. It is not correct to say that clause (17) does not apply and so clause (22) will be attracted. [136-G-H] (vi) On the language of clause (18), there can be no doubt that the E arbitrator was right in holding the respondents wholly liable to meet the liabilities to the Central Bank. Uhder clause (14), the objectors have taken over the entirety of dealings with the Central Bank. Just as all liabilities to the Central Bank of India are to be discharged by the objectors, the amount of fixed deposit with the same Bank and due or received from it F should also belong exclusively to them. The reasoning that the fixed deposit is not a part of the Bank account taken over by the opponents but an independent assets of the firm, which had only been pledged as a security for obtaining necessary advances from the Bank to enable the opponents to execute the contract is somewhat artificial and far-fetched, particularly as by pledging it with the Bank for purposes of execution of G the contract, it should be treated as an integral part of the dealings between the objectors and the said Bank. This is indeed clear from the clarification contained in clause (18) regarding the Pratapnagar factory. The position regarding the fixed deposit is therefore different. It should be treated as the exclusive property of the opponents not divisible between H the two groups. [138-E-G] r. JUGAL KISHORE v. VIJAYENDRA SHARMA 123 3.ACCOUNTS A perusal of the award shows that the arbitrator has examined the state of the accounts in great detail, considered various items appearing in the accounts and elaborately discussed the objections put forward by the objectors. The question of onus does not have importance at this stage where the arbitrator has examined the entire 1naterials available and reached his conclusion thereon. The other grievance of the opponents is that some of these entries are not correct. This of course is a question of fact, and no ground is found to interfere with the findings of the arbitrator. [140-F-G] 4.ARITHMETICAL ERRORS There are arithmetical errors in the decision of the arbitrator in respect of issue Nos. 7, 15(c) and 19(b) dealt with in paragraphs 52 and 69 of the interim award. If these errors are rectified, the opponents will be A B c entitled to receive a sum of Rs. 1.52 lakhs. [140-H, 141-A] D 5. INTEREST (i) When the disputes between the parties pending adjudication in a suit have been referred to an arbitrator, the arbitrator has all the powers which the Court itself would have in deciding the issues in the suit. (ii) There is some force in the contention that in Seth 77iawardas Phemmal v. Union of India, the grant of interest for the pre-reference period was set aside and to this extent its authority remains unaffected by E the decision in Secretary Inigation Department v. G.C. Roy and that as the F reference was prior to the coming into force of the Interest Act, 1978, the award of interest for the pre-reference period was not justified. [146-F] (iii) That apart, this is not a lit case for the grant of interest from January 1, 1980. The arbitrator should have been guided by the terms of clause (5) of the deed of dissolution which envisages the grant of Interest G only from the date of valuation of the assets. At the same time, this cannot mean that the objectors can take advantage of the entire delay in valua· tion. Some reasonable margin of time should be allowed for this process. It would not be correct to mulct the objectors with interest at least till the lapse of a reasonable time by which a valuation of all the assets and H 124 SUPREME COURT REPORTS (1992] SUPP. 2 S.C.R. A assessments of the rights of respective parties under the deed have been undertaken. [146-G] B (iv) It will be reasonable and proper to direct the payment of interest from January 1, 1983 onwards. There is however, no reason to otherwise modify the award on the question of interest, either in regard to the rate of interest, or in regard to the addition of interest till the date of award to be principal amount determined as payable to the applicants which is permissible under section 34 CPC. The award on interest will be modified accordingly. [147-A] C Seth Thawardas Phenanai v. Union of India, [1955] 2 SCR 48 and Secretary Irrigation Department v. G.C. Roy, [1992] l SCC 508, referred to. Per B.P. Jeevan Reddy, J. (Concurring) 1. The decision in G.C. Roy's Case was concerned only with the D power of arbitrator to award interest pendente lite. It was not concerned with his power to award interest for the reference period. This was made clear at more than one place in the said judgment. [149-B] E F 2. It would not be correct to read the first of the five principles set out in para 43 of G.C. Roy's case, [1992] 1 SCC 508, 532-33, as overruling Jena's case in so far as it dealt with the arbitrator's power to award interest for the· pre-reference period. Principle No. (i) should be read along with principle No. (v) wherein it is clearly stated that the interest for the period anterior to the reference (pre-reference period) is a matter of substantive law unlike interest pendente lite. The conclusion in para 44 again deals with the power of the arbitrator to award interest pendente lite. It is, therefore, not right to read _the said decision as over ruling Jena's case in so far as it dealt with the power of the arbitrator to award interest for the pre-reference period. [151-G-H] G 3. So far as the instant case is concerned, it is a reference in a pending suit. In such a case, the arbitrator has all the powers of the court in the matter of awarding interest. [152-A] Secretary Irrigation Department v. G.C. Roy, [1992] l SCC 508 and Executive Engineer, Irrigation, Galimaia v. Abaaduta Jena, [1988] l SCR H 253, referred to and explained. JlJGAL KJSHORE t', VJJAYENDRA SHARMA [RANGANATHi\N. J.j 125 CIVIL APPELLATE JURISDICTION : Interlocutory Application A Nos, 10-16 of 1991, IN Civil Appeal No. 1763 of 1980, From the Judgment and Order dated 4.7.1980 of the Gujarat High Court in Civil Revision Application No. 887 of 1980. T.U. Mehta, H,S, Parihar, N.C. Shah and Kuldeep Parihar for the Appellants. B.K. Mehta, P,K, Manohar, Mukul Mudgal, SK Bisaria and Survesh Bisaria for the Respondents. The Judgment of the Court was delivered by B c RANGANATHAN, J. All these applications can be disposed of by a D common order. They arise out of awards given by an arbitrator appointed by this Court in C.A. 1763 of 1980, The applications mainly raise issues as to how far the awards should be made a rule of Court and can, therefore, be conveniently dealt with together. A brief resume of the broad facts of the case will help in appreciating the points debates before us. The controversy has arisen out of disputes in E the family of Prabhatilal Parashram Sharma (P.P,) which consisted of his wife Bhuribai, four sons - Jugalkishore Prabhatilal (J.P.), Vijayendra Prabhatilal (V.P.), Gnancndra Prabhatilal (G.P,) and Mukesh Prabhatilal (M.P.), and three daughters - Surajidevi, Kamaladevi and Chamdidevi. The F father (P,P.) died during the pendency of the proceedings whereupon the wife and daughters, inter alia, were impleaded as his legal representative" The widow has also subsequently died. The daughters have evinced no interest in this litigation which pertains to the assets and liabilities of a partnership firm run by P.P., J,P,, V.P. and G.P. M.P. was not a partner of the firm and was not even represented in the arbitration proceedings G initially, It was only after P.P. died that he was brought in as one of his legal representatives. An allegation was made before us that M.P. was a person of unsound mind with lucid intervals and that the award is vitiated by a non-consideration of hi<> righls and interests. However, there is no evidence to support, much less substantiate, the allegations as to his H A B c 126 SllPREME COURT REPORTS [1992] SUPP. 2 S.C.R. incompelence except a general allegation. Moreover, he is represented before us hy L:OUnsel, Shri Bisaria, who states that he has no objections to the award and that he supports the stand of J.P. in these proceedings. In the result, the disputes are between P.P. and J.P. (who seek to have the awards made the rule of court except on two or three issues) on the one hand and V.P. and G.P. (who seek to have the awards set aside in material respects) on the other. P.P. and J.P. - of whom P.P. has since died - are hereinafter referred to as 'the applicants' and V.P. and J.P. as 'the objectors'. This is the first important aspect to be taken note of. The second essential aspect is that the issues in controversy before us have narrowed down considerably. The firm in which P.P., J.P., V.P. and G.P. were partners was carrying on business under two names and styles: viz. Variety Body Builders and Variety Engineers. It had two factories, the latter at Maneja and the former at Pratapnagar. The dispute between the two groups was in regard to the equal division of the assets and liabilities of the two businesses on the retirement of P.P. and J.P. from the firm as per D the terms of a "deed of dissolution" dated 31.12.1979 executed by and between the partners. This was the subject matter of Civil Suits Nos. 194, 510 and 584 of 1980. When one of the interim orders came up before this Court in C.A. 1763 of 1980, this Court suggested that the disputes be settled by arbitration. This suggestion was accepted and the parties agreed that E F G H the "subject matter of the three suit> as well as disputes relating to the dissolution deed" be referred to the arbitration of Shri A.A. Dave a retire Judge of the Gujarat High Court. After some time, Shri Dave was succeeded by Shri A.O. Desai, another retired Judge of the High Court of Gujarat and the latter was succeeded by Shri N.M. Miabhoy, a retired Chief Justice of the Gujarat High Court, who eventually completed the arbitration and made two awards : one, an interim award dated 22-2-91 and the other, the final award dated 18-7-91. The parties are agreed that the Pratapnagar factory should be taken over by the applicants and the Maneja factory by the opponents. About this broad division, there is no dispute. The controversy at present is restricted to the following i5'ucs : A. Valuation by the arbitrator of the land, raw materials and semi-finished goods at the two factories; B. The interpretation by the arbitrator of the terms of the deed of dissolution as to which of the parties should bear certain outstanding liabilities; .JUGAL KJSHORE v. VJJAYENDRA SllARMA !RANGANATHAN, l.! 127 C. Certain findings of the arbitrator in regard to allegations of falsification of accounts and payments to traders and depositors; D. Some arithmetical errors said to have crept into the award; and F. Liability to pay interest. We shall deal with these issues one after the other. A. VALUATION (a) LAND: The arbitrator has fixed the value of the lands at Pratapnagar A B c at Rs. 25 pet sq. ft. and that of the lands at Maneja at Rs. 4.50 per sq. ft. These were the values ascribed to the lands in the report of Sri Punambhai Patel, a Government recognized valuer, who, by consent of parties, had been asked to submit a report in this regard. According to the objectors, D the value of the lands at Maneja should not have been taken at more than Rs. 3 per sq. ft.; on the other hand, it is urged, that the lands Pratapnagar should have been valued at Rs. 58 per sq. ft. These were the figures suggested by an expert witness (Shri Jaiswal) examined by them. Prima facie, the question of such a valuation would be a question of fact and this Court would be loth to interfere with a finding of fact by the arbitrator. Shri B.K. Mehta, appearing for the objectors, however, seeks to coat this finding with a legal hue by urging that, in determining the values which he did for these lands, the arbitrator has just adopted the figures set out in the report of Punambhai Patel. In doing this he has erred in law on two counts : (i) he seems to think that Patel, being a "Government" valuer, his report was binding and conclusive; and (ii) he has accepted the report without examining the said P.D. Patel as a witness, notwithstanding an application therefor on behalf of his clients, and giving them an opportunity of cross-examination. These two errors, according to him, vitiate the valuaE F tion arrived at by the arbitrator. Learned counsel cited passages from Russel on Arbitration to the effect that the provisions of the Evidence Act G are applicable in arbitration proceedings and that the report of an expert witness is not admissible in evidence by the arbitrator unless the witness is orally examined and the parties given an opportunity to cross-examine him on his opinion, irrespective of whether the parties made a specific request for such examination or not. He also cited the decisions in U.P. Hotels and H 128 SUPREME COURT REPORTS fl992J SUPP. 2 S.C.R. A others v. U.P. State Electricity Board, [1989J l S.C.C. 359; Ahmedabad Municipality v. Shanti/al, A.1.R. 1961 Guj. 196; Payyavula Vengamma v. Pa;yavula Kesanna and Ors., [1953] 4 S.C.R. 119 and Penimal Mudaliar v. S.I. Railway Co., I.LR. 1937 Mad. 764 in this context. B c Having perused the award and heard Shri T.U. Mehta, counsel for the applicants, we ar.e of opinion that this contention cannot be upheld having regard to the sp~cial circumstances of this case. In the first place the report of Patel was taken on as an exhibit with the consent of both parties and without reservations of any kind. It did not therefore, need formal proof by producing the expert as a witness. Secondly, the irony of the situation is that, at the stage of the proceedings before the arbitrator, it was the applicants who felt aggrieved by the Patel report and made an application for having him summoned for cross-examination. The objectors did not make any such request. The request of the applicants was rejected and there counsel states before us that he did not take up the issue further D before this Court as he was anxious to have the. arbitration proceedings (which had been pending for several years with a number of arbitrators succeeding one another) come to an early conclusion. The silence of the objectors at that stage indicates that they were not interested in challenging the basis of the report of Patel by exami:iing him, particularly as they were E F G examining Sri J aiswal as an expert on their behalf. The present objection is raised only as a belated technical objection in an attempt to upset the award on this point and revive the arbitration proceedings. Thirdly, the deed of dissolution itself stipulated that the assets should be got valued by a Government approved valuer and, though perhaps it was not intended, as Sri T.U. Mehta suggested, that such valuer's report was to be conclusive, it seems the parties really had no tangible basis for challenging his opinion on merits. The applicants had decided to lead oral evidence as to instances of other sales in the locality to support their plea and the opponents had decided to contest Patel's report by putting in their own "expert" (Jaiswal) into the box. Finally, a perusal of the award shows that, though the arbitrator has made references to the report of Patel and its objectivity, he has indicated sufficient grounds for fixing the values in the manner he has done. Briefly speaking, he rejected the instances of sale cited by the applicants. So far as J aiswal was concerned, he found that there was not much difference between the "base" value for lands in the locality suggested by Patel (Rs. 25) and Jaiswal (Rs. 30). He found that the gound given by H Jaiswal for additions thereto were not tenable and as between the base JUGAL KJSHORE v. VIJAYENDRA SHARMA [RANGANATHAN, J.] 129 value of Rs. 25 and Rs. 30, he has accepted the former. He has also given A reasons for preferring Patel's valuation of Rs. 4.50 in preference to Jaiswal's valuation of Rs. 2 in respect of the Maneja lands. We are satisfied that the arbitrator has, in the circumstances, acted on proper material in fixing the value of the lands at Pratapnagar as well as Maneja and that his award in this respect has to be upheld. Shri B.K. Mehta also made a grievance that the arbitrator misconducted the proceedings by shifting their venue to Baroda a> a result of which the objectors' old counsel could not appear for them and by denying an opportunity to V.P. to give evidence in the case by rejecting his application for adjournment for this purpose on the ground of illness. We find that the shifting of the venue to Baroda was acquiesced in by both parties and there is a record by the arbitrator to this effect. So far as the request for the oral evidence of V.P. is concerned, it was made at a belated stage after the parties had agreed to have day to day proceedings and to avoid adjournments. Also V.P. wanted to give evidence primarily regarding valuation of immovable properties; on this, B c the objectors had already examined their expert and the Government D valuer's report was also on record. In this situation and having regard to the fact that limitation for giving an award was drawing to a close, the refusal to grant an adjourmnent to enable V.P .. to appear and depose cannot be characterised as misconduct. We, therefore, see no substance in this objection. B. RAW MATERIALS AND SEMI-FINISHED PRODUCTS (i) This topic has been discussed by the arbitrator at very great length E as issue Nos. 3 (c) and 6. He has meticulously gone into the accounts, inventories and other materials placed before him. It is not the province of F this Court to delve into the details and examine whether the opponents' objections in various items thereof and their genuineness or correctness should have been accepted or not. The principal contention of the objectors in regard to this item that can be taken note of is that the arbitrator has committed an error in wholly ignoring admissions made by the applicants in the written statement filed by them in Special Suit No. 194/80 G on the file of the Court of the Civil Judge (Senior Division) Baroda and also in Special Leave Petition (Civil) No. 6168 of 1980 before this Court. We find that, before the arbitrator, the contention of the objectors \Vas based only upon the petition for special leave before the Supreme Court referred to above. We do not know whether before the arbitrator, the H • 130 SUPREME COURT REPORTS [1992] SUPP. 2 S.C.R. A written statement in Special Suit No. 194 of 1980 was exhibited and whether, the arbitrator was made aware of the written statement and his attention invited to the alleged admission therein. This contention appears to have been taken for the first time only in the objections taken to the award. This cannot be permitted. So far as the reference to the Special Leave Petition B c is concerned, the arbitrator has dealt with the objection in his award. He has pointed out that J.P. had filed a suit against V.P. seeking an injunction restraining him, inter a/ia, from despatching the equipment, the finished and semi-finished goods which were lying in 'Variety Body Builders and Variety Engineers' and also seeking an interim injunction. The inte1im injunction was granted by the Civil Judge but this order was upset in revision. It is against this order of the High Court that the Special Leave Petition had been filed. The averments in the Special Leave Petition and its supporting affidavit were based on the figures of valuation contained in an inventory drawn up on 1.l.1980 (Exhibit 7112). The opponent contends that the fact that this exhibit was relied upon in the Special Leave Petition D itself constitutes an admission as to the correctness of, and the applicants' acquiescence in, the figures contained therein. We are unable to agree. As rightly pointed out by the arbitrator, the Special Leave Petition was only directed against the order vacating the interim injunction granted by the trial court in favour of V.P. J.P.'s plea E was that there were finished and semi-finished goods of high value lying in the factory and that V.P. and his group should be restrained from alienating these properties. It is in this context that exhibit 71/2 was filed to indicate that the valuation of the finished and semi-finished goods was approximately to the tune of Rs. 18.98 lakhs. There was dispute between F the parties as to whether the statement in Exhibit 71/2 was an agreed statement or not. According to J.P., Exhibit 71/2 had been received by him only subject to verification and .checking and that he had at no point of time accepted the valuations placed in this document as correct. This contention has been accepted by the arbitrator. But that apart, as pointed out by the arbitrator, the mere fact that J.P. relied upon the valuation given G in Exhibit 71/2 for purposes of seeking an injunction against V.P. from alienating any of the goods cannot be taken as an admission on his part as to their value. For the purposes of the Special Leave Petition, it was sufficient for him to go by the value contained in the inventory. The arbitrator was free to go into the whole question and determine the H JUGAL KISHORE v. VIJAYENDRA SHARMA [RANGANATHAN, J.] 131 valuation independently. This objection is, therefore, without substance. A (ii) The second important objection in regard to this issue is that the applicants' valuation, based on Ext. 576, an inventory made out by their storekeeper, of raw materials at Maneja should not have been accepted and the objectors' contention, that some of the items mentioned in Ext. 576 were items of material issued free by the Government of India to enable the objectors to execute their contract with the Department of Atomic Energy and the rest were non-existent, should have been accepted. This raises purely a question of fact and we see no reason to interfere with the reasoned findings of the arbitrator on this issue. We have mentioned this item only as there is an allied issue raised in this regard by the parties. The objectors' submit that the value of the materials issued free should be valued 'at nil. On behalf of the applicants, on the other hand, it is pointed B c out that certain items of lead issued free and in their possession have been valued by the arbitrator at Rs. 14 per kg., while similar items of lead in the possession of the applicant have been valued at Rs. 8 per kg. It is suggested that this is a patent error which needs to be rectified. We see no substance D in these objections. The arbitrator has pointed out that, so far as the items in possession of the objectors' are concerned, there was no rate mentioned in Ext. 576 and the figure of Rs. 14 per kg. was agreed to by both parties. Again, so far the lead in the possession of the applicants is concerned, the applicants had themselves valued it at Rs. 8 per kg. There is nothing before us to indicate the nature of the material in question and there is no explanation as to why the applicants who placed no value on the same item in the possession of the objectors valued the lead in their possession at Rs. 8. In the circumstances there is no reason to interfere with the arbitrator's conclusions on these issues. C. INTERPRETATION The objection based on the interpretation of the dissolution deed relate to four issues : (i) Bank liabilities; (ii) Gratuaity; bonus, P.L. and medical facilities; (iii) Liability of advance against the order received from the Department of Atomic Energy; E F G H A 132 SUPREME COURT REPORTS [1992] SUPP. 2 S.C.R. (iv) Excise liability. To appreciate the points at issue, it is necessary to set out the terms of the deed of dissolution to the extent relevant in this present context. This document, dated 31.12.79, is described as a "deed of retirement from B partnership", but, as rightly pointed out by Shri B.K. Mehta, nothing really turns on this label and there can be no doubt, on a persual of the document, that it really sets down the terms and conditions on which the assets and liabilities of the business carried on by the firm were to be divided between the two groups of partners. The deed is a carefully thought out document with its clauses set out in a logical sequence; only, not apparently being a C deed drafted by lawyers, its language in some places is not very felicitous. Clauses (1) to (4) set out the partners' shares and the decision, consequent on the applicants' severance from the firm, that the applicants should take over the factory at Pratapnagar and the objectors that at Maneja. Clauses (5) and (6) set out the mode of division of the land, buildings, machinery, D outstandings and other assets including goodwill. Clauses (7), (8) and (9) make provision in respect of certain specific items. Clauses (10) and (11), read with clause (12), deal with the apportionment of the firm's liabilities towards depositors and traders. Clause (13) deals with the books of account. Clause (14) makes a special provision in respect of the bank accounts of the firm. Clause (15) deals with vehicles and clause (16) with E residential premises. Clause (17) makes provision in respect of dues to workers and employees. Clauses (18) to (20) make special provision generally in respect the orders pending with the firm and in particular with the execution of a contract taken by the Maneja firm with the Department of Atomic Energy, an advance taken in respect thereof and a bank guaranF tee executed for its due performance. Clause (21) provides for mutual cooperation between the two groups. Clause (22) stipulates a 50 : 50 apportionment of all "debts and credits and expenses etc.'' and permits J.P. to attend to all income-tax matters of the firm in relation to the period prior to 31.12.79. This is the broad outline of the deed and we shall refer later to the relevant terms of specific clauses relied upon in respect of G specific issues. The broad contention urged on behalf of the ~bjectors is that despite the obvious scheme of the dissolution deed to bifurcate equally all the assets and liabilities of the firm, the arbitrator has burdened the objectors exclusively with certain liabilities which should also be borne by the applicants and divided certain asset which should have come only to H them between both groups. It is prayed that this imbalance should be set JUGAL KISHORE "· Vl.IAYENDR/\ SHARMA [RANGANATHAN, J.] 133 right. As already mentioned, the grievance relates to four items of apporA tionment. Of these, the plea regarding liability towards excise duty has not been pressed and we shall proceed to consider the other three : (i) Bank liabilities : Clause 11 of the deed of dissolution reads thus : "(11) The 50% of the amount payable to.the traders shall be the responsibility of partners No. (1) and (2) to pay and 50% responsibility is of partners No. (3) and (4) to disburse and the selection of own traders shall be made by the partners No. (3) and (4) and whereas the responsibility of the paying the dues of the Central Bank is undertaken by partners No. (3) & (4) and that responsibility of paying the dues of the Maharashtra Bank is undertaken by partners No. (1) and (2)." [underlining added] B c D Under this clause, the responsibility of paying the dues of the Central Bank has been undertaken by the objectors and the responsibility of paying the dues of the Maharashtra Bank by the applicants. Clause 14 of the deed reinforces this. It reads thus: "(14) Parnters No. (3) & (4) have to operate the accounts of the Central Bank and they have accepted the responsibility for the same and for that purpose any consent of signature is required, partners No. (1) and (2) shall do so. Partners No. (1) & (2) have to operate the accounts of the Bank of Maharashtra and they have accepted the responsibility for the same and for that purpose any consent-signature is required, partners No. (3) & (4) shall do so." It is the application of these clauses to the factual situation that has given rise to a dispute. E F The factual position in this reg •rd is as follows : The objectors have G discharged the debts which the er>· ile firm owed to the Central Bank but the liabilities in favour of Bank ,faharashtra have not been cleared by the applicants. The bank has focd three suits against the erstwhile partnership impleading both groups of members as parties therein. The arbitrator has, in view of the terms of clause 11, directed that as and when H • 134 SUPREME COURT REPORTS fl992] SUPP .. 2 S.C.R. A a decree happens to be passed against the dissolved firm and its erstwhile partners in the suits filed by the bank, the applicants will be liable to discharge those decrees and if a»y part thereof happens to be recovered from the opponents, they should be reimbursed to the extent of the amount so recovered from them. So far as this direction is concerned, there is no B quarrel. However, it was found that the debts due to the Central Bank, which the objectors have cleared, are in excess of the debts due to the Bank of Maharashtra. The objectors raised a claim before the arbitrators that the bank liabi'ities are to be borne equally by both groups .and that 50% of the excess of the dues of the Central Bank over those of the Bank of Maharashtra should be borne by the applicants. The arbitrator has negaC tived this claim. Shri B.K. Mehta submits that the arbitrator's finding proceeds on an erroneous interpretation of the deed of dissolution. He contends that the rights of parties in this regards are covered by clause (22) D E F G of the deed of dissolution. The clans