# DEWAN SINGH v. CHAMPAT SINGH & ORS

- **Citation:** [1970] 2 S.C.R. 903
- **Court:** Supreme Court of India
- **Decided:** 1969-10-17
- **Case number:** CIVIL APPELLATE JURISDIC1ION: Civil Appeal No. 1369 of 1966
- **Bench:** J. C. Shah, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dewan-singh-v-champat-singh-ors-4881
- **Pages:** 5

## Headnote

Limitalion Act (9 of 1908), Art. 158-Limitation for setting midc
awGrd-Co1nnJence1nent of-Decide in '1vluttever manner' he 1nay thinkWhether enables arbitrator to ilnport personal knowledge-High Court
txerclsing revisional powers-Discretion of Supre1ne Court to interfere in
appe3l by special leave uttder Art. 136.
Disputes between the appellant and the first respondent were re'erred
to five arbitrators as per the agreement entered into between the parties.
The agreement provided that the decision could be arrived at by the arbi·
trators 'in Vlhatever manner' they think. The arbitrators made their award,
on the basis of their personal knowledge.
The appellant filed a suit for
passing a decree in terms of the award on November 1, 1955. Though
the respondents bad notice of the suit, they had no notice of the filing of
the award into court. The respondent filed his written statement
on
February 3, 1956, challenging the validity elf
the
award
on certain grounds. While the first appellate court held that the arbitration
agreement empowered the arbitra~'Jrs to import their personal knowledge,
the High Court, in revision held that it did not so empower, tha~ the award
was vitiated by legal misconduct, and that the objection to the award by
the respondent was not barred by time.
In appeal to this Court,
HELD: (1) Article 158 of the Limitation Act, 1908, gives to the
party 30 days time for applying to set aside an award from the date of tlie
service of the notice of filing of the award. Since there !was no such notice,
the objection by the respondent was within time. [905 G-H]
(2) Parties to an agreement of .. eference may include in it such clauses
as they think fit, except those prohibited by law, but the phrase 'in whatever manner' they think does not mean that the arbitrators can decide the
disputes on the basis of their personal knowledge. Further, arbitrators
must act in accordance with the principles of nature1_ justice, and inform
the parties to the submission about the nature of their persoal knowledge
but in the pre;ent case, it was not done so. [906 F-G; 907 A-B, C-E]
C/umdris v. I>-brandtsen Moller Co. Inc., [!951] K. B. 240, referred to.
(3) The decision of the High Court being eminently just, this Court
will not interfere with it under Art. 136 of the Constitution, assuming that
the High Court, in exercise of its revisional powers, could not have correct·
ed the first appellate court's interpretation.
CIVIL APPELLATE JURISDIC1ION: Civil Appeal No. 1369 of
1966.
Appeal by special leave from the judgment and order dated
September 11, 1962 of the Allahabad High Court in Civil Revision
No. 653 of 1959.
904
SUPREME COURT REPORTS
[1970] 2 s.c.R.
G. N. Dikshit, 0. P. Saini and Lakshmi Chand Tyagi, for the
appellant.
J. P. Goyal and S. N. Singh, for the respondents.

## Text

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903
DEWAN SINGH
v.
CHAMPAT SINGH & ORS.
October 17, 1969
[J. C. SHAH AND K. S. HEGDE, JJ.]
Limitalion Act (9 of 1908), Art. 158-Limitation for setting midc
awGrd-Co1nnJence1nent of-Decide in '1vluttever manner' he 1nay thinkWhether enables arbitrator to ilnport personal knowledge-High Court
txerclsing revisional powers-Discretion of Supre1ne Court to interfere in
appe3l by special leave uttder Art. 136.
Disputes between the appellant and the first respondent were re'erred
to five arbitrators as per the agreement entered into between the parties.
The agreement provided that the decision could be arrived at by the arbi·
trators 'in Vlhatever manner' they think. The arbitrators made their award,
on the basis of their personal knowledge.
The appellant filed a suit for
passing a decree in terms of the award on November 1, 1955. Though
the respondents bad notice of the suit, they had no notice of the filing of
the award into court. The respondent filed his written statement
on
February 3, 1956, challenging the validity elf
the
award
on certain grounds. While the first appellate court held that the arbitration
agreement empowered the arbitra~'Jrs to import their personal knowledge,
the High Court, in revision held that it did not so empower, tha~ the award
was vitiated by legal misconduct, and that the objection to the award by
the respondent was not barred by time.
In appeal to this Court,
HELD: (1) Article 158 of the Limitation Act, 1908, gives to the
party 30 days time for applying to set aside an award from the date of tlie
service of the notice of filing of the award. Since there !was no such notice,
the objection by the respondent was within time. [905 G-H]
(2) Parties to an agreement of .. eference may include in it such clauses
as they think fit, except those prohibited by law, but the phrase 'in whatever manner' they think does not mean that the arbitrators can decide the
disputes on the basis of their personal knowledge. Further, arbitrators
must act in accordance with the principles of nature1_ justice, and inform
the parties to the submission about the nature of their persoal knowledge
but in the pre;ent case, it was not done so. [906 F-G; 907 A-B, C-E]
C/umdris v. I>-brandtsen Moller Co. Inc., [!951] K. B. 240, referred to.
(3) The decision of the High Court being eminently just, this Court
will not interfere with it under Art. 136 of the Constitution, assuming that
the High Court, in exercise of its revisional powers, could not have correct·
ed the first appellate court's interpretation.
CIVIL APPELLATE JURISDIC1ION: Civil Appeal No. 1369 of
1966.
Appeal by special leave from the judgment and order dated
September 11, 1962 of the Allahabad High Court in Civil Revision
No. 653 of 1959.
904
SUPREME COURT REPORTS
[1970] 2 s.c.R.
G. N. Dikshit, 0. P. Saini and Lakshmi Chand Tyagi, for the
appellant.
J. P. Goyal and S. N. Singh, for the respondents.
The Judgment of the Court was delivered by
Hegde, J. This appeal by special leave arises from an arbitration proceeding.
The appellant, the 1st respondent and one
Sukh Lal who died during the pendency of these proceedings
referred their disputes to five arbitrators as per the written agreement executed by them on September 9, 1955. Arbitrators made
their award on October 11, 1955.
They duly served on the
parties to the arbitration agreement, notice of making and signing
. the award.
The award was thereafter registered... On November 1, 1955 the appellant filed a suit in the court of Munsiff
Hawaii Meerut praying that the award in question be made a rule
of the court and decree passed in accordance with the same.
It
is said that the notice taken in that suit could not be personally
served on the defendants as they refused to accept the same. That
fact was reported to the court by the process server as per his
report dated 19-11-1955.
Thereafter the defendant£ filed their
"ritten statement on February 3, 1956 wherein they challenged
1~.e validity of the award on various grounds.
They contended
that the award was vitiated because of misconduct on the part of
tlle arbitrators inasmuch as the arbitrators decided the. disputes
referred to them primarily on the basis of their personal knowledge.
They also contended that the arbitration agreement was
)btained from them by exercise of undue influence.
Their further
coi..'.'ntion was that the subject matter of the. dispute could not
under law be referred to arbitration in view of the pre.visions of
U.P. Act 1 of 1951. It was also contended by them that the suit
was barred by time.
The trial court accepted the contention of the defendants that
the arbitrators were guilty of misconduct.
Dealing with the issue
of undue influence, it came to the conclusion that the arbitration
agreement was not executed by the defendants according to their
free will.
But it held that the plea of undue influence was noI
made out.
It upheld the contention of the defendants that the
subject mailer of the dispute could not have been referred to arbitration in view of the provisions of U.P. Act 1 of 1951.
In appeal the learned Civil Judge reversed the decree of the
trial court.
While agreeing with the trial court that the arbitra-
. tors had used their personal knowledge in deciding the disputes
referred to them, that court held that under the terms of the
agreement, it was open to the arbitrators to decide the disputes in
question on the basis of their personal knowledge.· Dealfog with
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DEWAN SINGH V. CHAM PAT SINGH (Hegel<', J.)
90 O'
the question of the arbitrators' competence to decide the disJ?utc.
that court held that the question whether the dispute came withrn
the scope of U.P. Act I of 1951 or not is a question of law and
the same could have been referred to arbitration.
It went further
and held that as the defendants had not taken their objection to
the award within the time prescribed, the same could not have
been entertained by the trial court.
The High Court in revision differed from the appellate court
on all the points mentioned above. It came to the conclusion
that the arbitration agreement did not specifically empower the
arbitrators to decide the disputes referred to them on the basis of
thdr personal knowledge; they having utilized their personal knowledge in deciding the disputes, they were guilty of legal misconduct and consequently the award made by them is vitiated. It
also came to the conclusion that the disputes in question could
not have been referred to arbitration in view of the provisions ol"
U.P. Act I of 1951.
It overruled the decision of the appellate
court that the defendants had not taken their objections to the
award within the prescribed time.
We may at this stage mention that the contention that the suit
was barred by time was not pressed before the trial court or in
any other court.
There is no basis for the finding of the appellate court that the
objection taken by the defendants to the award was
barr~ by
time.
As seen earlier, the suit to make the award a rule of the
court was brought by one of the parties to the arbitration agreement and not by any arbitrator.
The plaint filed does not .disclose that the award given had been produced along with it. There
was some controversy as to whether that award was produced
along with the plaint.
There is no need to go into that question
as we shall presently see. It is not said that along with the plaint
copy, a copy of the award had been sent to the defendants.
Nor
is it said that notice of the suit sent to the defendants mentioned
the fact that the award had been filed into court along with the
piaint.
Art. 158 of the Limitation Act, 1908 gives to party 30
days fone for applying to set aside an award or get an award
remitted for reconsideration from the date of the service of the
notice of filing of the award.
There is absolutely no proof in this
case that a notice of the filing of the award into court had ever
been given to the defendants.
Hence the objections taken by the
defendants to the award could not have been rejected on the
ground of limitation.
Now coming to the question of misconduct on the part of the
arbitrators, that allegation is founded on the fact that the arbitrators decided the disputes referred to them on the basis of their
906
SUPREME COURT REPORTS
[1970] 2 S.C.R.
personal knowledge.
That allegation has been accepted as lfUC
both by the trial court as well as the· appellate court. In fact the
award says:
"We gave our consideration to thr. entire dispnte
which is in full knowledge of us, the panchas".
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Therefore there is hardly any room to contest the allegation that
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the arbitrators had decided the disputes referred to them primarily
on the basis of their personal knowledge.
Uader these circumstances all that we have to see is whether the appellate court was
right in concluding that under the arbitration agreement, the arbitrators had been empowered to decide the disputes referred to them
on the basis of their personal knowledge.
c
The material portion of the arbitration agreement which is in
Hindi translated into English reads thus :
"All the panchas and S,arpanchas are residents of
village Keli Pargana Sarawa. The power is given to
them that the said Panchas and Sarpanch, whatever
decision, in whatever manner will give in relation to our
land described below, whate·•er land may be given to
any party or whatever party may be decided to be the
tenant of the entire land, whatever compensation they
may decide to be given to any party, whatever decision
they will give that will be final and acceptable and they
will have the right to inform us of their decision.
unanimous or of majority and get the same registered
and we will fully comply with their decision."
This agreement does not empower the arbitrators either specifically or by necessary implication to decide the disputes referred
to them on the basis of their personal knowledge.
The recital in
that agreement that the arbitrators may decide the disputes
.referred to them in "whatever manner" they think does not mean
that they can decide those disputes on the basis of their personal
khowledge.
The proceedings before the arbitrators are quasijudicial proceedings.
They must be conducted in accordance
with the principles of natural justice.
The par\ies to the submission may be in the dark as regards the personal knowledge of the
arbitrators. There may be ~cdnceptions or wrong assumptions
in the mind of the arbitrators, If the parties are not given opportunity to correct those misconceptions or wrong assumptions.
grave injustice may result.
It is no body's case_that the parties to
the submission were informed about the nature of the personal
knowledge, the arbitrators had and that they were given opportunity to correct any misconception or wrong assumption. Further
in the present case there were as many as five arbitrators. It is
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DEWAN SINGH v. CHAMPAT SINGH (Hegde, J.)
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not known whether the award was made on the basis of the personal knowledge of all of them or only some of them.
Arbitration
is a reference of a dispute for hearing in a judicial manner. It is
true that parties to an agreement of reference may include in it
such clauses as they think fit unless prohibited by law.
It is normally an implied term of an arbitration agreement that the arbitrators must decide the dispute in accordance with the ordinary
law--see Chandris v. Jsbrandtsen Moller Co. Inc(').
That rule
can be departed from only if specifically provided for in the submission.
The appellate court, in our opinion, has misread the arbitration agreement and hence it erroneously came to the conclusion
that the arbitrators had been empowered to decide the dispute on
the basis of their personal knowledge.
It was contended on behalf of the appellant that in exercise of
its powers under s. 115 of the Code of Civil Procedure, the High
Court could not have corrected the erroneous interpretation placed
by the appellate court as to the scope of the arbitration agreement.
We have not thought it necessary to go into that question as, in
our opinion, the decision reached by the High Court is an eminent1:t: just .one.
Hence we do not feel called upon in exercise of our
discreuonary power under Art. 136 of the Constitution to interfere with the decision of the High Court. In view of our above
conclusion, there is no need to go into the quesiion whether the
subject matter of the disputes could have been referred to arbitration.
In the result this appeal fails and the same is dismissed with
costs.
V.P.S.
Appeal dismissed.
(!) (1951] K.B. 240.