Case Note & Summary
The dispute arose between two real brothers, Balwant Singh and Dungar Singh, after the death of their father Jeet Mal Jain regarding partition of family properties. They appointed three arbitrators, who were close relatives, by agreement dated 23.11.1981. The arbitrators passed an award on the same day, partitioning immovable properties, jewellery, shares, and other assets. Dungar Singh filed an application to make the award rule of the court. The District Judge dismissed the application, holding that the award was passed hurriedly and was not clear. On appeal, the High Court reversed, holding that no misconduct was alleged and the award was valid. The Supreme Court upheld the High Court's decision, noting that the parties had consented to the arbitrators and submitted their claims. During the appeal, the parties further settled certain items: in lieu of 50% of jewellery (40 tolas), Balwant Singh's legal representative agreed to pay Rs.10,00,000/- within nine months, with 9% interest if delayed; the land in Khasra No.15/1Ka sold by Balwant Singh would be litigated by Dungar Singh's legal representatives at their cost; and other adjustments were made. The Supreme Court modified the award accordingly and disposed of the appeal.
Headnote
A) Arbitration Law - Validity of Arbitral Award - Section 39(1)(6) Arbitration Act, 1940 - Award passed by close relatives of parties on same day of reference - Held that mere passing of award on same day does not raise suspicion; no misconduct alleged; award valid and enforceable (Paras 6-7). B) Arbitration Law - Modification of Award by Consent - Section 39(1)(6) Arbitration Act, 1940 - Parties during appeal agreed to modify award regarding jewellery and land - Held that with consent, award can be modified to reflect settlement (Paras 7-10).
Issue of Consideration
Whether the arbitral award passed by close relatives of the parties on the same day of reference is valid and should be made rule of the court, and whether the award can be modified by consent of parties during appeal.
Final Decision
The Supreme Court upheld the High Court's order making the award rule of the court, but modified the award in terms of the further settlement between the parties. The appeal was disposed of with directions as per the modified award chart.
Law Points
- Arbitration Act
- 1940
- Section 39(1)(6)
- Arbitral award by close relatives
- Validity of award passed in one sitting
- Modification of award by consent
- Family settlement
