ABDUL KADIR SHAMSUDDIN BUBERE versus MADHAV PRABHAKAR OAK

Citation: [1962] 3 S.C.R. 702 · Decided: 20-09-1961 · Supreme Court of India · Bench: K.N. WANCHOO · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

702 
SUPREME OOURT REPORTS 
(1962] 
ABD"C'L KADIR SHA!lfSUDDIN BUBERE 
v. 
MADHAV PRABHAKAR OAK 
IK. N. WANCHOO, K. C. DAS GUPTA and 
J. c. SHAH, JJ.) 
Arbitrction-All pmon8 intemled in the .ubject matter of 
di8pule Mt made parti-.-lf diapule could be referred to 
arbitration-Aaking for accounts-ff amounts lo a/legation of 
fraud-Arbitration Act, 1940 (X of 1940), 8. 20. 
An agre<ment with regard to a forest was entered into 
between B the appellant and 0 and A the respondents. Apart 
from 0 and A another person was also interested in the said 
forest. 
The said agreement mentioned other earller agree· 
ments enterer! into with regard to the said forest. 
The 
cperative part of the agreement wa~ in lhesc terms:-
Should there be a dispute between the partie• in 
connection "·ith this aQ'.reemcnt or in connection with 
the a~reements dated 22.10.19~8 and 5.5. 1952 or regard• 
;ng Khan Bahadur Divakar's money or the Jungle cut· 
tin~ or export or in any other way, the same should be 
got decided in accordance with the current law by 
appointing arbitrators and through them." 
Disputes arose between B the appellant and respondents O 
and A. 
T!-e respondents filed an application under s. 20 of 
the Arbitration Act for reliers including accounts and appoint· 
rr.en t of receiver. 
' 
The application was opposed by B the appellant on the 
~rounds inter alia that as one of the person who had an 
interest in the forest \\•as not a party to the application, there 
could be no reference to the arbitration, as the whole dispute, 
as to the forest would not be before the arbitrator and furthrr, 
as there were allegations of fraud that was a ground· for not 
referring the d~spute to arbitration. 
/leld, that 'where parties entered into an arbitration 
agreement, knowing fully well that there was another person 
"·ho v..·as interested, but leaving him out, then the court 
should send the parties to the forum chosen by them, even if 
the other pt-rson \'.'ho r.iight be interestcr.I, and 
\vho~e share 
was not in dispute, could not be made party before the arbit-
rator. 
Where tli. share of a person, not a party before the 
arbitrator, was not in dispute, there could not be any bar to 
referrinll the dispute to arbitration on the ground that the 
whole dispute was not before the arbitrator. The arbitrator 
would decide the dispute between the parties before hil"I •nd 
..• 
...
3 S.C.R. 
SUPREME COURT REPORTS 
703 
give an award leaving out the share of the person who was 
not a party before him. 
Held, further, that when serious alle1<atiom of fraud 
were made against a party and the party w'io was charged 
with fraud desird that the m'tter should be tried in open 
court, t11at w0uld be a sufficient cause for the court not to 
Qrder an arbitration agreement to be filed and not to make a 
rCference. 
But it was not every a1legation imputing some kind 
of dishonesty particularly in matter' of accounts alleging that 
they were not correct or certain items were exaQgerated or 
allegations tending to suggest or imply moral dishonesty or 
moral misconduct in the matter of keeping accnunts that 
would amount to such serious allegations of fraud as would 
impel a court to refuse to order the arbitration agreement 
to be.filed and refuse to make a reference and to take 
the matter out of the forum which the parties themselves had 
chosen. 
In the presen ~ case, it cannot be said that the reference 
desired was piecemeal and split up the cause of action. 
The 
dispute raised was covered by the arbitration clause, and 
there was no such serious allegation of fraud as would be 
sufficient for the co·1rt ti) 
say 
that 
ther.~ was sufricient 
cause for not referring the dhpute to arbitration. 
Obiter. 
The pleadings in Mufassil courts could not be 
considered too strictly. 
· 
Russel v. Russel, [1880j I+ Ch. D. 471, discussed. 
Charle• Osention and company v . .John•fon, r1942] A. C. 
130, Maharajah Sir Maniwlra Ohnndra Nandu v. H. V. Low&: 
no., Ltd. A.I.R. 1924 Cal. 796, Narsingh Prasad BoobM v. 
Dhanrai Mills, l.L.R. (1942) 21 Pat. 544, Union of India v. 
Firm Vishvadha Ghee Vyopar Mandal, I. L. R. (19S3) 1 All. 
423, Sudhangsu Bhattacharjee v. Ruplekha Pictures, A LR. 
1954 Cal. 281 a~d Manif1:a v. '!!he 
Railwau Pa.sengers Assur-
ance Go. (1881) 44 L. T. 552, referred to. · 
CrVIL APPELLATE JURISDICTION: Civil Appeal 
No. 30.3 of 1958 . 
. Appei>l from the judgment and decree. dated 
April 14/15,1955 of the Bombay Hi"h Court in 
Appeal fro

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