JUGAL KISHORE PRABHATILAL SHARMA AND ORS. versus VIJAYENDRA PRABHATILAL SHARMA AND ANR.

Citation: [1992] SUPP. 2 S.C.R. 118 · Decided: 22-10-1992 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Disposed off
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Judgment (excerpt)

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 arbitra-
tion 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 arbitra-
tion 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 fimi-
Reports of Govemn1ent recognised valuer and expen valuer-Consideration 
of by arbitrator-Arbitrator-Whether entitled to accept report witho11t examin-
ing 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 or<lers passed therein came up before this Court, this 
Court suggested that the disputes be settled by arbitration. This sugges-
tion was accepted and the parties agreed that the "subject matter of the 
three suits as well as disputes relating to the dissolution deed" be referred 
to arbitration. The arbitrator was a retired Judge of the High Court. The 
arbitrators changed several times and eventually a retired Chief Justice of 
the High Court 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. 
In the appeal and interlocutory applications to this Court, P.P. and 
J.P. sought to have the awards made the rule of Court except on two or 
three issues, while V.P. and G.P. sought to have the awards set aside in 
material respects, but were agreed that the Pratapnagar factory should be 
taken over by the former and the Maneja factory by the latter. 
On the question as to how far the aforesaid awards should be made 
a rule of Court, the issues involved were : 
1. Valuation by the arbitrator of the land, raw materials and semi~ 
finished goods at the two factories. 
D 
E 
F 
2. Interpretation by the arbitrator of the terms of the deed of 
dissolution as to which of the parties should bear certain outstanding G 
liabilities. 
3. Findings of the arbitrator in regard to allegations of falsification 
of accounts and payments to traders and depositors; 
4. Arithmetical errors that have crept into the award; and 
H 
120 
SUPREME COURT REPORTS [1992] SUPP. 2 S.C.R. 
A 
5. The liability to pay inten'5t. 
B 
Disposing of the appeal and interlocutory applications, this Court, 
HELD :RANGANATHANAND V. RAMASWAMY, JJ. (PER RAN-
GANATHAN, J.) 
1. VALUATION 
(i) The deed of di>solution 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
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