LexSHANMUGHASUNDARAM AND ORS. versus DIRAVIA NADAR (D) BY LRS. AND ANR.
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SHANMUGHASUNDARAM AND ORS. A V. DIRA VIA NADAR (D) BY LRS. AND ANR. MARCH 11, 2005 [D.M. DHARMADHIKARI AND G.P. MATHUR, JJ.] B Arbitration Act, 1940-Section 30(c): Award found unenforceable and invalid on the date it is sought to be made a Rule of Court-Held: Cannot be upheld on possibilities and C eventualities which might occur in future. Order of Civil Court setting aside arbitral award inter alia on ground of invalidity of the arbitration agreement upheld by High Court and attained finality-Held: Judgment of High Court operated as res judicata between the D parties-Civil Court on a subsequent application could not have allowed revival of arbitration proceedings on the same arbitration agreement-Res judicata. Specific Relief Act, I 963-Section I 2-Specific performance of part of contract-Property jointly inherited by two brothers and three sisters-No E partition between them-The two brothers agreed/or sale of the entire property without the sisters being parties to the agreement-Held: The vendee can only obtain undivided interest of the ~o brothers-:-He cannot invoke S. I 2 to obtain sale of undivided share of the two brothers with a right to force partition on the sisters-Hindu Succession Act, 1956. Respondents are two brothers who alongwith their three sisters jointly inherited certain property, viz. land. Respondents wanted to sell the entire property to appellant. They entered into a written sale agreement with him F and for deciding the rate at which the property would be sold, agreed for arbitration by a panel of seven named arbitrators. The arbitrators passed an unanimous Award. Appellant filed application before the Civil Court for G making the Award the Rule of Court, but the Civil Court set aside the Award. That order was upheld in appeal before High Court. Claiming that the arbitral award was set aside but the arbitration agreement was not superseded, appellant filed an application before the Civil 649 H 650 SUPREME COURT REPORTS [2005) 2 S.C.R. A Court for reconstitution of the panel of arbitrators by substituting one arbitrator in place of an arbitrator who, in the intervening period, had died. Civil Court allowed the application. The newly constituted panel of arbitrators passed a second award. Appellant filed application for making the second award a Rule of the Court. Respondents did not file any application to set aside the second award and instead filed revision petition before High Court B against the subsequent order of Civil Court by which substitution in place of the deceased arbitrator was allowed and arbitration was revived. High Court set aside the subsequent order of Civil Court holding t~at the arbitration agreement cannot be allowed to be re-invoked for revival of the arbitration proceedings. Hence the present appeal. c Dismissing the appeal, the Court HELD: 1.1. Reading the judgment of the Civil Court it is not possible to accept the contention of the appellant that the first award was set aside only on ground of breach of principles of natural justice. It is clear that ·bot.h D breach of natural j~stice and absence of three sisters as parties to the agreement, were grounds to set aside the award. (657-C] E Juggilal Kamplapat v. General Fibre Dealers Ltd, [1962) Supp. 2 SCR 101; Dhannalal v. Kalawatibai, (2002) 6 SCC 16 and India Umbrella Manufacturing Co. v. Bhagabandei Agarwal/a, (2004) 3 SCC 178, referred to., 1.2. Unfortunatety, for the appellant, the second ground of invalidity of the first award was not expressly challenged in the appeal preferred to the High Court against the order setting aside the said award. The High Court has confirmed judgment of the Civil Court settin,g aside the first award and the same has attained finality. It would operate' as res judicata between the F parties. (657-G-H) 1.3. In the subsequent;proceedings initiated on the same arbitration agreement, therefore, it is not open to the appellant to contend that the first award was set aside. only on ground of breach of natural justice and not on G th~ ground of its invalidity that the sisters of the respondents were not parties to the arbitration agreement and not bound either by agreement of sale or fixation of price at the instance of the respondents. (~58-F-G) . Dia/a Ram v. Mt. Nihali Bai, AIR (1936) Peshawar 96 and,Abdul Kadir Shamsuddin Bubere v. Madhav Prabhakar Oak and Anr., AIR (1962) SC 406, H distinguished. - SHANMUGH
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