ivil Appeal No 2678 of 1985
From the Judgment and order dated 3041985 of the Delhi High Court in FAO No 270 of 1982
MC Bhandare Sandeep Narain and Shri Narain for the Appellants
Dr Shankar Ghosh and NR Choudhary for the Respondent
The Judgment of the Court was delivered by KANIAJ
The hearing before us now relates to certain objections filed to the Award made by Shri AC Gupta a former Judge of this Court who was appointed the sole arbitrator to adjudicate upon the dispute between the parties pursuant to the Order of this Court dated 18th November 1987 in the circumstances as set out hereinafter
In order to appreciate the objections it is necessary to refer to certain facts
The Settlement Commissioner Government of India allotted Plot No 631 at Chitranjan Park New Delhi measuring 160 sq
yds to the Respondent under the Settlement Scheme for the refugees from Pakistan for a total price of Rs4800
This allotment was made by the Settlement Commissioner on behalf of the Rehabilitation Department of the Government of India
The Respondent applied for a loan from the Ministry of Defence for construction of the house on the said plot and a loan of Rs15000 was sanctioned in his favour
Under the House Construction Rules of the Government the plans and estimates had to be submitted along with the application and a sanctioned amount was paid in four instalments at different stages of construction
The Respondent started the construction of a building on the said land
By the end of 1973 the Respondent had constructed a house on the said plot upto the roof level
By that time he had obtained and used up a sum of Rs12000 out of the loan sanctioned to him and only a balance of Rs3000 PG NO 517 remained to be paid to him under the said loan
According to the Respondent this amount was not sufficient for the final completion of the house and he therefore sought the help of Appellant No I who advanced a sum of Rs5000 to him
In September 1973 the Respondent entered into an agreement dated September 6 1973 to sell the house and the said plot to the Appellant No 1
The aforesaid amount of Rs5000 given by way of loan was shown in that agreement as an advance paid towards the sale price
The Respondent also executed a General Power of Attorney in favour of Appellant No 1 inter alia enabling him to carry on construction work on the said land on behalf of the Respondent
According to the Respondent the house was not complete but the Appellants who are husband and wife were occupying the same
Under circumstances we need not discuss here on January 29 1974 another agreement was entered into between Appellant No 1 and the Respondent which has been described as an agreement for construction
Under that agreement Rs80000 was to be paid by the Respondent as the price of the construction to be put up by Appellant No I on the said plot and he was to charge Rs20000 as the profits and labour charges
He was to deposit Rs15000 with the Respondent this transaction was sham and bogus
Disputes arose Respondent was to return the amount of Rs115000 within three years in a lump sum and on such payment Appellant No I was to hand over the possession of the building and the plot to the Respondent
Till that amount was paid Appellant No 1 was entitled to possess and occupy and enjoy the same and to receive rents thereof
According to the Respondent this transaction was sham and bogus
Disputes arose between the parties and the Respondent filed a suit in August 1977 claiming for the return of the possession of the said plot and the house
A notice of motion under section 34 of the for stay taken out by the Appellants was dismissed
An appeal was preferred against the said decision
In the appeal which came up for hearing before the Additional District Judge Delhi
with the consent of the parties Shri Bakshi Man Singh was appointed as the sole arbitrator to adjudicate upon the disputes in the suit
The said Shri Bakshi Man Singh died in July 1979 without making any award
On an application by the Respondent the learned Additional District Judge filled up the vacancy by appointing Shri Hari Shanker Advocate as the sole rbitrator
Shri Hari Shanker made and published his award which went against the Appellants
According to the Appellants the said award was made ex parte
The appellants challenged the award by filing objections under sections 30 and 33 of the before the learned Additional District Judge and applied for setting aside the said award
This application was dismissed by the learned Additional District Judge
The Appellants PG NO 518 filed an appeal against this decision on October 141982 before the Delhi High Court but the said appeal was dismissed by the learned Single Judge of that High Court on April 30 1985
This decision of the learned Single Judge was challenged before this Court by way of Special Leave Petition under Article 136 of the Constitution
Leave was granted and the present Appeal came to be numbered as aforesaid
This Appeal came up for hearing before a Division Bench of this Court on November 181987
After hearing Counsel for the parties
in order to ensure fairplay in the action this Court set aside the award of the Arbitrator and also the judgment of the Delhi High Court and appointed Shri AC Gupta a former Judge of this Court as the sole arbitrator to adjudicate upon the disputes between the parties
The arbitrator was directed to make his award with short reasons within four months from the receipt of the the order
Certain other conditions like payment of compensation and additional expense were imposed on the Appellants
Pursuant to the said order of this Court the said Shri AC Gupta entered upon the reference and made and made and published his award on March 181988
Under the said award it was held that the Respondent was entitled to a sum of Rs5849860p and interest on this amount at the rate of 18 per annum from the date of the reference to the date of the award which worked out to a sum of Rs3510
Taking into account the amount paid by the Respondent initially towards the arbitrator s remuneration and others costs and after setting off the dues of Appellants against the Respondent it was held that the Respondent claimant was entitled to recover possession of the disputed building from the Appellants and that a sum of Rs57753 was payable by the Appellants to the Respondent
It is this award which is challenged before us now
The sole submission made by Mr Bhandare learned Counsel for the Appellants is that the award is bad in law and liable to be set aside as there is an error of law disclosed on the face of the award
In this connection Mr Bhandare drew our attention to clause 2b of the agreement to sell dated September 6 1973 referred to earlier
Ten earlier part of the agreement set out that the purchaser Appellant No 1 had paid to the seller Respondent a sum of Rs5000 the receipt of which was acknowledged by the Respondent and the balance amount payable was to be paid in the manner set out in the said clause 2b which runs as follows The purchaser shall pay to the seller Rs105 each month against the sanctioned loan of Rs15000 by the fifth day of every English Calendar month till such time the full PG NO 519 amount of loan is recovered from the seller by the Government of lndia
The first instalment shall commence with effect from 5th October 1973 The purchaser if he desires can also deposit the actual remaining amount towards this loan at any time in lump sum to the Government of India on behalf of the seller
 It is a common ground that the sum of Rs 105 per month referred to clause 2b of the said agreement was paid by the Respondent only upto January 1976 and that this payment covered upto 23 instalments more than 100 instalments were remaining unpaid
Mr Bhandare pointed out that it was contended by the Appellants before the arbitrator that although the agreement for sale between the parties was not registered and might not convey and interest to Appellant No 1 in the property the Appellants had been put in possession of the said land and construction pursuant to the said agreement since September 1973 as appears from the agreement of sale
and in view of this Appellants were entitled to retain possession under the protection afforded by Section 53A of the Transfer of Act
He drew our attention to the following statements contained in the award of the learned Arbitrator The Respondent who has been in possession of the property since September 1973 as would appear from the agreement for sale claimed that his possession was protected Under Section 53A of the 
Section 53A affords protection to a transferee on certain condition One of which is that the transferee has performed or is willing to perform his part of contract 
Under the agreement for sale the respondent was required to pay the claimant a monthly sum of Rs 105 to enable the latter to pay the instalments in discharge of the house building loan
From the receipts filed it appears that the respondent paid only upto January 1976 which covered 23 instalments only and more than 100 instalments remained to be paid
There is no valid reason why he should have failed t to carry out his obligation under the contract
Thus it cannot be said that the respondent had performed or was willing to perform his part of the contract
Therefore the respondent was not entitled to retain possession of the disputed property beyond January 1976
 PG NO 520 It was submitted by Mr Bhandare that these statements clearly disclose close an error apparent on the face of the award
It is pointed out by him that prior to February 1976 the Respondent by his Advocate s notice dated 1611976 had repudiated the said agreement for sale by contending in his notice that it had been procured by fraud undue influence and coercion practised by Appellant No I and it was submitted that the said repudiation was wrongful and in view thereof Appellant No 1 was absolved from his obligation to make any further payment of Rs105 per month or to continue to be ready and willing to perform the agreement
It was submitted by him that the aforestated statements contained in the award ran counter to the settled position in law and disclosed a clear error of law on the face of the award
He drew our attention to the decision of this Court in International Contractors Ltd vs Prasanta Kumar Sur In that case the appellant had purchased the property in dispute from the respondent but soon thereafter there was an agreement for reconveyance of the property to the respondent within a period of two years for almost the same value for which it was sold
Before the expiry of the stipulated period the respondent entered into correspondence with the appellant asking for the completion of the agreed reconveyance and intimating that the purchase money was ready to be paid but after some further correspondence the appellant s solicitors on his behalf repudiated the agreement for reconveyance
The respondent then did not tender the price agreed to be paid and filed a suit for specific performance
The suit was dismissed by the trial court on the ground that the respondent had not paid the money
The High Court reversed the decision and decreed the suit
On an appeal to this Court it was held that as the appellant had totally repudiated the contract for reconveyance and had tailed lo perform his part of the contract it was open to the respondent to sue for its enforcement and the High Court was right in holding that respondent was entitled to a decree for specific performance
In our view Mr Bhandare may be right in contending that this decision does show that it has been held by this Court that in certain circumstances once a party to a contract has repudiated a contract it is not necessary for the other party to tender the amount payable under the contract in the manner provided in the contract in order to successfully claim the specific performance of the contract
The decision however nowhere lays down that where one party to a contract repudiates the contract the other party to the contract who claims specific performance of the contract is absolved from his obligation to show that he was ready and willing to perform the contract
Mr Bhandare s argument really is to the effect that the Respondent wrongly repudiated the contract by his said letter dated 16th January 1976 before all the mutual PG NO 521 obligations under the contract had been carried out that is to say he committed an anticipatory breach of the contract and in view of this Appellant No 1 was absolved from carrying out his remaining obligations under the contract and could claim specific performance of the same even though he failed to carry out his remaining obligations under the contract and might have failed to show his readiness and willingness to perform the contract
In our view this argument cannot be accepted
It is settled in law that where a party to a contract commits an anticipatory breach of the contract the other party to the contract may treat the breach as putting an end to the contract and sue for damages but in that event he cannot ask for specific performance
The other option open to the other party namely the aggrieved party is that he may choose to keep the contract alive till the time for performance and claim specific performance but in that event
he cannot claim specific performance of the contract unless he shows his readiness and willingness to perform the contract
The decision of this Court in International Contractors Limited vs Prasanta Kumar Sur supra properly analysed only lays down that in certain circumstances it is not necessary for the party complaining of an anticipatory breach of contract by the other party to offer to perform his remaining obligations under the contract in order to show his readiness and willingness to perform the contract and claim specific performance of the said contract
Mr Bhandare also referred to the decision of the Andhra Pradesh High Court in Makineni Nagayya and Others v Makineni Bapamma AIR 45 We do not consider it necessary to refer this decision as it does not carry the case of the Appellants any further
The ratio of the said decision in no way runs counter to the said position in law set out above
In the case before us what the arbitrator has done is to set out in his award the relevant portion of Section 53A of the in terms of the said section
There can be no dispute that these provisions have been correctly set out
There is thus no error in the proposition of law set out by the learned Arbitrator in the award
It may be that there is an error although that is by no means certain
in the application of these principles in coming to the conclusion that notwithstanding the repudiation of the said contract by the respondent Appellant No I was not absolved from his obligation to pay the remaining instalments of Rs105 per month as provided under the contract
In Coimbatore District Podu Thozillar Samgam vs Balasubramania Foundary and others  it has been held by this Court that it is an error of law and PG NO 522 not a mistake of fact committed by the Arbitrator which is justiciable in the application before the Court
If there is no legal proposition either in the award or in any document annexed to the award which is erroneous and constitutes the basis of the award and the alleged mistakes or alleged errors are only mistakes of fact the award is not amenable to corrections by the Court
In its judgment the Court referred to the decision of this Court in Union of India vs A L Rallia Ram   and after referring to certain factors pertaining to awards in arbitration proceedings and the machinery devised by the  pointed out that the award was the decision of a domestic tribunal chosen by the parties and the civil courts which were entrusted with the power to facilitate arbitration and to effectuate the awards could not exercise appellate powers over the decisions
This Court reiterated that it was now firmly established that an award was bad on the ground of error of law on the face of it only when in the award itself or in a document actually incorporated in it there was found some legal proposition which was the basis of the award and which was erroneous
This view was enunciated by the Judicial Committee in Champsey Bhara and Co vs Jivraj Balloo Spinning and Weaving Co Ltd 1922 23 LR 5O IA 324 This view was again reiterated and emphasised by this Court in Kanpur Nagar Mahapalika v Ms Narain Das Haribansh 11970 2 SCR 28 where Ray J as the learned Chief Justice then was observed at page 30 of the Report relying on Champsey Bhara case An error of law on the face of the award meant that one could find in the award or in a document actually incorporated thereto as for instance
a note appended by the arbitrator stating the reasons for his judgment some legal proposition which was the basis of the award and which one can say is erroneous
 In State of Orissa  Ors v Ms Lall Brothers 1988 Judgment Today SC 552 it was held by a Bench of this Court that it is not open to the Court to speculate where no reasons are given by the arbitrator as to what impelled him to arrive at his conclusions
Reference was made in this connection see paragraph 8 to the observations of the Judicial Committee in Champsey Bhara  Co vs Jivraj Balloo Spinning  Weaving Co ltd and of this Court in Jivarajbhai Ujamshi Sheth  Ors
vs Chintamanrao Balaji and Ors  PG NO 523 It was next contended by Mr Bhandare that the award disclosed an error in law as certain important documents relied on by the Appellants were not referred to or discussed in the award at all
In support of this contention Mr Bhandare referred to the decision in KP Poulose vs State of Kerala and Another  In that case the arbitrator failed to take into account material documents which were necessary to arrive at for a just and fair decision to resolve the controversy between the parties and it was held that this amounted to legal misconduct on the part of the arbitrator and his award liable to be set aside
This decision is not of much assistance in the case before us as it is not the contention of Mr Bhandare that the award is bad on the ground of any misconduct of the arbitrator but on the ground that it discloses an error of law on the face of the record
Moreover our attention has not been drawn to any particular document which was essential to resolve the controversy between the parties nor has it been demonstrated that any such document was not taken into account by the arbitrator
In view of this there is no basis to support the contention of Mr Bhandare which must be rejected
It cannot be even said in this case that the arbitrator was guilty of any legal misconduct or otherwise 
The objections to the Award of Shri AC Gupta therefore fail and are dismissed
There will be a judgment in terms of the Award
Let the decree be drawn up accordingly
In the facts and circumstances of the case there will be no order as to costs to the hearing before us


Summary:
The appellant now represented by his legal representatives had taken on rent certain premises and was in occupation thereof
On the basis of a usufructuary mortgage executed by the landlord in their favour the respondents who are the partners sought the eviction of the appellant under section 211h of the Karnataka Rent Control Act 1961 on the ground that they were bona fide in need of the premises to run their business
The appellant s defence was that the usufructuary mortgage was a sham and nominal transaction created by the landlord with an oblique motive because he had refused to pay higher rent for the premises and secondly the mortgagees were not bona fide in need of the premises for their business
The Trial Court rejected both the defences and ordered eviction and the said order was affirmed by the appellate court and the High Court
Hence this appeal
Dismissing the appeal this Court HELD The definition of landlord  in Section 3his an inclusive definition and would take within its fold any per
who for the time being is receiving or is entitled to receive the rent in respect of the leased premises
The person receiving or entitled to receive the rent may do so either on his own account or On account of or on behalf of or for the benefit of any other person or as a trustee guardian or receiver for any other person
A mortgagee with possession undoubtedly falls under the first category as under Sec
58d of the Transfer of property Act he is PG NO 505 PG NO 506 entitled to receive the rent on his own account and this factor makes the usufructuary mortgagee stand on a higher and different footing than other persons accorded the status of a landlord under Scction 3h because their entitlement to receive rent is on behalf of or for the benefit of others and not on their own account
5l0F H V
Baluswamy Servai vs N Raju Servai  T Ezhumalai vs Padmavathi Ammal 1971 J Aswatharamiah vs Special Deputy Commissioner  section Subramanayaswamy vs Deputy Commissioner Bangalore AIR 1981 Karnataka 190 R Vijendra vs HR  AC ILR  referred to
If the legislature so wanted it would have undoubtedly categorised a mortgagee with possession also as one of the excluded class of landlords for the purpose of sec
211h of the Act
Obviously the legislature has not done so as would appear from the explanation to clause 4 of sec
511D E A mortgagee with possession steps into the shoes of the mortgagor and becomes entitled to all the rights of the mortgagor and the only right left with the mortgagor is the redemption
A mortgagee with possession is entitled to be in posession of the mortgage property as long as it is not redeemed
If the mortgagee with possession leases back the property to the mortgagor he acquires the rights of a lessor and is entitled to enforce the terms of he lease against the mortgagor
511F G Mathur Lal vs Keshar Bai  Anr   referred to
There can be no doubt that a mortgagee with possession stands very differently from other kinds of landlords euvisagad under section 3b of the Act
He is therefore entitled as much as the owner himself to seek recovery of posession of the leased premises from a tenant for him own bona fide requirement of use
511g H VBaluswamy Servai vs N Raju Servai  R Vijendra vs H R  A 
C ILR  approved
The appellant s argument that a scheming landlord can adopt the devious method of creating a sham deed of usufructuary mortgage in order to have u tenant evicted has no force because il fails to note that an order of eviction under sec
211h would not be Passed by the court for the PG NO 507 mere asking because the mortgagee with possession has first get to prove that the premises are reasonably and bona fide required by him for occupation by himself
512B C