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Rajasthan High Court · body

1954 DIGILAW 263 (RAJ)

Ismail v. Hansraj

1954-11-26

MODI

body1954
ORDER : - This is an application in revision by the defendant Ismail and has arisen under the following circumstances. 2. The opposite parties Hansraj and another filed a suit in the Court of the Judicial Superintendent, Sojat, against the defendant for recovery of a sum of Rs.1100/- as damages for breach of a contract relating to the construction of a house for the plaintiffs. The defendant repudiated the plaintiffs cLalm and put in a counter-claim for Rs.750/-. The case was fixed for the plaintiffs evidence on 20-1-1950, when the parties referred the dispute between them to the arbitration of three persons, namely, Shri Manakraj Singhvi, Shri Abheynandanmal Kochar and Shri Manaklal Mathur (vide reference bearing the same date i.e., 20-1-1950). It was agreed to between the parties that two arbitrators out of the above will have the right to give the award so long as Shri Manakraj Singhvi was one of them, who was also authorized to conduct the arbitration proceedings. It was further provided that in case all the three arbitrators participated in the award and if there was a difference of opinion between them, the decision of the majority will be binding on the parties. The trial Court referred the dispute to the arbitrators accordingly and fixed 25-2-1950, for filing their award. The case was thereafter transferred to the Court of the Munsiff Sojat under the new scheme of the re-organization of Courts, and the time appears to have been extended up to 26-9-1950, by the order of the Munsiff dated 18-7-1950. Meanwhile as the arbitrators had not given their award, on 16-8-1950, the defendant petitioner moved an application in Court for revoking the reference on certain allegations the effect of which was that he had no confidence in the arbitrators. This application was ordered by the Court to be put up with the file on that very day but no order appears to have been passed. It further appears that the defendant also served a notice on the arbitrators that he did not want the matter to be decided by them. On 23-8-1950, the arbitrators asked for the Court record to be sent to them. On 25-8-1950, the office reported that an application for recalling the reference had been made by the defendant and was pending. It further appears that the defendant also served a notice on the arbitrators that he did not want the matter to be decided by them. On 23-8-1950, the arbitrators asked for the Court record to be sent to them. On 25-8-1950, the office reported that an application for recalling the reference had been made by the defendant and was pending. The trial Judge on the same date passed an order that Shri Manakraj be informed that he should take the file from the office whereupon the latter acted accordingly. On 26-8-1950, the plaintiff Hansraj also filed an application in the Court of the Munsiff wherein he stated that he had come to know that the defendant had filed an application for revocation of the reference but that no orders had been passed on that application. Hansraj further stated that the Surpunch, that is, Shri Manakraj was to come from Sumerpur on 28-8-1950, and that it was very necessary to decide the defendants application urgently. The Munsiff asked for a report on this application but no order cancelling the reference was made. The arbitrators Messrs. Manakraj Singhvi and Abheynandanmal met on 28-8-1950, and gave an award by which they decreed the plaintiffs claim for a sum of Rs.777,8/- with costs and interest from the date of the award to the date of realization at 6 per cent per annum, and they also dismissed the defendants counter-claim with costs. The arbitrators filed the award in Court on 26-9-1950, in the presence of counsel for the parties and the defendant himself. On that very day, the Court passed an order that if the parties had any objections to be filed against the award, they be put up, and 24-10-1950, was the next date fixed for the case to come up before the Court. On 24-10-1950, the plaintiffs said that they had no objections to put in but a request was made on behalf of the defendant for further time within which to raise his objections. The plaintiffs objected but their objection was overruled. On 8-12-1950, the defendant put in his objections, and eventually the objections of the defendant were dismissed as barred by time, and a decree was passed in accordance with the award. The plaintiffs objected but their objection was overruled. On 8-12-1950, the defendant put in his objections, and eventually the objections of the defendant were dismissed as barred by time, and a decree was passed in accordance with the award. The defendant went up in appeal from the aforesaid order to the Civil Judge, Sojat, who has upheld the order of the trial Court on the point of limitation although the learned Judge has given his findings on many other points raised on behalf of the defendant in his favour. It is from that order that this revision has been filed. 3. It has been strenuously contended before me on behalf of the petitioner that the Courts below had fallen into serious error in throwing out the objections filed on his behalf as barred by Art.158 of the Limitation Act. It was further contended before me that the Courts below should have taken notice of the defects of the award suomotu and declined to pass a decree in terms of the award. The most important question for determination in this revision is whether the objections filed by the defendant fall within the four corners of Art.158 of the Limitation Act by which a period of only 30 days has been prescribed for such purpose; the period to commence from the date of service of the notice of filing of the award. It is not contested before me that the defendant had notice of the filing of the award, and it was in fact conceded that the failure to give a formal notice by the Court was merely a formal defect. It is clear, therefore, that if the date of such notice is taken to be 26-9-1930, the objections filed by the defendant on 8-12-1950, were clearly barred by the 30 days limitation provided under Art.158. It was contended, however, that Art.158 was not applicable and that the defendants objections really fell within the scope of S.33, Arbitration Act, and that the period for such an application was three years under the residuary Art.181, Limitation Act. It was contended, however, that Art.158 was not applicable and that the defendants objections really fell within the scope of S.33, Arbitration Act, and that the period for such an application was three years under the residuary Art.181, Limitation Act. The contention on behalf of the defendant was that the period of 30 days was applicable to an application under S.30, Arbitration Act, only which deals with the setting aside of an award whereas the objections filed by the defendant pertained to the validity of the award and fell under S.33 for which Art.158 did not provide any period of limitation. This raised the question of the scope and effect of S.30, and S.33, Arbitration Act. It may be pointed out at once that there is a certain amount of conflict of opinion as regards the interpretation of cl.(c) of S.30. The view of the Calcutta High Court is that the expression "or otherwise invalid" occurring in cl.(c) of S.30 must be interpreted ejusdem generis and does not cover the case of a challenge to an award based on the ground of want of jurisdiction, or any other ground which is not analogous to those mentioned in the preceding clauses. Reference may be made in support of this view to - Durga Charan v. Ganga Dhar, AIR 1931 Cal 109 (A); - Golnur Bibi v. Abdus Samad, AIR 1931 Cal 211 (B) and - Shah and CO.v. Ishar Singh Kirpal Singh and Co., AIR 1954 Cal 164 (C). The view taken in these cases is that the words "or otherwise invalid" refer to invalidity of the kind referred to in the preceding clauses ana that to hold that these words are sufficient to let in any ground of invalidity would be erroneous. Reference in this connection was also made to - Chhabba Lal v. Kallu Lal, AIR 1946 PC 72 (D) with which I propose to deal a little later. On the other hand, a Full Bench of the Allahabad High Court in - Lutawan Kubar v. Lachiya, AIR 1914 All 446 (FB) (E) took the view that the expression "or otherwise invalid" covered all objections to an award on the ground of invalidity from any cause whatsoever. The same view is shared by the High Courts of Bombay, Madras, Lahore and Rangoon, the Chief Court of Oudh and the Judicial Commissioners Court of Sind. The same view is shared by the High Courts of Bombay, Madras, Lahore and Rangoon, the Chief Court of Oudh and the Judicial Commissioners Court of Sind. Reference may be made in this connection to A.R. Savkur v. Amritlal Kalidas, AIR 1954 Bom 293 (F); - Lakshminarayana Tantri v. Ramchandra Tantri, AIR 1919 Mad 1029 (G); - Madho Ram v. Sita Ram, AIR 1939 Lah 69 (H); U Sein Win v. Central Plumbing Co., Ltd., AIR 1935 Rang 94 (I); - Balak Ram v. Ramjiwan Lal, AIR 1936 Oudh 1 (J) and - Kishinchand Changomal v. Takhitram Tulsidas, AIR 1939 Sind 241 (FB) (K). I have, therefore, no hesitation - in holding that any objection giving rise to the in validity of an award cannot be excluded from the scope of S.30, Arbitration Act. 4. Now, so far as Chhabba Lal v. Kallu Lal, (D), is concerned, it was a case in which the objection was to the validity of a reference to an arbitration and not to an award as such, and it was held that such an objection was not covered by para. 15 of Sch.II of the Code of Civil Procedure in which also the expression "or otherwise invalid" occurs. Their Lordships of the Privy Council held disagreeing with the majority of the opinion of the learned Judges of the Allahabad High Court in - Mt. Mariam v. Mt. Amina, AIR 1937 All 65 (FB) (L), that such an objection was not covered by the phrase "or otherwise invalid", and proceeded to observe that all the powers conferred upon the Court in relation to an award on a reference made in a suit presupposes a valid reference, and if there was no valid reference, the purported award was a nullity and could be challenged in any appropriate proceeding. In the first place, it may be pointed out that the present case raises an objection not as regards the validity of a reference but the award itself, and is on that ground distinguishable from the case before their Lordships of the Privy Council. In the second place, it is necessary to bear in mind that their Lordships were laying down the law with reference to the Second Schedule of the Code of Civil Procedure and not with regard to the provisions of the Arbitration Act. In the second place, it is necessary to bear in mind that their Lordships were laying down the law with reference to the Second Schedule of the Code of Civil Procedure and not with regard to the provisions of the Arbitration Act. The scheme of the said Schedule appears to be somewhat different in certain important respects and we do not find therein any provisions corresponding to S.33 or S.32 which bars all suits in respect of the existence, effect or validity of an arbitration agreement or award, and which also provides that any such agreement or award cannot be set aside, amended, modified or in any way affected otherwise than as provided in the Arbitration Act. It is possible that under the Second Schedule, one may contemplate a suit for the purpose of a declaration that a particular reference or award was a nullity; such a contingency cannot be held to be open under the Arbitration Act. With respect, therefore, I hold that the true view appears to me to be that the expression "or otherwise invalid" occurring in S.30 of the Arbitration Act is the one which has been generally taken in the High Courts in India except Calcutta. 5. Now, applying the above principles to the facts and circumstances of the present case, a careful perusal of the so called application filed on behalf of the defendant also leaves no doubt in my mind that the object of the defendant in filing it was to have the award set aside which is the expression used under S.30. This application is called by the defendant as "Etrazi Jawab, and then a number of grounds are taken that the award of the arbitrators was invalid, that they had no authority to give the award, that they had given their award beyond the time allowed by the Court and even after the defendant had informed them that he did not wish to get the matter decided by them, that he had filed a similar application in Court, that the number of arbitrators appointed were three but the third Punch had not been even informed, and finally, that the arbitrators had not directed their attention to the defendants claim for set off and, therefore, they were guilty of fraud and misconduct and no decree could possibly be passed on such award. It was, therefore, prayed that the award given by the arbitrators be set aside. It is difficult to hold that this application did not fall within the ambit of S.30, and was clearly made with a view to have the award set aside. The contention of learned counsel that this application was really made under S.33, assuming of course that S.33 deals with a different kind of application in the matter of the setting aside of the award, is difficult to accept, and has no merit in my judgment. Having given the matter my further careful consideration, it seems to me that even if the objection of the defendant was covered by S.33, and his prayer being for the setting aside of the award, I find it impossible to hold that the application of Art.158 thereto could be resisted. The language of Art.158 is quite clear and is as follows: Description of application Period of limitation Time from which period begins to run. 158. Under the Arbitration Act, 1940, to set aside an the award or to get an award remitted for reconsideration. Thirty days The date of service of filing of the award. So long as the question relates to the setting aside of the award (we are not concerned with the rest of the Article) under the Arbitration Act, 1940, for whatever reasons this may be asked for and these reasons may be covered by S.30 or S.33 - the application of Art.158 to my mind is at once attracted as it contains no qualification and as it is specific in its terms and such objections must, therefore, be filed within 30 days of the service of the notice of the filing of the award on the objector. Reference may be made in this connection to the Bombay case (F), already cited above where Chagla C.J. has, on a consideration of Ss.17, 30, 32, 33 and 39, Arbitration Act, has taken the view that in fact S.30 really lays down the powers of the Court and S.33 sets forth the procedure for the exercise of such powers at the motion of a party, and that the Arbitration Act really contemplates so far as an application at the instance of a party is concerned one under S.33 only. The learned Chief Justice has thus endeavoured to harmonise Ss.30 and 33 and the effect thereof. The learned Chief Justice has thus endeavoured to harmonise Ss.30 and 33 and the effect thereof. Thus, he says "It is futile to attach importance to the fact that S.33 does not in terms refer to an application to set aside an award. But when a party makes an application challenging an award, the result of the challenge if successful must be the setting aside of that award." The difficulty however that one is faced with in treating S.33 as wholly procedural is that that section deals with the existence or validity of the arbitration agreement also to which S.30 makes no reference in terms, and further that S.33 contemplates a proceeding to have the effect of an agreement or an award determined. It. does not seem to be quite correct to hold that S.33 has no independent existence. But be that as it may, so far as an objector wants to have an award set aside, never mind what the grounds are, and attacks the validity of the award and directly or indirectly wishes to have the award set aside, I am definitely of the opinion that the objector must meet the hurdle which the specific terms of Art.158, Limitation Act, place in his way. In other words, if his application or objection is filed beyond the period of 30 days prescribed by the Article in question, it must be held to be barred by time. I may briefly dispose of - Balwant Singh v. Ram Charan Singh, AIR 1944 All 188 (1) (M), which was cited before me to show that Art.91 applied to such a case by saying that that Article applies to suits and not to applications at all. The only other Article which may possibly apply is Art.181 of the Limitation Act; but I have no doubt in my mind that a general Article like that must yield place to the specific Article where such a one exists and governs a particular matter. I, therefore, hold that the defendants application or objection dated 8-12-1950, was barred by time and cannot be considered. 6. Learned counsel for the respondents next argued that even if the application dated 8-12-1950, was held to be time barred, the award in this case was so defective on its very face that the Courts below should have refrained from passing a decree in accordance with it. 6. Learned counsel for the respondents next argued that even if the application dated 8-12-1950, was held to be time barred, the award in this case was so defective on its very face that the Courts below should have refrained from passing a decree in accordance with it. Now, I have no hesitation in accepting the proposition that apart altogether from an application filed by a party, the Court has an inherent right to refuse to recognize an award where it happens to be inflicted by a patent illegality or something of that kind. The scheme of S.17 and S.30 clearly supports this view. The question, however, is whether the defendant has succeeded in establishing any such grounds in the present case. I have been referred in this connection to the findings of the lower appellate Court. A careful consideration of the grounds relied on in the judgment under appeal has only served to show that there is no substance in them. In the first place, considerable argument was raised before me that two of the arbitrators had no jurisdiction to give the award and that it was provided by para 2 of Sch.1, Arbitration Act, that if the reference is to an even number of arbitrators, they must appoint an umpire. It may be pointed out in this connection that the rules laid down in the first Schedule come into application only where a different intention does not exist. In this case the arbitration agreement clearly shows that the intention of the parties was that two arbitrators out of the three would be perfectly within their rights to make an award, so far as Shri Manakraj Singhvi was one of them. It also seems to me that the reference here was not to an even number of arbitrators but an uneven number, and the further qualification Laid down by R.2 is that the arbitrators shall appoint an umpire "not later than one month from the latest date of their respective appointments". This particular condition could not possibly be fulfilled in the present case because the number of arbitrators appointed in the very beginning was three. The lower appellate Court was, therefore, entirely wrong when it came to the conclusion that the award was bad on account of any defect in this connection. This particular condition could not possibly be fulfilled in the present case because the number of arbitrators appointed in the very beginning was three. The lower appellate Court was, therefore, entirely wrong when it came to the conclusion that the award was bad on account of any defect in this connection. It may also be pointed out that there is nothing on this record to show that the third arbitrator, namely, Mr. Manaklal Mathur was not informed of the meeting of the arbitrators on 28-8-1950. The proceeding filed by Shri Manakraj Singhvi clearly shows that Shri Mathur had been informed but that he was not able to be present at the time of the award, as he was occupied elsewhere and had gone out of town. Another ground relied on in this connection was that the arbitrators had not considered the counter claim at all. This argument is wholly without foundation as on a perusal of the award given in this case I find that the arbitrators had the counter claim before them and given their attention to it but they said that they dismissed it as they had no evidence in support of it from the side of the defendant. It was also urged before me that the arbitrators who gave the award did not give any notice to the petitioner. This ground, if true, might have gone a long way to support the petitioners contention before me. It is very curious, however, that when a number of other grounds were raised before the Court, this ground was not at all taken in the application dated 8-12-1950. The reason, to my mind, can only be - and there is material on the record to support that conclusion - that the arbitrators had very much informed the defendant that they were meeting at a certain place on the 28th and that he was expected to come there. The defendant, for reason or advice best known to him, had no intention whatsoever to be present at the meeting of the arbitrators. This ground, therefore, is equally devoid of substance. So also the ground that the arbitrators had given the award after the time allowed to them by the court. There was a clear extension of time in the present case up to 26-9-1950, and the award had been given by the arbitrators before that date. This ground, therefore, is equally devoid of substance. So also the ground that the arbitrators had given the award after the time allowed to them by the court. There was a clear extension of time in the present case up to 26-9-1950, and the award had been given by the arbitrators before that date. So far as the application of the defendant to the Court and his notice to the arbitrators that he did not want the matter to be decided any more by them is concerned, it is sufficient to say that the authority of an arbitrator cannot be revoked except with the leave of the Court, and such leave was never granted in the present case although both the plaintiffs and the defendant had brought the matter to the notice of the Court without any reservation or suppression of the true situation. 7. For the reasons mentioned above, I hold that this contention has no force and must be dismissed. There is no justification whatever for holding that the award in the present case was illegal on the very face of it and that the Courts below should have rejected or this Court should reject the award suo motu. 8. Consequently, this revision must fail and it is hereby dismissed with costs. Revision dismissed.