Judgment Untwalia, J. 1. In title suit 38/14 of 1958/59 all the parties agreed that the matters in difference between them in the suit should be referred to arbitration and they, accordingly, applied in writing on 16-2-59 to the Court where the suit was pending for an order of reference under Sec.21 of the Arbitration Act (Central Act 10 of 1940), hereinafter referred to as the Act. The Court made an order of reference on 25-2-59. Two arbitrators named in the petition of reference, were agreed to be appointed and were appointed to make a unanimous award which, when so made, as stated in the petition of reference, would be binding on parties. 2. The award was made; it was filed in Court. An application was filed by the defendant petitioner for setting aside the award on several grounds. The trial Court refused to set aside the award by its order dated 28-4-61. An appeal filed by the petitioner under Sec.39 of the Act was dismissed by the lower appellate Court on 11-7-63. He has, therefore, come up in revision to this Court. 3. The only point urged by the learned Government Pleader who has appeared in support of the revisional application is that the award was void and invalid for the failure of the two arbitrators to appoint an umpire as required by Article 2 of Schedule I of the Act. 4. In my opinion, there is no substance in the point urged on behalf of the petitioner. Firstly, it is to be noticed that on the terms of the agreement as evidenced by the petition of reference filed on 16-2-59, an intention different from the requirement of Article 2 of 1st Schedule is expressed therein and that being so, in terms of Sec.3 of the Act, which says- "An arbitration agreement, unless a different intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule in so far as they are applicable to the reference", the requirement of Article 2 of the 1st Schedule is not an implied condition of the arbitration agreement in question. The words in the petition are :- - (Local Language) In my opinion, on the wordings of the agreement, the parties wanted the two arbitrators to give an award after a concurrent decision.
The words in the petition are :- - (Local Language) In my opinion, on the wordings of the agreement, the parties wanted the two arbitrators to give an award after a concurrent decision. And, this leads to the conclusion that the parties did not want that there should be an umpire appointed by the two arbitrators, the purpose of which would have been to bring into existence, in case of difference, an award of the majority. 5. Even assuming that the wordings of the agreement aforesaid are not capable of the meaning and interpretation which I have put upon them, there is no substance either in the point of law as urged. Article 2 of the 1st Schedule reads- "If the reference is to an even number of arbitrators, the arbitrators shall appoint an umpire not later than one month from the latest date of their respective appointments." If this was an implied condition of the arbitration agreement, the arbitrators did fail in their duty to appoint an umpire as required by the said Article. What was the remedy of the aggrieved party then? Section 8 of the Act pro vides for such a contingency. It says- " (1) In any of the following cases- X X X X X X X X (c) where the parties or the arbitrators are required to appoint an umpire and do not appoint him; any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy." The arbitrators under Article 2 were required to appoint an umpire. If the arbitrators did not appoint him, it was open to the petitioner--in case he felt aggrieved by the failure of the arbitrators to appoint an umpire to serve the arbitrators with a written notice to concur in the appointment of an umpire who could have been named by him.
If the arbitrators did not appoint him, it was open to the petitioner--in case he felt aggrieved by the failure of the arbitrators to appoint an umpire to serve the arbitrators with a written notice to concur in the appointment of an umpire who could have been named by him. If they would not have concurred, Sub-section (2) of Section 8 provides- "If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties" and in accordance with this provision the petitioner could have applied to the Court, meaning thereby the trial Court which had made me reference in this case, to appoint an umpire. It is undisputed that he neither gave the notice to the arbitrators nor applied to the Court for appointment of an umpire. The arbitration proceeded. The two arbitrators conducted the proceeding in which the parties interested including the petitioner took part. At no point of time, the petitioner made any objection before the arbitrators not to proceed in the matter without appointment of an umpire. 6. What is the result of the failure of the arbitrators to appoint an umpire as required by Article 2 of the 1st Schedule? Will it invalidate the entire proceeding and the award? The answer will depend on several considerations. Firstly, in my opinion, the requirement of Article 2 of the 1st Schedule is not mandatory. The reason is that if it is open to the parties to the arbitration agreement to express an intention contrary to the said requirement, as a matter of construction, the requirement cannot be said to be a mandatory one in the sense of nullifying the entire proceeding for non-fulfilment of the requirement.
The reason is that if it is open to the parties to the arbitration agreement to express an intention contrary to the said requirement, as a matter of construction, the requirement cannot be said to be a mandatory one in the sense of nullifying the entire proceeding for non-fulfilment of the requirement. Secondly, a machinery has been provided in the 8th section of the Act to remedy the failure of the arbitrators to appoint an umpire, and if the party who has been given the remedy, fails in his duty or right to avail of that remedy, he cannot be heard to say that the failure of the arbitrators was such as to render their award invalid. Thirdly, even assuming that the arbitrators committed an irregularity of procedure in proceeding to arbitration without appointment of an umpire and the irregularity was not cured by the failure of the petitioner to avail of the machinery provided in the 8th section of the Act, the principle of waiver will be attracted in this case. The petitioner, in such a situation let us assume, had a right to object to the proceeding being carried on by the two arbitrators without appointment of an umpire. He did not exercise this right; he waived it. It was not such a right which had any public policy behind it and could not be waived by a party. It was a right of the kind which, undoubtedly, could be waived and was waived on the facts and in the circumstances of this case. That being so, it is now not open to the petitioner to say, after having failed in the, two Courts below in challenging the award on substantial grounds, that it must be invalidated for the alleged failure of the two arbitrators to comply with the requirement of Article 2 or the 1st Schedule of the Act. 7. In Tikaram Khupchand V/s. Hansraj Hazarimal, AIR 1954 Nag 241, it was pointed out by a Bench of the Nagpur High Court that it is not correct to say that when the reference is to an even number of arbitrators the failure to appoint an umpire vitiates the award. The same view was expressed by a learned single Judge of the Calcutta High Court in United Printing and Binding Works Ltd. V/s. Kishori Lal, AIR 1956 Cal 593 .
The same view was expressed by a learned single Judge of the Calcutta High Court in United Printing and Binding Works Ltd. V/s. Kishori Lal, AIR 1956 Cal 593 . I am in respectful agreement with the view expressed in those cases. The contrary view expressed in Jawala Prasad V/s. Amar Nath, AIR 1951 All 474 , if I may say with respect, is not correct. The observation of a learned single Judge of the Bombay High Court in Vinayak Vishnu V/s. B.G. Gadre, AIR 1959 Bom 39 , on the lines of the Allahabad view is in the nature of obiter dictum. It also refers to another Bench decision of the Nagpur High Court in Firm Shriram Haracharandas, Khamgaon V/s. President Cotton Seed Forward Delivery Managing Association Ltd., Khamgaon, AIR 1954 Nag 236. In this case, however, while discussing the point, it has merely been stated that an umpire could be appointed in accordance with the provision contained in Article 2 of the first schedule of the Act. The question as to what will be the result of this failure did not directly fall for decision nor was it decided in this case. 8. For the reasons stated above, I find that in any view of the matter there is no substance in this application which must be dismissed with costs payable to plaintiffs opposite parties 1 to 3; hearing fee Rs. 48/- only. S.N.P.Singh, J. 9 I agree.