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1969 DIGILAW 99 (MP)

Jamna Prasad Agrawal v. Mahesh Prasad Shukla

1969-09-17

Bishambhar Dayal, S.P.Bhargava

body1969
ORDER Bhargava, J. l. This appeal arises out of an application which was made by the first respondent under section 14 of the Arbitration Act in the trial Court. The trial Court held the said application to be barred by time and dismissed it. The appellant, who was one of the parties impleaded in the said application, has filed this appeal. 2. Briefly stated, the facts are these. The appellant agreed to purchase a house belonging to the second' respondent for Rs. 11,000 on 28-3-1959 and he paid Rs. 9000 out of the agreed sale price to him on that date. The agreement is Ex. P-l on record. The appellant then paid a further sum of Rs.1000 towards the sale price to the second respondent on 6-4-1960. According to the terms of Ex. p-1, the sale deed was to be executed within one year. However, no sale deed was executed within that time and on 6-4-1960 under the agreement Ex. P-1-A the parties extended the time of the execution of the sale deed till 28-3-61. No sale deed was executed within this extended period also, but on 28-3-1962 the appellant and the second respondent entered into a fresh agreement where- by they agreed to the total sale price being raised to Rs. 14,000. The appellant paid Rs.1000 to the second respondent on 28-3-1962 and the time for execution of the sale deed was extended by one year. A notice was then given by the appellant to the second respondent on 1-7-1963 requiring the respondent to execute the sale-deed after receiving from the appellant the remaining price thereafter the appellant and second respondent agreed to refer their dispute to the arbitration of the first respondent Shri Mahesh Prasad Shukla, Advocate. The arbitrator entered on the reference on 8-8-1963. However, he made his award on 11•4-1965 and filed it in Court on 20-10-1965 impleading the appellant Jamna prasad and Dwarkaprasad as non-applicants in the application. He prayed that the award made by him may be made a rule of the Court and a decree may be passed in accordance with the award. 3. The first respondent in his award held that the real nature of the transaction between the parties was that of a loan and the appellant Jamna Prasad was entitled to recover from Dwarkaprasad the amount of Rs. 11, 000. 4. 3. The first respondent in his award held that the real nature of the transaction between the parties was that of a loan and the appellant Jamna Prasad was entitled to recover from Dwarkaprasad the amount of Rs. 11, 000. 4. The second respondent urged in reply to the application of the first respondent under section 14, inter alia, that as the award was not filed within thirty days of its having been made, it was barred under Article 119 of the new Limitation Act (corresponding to Article 178 of the Limitation Act, 1908). The second objection raised was that as the award had not been made within four months of the arbitrator-respondent having entered on the reference and as the time was not got extended by the Court, the award could not be made a rule of the Court. 5. The trial Court considered both these objections as preliminary objections. It decided both these objections in favour of the second respondent and dismissed the application of the first respondent as being barred by time. Feeling aggrieved, the appellant has filed this appeal. 6. Both the learned counsel agreed before us that the finding of the trial Court about the application under section 14 of the Arbitration Act being barred by time on the ground that the award was not filed in Court by the Arbitrator within one month of the date of its making, was erroneous. Article 119 of the new Limitation Act, which corresponded to Article 178 under the old Limitation Act, applies only when an application is made by the parties for filing an award. The said Article has reference only to the application made by a party to the arbitration proceedings and is not intended to apply to an arbitrator filing an award in Court. (See Champalat Vs. Mst. Samrathbai AIR 1960 SC 629 ; Robarts Vs. Harrison ILR VII Cal. 333; Jayantilal Jamnadas Gandhi Vs. Chhaganlal Nathoobhai Mehta ILR 1946 Born. 113 and Gendalal Motilal Vs. Malhuradas Ramprasad and others AIR 1951 Nag, 32. It is, therefore, held that the finding recorded by the lower Court on the first objection of the second respondent to the effect that the application of the arbitrator .respondent was barred under Article 119 is erroneous. 7. Chhaganlal Nathoobhai Mehta ILR 1946 Born. 113 and Gendalal Motilal Vs. Malhuradas Ramprasad and others AIR 1951 Nag, 32. It is, therefore, held that the finding recorded by the lower Court on the first objection of the second respondent to the effect that the application of the arbitrator .respondent was barred under Article 119 is erroneous. 7. As regards the second objection stated in paragraph 4 of this order, the contention of the learned counsel for the appellant is that the Court is competent to extend time even at the present stage under section 28 of the Arbitration Act. It is further urged that considering the facts and circumstances of the case, the time for making the award should be extended up to the date on which the award was actually made by the arbitrator. 8. For examining this contention, it would be necessary to state some more facts. The proceedings recorded by the arbitrator show that he entered the reference on 8-8-1963 in pursuance of the agreement between the parties to refer their dispute to arbitration dated 6-8-1963. Both the parties remained present before the arbitrator on the various dates that he fixed for carrying on the arbitration proceedings and filed their statements, documents and books of account before him. The counsel of the parties also attended on some dates of bearing fixed by the arbitrator. Issues were framed by the arbitrator on 5-1-1964. The parties filed their agreements dated 21-4-1964 T before the arbitrator extending the time for making the award till 15-6-1964. Subsequently, witnesses of the parties were examined by the arbitrator. As the award could not be completed by 15-6-1964, the parties, i.e., the appellant and the second respondent, entered into a second agreement whereby they agreed to have the period of making the award extended upto 12-7-1965' This is clear from the proceeding recorded by the arbitrator on 28-6-1964. The second respondent examined his numerous witnesses before the arbitrator and ultimately the arbitrator made his award on 11-4-1965 and gave notice of it to the parties on the same day. It must be presumed on the facts and circumstances of this case that both the parties were conscious that proceedings before the arbitrator could not be finished and the award could not be made within the period of four months as contemplated by Schedule I, Rule 3, of the Arbitration Act. It must be presumed on the facts and circumstances of this case that both the parties were conscious that proceedings before the arbitrator could not be finished and the award could not be made within the period of four months as contemplated by Schedule I, Rule 3, of the Arbitration Act. The second respondent without any protest took a chance of the award being in his favour. In fact, he succeeded in convincing the arbitrator that the real nature of the transaction between the parties was not that of a sale as urged by the appellant but the transaction was a loan as contended by him. 9. Section 28 (I) enacts that the Court may, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarge from time to time for making the award. Under this provision, if an award has been made by an arbitrator beyond time, the delay may be condoned at any time by the Court in a proper case, for this section given power to the Court to extend time even after the award has made. (See Nani Bala Saha Vs. Ramgopal Saha and another AIR 1946 Cal 19 and Hari Shankar Lal Vs. Shamhhu Nath and others AIR 1962 SC 78 . 10. The only question for consideration, therefore, is as to whether the time can be extended at this stage. The contention advanced' by the learned counsel for the second respondent is that as no application was made in the trial Court for the extension of time and as an application for extension of time for making of the award has been made in this Court on 29-1-1969, the time should not be extended. Relying on the decision of the Bombay High Court reported in Shiv Onkar Maheshwari Vs. Bansidhar Jagannath AIR 1956 Bom. 459 it has been urged that as to whether time should be extended or not is a matter left entirely to the discretion of the trial Judge and the order that the trial Judge may pass in the exercise of his discretion must be regarded as final. It is contended that as no effort was made before the trial Judge to have the time extended, it is too late for the appellant to seek the extension of time in this Court. 11. It is contended that as no effort was made before the trial Judge to have the time extended, it is too late for the appellant to seek the extension of time in this Court. 11. In our opinion, this contention of the respondent cannot be accepted. The case reported in Shiv Onkar Maheshwari Vs. Bansidhar JaKannath (supra) can have no application in the present case. The trial Court was not called upon to consider the question as to whether time should be extended or not. If the trial Court had decided the question one way or the other and it appeared that the discretion was exercised by it judicially, we agree that its opinion could be held to be final, but as that question has not been considered at all, we find no reason to hold that the question of enlargement of time cannot be considered by us in appeal. The appeal is a continuation of the suit and hearing of the appeal is a re-hearing of the lis. The appellate Court, from the very nature of its jurisdiction, can exercise all those rowers which are vested in the trial Court. There is nothing in the language of section 28 on the basis of which the phrase "the Court" has to be read as signifying the trial Court alone. In our opinion, the word 'Court' as used in section 28, would also include an appellate or revisional Court when the matter is before it for consideration. The whole matter being at large before the appellate Court, we see no justification for holding that this Court is precluded from extending time for making the award in a fit case. 12. The circumstances narrated by us above, in our opinion constitute very satisfactory and proper grounds for extending the time for making the award till the date that the award was made by the first respondent. In the first place, we may point out that the second respondent throughout continued to take part in the arbitration proceedings without any objection or protest. Actually, on two occasions the appellant and the second respondent by their mutual consent extended the time for making the award. By their first agreement they extended time upto 15•6•1964 and by their second agreement they agreed to extend the time till 12-7-1965. Actually, on two occasions the appellant and the second respondent by their mutual consent extended the time for making the award. By their first agreement they extended time upto 15•6•1964 and by their second agreement they agreed to extend the time till 12-7-1965. There is nothing suggested in the conduct of the appellant on the basis of which the discretionary power of the Court" should be exercised in refusing to extend the time. It is true that the power of the Court under section 28 is discretionary but discretion has to be exercised on sound judicial principles. What is necessary for the Court for exercising its discretion in favour of enlargement of time is that the case should be a fit one for exercising that discretionary power. The conduct of the party in appearing before the arbitrator even after the time for making the award had expired without any objection on the ground of time is to be read as a further consideration in favour of enlarging the time for the making of the award (see Kanhayalal Dugar Vs. Ashkaran Kishanlal AIR 1957 Cal. 658 and B. Bhagwan Din Gupta Vs. B. Bisheshwar Nath and other AIR 1958 All 568 . Refusal to enlarge time at this stage, in our opinion, would be clearly unreasonable, unfair and unjust. It has been held in Narsing Das Hiralal Ltd. and another Vs. Bisandayal Sutyanarain Firm AIR 1954 Orissa 29, that the Court can extend time even suo motu. We, therefore, extend the time for making of the award as prayed for by the appellant in his application dated 29.1-1969. 13. In the view that we have taken, it is not necessary to consider the appellant's contention that the two agreements referred to above should be treated either as modifications of the initial agreement or as being independent agreements authorizing the arbitrator to make the award within the time stipulated in those agreements. 14. For all these reasons, the appeal is allowed and the decision of the trial Court on both the preliminary points is set aside. The trial Court is now directed to decide the first respondent's application under section 14 of the Arbitration Act according to Jaw. As the appellant did not make an application in the trial Court for extension of time, we leave the parties to bear their own costs in this Court.