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1974 DIGILAW 198 (PAT)

Nepali Sah v. Shyam Sundar Ram

1974-10-03

HARI LAL AGRAWAL

body1974
H.L. AGRAWAL, J. 1. This application in revision is by some of the defendants arising out of a proceeding under - the provisions of the Arbitration Act, in the following circumstances. 1. The case of the plaintiffs-opposite party is based on a claim for money against the defendants first party which they were not paying. Ultimately, they agreed to get the said dispute decided by arbitration and appointed, by a written agreement (Ext. 1) five arbitrators. On 12.11.59 the said agreement was signed by the plaintiffs and three defendants as well as by all the arbitrators, defendant no. 4, however, gave her thumb impression only. It is said that the said arbitrators held sittings on different dates in presence of the defendants and gave their award on 14.2.60 in presence of the defendants, but as the award went against the defendants, they refused to sign the same. 2. The plaintiffs then made an application in the trial court for a direction to the arbitrators to file the award in question and for passing a judgment in terms of the same. 3. The application was registered as a regular title suit and was contested by defendant nos. 2 and 3. Apart from contesting the claim of the plaintiffs on merits, they also challenged the entire arbitration proceeding from the stage of reference to the passing of the award as collusive and also challenged the two documents (Exts. 1 & 2) as forged and fabricated. The learned Munsif, however, dismissed the suit on the findings that the Punchnama (Ext. 1) was a spurious document and that there was no arbitration agreement between the parties at all. He further held that there was no notice of the arbitration proceeding served on the defendants by the said punches and the award (Ext. 2) was improperly procured by the plaintiffs in collusion with the arbitrators. The learned Munsif, on the evidence of one of the Punches, who examined himself as P. W. 1 who had stated that after recording the evidence of the parties, they asked the parties to resolve their differences themselves within a period of three months, held that by this act, the arbitrators divested themselves of their charge to decide the dispute and ceased to be arbitrators and thus having relinquished the duties of the arbitrators and not having been appointed afresh, the award given by them on 14.2.62. was invalid and without jurisdiction. 4. On appeal by the plaintiffs, the court of appeal below on re-appraisal of the evidence however, held in favour of the plaintiffs on the first two questions, namely, that the Punchnama (Ext. 1) was a true and genuine document executed by all the parties and that there was no misconduct on the part of the arbitrators in conducting the arbitration proceedings and that the award was valid and operative document. He accordingly, directed for passing a decree in terms of the award. It however, did not address itself on the 3rd point, namely, the effect of the direction of the arbitrators to the parties to settle the matter among themselves. 5. Mr. S.B.N. Singh in support of this petition, after some argument, had ultimately' to concede that the finding of the learned Additional Subordinate Judge on the first two questions could not be examined by this Court in revision. He, however, pressed the application on the third point answered in favour of the petitioner by the trial court and contended that the reference in question will automatically stand revoked on the arbitrators' aforesaid direction and, therefore, the award was without jurisdiction. The contention of the learned counsel is attractive but is not tenable. Section 5 of the Arbitration Act, lays down that the 'authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the court, unless a contrary intention is expressed in the arbitration agreement. The above provision makes it abundantly clear that in order to revoke the authority of the arbitrators, leave of the court is necessary. I do not find any force in the contention that if the arbitrators instead of proceeding with deliberation' towards its disposal, granted some time to the parties to settle up their matter, that would amount to a cessation or revocation of the authority automatically, as according to the evidence, when it was disclosed to them that it could not be possible to settle up the matter, they proceeded in the matter further and gave their award. Although no authority could be cited where an exact situation had to be considered, reference can be usefully made to two cases of the Calcutta High Court, namely, (1) The Baranagore Jute Factory Co. Ltd. Vs. M/S Hulaschand Rupchand A.I.R. 1958 Cal. 490 and (2) Morgan Walker and Co. Vs. Khardah Co. Although no authority could be cited where an exact situation had to be considered, reference can be usefully made to two cases of the Calcutta High Court, namely, (1) The Baranagore Jute Factory Co. Ltd. Vs. M/S Hulaschand Rupchand A.I.R. 1958 Cal. 490 and (2) Morgan Walker and Co. Vs. Khardah Co. Ltd. A.I.R. 1959 Cal 169. In the first case an award given by the arbitrators was set aside by the Court and thereupon a fresh award was given by the arbitrators. The question was raised as to whether the authority of the Arbitrators some to an end after giving of the award. It was held that where the award was set aside, the reference and the agreement automatically revived. In the next case also in a similar situation it was again held that a reference was not superseded on the setting aside of the award and the arbitrator remained in seisin of the proceeding and the arbitration agreement continued to subsist. 6. Relying upon the views taken by the learned Judges of the Calcutta High Court, I do not feel any doubt in taking a view in this case that if the arbitrators allowed the parties some time to compromise the matter, the said Act, would not amount to a revocation or cessation of the authority and the reference and agreement remained in full force and, accordingly, the arbitrators had full jurisdiction to ultimately determine the dispute and give their award. 7. I do not find any merit in this application and would dismiss the same, but in the circumstances of the case, there will be no order as to costs. Application dismissed.