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1984 DIGILAW 194 (PAT)

Mosst. Fulmani Devi v. Sheo Govind Prasad Agrawal

1984-05-10

CHAUDHARY SIA SARAN SINHA

body1984
Judgment 1. This Miscellaneous Appeal arises out an order dated 5-5-1979 passed by the Subordinate Judge, Bhabhua in Title Suit No. 58 of 1974 by which he made the award a rule of the Court. 2. It is undisputed that certain dispute cropped up between three sets of persons, namely, appellants of this Miscellaneous Appeal, respondent Sheogovind Prasad Agrawal as also respondent Dinesh Chandra and others. It is undisputed that in respect of some of these disputes, civil and criminal litigations were pending between the parties. There was an agreement between the three parties to refer the disputes existing between them, outside the Court and without intervention of the Court, to five panchas arrayed as opposite party set in Title Suit No. 58 of 1974 and a registered deed of reference dated 9-11-1971 came into being. The panchas could not submit the award in time and time for giving the award was extended. Ultimately, the panchas delivered their award on 7-11-1972 and registered the same on 5-12-1972. 3. On 14-2-1974, respondent Shivgovind Prasad Agrawal instituted Title Suit No. 58 of 1974 in the Court of Subordinate Judge, Sasaram, for making the said award a rule of the Court and for directing the panchas to file the award in the Court. The present appellants, who were defendants 1 to 3 filed written statement in that suit opposing the prayer of the plaintiff, Shivgovind Prasad Agrawal in the Title Suit on various grounds and praying that the suit be dismissed. On the death of defendant No. 1 his wife Fulmani Devi filed another written statement. 4. The parties led evidence and on consideration of the same, the Subordinate Judge made the award the rule of the Court and thus decreed the suit on contest against the present appellants and dismissed it ex parte against defendant No. 4 Ravindra Prasad on the ground that he was a minor. The defendants appellants have now brought this matter to this Court in the instant Miscellaneous Appeal. 5. Learned counsel for the appellants raised the following five contentions : (i) the registered deed of reference dated 9-11-1971 not having been filed before the Subordinate Judge in spite of the specific plea taken by these appellants in para-10 of the written statement that the award was not in conformity with the points referred to the arbitrators, the decree passed was illegal. (ii) the award not having been made within four months after entering on the reference and the time for making the award not having been extended with the consent of the parties, the award was illegal. (iii) the suit instituted by respondent Shivgovind Prasad Agrawal for making the award a rule of the Court was barred by limitation. (iv) non-consideration by the trial Court of the alleged misconduct on the part of the arbitrators on the ground that this would take the parties by surprise was bad in law, and (v) dismissal of the suit as against defendant No. 4 and its being decreed against the other defendants would introduce inconsistency in the award and make it illegal. Learned counsel for the respondents refuted all these contentions. 5A. Coming to the first point, there is force in the argument of the learned counsel for the appellants and this alone, as further contended by him, necessitates a remand of the case to the Subordinate Judge for fresh consideration. Reference to arbitration was outside the Court and without its intervention on the basis of a registered deed of reference dated 9-11-1971. The specific plea taken by the defendants in para-9 of the written statement was that the alleged award did not make any mention of any criminal case between the parties. The assertion made in para-10 of the written statement was that the alleged award was not in conformity with the points referred to in the arbitration agreement, that is to say, the registered deed of reference dated 9-11-1971. Jurisdiction of an arbitrator is restricted in the manner provided in the arbitration agreement and though the Court should lean in favour of upholding the award that is no ground for sustaining the award where the arbitrators have clearly misdirected themselves and have exceeded the scope of their authority. In spite of specific plea taken in this connection in the written statement, no issue was framed by the trial court in this respect nor did it consider this aspect of the defence case by a perusal of the arbitration agreement. In fact, as is undisputed, the arbitration agreement was not even produced before the Court below in spite of the petitions filed to that effect. In fact, as is undisputed, the arbitration agreement was not even produced before the Court below in spite of the petitions filed to that effect. It appears from order No. 67 dated 29-8-1978 of the trial Court that the panchas were noticed to produce papers in connection with the arbitration agreement, obviously, including the agreement for reference to arbitration. Four, out of five panchas, appeared and submitted that the papers were not with them. The fifth arbitrator does not appear to have appeared. In view of the specific objection taken in the written statement, referred to above, it was incumbent on the trial court to get produced the agreement for reference and then to examine whether the grievance raised by the defendants in the written statement on this score was valid or not. This has not been done. This, by itself, renders the judgment of the trial Court unsustainable and necessitates a remand of the case to the lower Court. This point is accordingly decided. 6. Since the case necessitates a remand, as mentioned above, it is not necessary to decide the other points urged before this Court. It shall be open to the trial Court to keep those contentions in view while deciding the case afresh on remand. It would suffice to say that rule 3 of the first schedule to the Arbitration Act, 1940 (hereinafter referred to as the Act) provides that the arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow. The allegation in paragraph-3 of the plaint of Title Suit No. 58 of 1974 that the time for filing the award was extended by the Court on the petition of the parties and that the time was extended with the consent of the parties was challenged in para-13 of the written statement and was denied. Sub-section (1) of sec. 28 of the Act provides 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 the time for making the award. Sub-section (2) of sec. Sub-section (1) of sec. 28 of the Act provides 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 the time for making the award. Sub-section (2) of sec. 28 of the Act provides that any provisions in an arbitration agreement whereby the arbitrators or umpire may, except with the consent of all the parties to the agreement, enlarge the time for making the award, shall be void and of no effect. In para-5 of its order, the trial Court has referred to the evidence of P.W. 5 and has observed that his evidence is unchallenged. This observation of the trial Court was challenged by the learned counsel for the appellants and he made a reference, in this connection, to para 23 of the cross-examination of P.W. 5 where he showed colossal ignorance of the date when the arbitrators entered on the reference. He took recollection to memory and stated that he was not in a position to say if the copies of the petitions filed by the parties for extension of time were filed in the case. In this state of evidence existing before the trial Court, it was incumbent upon the Court below to call for the papers of the Court which was said to have extended the time for submission of the award as also such of the petitions in which the parties indicated their consent to the extension of time. Learned counsel for the respondents relied on a decision of this Court reported in AIR 1975 Patna 63 (Bihar State Co-operative Bank Ltd. V/s. Phosphate Co. Ltd.) wherein it was observed that an award made beyond the period of four months is neither invalid nor void merely on that account. If either of the parties raises an objection or continues to participate beyond the period of four months under protest then, only can the arbitrator be held to be functus officio. This aspect has not been considered by the trial Court. 7. If either of the parties raises an objection or continues to participate beyond the period of four months under protest then, only can the arbitrator be held to be functus officio. This aspect has not been considered by the trial Court. 7. On the question of limitation, learned counsel for the respondents relied on a decision of this Court reported in AIR 1968 Patna 82 (Mahommad Hasan V/s. Mohammad Anwar Ahmad) wherein it was held that Art.119(a) of the Limitation Act, 1963 can have to application to the filing of an award by the arbitrators or umpire. This aspect will also be considered by the trial Court on remand. 8. In para-18 of the written statement filed on behalf of defendant Nos. 2 and 3, specific allegation was made that the arbitrators had misconducted and the proceedings and the award had been improperly procured by the plaintiff in collusion with the defendant second set, namely, the arbitrators. In para-14 of the written statement filed on behalf of defendant Fulmani, details of the alleged misconduct have been given and in the concluding portion of that para, it has been stated that there are other factors also which will amply prove that the arbitrators, in collusion with applicant, misconducted the proceedings and hence the award is liable to be set aside. In the case of K. P. Poulose V/s. State of Kerala, 1975 0 BBCJ 523, the Supreme Court held that under S.30(a) of the Arbitration Act, an award can be set aside when an arbitrator has misconducted himself or the proceedings. Their Lordships observed that misconduct under S.30(a) has got a connotation of moral lapse. It comprises legal misconduct which is complete if the arbitrator on the face of the award arrives at an inconsistent conclusion even on his own finding or arrives at a decision ignoring very material documents which throw abundant light on the controversy to hold a just and fair decision. The trial Court has not considered the instances of misconduct on the ground that this will take the other side by surprise. In view of the pleadings referred to above, the trial Court shall consider the alleged misconduct as stated in the two written statements and then record an appropriate finding on the basis of the materials available on the record. 8A. In view of the pleadings referred to above, the trial Court shall consider the alleged misconduct as stated in the two written statements and then record an appropriate finding on the basis of the materials available on the record. 8A. The trial Court will also consider the contention raised on behalf of the appellants about the award being inconsistent on account of the suit being dismissed as against defendant No. 4 and decreed as against the rest and record an appropriate finding in accordance with law. 9. In view of the infirmities pointed out above, the impugned order cannot be supported in law and is bound to be set aside. 10. The result is that the appeal is allowed, the impugned order is set aside and the matter is sent back to the trial Court on remand for fresh decision in accordance with law keeping in view the observations made above. The trial Court shall frame a separate issue regarding point No. 1, referred to above, and allow the parties to adduce such further evidence as they like on that issue and then decide the case afresh on the materials already available on the record as also on such further materials as are furnished by the parties regarding the additional issue and such paper or documents as are brought on the record even at the instance of the Court below for the ends of justice. There shall be no order for costs of this appeal and the parties are directed to bear their own costs.