ABDULKHADER HAJI v. KUNHAMMED — 1985 DIGILAW 128 (KER)

Judgment :- 1. Questions of considerable importance in the law of Arbitration arise for consideration in this case. The questions are: (1) Whether the dismissal by court of an original petition by the Arbitrator under S.28 of the Arbitration Act. 1940 to enlarge the time for making the Award. will amount to 'superseding an arbitration' and whether an appeal will lie under S.39 of the Act from the order of dismissal; (2) Whether the Arbitrator can file an appeal from an order of the Court refusing to enlarge the time for making the Award; and (3) When the Arbitrator dies pending the appeal can any of the parties to the Arbitration agreement get himself transposed as the appellant. A question whether an Award passed in violation of an injunction restraining the Arbitrator from passing an Award has to be ignored also arises in the case. 2. This appeal was filed by the Arbitrator against the order of the Court below dismissing his original petition for enlargement of time for making the Award under S.28 of the Arbitration Act. 1940. By the same order the Court also dismissed the interim application by which the appellant Arbitrator filed in court the Award he made pending the Original Petition for time to make the Award. 3. As per an Arbitration agreement dated 24-6-1973 the respondents appointed the appellant as the sole Arbitrator for deciding certain disputes and for partition of the properties scheduled to the Original Petition. The Original Petition for extension of time was filed in the court below on 28-2-1974. On 14-8-1974 the court granted time up to 23-12-1974. On 18-11-1974 the 6th respondent who was exparte filed an interim application for setting aside the exparte order alleging that the Arbitrator and the first respondent colluded and obtained an extension of time for making the Award. On 18-11-1974 itself the 6th respondent filed an application for injunction restraining the Arbitrator from making the Award. Though the interim order of injunction issued by the court on 18-11-1974 was attempted to be served on the Arbitrator on 19-11-1974 he refused to accept the same. The Arbitrator then passed the Award and the same is purported to have been signed by him on 22-11-1974. On 17-1-1975 the exparte order against the 6th respondent was set aside. Though the interim order of injunction issued by the court on 18-11-1974 was attempted to be served on the Arbitrator on 19-11-1974 he refused to accept the same. The Arbitrator then passed the Award and the same is purported to have been signed by him on 22-11-1974. On 17-1-1975 the exparte order against the 6th respondent was set aside. Though the Arbitrator challenged the above order in a civil revision before this Court the same was dismissed by this Court on 26-5-1975. On 17-1-1975 the interim order of injunction also ceased to be in force. On 31-2-1975 the Arbitrator gave notice to the parties except the 6th respondent. of the making of the Award. On 19-2-1975 the Award was filed in court along with I.A. 208 of 1975. On 8-4-1975 the 6th respondent filed a counter challenging the making and filing of the Award in Court. 4. The Court below dismissed the Original Petition for extension of time for making the Award and I.A. 208 of 1975 filing the Award in court holding: "In the case on hand the arbitrator has not given notice of filing the award. However. the court issued notice on 15-3-1975and the 6th respondent filed a counter challenging the award on 8-4-1975. Hence the objection is filed. within time. That apart. the award; was made at a time when interim injunction was in force. Moreover. when the award was made the period had expired and the application for extension of time was not allowed by the Court. Hence the award sought to be canvassed in I.A.No.203 of 1975 is a nullity. Since the award is made even before the extension of time. O.P.N3.7/1974 becomes infructuous." 5. As already mentioned the Arbitrator filed this Miscellaneous first Appeal against the above order of the Court below. Pending the appeal the Arbitrator left this world on 9-10-1984. On 11-11-1984 the legal representives of the Arbitrator filed C.M.P. No. 30226 of 1984 to implead them as supplemental appellants in the appeal. The 3rd respondent in the appeal opposed the impleading by contending that when the Arbitrator died no cause of action survived to his wife and children as the right is purely personal and hence the wife and children have no locus standi to come in. The contentions of the 3rd respondent. were upheld and the application for impleading was dismissed. The 3rd respondent in the appeal opposed the impleading by contending that when the Arbitrator died no cause of action survived to his wife and children as the right is purely personal and hence the wife and children have no locus standi to come in. The contentions of the 3rd respondent. were upheld and the application for impleading was dismissed. holding that the arbitrator when appointed is an officer and the right is a personal one and in an appeal filed by him against an order in an Original Petition for extension of time for making an Award the right to prosecute the appeal will not survive to his legal heirs. 6. Then respondents 1 and 2 in the appeal filed C.M.P.32366 of 1984 to transpose them as appellants in the appeal and allow them to continue the appeal. Respondents 3.4 and 9 to 15 in the appeal opposed the C.M..P. A counter-affidavit was filed by the 3rd respondent contending that the appeal by the Arbitrator was incompetent and the right to sue at any rate will not survive after the death of the Arbitrator. 7. The first question to be considered is whether an appeal lies under S.39 of the Arbitration Act. 1940 from an order of the Court refusing to enlarge time for making the award. S.39 of the Arbitration Act enumerates the orders from which the appeal lies under the section and one of those orders is an order superseding an arbitration. So. if the order refusing to enlarge time for making the award is in effect an order superseding an arbitration. an appeal will lie under S.39 of the Act. The effect of an order refusing to enlarge time for making the award is that the arbitration as per the agreement of the parties appointing the arbitrator comes to a grinding halt. The order becomes final. it goes without saying that there can be no arbitration as per the agreement of the parties appointing the arbitrator. Though the order does not say in so many words that the arbitration is superseded. there cannot be any arbitration as per the agreement after the Court refuses to enlarge time for making the award. So. The order becomes final. it goes without saying that there can be no arbitration as per the agreement of the parties appointing the arbitrator. Though the order does not say in so many words that the arbitration is superseded. there cannot be any arbitration as per the agreement after the Court refuses to enlarge time for making the award. So. it has to be taken for granted that by refusing to enlarge the time for making the award the Court really supersedes an arbitration and an order under S.28 of the Arbitration Act refusing to enlarge time for making the award is really an order superseding an arbitration. Hence it goes without saying that there is an appeal from such an order passed by the Court under S.28 of the Arbitration Act. Counsel on both sides relied on a number of authorities in support of their contentions. In Martirosi v. Subramaniam Chettiar (AIR 1928 Mad. 69) it has been held: "An order refusing to enlarge the time for the submission of an award remitted [to the umpire on an application under S.13. Arbitration Act is a judgment and is appealable." It has to be pointed out that in the above decision what the High Court of Madras has held is that an appeal will lie under the Letters Patent (Madras) Rules and not an appeal under the provisions of the Arbitration Act. In Bhaiyalal v. Swat Singhai Pannalal (AIR 1944 Nag. 152) it has been held: "The order allowing leave to revoke the authority of the appointed arbitrator is not an order superseding the arbitration such as can be appealed against." In S.N. Agarwalla. Baidyanath Mandal (AIR 1972 Patna 29) it has been held: "Mr. Chatterjee then contested the impugned order. He drew our attention to S.39 of the Act which gives a list of the order against which appeal may lie. That section provides that an appeal shall lie from those orders as given therein and from no others. The first in the list of an order is superseding an arbitration. In my view. the impugned order amounts to supersession of an arbitration. Therefore. the appeal was maintainable". (para. 13) In Chandra v. Godavari (A. I. R.1972 Pat. That section provides that an appeal shall lie from those orders as given therein and from no others. The first in the list of an order is superseding an arbitration. In my view. the impugned order amounts to supersession of an arbitration. Therefore. the appeal was maintainable". (para. 13) In Chandra v. Godavari (A. I. R.1972 Pat. 340) it has been held: "Under the Act the phrase 'superseding an arbitration' in clause (i) of sub-section "(1) of S.39 has got to be assigned a meaning with reference to the power of the Court to supersede an arbitration under S.19 of the Act In my opinion. therefore. the order recalling the reference is not appealable under S.39 of the Act. I am of the opinion in the first instance that when the Court has got power to make a reference under S.23 of the Act. it must be assumed that the Court has got power to recall the reference. But here. an order making a reference under. S.23 of the Act is. undoubtedly. not appealable and. therefore. an order recalling a reference also is not appealable". (para. 2) In the above case. the reference was under S.23 of the Arbitration Act at the instance of the Court and it was not an arbitration in pursuance of an agreement for arbitration. In R.N. Rice Mills v. State of Orissa (AIR 1959 Orissa 4) it has been held: "I am of the opinion that refusal to extend time by the court on the application of the arbitrators or the party does not amount to an order superseding the arbitration so as to be appealable under Cl. (1) of S.39 of the Arbitration Act of 1940". (para. 5) In Shiv Omkar v. Bansidhar (AIR 1956 Bom. 459) it has been held: "It is true that the application made by the respondent for extending time was consolidated with the appellant's application for setting aside the award. But this consolidation cannot give the appellant a right to challenge an order which. under the law. is not appealable. Therefore. in our opinion. it is unnecessary for us to consider whether the learned judge was right or not in extending time for making the award." By no stretch of imagination the above order will amount to an order superseding an arbitration. In M.H. Tejani v. Kulsumbai (AIR 1967 Bom. under the law. is not appealable. Therefore. in our opinion. it is unnecessary for us to consider whether the learned judge was right or not in extending time for making the award." By no stretch of imagination the above order will amount to an order superseding an arbitration. In M.H. Tejani v. Kulsumbai (AIR 1967 Bom. 300) it has been held: "From this scheme it is clear that although the language employed in S.19 and 25 is not identical with the language employed in S.12(2) in substance the power contained in the two sections is identical. namely the power to order that there will be no arbitrasion with respect to the difference referred and that the arbitration agreement shall cease to have effect. In other words. when the court orders that the arbitration agreement shall cease to have effect. in effect it sets aside the arbitration agreement with respect to the difference referred. When the court orders that the arbitration agreement is superseded. the court in terms makes an order that the arbitration agreement shall cease to have effect. Therefore. an order by the court that the arbitration agreement shall cease to have effect with respect to the difference referred. is in law an order superseding the arbitration and is. therefore. appealable under S.39(1)(i) of the Act." 8. The next question to be considered is whether an arbitrator can file an appeal against an order by which the Court refuses to enlarge the time for making the award. It was contended that the arbitrator cannot be a person aggrieved by the order passed by the Court refusing to enlarge time and hence the appeal filed by him is incompetent. The learned counsel for the petitioners in the petition for transposing. contended that the arbitrator is the representative of all the parties to the agreement for arbitration and hence he is competent to file an appeal from the order in question. In Adi Pherozshah Gandhi v. H.M. Seervai (AIR 1971 SC 385) the Supreme Court had occasion to consider the scope and ambit of the words 'person aggrieved'. The Supreme Court held: "it is apparent that any person who feels disappointed with the result of the case is not a'person aggrieved'. He must be disappointed of a benefit which he would have received if the order had gone the other way. The Supreme Court held: "it is apparent that any person who feels disappointed with the result of the case is not a'person aggrieved'. He must be disappointed of a benefit which he would have received if the order had gone the other way. The order must cause him a legal grievance by wrongfully depriving him of something. It is no doubt a legal grievance and not a grievance about material matters but his legal grievance must be a tendency to injure him. That the order is wrong or that it acquits someone who he thinks ought to be convicted does not by itself give rise to a legal grievance." In Corpus Juris Secondum. Vol. IV page 356. Ist Edition it has been stated: "Broadly speaking. a party or person is aggrieved by a decision when. only when it operates directly and injuriously upon his personal. pecuniary and proprietary rights." In Re Riviere's Trade Mark ((1884) 26 Ch.D. 48) it has been held: "it must be a legal grievance. it must not be a stet pro ratione voluntas the applicant must not come merely saying 'I do not like this thing to be done". it must be shown that it tends to his injury. or to his damage. in the legal sense of the word." In State v. Ram Sri (AIR 1976 All. 121) it has been held: "In other words. the right to file an appeal against a judgment or decree exists only in the person who is aggrieved or prejudiced thereby. A party. therefore. who would benefit from the change in the judgment has an appealable interest. This interest. of course. should not be contingent. speculative or futurities. It must be substantial. immediate and pecuniary. Such an interest must have invaded legal rights of the person filing an appeal. It is. therefore. clear that an aggrieved party is one who is injuriously affected by the judgment or whose rights are directly affected by the operation of the same." "The important thing which may be noted in this definition is that the person filing an appeal must have 'legal grievance' against the decision which 'wrongfully deprives him of something' or 'affects his title to something' "it is clear that the mere fact that a judgment is wrong. does not entitle a person to file an appeal against the same. does not entitle a person to file an appeal against the same. It is necessary that such a person must be deprived of the results of the litigation which he was expecting in his favour in case the judgment went against him." (paras.8. 9.10) In the above decision the Court relied on the following passage from Re Sidebotham: Ex. P. Sidebotham ((1880) 14 Ch. D. 458): "not really a person who is disappointed of a benefit which he might have received if some order had been made. A'person aggrieved' must be a man who had suffered a legal grievance. a man against whom a decision has been pronounced which had wrongfully deprived him of something. or wrongfully refused him something or wrongfully affected his title of something." In A.P. Agricultural University v. Dan Reddy (1974-ALT 332) Chinnappa Reddy J. (as he then was) speaking for the Court. has held that a person cannot be said to be directly affected by the judgment of a Court unless some right or liability of his is declared by the Court. An arbitrator is a judge of the parties' own choosing. He is a disinterested person for whose decision the matters in dispute are referred to by the parties. Even though he has been chosen by the parties he cannot identify himself with any of the parties. The moment he does this he will cease to be entitled to continue as arbitrator. So. it goes without saying that an arbitrator cannot represent any of the parties or cannot be a representative of the parties to the arbitration. Under S.28 of the Arbitration Act. 1940 the arbitrator or any of the parties to the arbitration agreement can move the Court for enlarging the time to make the award. If the Court declines to enlarge the time the parties to the arbitration can challenge that order in appropriate proceedings but the arbitrator has nothing more to do. As per the agreement for arbitration the arbitrator is to conduct the arbitration within a specified time and make the award. If he was not able to do that and the Court refuses to enlarge the time he will have to leave it there. It is not the arbitrator's job to fight out the matter and get an extension of time. If he was not able to do that and the Court refuses to enlarge the time he will have to leave it there. It is not the arbitrator's job to fight out the matter and get an extension of time. Whether the parties to the arbitration will suffer if the time for making the award is not enlarged this cannot be the concern of the arbitrator. He can rest content that the parties will take care of themselves. By no stretch of imagination the arbitrator who is a person disinterested in the dispute. can be aggrieved by the order of the Court refusing to enlarge time for making the award. In this view. the arbitrator cannot be a person aggrieved by the order of the Court refusing to enlarge time. As it goes without saying that an appeal can be filed only by a person aggrieved by the order appealed against this Miscellaneous First Appeal filed by the arbitrator is not maintainable. 9. Respondents 1 and 2 in the appeal filed by the arbitrator has applied for transposing them as appellants in the place of the arbitrator who passed away pending the appeal. So. the question is whether this can be allowed and whether they can be permitted to prosecute the appeal. If the appeal abated by the death of the arbitrator. no question of transposing arises. Even if the appeal did not abate if no purpose will be served by transposing. then also transposing need not be done. No question of transposing also arises in an incompetent appeal. In Aiyappan v. Kesavaru (AIR 1953 TC 545) it has been held: "Abatement is a legal consequence flowing from the omission to take the necessary steps within the time limited by law to implead the legal representative of the deceased plaintiff and a formal order of the court is not necessary for such a consequence to happen. In Aiyappan v. Kesavaru (AIR 1953 TC 545) it has been held: "Abatement is a legal consequence flowing from the omission to take the necessary steps within the time limited by law to implead the legal representative of the deceased plaintiff and a formal order of the court is not necessary for such a consequence to happen. That must be the reason why the framers of the Code chose to use the expression that the suit shall abate so far as the deceased plaintiff is concerned in 0.22 R.3(2) instead of the expression that the 'court may pass an order that the suit shall abate' as contained in S.366 of the old Code."The effect of these provisions is only that the abatement takes place by operation of law and it does not depend on any order of the court." (page 548) In P.V. Sarma v. S.C. Rly. Employees Co-op. Cr. Socy. (AIR 1977 A.P. 319) it has been held: "In order to decide whether a particular right of action survives to the legal representatives or not the correct approach is to consider what the right claimed in the proceeding is. If the right is purely a personal one then the right to sue cannot survive. The mere fact that there is a possibility of the petitioner obtaining further reliefs in case he succeeds in establishing the right which he claims in the particular proceeding cannot be taken into account in determining whether the right to sue survives or not (para. 9) In Girijanandini v. Pijendra Narain (AIR 1967 SC 1124) it has been held; "A claim for rendition of account is not a personal claim. It is not extinguished because the party who claims an account or the party who is called upon to account dies The maxim'actio personatis moritur cum persona' a personal action dies with the person. has a limited application. It operates in a limited class of actions ex delicto such as actions for damages for defamation. assault or other personal injuries not causing the death'of the party. and in other actions where after the death of the party the relief granted could not be enjoyed or granting it would be nugatory." (para. 14) In T K. Amma v. M. K. Ravunni Nair (AIR 1965 Ker. 303) it has been held that there will be no abatement of a representative suit by the death of the plaintiff. and in other actions where after the death of the party the relief granted could not be enjoyed or granting it would be nugatory." (para. 14) In T K. Amma v. M. K. Ravunni Nair (AIR 1965 Ker. 303) it has been held that there will be no abatement of a representative suit by the death of the plaintiff. The same view has been taken by the Supreme Court in Charan Singh v. Darshan Singh 1975 (1) SCC 298. In The State of Uttar Pradesh v. C. Tobit (AIR 1958 SC 394) it has been held that a transferee pendente lite can continue an appeal filed by the transferor. In Santuram Hari v. Trust of India Assurance Co. (AIR 1945 Bom.11) it has been held: "Although the original plaintiff might not be entitled to maintain the suit. it is competent to the Court exercising its discretion under 0.1 R.10 to transpose a party defendant to the place of the plaintiff. such a party being entitled to maintain the suit. and pass the decree in favour of the newly added plaintiff though in most cases the Court would not exercise' its discretion in transposing defendants as party plaintiffs where a valuable right acquired by one of the defendants is likely to be taken away or defeated." In Ramnibas v. Benarashi (AIR 1968 Cal. 314) it has been held that in the case of the death of parties to an award filed in Court before judgment the Court has inherent power to bring on record the legal representatives. In Sitamony v. Sivarajan(1916 KLT 263) it has been held: "The provision in R.10 of 0.22 indicates that the right of the assignee to seek to continue the suit is not absolute as it is for the court to consider whether leave is to be granted. In appropriate cases the court may grant leave to continue the suit. Such an assignee is bound by the previous proceedings in the suit and his right is only one of further prosecution of the suit. It seems to be plain from the scheme of 0.22 that an assignee can make an application for leave to continue the suit so long as there is a suit. so far as it concerns the assignee. on the file of the court. In a suit which is not subsisting there is no scope for seeking continuance. It seems to be plain from the scheme of 0.22 that an assignee can make an application for leave to continue the suit so long as there is a suit. so far as it concerns the assignee. on the file of the court. In a suit which is not subsisting there is no scope for seeking continuance. It is only logical that in a case where the suit has abated the assignee cannot thereafter seek to be added as a party to the action. If the assignee seeks to be impleaded in the proceedings before the suit abates and the legal representatives also seek to be impleaded whether the court would allow the assignee to come on record is a different question. That will depend upon consideration of many matters. But the assignee cannot claim to come on record as a matter of right since leave is not to be granted as a matter of course. R.10 begins with the words 'in other cases'. The reference is to cases other than those mentioned in R.2. 3. 4. 7 and 8 of 0.22 of the C.P.C. The provision enables only continuance and that by leave of the court. There would be no scope for continuance where by reason of the operation of R.3 or R.4 as the case may be. there is abatement and consequently termination of the proceedings. In such a situation there is no scope for the assignee to make application under 0.22 R.10 C.P.C. In other words it means that no motion will succeed under R.10 when once there is abatement of the suit as against the party as whose assignee motion is made under O.22 R.10." (Headnote) In this case. by the death of the arbitrator appellant. the appeal has abated because the appeal arose from an order of the Court refusing to enlarge the time for making the award. The award is something which the appellant atone can make and he cannot make it once he has left this world. So. in this case. the personal action died with the person and the right to sue cannot survive. Not only that. no purpose will be served by transposing the respondents petitioners as appellants. Even if the appeal is allowed and the time for making the award is enlarged. they cannot step into the shoes of the arbitrator and make the award. There is another reason also. Not only that. no purpose will be served by transposing the respondents petitioners as appellants. Even if the appeal is allowed and the time for making the award is enlarged. they cannot step into the shoes of the arbitrator and make the award. There is another reason also. Only in a pending appeal a respondent can be transposed as an appellant. Here. the appeal abated on the death of the appellant. Over and above all these. the appeal itself being an incompetent appeal in the sense that it was filed by a person who cannot be an aggrieved person. no question of transposing arises in such an appeal. 10. The only question that remains to be considered is whether the passing of the award by the Arbitrator after the time for making the same had expired and when there was an injunction from Court restraining him from making the award in force. can in any way help the respondents petitioners in getting themselves transposed as the appellants in the place of the deceased appellant-arbitrator. In Hari Shanker Lal v. Shambhu Nath (AIR 1962 SC 78) it has been held: "The legal position may be formulated thus: (a) A notice to act may be given before or after the arbitrators entered upon the reference. (b) If notice to act is given before they entered upon the reference. the four months would be computed from the date they entered upon the reference. (c) If a party gives notice to act within 4 months after the arbitrators entered upon the reference. the arbitrators can make an award within 4 months from the date of such notice. And (d) in that event. after the expiry of the said 4 months the arbitrators become functus officio. unless the period is extended by court under S.28 of the Act; such period may also be extended by the court. though the award has been factually made". (para. 11) In Union of India v. K.L. Shaila (ILR (1973) 1 Delhi 160) it has been held: "I have. therefore. to hold that the learned Subordinate Judge had the" power to consider the question of extending the time for filing the decision of the arbitrator notwithstanding the fact that the decision had been filed after the expiry of the time previously fixed by court". In this case. admittedly. therefore. to hold that the learned Subordinate Judge had the" power to consider the question of extending the time for filing the decision of the arbitrator notwithstanding the fact that the decision had been filed after the expiry of the time previously fixed by court". In this case. admittedly. the award was not made within the time allowed for making the same. But the award was. as a matter of fact. later made and filed in Court. But before making the award something very relevant happened. The appellant-arbitrator moved the Court for enlarging the time for making the award and got an order enlarging the time colluding with some of the respondents. So. the order of the Court enlarging the time was later set aside by the Court at the instance of the 6th respondent who was earlier declared ex parte. The 6th respondent along with the petition to set aside exparte. moved an application for injunction and obtained an injunction restraining the arbitrator from making the award. The injunction order when taken to the arbitrator was refused by him. The arbitrator then made the award. So. the award made by the arbitrator was one made when he was. as a matter of fact. restrained by the Court by an injunction from making the award. In the case of such an award. the question is whether the Court will be justified in passing a subsequent order for enlarging the time for making the award. As it goes without saying that the award is one made in violation of an injunction issued by the Court. no Court will pass an order enlarging the time for making the award and legalise the award made in flagrant violation of a Court order. For the above reason. even if the respondents-petitioners get themselves impleaded as appellants in the place of the deceased arbitrator. it will only be a futile exercise as the award passed by the arbitrator cannot be treated as an award in the eye of law. 11. In the result. C. M. P. 32366 of 1984. the petition for transposing respondents 1 and 2 as appellants in the appeal is dismissed. The Miscellaneous First Appeal which has abated. is dismissed. No costs.