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Gauhati High Court · body

1987 DIGILAW 8 (GAU)

Gaurisankar Chowkhani v. L. C. Baruah & 3 Others

1987-02-02

S.N.PHUKAN

body1987
This application under section 115 of the Code of Civil Procedure read with Article 227 of the Constitution is directed against the order dated 15.3.85 passed by the learned Asstt. District Judge, Dibrugarh in Money Suit (Arbitration) Case No. 53 of 1984. By the aforesaid order the learned trial court dropped the Arbitration proceeding on the ground that the Arbitrators neither filed the award nor prayed for extension of time. 2. On 8.12.83 the Opposite parties 2, 3 and 4 entered into an agreement with the petitioner under which they agreed to sell the entire green leaves produced by Mulchandbag Tea Estate in the year 1984 to the petitioner and in turn the petitioner made an advance payment of Rs. 1,00,000/-(Rupees one lakh). There was a clause in the agreement to resolve the dispute through Arbitration and as disputes arose between the parties, the petitioner filed a petition under section 20 of the Arbitration Act, 1940, for short the Act, praying inter alia, for filing of the Arbitration Agreement, appointment of Arbitrators and references of the disputes to the Arbitrators for settlement in terms of, the agreements. Another petition was also filed under section 41 of the Act praying for an injunction restraining the opposite parties from selling green tea leaves to the neighbouring tea estates and the learned trial court issued ad-interim injunction. However, the ad-interim injunction came up in appeal before this Court which was heard in presence of both the parties and this court passed an order vacating the injunction on the condition that the opposite parties would furnish necessary bank guarantee. By the impugned order the learned trial court not only dropped the proceeding, but vacated the injunction order and also discharged the opposite parties from the liabilities of the bank guarantee. 3. The learned trial court appointed two Arbitrators and by letter dated 13. 12. 84 (Annexure-A to the petition) referred the disputes to the Arbitrators with the direction to submit the award within first week of February, 1985. It is stated that parties appeared before the Arbitrators, submit their respective statement of claims, several sittings were held and matter was finally heard by the Arbitrators on 24th February, 1935. It is also stated that the Arbitrators informed the parties that no further hearing would be necessary and necessary award would be passed. It is stated that parties appeared before the Arbitrators, submit their respective statement of claims, several sittings were held and matter was finally heard by the Arbitrators on 24th February, 1935. It is also stated that the Arbitrators informed the parties that no further hearing would be necessary and necessary award would be passed. As the Arbitrators were directed by the learned Trial Court to file the award within 1st week of February, the Arbitrators filed a joint petition praying for extension of time. 4. Mr. D. P. Chaliha, learned counsel for the petitioner submits that though, on the petition for time, the learned trial court granted time upto 15. 3. 85, this order of the court was not communicated to the Arbitrators. I have perused the records and it does not show that the orders of the learned court were communicated to the, Arbitrators. 5. From the records, it appears that the present Arbitration proceeding was started under section 20 of the Act. i. e. with the intervention of the court. Sub-section (5) of section 20, inter alia, provides that after the reference is made to the Arbitrator, the Arbitration shall proceed in accordance with and shall be governed by the other provisions of the Act so far as they can be made applicable. According to item 3 of the First Schedule to the Act normally Arbitrators are to make their award within 4 months after catering on the reference or within such extended time as the court may allow. According to the section 23 of the Act, the court has to specify reasonable time for making the award. Though the reference was made to the Arbitrators on 13. 12. 84 court gave less than 2 months time. Normally the Court should have been guided by the item 3 of the first schedule in fixing the time. Be that as it may, though the learned court extended the time the Arbitrators were not informed and as such they were ignorant about the time within which they were to make the award and in my opinion the fact is sufficient to set aside the impugned order. 6. As stated above, this is an Arbitration with intervention of the court. Before passing the impugned order the learned trial court could have called for a report from the Arbitrators regarding the stage of the proceeding. 6. As stated above, this is an Arbitration with intervention of the court. Before passing the impugned order the learned trial court could have called for a report from the Arbitrators regarding the stage of the proceeding. By dropping the proceeding, the learned trial court has put an end to the agreement between the parties which the court has no power to do so. That apart, section 28 of the Act is wide enough to enable the court to enlarge the time for making the award even after the award has been made. 7. In view of what has been stated above, I am of the opinion that the impugned order dated 15.3.85 passed by the learned Asstt. District Judge, Dibrugarh in (Arbitration) Money Suit 53 of 1984 is liable to be set aside, which I hereby do, I also direct the learned trial court to implement the orders of this court directing the opposite parties to furnish necessary bank guarantee. Mr. Chaliba has stated that for the end of justice this matter may be tried by some other court. I accept his contention and direct that the matter may be sent back to the District Judge, Dibrugarh who may himself try this case or transfer it to some other competent court. 8. With the above directions the rule is made absolute. No costs.