Research › Browse › Judgment

Orissa High Court · body

1988 DIGILAW 3 (ORI)

GANGARAM CHHAPOLIA v. BHAGIRATHI PRADHAN

1988-01-07

L.RATH

body1988
JUDGEMENT L. Rathe, J. - An award in favour of the appellant having been refused to be made a rule of the court by the Additional Subordinate Judge, Cuttack, the present appeal has been preferred. The short facts are that after the award was filed in the court in pursuance of an application made by the appellant under Section 14(2) of the Arbitration Act, notice was issued by the court to both the parties. The respondent having not appeared and contested, the award was confirmed. An application was made by the respondent to set aside the ex-parte decree and to grant him opportunity to contest the proceeding. Eventually, the decree was set aside and the proceeding was restored to file. Thereafter the respondent filed objection on 22-4-1981 challenging the award on the ground of misconduct of the arbitrator as also on the ground that no arbitration agreement existed between the parties. The learned Subordinate Judge accepted the plea of absence of any arbitration agreement and hence refused to affirm the award. Mr. Patnaik, learned counsel for the appellants, urges substantially two questions to assail the judgment. First, that the objection filed was barred by limitation since after the award notice of the same had been issued by the arbitrator and the court to the parties and at any rate the respondent had notice of the award during the proceeding execution since he, during the pendency of the execution preceding, had filed application before the court to set aside the decree and as such he should have filed the objection to the award within thirty days from the date. Secondly, the objection filed by the respondent could not have been acted upon inasmuch as the same was not in compliance with rule 2(e) of the Orissa Arbitration Rules, 1963. So far as the first submission of Mr. Patnaik is concerned, it clearly does not service. It is the case of the respondent, which had also been accepted by the learned Additional Subordinate Judge, that he never had any notice of the award either from the arbitrator or from the court when the same was filed there and his such plea having been accepted the ex-parte decree was set aside. It is the case of the respondent, which had also been accepted by the learned Additional Subordinate Judge, that he never had any notice of the award either from the arbitrator or from the court when the same was filed there and his such plea having been accepted the ex-parte decree was set aside. Thus the limitation against him under Article 119 of the Limitation Act could not have started to run until the notice was served upon him either of making of the award or of filing of the same. Even if it is taken that the respondent became aware of the award during the execution proceeding, yet he could not have filed an application to set aside it until the decree confirming the award had itself been set aside since as long as the decree subsisted there was no award it having merged in the decree itself. The view is also supported by a decision of the Allahabad High Court in Janki Rice Mills v. Dwarika Prasad Asharfi Lal (1964 ACJ 724). So far as the second submission made by Mr. Patnaik is concerned it has more substance. Rule 2(c) of the Orissa Arbitration Rules may be extracted with benefit : "Applications under Sections 14(2) and 20(1) of the Act shall, if the Court is satisfied that the petition is in order, be numbered and registered as regular suits. Other applications under the Act shall be numbered and registered as Miscellaneous Judicial Cases. The provision requires that all applications under the Act except these under Sections 14(2) and 20(1) are to be numbered and registered as Miscellaneous (Judicial) Cases. An objection taken to an award on he ground of misconduct or absence of arbitration agreement is in effect an application to set aside the award on such ground. Such an application is contemplated under Section 30 or Section 33 of the Arbitration Act and the latter section provides that the court has to be moved for such reliefs through an application. Rule 431(xxxi) of the G.R. & C.O. Civil Vol. I also stipulates that an application under Section 33 of the Arbitration Act is to be registered as a Miscellaneous (Judicial) Case. Rule 431(xxxi) of the G.R. & C.O. Civil Vol. I also stipulates that an application under Section 33 of the Arbitration Act is to be registered as a Miscellaneous (Judicial) Case. Rule 11 of the Orissa Arbitration Rules stipulates that after a petition has been presented in court and if found to be in order, a notice thereof has to be given to all persons as may seem to be likely to be affected by the proceedings, requiring them to show cause as to why the relief sought in petition should not be granted. The notice is to be accompanied by copies of the petition and the affidavits, if any, the copies being supplied by the petitioner." Admittedly, the objection filed by the respondent was not in the form of an application and it had also not been registered as a Miscellaneous (Judicial) Case. It had also not been affixed with the proper stamp. Since no Miscellaneous (Judicial) Case was stated, there was no occasion for the appellant to file objection regarding existence or otherwise of the arbitration agreement. It is found from the orders that after several adjournments of the instance of both the parties an order was recorded on 6-1-1983 that no evidence had been adduced by the parties and instead arguments were advanced. In these circumstances, it is urged by Mr. Patnaik that a valuable right had been lost to the appellant of filing his objection in the Miscellaneous (Judicial) Case which ought to have been started and thus he did not have opportunity to contest the claim of the respondent regarding absence of the arbitration agreement. Mr. R.K. Mohanty, learned counsel for the respondent, while conceding that no formal application had been made seeking setting aside of the award, yet strenuously contends that filing of an application is a mere formality and that in effect such an application had been made in the form of an objection. It is contended that merely because the objection was not affixed with stamp had not appended with it a prayer, such facts would not detract in any way substantially from it being taken as a prayer where the court to set aside the award and that the substance was there, mere absence of the form should not be allowed to override the same. In support, he has placed reliance on Madanlal v. Sunder Lal ( AIR 1967 SC 1233 ), where their Lordships observed that it may be conceded that if there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in the case may be treated as such an application. Objections raised by the party in that case were covered by Section 30 of the Arbitration Act and the Court held that though he had not specifically stated for setting aside the award, yet that is what he had really wanted the Court to do after hearing the objection. Further reliance is also placed by Mr. Mohanty on Narayan Panda v. The State of Orissa and another (AIR 1978 Orissa 135), where in respect of a similar objection raised it was observed that even though the objection filed was not in terms in compliance with rule 3 of the Orissa Arbitration Rules, 1963 in so far as the objections were not verified as required under the Code with the requirements of the rule the same having been affixed with proper stamp, the pages having been signed by the advocate and there having been also a prayer. So far as the decision of the Supreme Court is concerned; it is not one in which any rule like the Orissa Rules was before their Lordships for consideration. The rule requires that not only the objection, should be in the form of an application, but the same has to be registered as a Miscellaneous (Judicial) Case and upon its such registration a procedure has been laid down how the court shall proceed, i.e. under rule 11 the court Is called upon to issue notice to the parties to file their objections to the same and decide the matter accordingly. Hence, even if the submission of Mr. Mohanty that the objection filed by the respondent have been treated as an application is conceded to, yet that having not been registered as a Miscellaneous (Judicial) Case, effectively flouted the provisions of the rule depriving the appellant of opportunity to file objection to the stand of the respondent that there had been no arbitration agreement. Mohanty that the objection filed by the respondent have been treated as an application is conceded to, yet that having not been registered as a Miscellaneous (Judicial) Case, effectively flouted the provisions of the rule depriving the appellant of opportunity to file objection to the stand of the respondent that there had been no arbitration agreement. Since no litigant is to be made to suffer for the laches of the court, and here it was the duty of the court to have registered the objection as a Miscellaneous (Judicial) Case, the ultimate result cannot be said to have been properly reached, particularly when the appellant has apparently suffered a prejudice having not been able to file objection to the objection filed by the respondent. A view somewhat similar to this was also taken in a decision of Hon'ble S. C. Mohapatra J. in Chandrasekhar Mohanty v. M/s. Gangaram Chhapolia & Co. In that view of the matter, the appeal is allowed. The judgment and decree of the court below are set aside and the case is remanded to the Additional Subordinate Judge, Cuttack for registering the objection of the respondent as a Miscellaneous (Judicial) Case, to treat it as an application under Section 33 of the Arbitration Act, grant opportunity to remove defects regarding court-fee and otherwise and re-dispose of the matter in accordance with law. There shall however be no order as to costs. The lower court records be sent back forthwith. Appeal allowed.