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1988 DIGILAW 760 (ALL)

PANNA DEVI v. SADHU SARAN

1988-08-26

S.R.BHARGAVA

body1988
JUDGMENT S. R. Bhargava, J. - This appeal is directed against an order refusing to set aside the arbitration award. Sheo Murat and respondent Ram Chandra were real brothers Respondents Sadhu Saran and Subhash are sons of said Sheo Murat. Lal Bahadur was the brother-in-law (user) of Ram Chandra Respondent Gauri Shanker is alleged to be the relation of Sadhu Saran and Subhash. Respondent Sadhu Saran filed application under Section 14 of the Arbitration Act contending that Ram Chandra was tenure-holder of certain agricultural plots. On 7-7-1973 he accepted Rs. 12,000 from Sadhu Saran and agreed to execute sale-deed in respect of the said agricultural plots for Rs. 22,000. But before sale-deed could be executed in favour of Sadhu Saran, Subhash started claiming that the property should be treated as joint family property because the payment of Rs. 12,000 was made from joint family funds. This delayed execution of sale-deed by Ram Chandra. Meanwhile Sheo Murat colluded with Ram Chandra and Lal Bahadur. On 22-12-1976 a fictitious sale-deed in respect of the same plots was executed by Ram Chandra in favour of Lal Bahadur. This gave rise to dispute and differences. Ultimately there was an agreement to refer the dispute for arbitration to Gauri Shanker. Agreement dated 28-12-1976 was executed. Said Gauri Shanker carried out arbitration proceedings and made an award which was ultimately recorded and registered on 6-7-1980. Hence there was application for filing of the award in the court and making it rule of the court. On 5 July, 1981 notice was served upon the alleged arbitrator Lal Bahadur and Ram Chandra by publication in newspaper. On 24 August, 1981 Gauri Shanker filed some documents including the award dated 20-6-1980 in the court. On 15-9-1981 Lal Bahadur and Ram Chandra filed separate written statements in identical terms. They alleged title of Lal Bahadur through agreement of sale-deed dated 10-7-1973 and sale-deed dated 22-12-1976. According to them there was no difference or dispute. Sheo Murat being head of the family was attesting witness of sale-deed dated 22-12-1978. They denied execution of alleged agreement of arbitration dated 28-12-1976 and contended that the award dated 20-6-1980 is a fictitious and forged document prepared with the help of the relation of Sadhu Saran and Subhash. They further asserted that the alleged arbitrator Gauri Shanker never carried out the proceedings on arbitration with notice and mis-conducted himself. They denied execution of alleged agreement of arbitration dated 28-12-1976 and contended that the award dated 20-6-1980 is a fictitious and forged document prepared with the help of the relation of Sadhu Saran and Subhash. They further asserted that the alleged arbitrator Gauri Shanker never carried out the proceedings on arbitration with notice and mis-conducted himself. Though separate issue were framed yet the learned Civil Judge took up all the if sues together and repelled all the pleas raised on behalf of Lal Bahadur and Ram Chandra. He, therefore, made award rule of the court, impliedly refusing to set aside the award. Being aggrieved the heirs of Lal Bahadur preferred this appeal which has been heard at admission stage. On behalf of the respondents reliance was placed on the case of Madan Lal Haveliwala v. Sundar Lal (1983 ALJ 559). In this case it was held that application for setting aside the award on grounds covered by Section 30 of the Arbitration Act is necessary under Section 33 of the Act. Written statement filed was criticized not being an application and as being time barred. It was urged on behalf of the respondents that since there was no application for setting aside the award, the only option open to the lower court was to make the award rule of the court. Aforesaid case of Madan Lal v. Sunder Lal ( AIR 1967 SC 1233 ) went up in appeal to Supreme Court in the said case their Lordships of the Supreme Court laid down that the scheme of Arbitration Act clearly shows that if party wants an award to be set aside on any of the grounds mentioned in Section 30, it must apply within 30 days of the date of service of the notice of filing of the award. If no such application is made, to award cannot be set aside on any of the grounds specified in Section 30 of the Act. Their Lordships further held that it may be conceded that 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, if it is filed, within the period of limitation. Their Lordships further held that it may be conceded that 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, if it is filed, within the period of limitation. But if an objection like this has been filed after the period of Limitation, it cannot be treated as an application to set aside the award, or if it is so treated, it will be barred by limitation. The law laid down by the Supreme Court has to be followed. Now in the instant case it has to be seen whether the objections of Lal Bahadur and Ram Chandra in the form of written statements were filed within limitation. It has already been noted that award was filed in the court on 24-8-1981. Even before notice could be issued to Lal Bahadur and Ram Chandra, they filed objections in the form of written statement of 15-9-1981. Article 119 of the Schedule of Limitation Act prescribes Limitation of 30 days for applications of set aside award from the date of service of notice of filing of award. When a party did not wait for the notice and filed objections within 30 days of the filing of the award, it cannot be said that the objections were filed beyond limitation prescribed in Article 119. Then the question arises whether it is an appropriate case for accepting the objections of Lal Bahadur and Ram Chandra in the form of written statements as applications under Section 33 of the Arbitration Act. No doubt grounds urged by Lal Bahadur and Ram Chandra were covered by Section 30 of the Arbitration Act which, inter alia, lays down that an award can be challenged on the ground of misconduct of the arbitrator, improper procurement of award or ward otherwise being invalid, if an agreement of arbitration is forged and fictitious and if the award on the basis of such an agreement is made by a relation the case would certainly fall u/s. 30 of the Act. In the instant case the most important feature of agreement of arbitration dated 28-12-76 is that although in the body of the agreement Ram Chandra is mentioned as a party to the agreement yet signature of Ram Chandra on this agreement is conspicuous by its absence. In the instant case the most important feature of agreement of arbitration dated 28-12-76 is that although in the body of the agreement Ram Chandra is mentioned as a party to the agreement yet signature of Ram Chandra on this agreement is conspicuous by its absence. Secondly the award is alleged to have been recorded and registered on 20-6-1980, i.e., after considerable delay. Even if the award is not hit by paragraph 3 of the 1st Schedule of the Arbitration Act, reasonable explanation for delay is required. Circumstances of the case are such that if the objections of Lal Bahadur and Ram Chandra are not treated as application under Section 30 much injustice may be caused. I held that it is a fit case in which objection in the form of written statements would be treated as application under Section 33 of the Arbitration Act. Once these objections are treated as application it becomes necessary for the court to resort to proper proceeding's under Section 33 of the Act. It also becomes necessary that proper court fee is realised from the heirs of Lal Bahadur and Ram Chandra himself. It is further necessary that Sadhu Saran is called upon to file objections or written statement against application under Section 33 of the Act. Then the court may receive evidence on affidavits or such further evidence as it may deem necessary. Hence in result this appeal should be allowed. Order of the trial court should be set aside. The case should be remanded to the trial court with specific direction that the objections of Lal Bahadur and Ram Chandra filed in the form of written statements should be treated as application under Section 33 of the Act and proper court fee should be realised from the heirs of Lal Bahadur and Ram Chandra himself. Then the procedure indicated above should be followed and case should be disposed of fresh. Appeal is allowed. Order under appeal is set aside. Case is sent back to the trial court for fresh disposal in the light of the observation made above. Cost of this appeal shall abide by the ultimate result of the case. Appeal allowed.