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Gauhati High Court · body

1990 DIGILAW 256 (GAU)

Ratish Chandra Dutta v. Union of India

1990-12-07

B.P.SARAF

body1990
This appeal under section 39 of the Arbitration Act, 1940 is directed against the judgment and decree dated 18.6.83 of the Assistant District Judge, Tezpur by which the objection filed by the appellant under section 16/17 read with section 30 the Arbitration Act, 1940 hereinafter 'the Act' was rejected and decree was granted in terms of the award. The appellant, who is a contractor, entered into a contract with the Union of India for providing refuse bins at Tezpur to the Garrison Engineer. In course of the execution of the contract, certain disputes and differences arose between the parties in the matter of payment of certain claims and eventually the matter was referred to an arbitrator in accordance with clause 70 of the contract between the parties. One Lt. Col. V. R. Gudi was appointed as sole Arbitrator by the Union of India which was agreed to by the appellant. The Arbitrator entered into reference on 13.7.1977. Though hearing etc. were all completed, Arbitrator could not make the award within the statutory period of four months. The Arbitrator, therefore, filed an application before the Court praying for enlargement of time for making and publication of the award upto 31st August, 1978. The prayer was allowed by order dated 12.7.78. The award was made thereafter by the Arbitrator on 25.7.78 much before the expiry of the enlarged period. By this award, the Arbitrator rejected the claim of the appellant and partly allowed the claim of the Union of India. The appellant filed a petition under section 16/17 read with section 30 of the Act for setting aside the award which was rejected by the Court below. Aggrieved by the said order of the Court, the appellant has come up before this Court in appeal under section 39 of the Act. The only point that is urged before this Court on behalf of the appellant is that the award is void, the same having been made after the expiry of the stipulated period of four months. This submission is based on the supposition that the order dated 12.7.78 passed by the Court under section 28 (1) of the Act enlarging time for making the award was void, the same having been made without hearing the appellant. Two points arise for consideration. This submission is based on the supposition that the order dated 12.7.78 passed by the Court under section 28 (1) of the Act enlarging time for making the award was void, the same having been made without hearing the appellant. Two points arise for consideration. The first is whether the appellant can challenge an order under section 28 (1) of the Act in an appeal under section 39 preferred against an order of refusal to set aside an award. The admitted position is that an order under section 28 (1) of the Act enlarging time for making award is not appealable under section 39 of the Act. The question is whether such an order, which is not appealable, can be challenged collaterally i an appeal under section 39 of the Act against an appealable order. The second question which it may be necessary to consider is that what is the scope and ambit of the power of the Court under section 28 (1) of the Act. It is necessary for the Court, before passing such an order to give a hearing to the parties or to pass a speaking order ? To properly appreciate these issues, it will be worthwhile to refer to the relevant provisions of the Act. Under clause 3 of the First Schedule to the Act, an Arbitrator is required to make an 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 power to enlarge time for making an award is contained in section 28 of the Act which reads : 28. (I) 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 for making the award. (2) Any provision in an arbitration agreement whereby the arbitrators or umpire may except with the consent of all the parties of the agreement enlarge the time for making the award, shall be void and of no effect." Section 39 of the Act specifies the orders which are appealable. From a perusal of the same it is evident that an order under section 28 (I) of the Act enlarging time for making an award is not appealable. From a perusal of the same it is evident that an order under section 28 (I) of the Act enlarging time for making an award is not appealable. So far as the scope and ambit of the power of the Court under section 28 (1) is concerned, it is well settled that the power given to the Court under section 28 (1) of the Act is very wide and confers full discretion on the Court to enlarge time for making an award at any time. It is equally settled that this power can be exercised even by the appellate Court. No appeal has been provided by the legislature against such an order. The questions for consideration is whether such an order can be allowed to be challenged collaterally in an appeal under section 39 of the Act. The order enlarging time for making the award in-the instant case was passed by the Court on 12.7.78. The award was made by the Arbitrator within the extended time. The appellant filed application for setting aside the award which was rejected by the Court. The present appeal is against the order of rejection of the prayer to set aside the award. In this appeal the appellant wants to challenge the order passed by the Court earlier on 12. 7. 78 enlarging the time for making award which admittedly is not appealable. The question is can he be allowed to do so. 1 find that somewhat similar situation was faced by the Bombay High Court in Shiv Omkar Maheshwari vs. Bansidhar Jagannath, AIR 1956 Bombay 459. It was held ; "...the contention that extension of time should not have been allowed by the learned Judge cannot, in our opinion, be made by t e appellant because under section 39, Arbitration Act, an order passed by the trial Judge extending time is not appealable. Legislature has clearly contem­plated that the question as to whether time should be extended should be left entirely to the discretion of the trial Judge and the order that the trial Judge may pass in the exercise of his discretion should be regarded as final." In that case a consolidated order was passed by the Court enlarging time under section 28 (1) and refusing to set aside the award. The order of extension of time was sought to be challenged in an appeal against the conso­lidated order. The order of extension of time was sought to be challenged in an appeal against the conso­lidated order. This attempt was turned down by the Court. It was observed- "...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." I am fully in agreement with the aforesaid decision of the Bombay High Court. Following the same, I hold that it is not open to the appellant to challenge the order enlarging time for making the award passed by the trial Court under section 28 (1) of the Act which under the law is not appealable. However, in the instant case, even on facts, I find that the trial Court was justified in enlarging the time for making the award. As observed earlier, the power under sub-section (1) of section 28 is very wide and confers full discretion on the Court to enlarge time for making the award at any time. The scope and ambit of the power were considered by the Supreme Court in State of Punjab vs. Hardyal, AIR 1985 SC 920 where it observed : "The policy of law seems to be that the arbitration proceeding should not be unduly prolonged. The arbitrator therefore has to give the award within the time prescribed or such extended time as the court concerned may in its discretion extended and the court alone has been given the power to extend time for giving the award. As observed earlier, the court has got the power to extend time even after the award has been given or after the expiry of the period prescribed for the award. But the Court has to exercise its discretion in a judicial manner." It was further observed that this power can be exercised even by the appellate Court. In the aforesaid case before the Supreme Court, the award was given after the expiration of the prescribed period. There was no extension of time by the trial Court. But the Court has to exercise its discretion in a judicial manner." It was further observed that this power can be exercised even by the appellate Court. In the aforesaid case before the Supreme Court, the award was given after the expiration of the prescribed period. There was no extension of time by the trial Court. The Supreme Court, however, on consideration of the facts and circumstances of the case, particularly the facts that the appeal had been pending for long and no useful purpose would be served in remanding the case to the trial Court for deciding whether the time should be allowed in the circumstances of the case or not, itself extended the time for making the award and directed that the award should be taken to have been given in time. This decision was followed in Hindustan Steelworks Construction Ltd. vs. C. Rajasekhar Rao, (1987) 4 SCC 93 . From the aforesaid pronouncements of the Supreme Court, it is clear that the power conferred on the Court under section 28 (1) of the Act to enlarge time for making the award is very wide. It has been left to the discretion of the Court to decide whether to enlarge the time for making the award or not. Needless to say that this discretion has to be exercised by the Court judiciously having regard to the facts and circumstances of each individual case. But once it has been so exercised the decision of the Court in this regard is final. No appeal lies against the same. Giving a hearing to the parties is not a sine qua non of exercise of discretion properly. Nor a speaking order a condition precedent. It is enough that the discretion is exercised bona fide and on proper application of mind to the relevant facts and circumstances of the case. This is so because the power is confined only to enlargement of time for making an award. The object and purpose of the power is to see that arbitration proceedings are not unduly prolonged. The order is in the nature of an order granting adjournment. There is no deter­mination of the rights of the parties. That is perhaps the reason that the legislature has granted finally to the order and provided no appeal against tbe same. The object and purpose of the power is to see that arbitration proceedings are not unduly prolonged. The order is in the nature of an order granting adjournment. There is no deter­mination of the rights of the parties. That is perhaps the reason that the legislature has granted finally to the order and provided no appeal against tbe same. It is also for the same reason that the Courts have held that this power can be exercised even by the appellate Court. In fact in Hindustan Steelworks Construction Ltd., supra, the Supreme Court itself exercised this power and enlarged the time and declared that the award would be treated as being made within time. We may, therefore, consider the facts of present case in the light of the law stated above. In the instant case, the application for enlargement of time made by the Arbitrator was the first application. The proceedings had been completed before the stipulated period of four months. The problem was with the Arbitrator who could not make the award within the time-frame. Therefore, Arbitrator applied to the Court for enlargement of time till 31st August, 1978 for making the award. On consideration of the facts and circumstances of the case, the Court was satisfied about the necessity of enlarging time and accordingly extended the time for making the award till 31.8.78. The award was made within the extended period. In these circumstances, I do not find any justification to hold that the exercise of discretion by the Court under section 28 (1) of the Act was unreasonable or improper. The reason for extension of time is obvious. In that view of the matter, the contention that the award was not made within time and as such, was a nullity, is not tenable. No other ground has been urged in this appeal. This appeal, therefore, fails and is dismissed. In the facts and circumstances of the case, I make no order as to costs.