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1992 DIGILAW 885 (RAJ)

Chhoga Lal v. Legal Representatives of deceased Keshav Lal

1992-11-11

B.R.ARORA

body1992
B.R. ARORA, J.—Appellant Chhoga Lal and respondent Ganesh Mal were the partners in a business firm M/s. Ganesh Mal Bhagwanji and Company Sumerpur. Dispute arose between the two partners Chhoga Lal and Ganesh Mal and both the partners, on August 13,1961, vide EX. 2, agreed to refer the dispute to the Arbitration of Shri Dhan Raj. Shri Dhan Raj gave his Award on November 3, 1961, and in token of the receipt of the Award, got the signatures of Ganesh Mal and Chhoga Lal appended on the Award EX. 1. Dhan Raj, the Arbitrator on May 25, 1966, filed the Award in the Court of the Additional District Judge, Sirohi. Notices of this Award were issued to Ganesh Mal and Chhoga Lal. On August 18, 1966, Ganesh Mal appeared in the Court of the learned Additional District Judge, Sirohi, and filed the reply, accepting the Award. Chhoga Lal,also, appeared on the same day and filed reply raising certain objections regarding the validity of the Award. On March 15,1972 Chhoga Lal again filed an amended objection application challenging the validity of the Award. The main objections, taken by Chhoga Lal challenging the Award, were that the Award EX. 1 is neither signed by the Arbitrator nor is it registered as is required under Section 17 of the Indian Registration Act as it affects the immovable property and, therefore, the award is not valid and cannot be made a rule of the Court. An objection was, also taken that the application made by the Arbitrator under Sec. 14 (2) of the Arbitration Act (for short, the Act) is not properly verified as required under the Rules and it is,also barred by time and, therefore, the award cannot be made the rule of the Court. Chhoga Lal, in support of its case, examined himself as AW 1 and, also, got examined AW 2 Magan Raj and AW 3 Shesh Mal-the Munim of the firm, and placed reliance over certain documents. Ganesh Mal, in support of its case, examined himself as NA l/Wl and, also, got examined N Al/W 2 Tejaji, the scribe of EX. 2 and NA 1/W 3 Dhan Raj and a so, placed reliance over certain documents, including the copy of the Award EX. A1 and four letters marked as NAW 3/1 to NAW 3/4 dated August 13, 1961. 2 and NA 1/W 3 Dhan Raj and a so, placed reliance over certain documents, including the copy of the Award EX. A1 and four letters marked as NAW 3/1 to NAW 3/4 dated August 13, 1961. NAW 3/1 and NAW 3/2 were the letters which were signed by both Chhoga Lal and Ganesh Mal, which were addressed to the Arbitrator Shri Dhan Raj, in which a request was made for time for preparing the accounts-books. Letter dated 12-11-61 (NAW 3/3) was the letter signed by both Chhoga Lal and Ganesh Mal, addressed to Shri Dhan Raj, enclosing the stamp-papers for writing the Award and further stating that the award will be acceptable to them. The letter dated 19-11-61 (NAW 3/4) is written by Chhoga Lal to Shri Dhan Raj, the Arbitrator in which it has been mentioned that the sum payable under the Award to him by Shri Ganesh Mal has not been paid to him by Ganesh Mal. The learned Additional District Judge, Sirohi, by its decree and judgment dated February 24, 1975, allowed the application under Section 14 of the Arbitration Act filed by the Arbitrator for making the Award as the rule of the Court and the decree dated February 24, 1975. was prepared on the basis of this award. It is against this decree and judgment dated February 24, 1975, passed by the learned Additional District Judge, Sirohi, that the appellant has filed this miscellaneous appeal. 2. The first centention, raised by the learned counsel for the appellant, is that the Award Ex. 1 in question is an unsigned award and, therefore, the learned lower Court committed an error in making the award a rule of the Court. The learned counsel for the respondents, on the other band, has submitted that the award Ex. 1 has been produced by the Arbitrator himself in the Court which apparently shows that the Arbitrator Shri Dhan Raj owns the Award. Alternatively, it is submitted that Ex. A. 1 is the exact copy of the Award which is signed by the Arbitrator and which has been produced by Ganesh Mal in the Court, which can be treated as the Award and non-signing of the award by the Arbitrator is a formal defect which can be cured. 3. Alternatively, it is submitted that Ex. A. 1 is the exact copy of the Award which is signed by the Arbitrator and which has been produced by Ganesh Mal in the Court, which can be treated as the Award and non-signing of the award by the Arbitrator is a formal defect which can be cured. 3. Section 14 (1) of the Arbitration Act provides that when the Arbitrator has made his award, he shall sign it and shall give notice in writing to both the parties of the making and signing the award and the amount of the fee chargeable and payable to him in respect of the arbitration award. The Arbitrator while making the award, must make-up his mind upon the matter referred to him and express his judgment in writing and authenticate the same by signing it. The requirement of authenticating the Award by signing it is mandatory as is clear from the use of word shall before the word sign in Sec. 14(1) of the Act. Non-signing of the Award by the Arbitrator is a curable defect and that could have been cured if the learned lower Court so liked and could have returned the award for signing to the Arbitrator. But the learned trial Court did not get the award signed by the Arbitrator and placed reliance over the copy of the Award Ex. A. 1, which could not have been done. In the present case, the Award was got typed by the Arbitrator Dhan Raj, but it is not signed by him though it is signed by both the parties namely, Chhoga Lal and Ganesh Mal. Chhoga Lal and Ganesh Mal appended their signatures only with respect to the receipt of the copy of the award and they were not the executors of the document of award. The award could have been signed and authenticated by the Arbitrator Dhan Raj himself but that does not bear his signatures and the want of signature of Dhan Raj, the Arbitrator on the award invalidates it and renders the award nullity. The leaned lower Court, therefore, committed an error in making the award a rule of the Court in the absence of the signatures of the Arbitrator. The case of the respondents, on the other hand, is that though the Award EX. The leaned lower Court, therefore, committed an error in making the award a rule of the Court in the absence of the signatures of the Arbitrator. The case of the respondents, on the other hand, is that though the Award EX. 1 is not signed by the Arbitrator but because the Arbitrator himself has moved an application under Section 14 of the Arbitration Act to make the award a rule of the Court and, therefore, it may be deemed that he has appended his signatures on the Award. Alternatively, it is contended by the learned counsel for the respondents that EX. A. 1 is the true and correct copy of the award and is signed by Shri Dhan Raj-the Arbitrator and, therefore, that may be treated as the Award. It is, no doubt, true that the A bitrator Dhan Raj moved an application under Section 14 of the Act alongwith the award with the prayer that the award may be made a rule of the Court, but merely on the basis of making an application and filing the unsigned award alongwith that application, it cannot be presumed that the Arbitrator has signed the award particularly when Section 14(1) of the Act makes the requirement of the signature of the Arbitrator on the Award as a mandatory requirement and, therefore, filing of the application alongwith the award, which is not signed by the Arbitrator, cannot validate the award, which is not signed by the Arbitrator. So far as EX. A. 1 is concerned it is the typed carbon copy of the award Ex. 1 prepared by the same process. It bears the signatures of the Arbitrator Shri Dhan Raj. Dhan Rajs signatures on this copy of the award may at the most be taken to the effect that it is the true and correct copy of the award and not beyond that. The learned counsel for the respondents, in this respect, has placed reliance over the judgment of the Honble Supreme Court in that case of M/s. Hindustan Construction Company vs. Union of India(l). The learned counsel for the respondents, in this respect, has placed reliance over the judgment of the Honble Supreme Court in that case of M/s. Hindustan Construction Company vs. Union of India(l). In that case, the copy of the awad was produced in the Court which was signed by the Arbitrator but no endorsement was made on that copy that it is a certified true copy of the award and the Court, therefore, came to the conclusion that non-mentioning of the words certified/true copy of the original, will not make any difference and the signed copy of the award can be filed by the parties alongwith the application under Section 14 (2) of the Act and the copy bearing the signatures of the Arbitrator can be treated as the certified to be true copy. The copy EX. A. 1 filed by Ganesh Mal, at the best can be treated as the certified true copy of the award but it cannot be treated as the Award itself when the original award filed by the Arbitrator in the Court does not bear the signatures of the Arbitrator and, therefore, unless the award bears the signatures of the Arbitrator, it cannot be said to be an award in the eye of law and is a nullity and cannot be made a rule of the Court. 4. The next contention raised by the learned counsel for the appellant is that Shri Dhan Raj, the Arbitrator had noauthority under the law to file an Award in the Court on 25-5-66 as the Award was given in the present case without the intervention of the Court and the Arbitrator was not authorised-by the agreement EX. 2 to produce the award in the Court. The learned counsel for the respondents, on the other hand, submits that Section 14 of the Act nowhere precludes the Arbitrator to file the Award in the Court suo moto and the Arbitrator can file the award in the Court so as to make it a rule of the Court and it will not make any difference whether the Arbitrator is appointed by the Court or by the parties agreed to appoint the Arbitrator. This point was not argued by the learned counsel for the appellant before the learned Additional District Judge, Sirohi, but since it is a pure question of law and no evidence is required for the disposal of this controversy and, therefore this point can be considered even without its being agitated before the trial Court. Sub-sec.(2) of sec. 14 of the Act states that the Arbitrator or the Umpire shall, at the request of any of the parties to the arbitrator, or any person claiming as such as a party or if sodirected by the Court, to be filed in the Court and the Court shall, thereupon give notice to the parties of the filing of the Award. The language of Sub-section (2) of Section 14 of the Act does not preclude the Arbitrator from filing the award suo moto. It is, therefore, not necessary that the award can be filed by the Arbitrator only if the parties make a request to the Arbitrator to file same the or he may be asked by the Court on the application made by the parties to submit it in the Court. There is no prohibition in the Act against the Arbitrator from suo moto filing the award in the Court. The objection raised by the learned counsel for the appellant is, therefore, wholly untenable. The Arbitrator was competent to file the award in the Court suo moto so as to make it a rule of the Court. No illegality has been committed by the learned lower Court in deciding this objection against the appellant. 5. The next controversy, which requires consideration in the present case, is whether the award filed by the Arbitrator in the Court on May 25,1966, is, after about 4 1/2 years so as to make it a rule of the Court, was incompetent as being barred by limitation? According to the learned counsel for the appellant, Article 119 of the Indian Limitation Act deals with such type of cases and according to Section 119 of the Limitation Act, the period of thirty days is provided for filing of the award in the Court. According to the learned counsel for the appellant, Article 119 of the Indian Limitation Act deals with such type of cases and according to Section 119 of the Limitation Act, the period of thirty days is provided for filing of the award in the Court. The second limb of the argument of the learned counsel for the appellant is that if Article 119 of the Indian Limitation Act is not found applicable to the present case then the application is covered by Article 137 of the Limitation Act, which provides the limitation of three years for filing the application. The present application was filed after a period of 4 1/2 years and, therefore, it is barred by time and was incompetent. The learned counsel for the respondents, on the other hand, has submitted that neither Article 119 nor Article 137 is applicable in the present case as the application has been filed by the Arbitrator himself and for filing the award by the Arbitrator himself, no period of limitation has been provided under the Indian Limitation Act. Article 137 of the Limitation Act is a residuary article which provides a limitation of three years for making an application for which no period of limitation is provided elsewhere in the Act. This residuary Article 137 is applicable only to those applications for which no period of limitation has been provided in the Act. This is a general provision which cannot be invoked in the matters of application under the Arbitration Act because Article 119 of the Limitation Act specially covers the applications under Section 14 (2) of the Arbitration Act. Article 119 of the Limitation Act provides a period of thirty days for the filing of an Award in the Court under the Arbitration Act and the statting point of the limitation under Article 119 of the Indian Limitation Act is the date of the service of the notices under Section 14 (1) of the Arbitration Act. If any party has any objection to the Award after receiving the notice of the award, he can make an application for setting aside the awaid or for getting the award remitted for the reconsideration of the Arbitrator. This application has to be made under Section 33 of the Act, which reads as under: 33. If any party has any objection to the Award after receiving the notice of the award, he can make an application for setting aside the awaid or for getting the award remitted for the reconsideration of the Arbitrator. This application has to be made under Section 33 of the Act, which reads as under: 33. Arbitration agreement or award to be contested by application: Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits : Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit." Such an application can be made by a party to the Award and not by the Arbitrator himself. The Arbitrator, under Section 14 of the Act is not required to file any application. He can merely file an award in the Court and just intimate the Court that he has filed the same. Such an intimation or the filing of the award by the Arbitrator cannot be treated as an application as contemplated under Article 119 of the Indian Limitation Act. The Arbitration Act does not make it obligatory on the part of the Arbitrator to file the Award in the Court. All that Sub-section (1) of Section 14 requires is that the Arbitrator has to pronounce the Award and sign it and give notice of making of the award to the parties to the reference. The third column of Article ! 19 states that the time shall run from the date of service of the notice of the making of of the award. If Section 119 is made applicable to the application filed by the Arbitrator while submitting the award in the Court, then the third column of Article 119 will become redundant and lose its meaning and significance. The Arbitrator cannot be said to be a party interested in taking the award to the Court unless required to do so under sub-secticn (2) of Section 14 of the Act on the application made by the parties in the Court. The Arbitrator cannot be said to be a party interested in taking the award to the Court unless required to do so under sub-secticn (2) of Section 14 of the Act on the application made by the parties in the Court. It is for the parties to the arbitration to apply to the Court to see that the award may be made the rule of the Court and Article 119 of the Act is applicable only in those cases where the application under Section 14 (2) of the Act is moved by the parties to the arbitration. Thus, limitation provided under Article 119 of the Indian Limitation Act applies only to those cases where the parlies apply to the Court under Section ]4 (2) of the Act for filing the award and Article 119 has no application where the application is made by the Arbitrator himself. The application filed by the Arbitrator in the present case was, therefore, well within the time as no period of limitation has been provided under the Indian Limitation Act. 6. The next contention, raised by the learned counsel for the appellant, is that the award in the present case affects the movable and immovable properties both ana it is inadmissible in evidence because it is not registered. According to the learned counsel for the respondents, the Award EX. 1 does not refer to any immovable property and there is no materia] on record to show that the firm M/s. Ganesh Mal Bhagwanji owns any immovable property and, therefore, it was not required to be registered. Clause (5) in the Award EX. 1 read as under:— ^^blds vykok dqy cdk;k tk;nkn xq.kskey Hkxokuth ,.M dEiuh dh gSA blds ekfyd Jh xq.kskey Hkxokuth lqesjiqj okys jgsaxsA o cdk;k QeZ dh ysunsus ftEesokjh xq.kskey Hkxokuth dh jgsxhA AW-1 Chhoga Lal, in his statement before the Court, has stated that the immovable property worth Rs. 1,00,000/- belongs to the firm. AW 3 Shesh Mal, who was the Munim of the firm, has stated in the examination-in-chief that the firm owns Gudariya well and five Bighas of agricultural land having a garden and a building over it. He has further stated that the property, which was mortgaged by Ganesh Mal in favour of Shri Dhan Raj vide Ex. 7 was the property of the firm. He has further stated that the property, which was mortgaged by Ganesh Mal in favour of Shri Dhan Raj vide Ex. 7 was the property of the firm. In the cross-examination he stated that Gudariya well was the property of the firm and the Patta may be in the name of Ganesh Mal. NA 1/VV1 Chhoga Lal, in the examination-in-chief, has stated that Gudariya well was in his name but M/s Ganesh Mal Bhagwanji was managing the affairs of this well and the land. In the cross-examination he has admitted that the house over this land was constructed from the funds of the firm and he used to bring the amount in his own name but used to deposit that amount in the name of the firm. From the statements of these three witnesses as well as from Clause (5) of the Award it is, therefore, clear that the arbitration agreement EX. 1 in question relates to both movable and immovable properties. The Award declares that apart from the movable property divided by him, the remaining immovable property will be owned by Ganesh Mal. The award, thus, purported to create a right in favour of Ganesh Mal in the immovable property above Rs. 100/- and, therefore, it requires registration and as such the Award EX. 1 is inadmissible in evidence for want of registration. (See Lachhman Das Vs. Ram Lal (4). The learned lower Court was, therefore, not competent to pronounce the judgment in accordance with this award without its being registered. The award cannot be looked-into and no decree could have been passed in accordance with this award. The award could have been returned to the Arbitrator for getting it signed to getting it registered, but since the Arbitrator has breathed his last and, therefore, now, it can, neither be signed by the Arbitrator Shri (late) Dhan Raj, who is dead, nor can it be registered. 7. The next contention, raised by the learned counsel for the appellants that the Award is beyond the scope of the agreement EX. 2. I have perused the agreement EX. 2, by which the appellant Chhoga Lal and respondent Ganesh Mal agreed to refer the dispute to the Arbitrator Dhan Raj for arbitration. By this agreement EX. 7. The next contention, raised by the learned counsel for the appellants that the Award is beyond the scope of the agreement EX. 2. I have perused the agreement EX. 2, by which the appellant Chhoga Lal and respondent Ganesh Mal agreed to refer the dispute to the Arbitrator Dhan Raj for arbitration. By this agreement EX. 2, both the parties to the agreement agreed to refer the dispute to the Arbitrator Shri Dhan Raj for the closure of the partnership business and to resolve the dispute between them. All the disputes relating to the partnership business were referred by this agreement EX. 2 to Shri Dhan Raj and Dhan Raj gave his Award EX. 1. He acted within the parameters of the agreement EX. 2 and did not exceed his jurisdiction. The Award EX. 1 is in conformity with the dispute referred to the Arbitrator. He acted within the bounds and in terms of the contract and did not travel beyond the designated area fixed by EX. 2. 8. The next contention raised by the learned counsel for the appellant is that the application under Section 14 of the Act, filed by Shri Dhan Raj, the Arbitrator was not properly verified nor was any Court fee paid. No particular form is prescribed for the application to be filed by the Arbitrator in the Court. He is not even required to file any application. He is supposed to file the Award in the Court and no formality on the part of the Arbitrator is necessary if he suo moto files the award in the Court and, therefore the application filed by the Arbitrator suo moto submitting the Award in the Court, does not require any verification as no particular form of the application is provided. Rule 787 of the Rules applies only in the cases where a party files, an application and not on the application filed by the Arbitrator who suo moto applies to the Court. The Arbitrator can invoke any procedure for sending the award to the Court. He can even send the award by post. Thus, it does not require any verification as pointed out by the learned counsel for the appellant. 9. The next question raised by the learned counsel for the appellant is that the learned lower Court wrongly admitted the documents NAW 3/1 and NAW 3/2 to 3/4. He can even send the award by post. Thus, it does not require any verification as pointed out by the learned counsel for the appellant. 9. The next question raised by the learned counsel for the appellant is that the learned lower Court wrongly admitted the documents NAW 3/1 and NAW 3/2 to 3/4. The genuineness of these documents is not in dispute. The appellant admitted his signatures over these documents and when the genuineness of the documents is not disputed, the documents cannot be ignored merely on the ground of delay in their production. The learned lower Court has therefore, rightly taken these documents on record. There is no illegality in the order passed by the learned lower Court on this count. 10. The last contention, raised by the learned counsel for the appellant, is that the Arbitrator misconducted himself. The contention of the learned counsel for the appellant is that a day before the Award, the Arbitrator got a mortgage deed of the disputed property executed in his favour. Both Chhoga Lal and Ganesh Mal were aware of the indebtedness of the firm to Dhan Raj the Arbitrator and were, also, knowing that the property belonging to the firm, has been mortgaged with Dhan Raj, but inspite of that, both agreed to appoint Dhan Raj as the Arbitrator. Even after the appointment of Dhan Raj as the Arbitrator, the appellant participated in the entire arbitration proceeding without any protest and when this award was given against him, he has raised this objction and has, now, challenged these proceedings on this ground. This cannot be allowed to be done. As the appellant participated in the proceedings without any demur, he is, therefore, precluded by his acquiescence from challenging the award on that ground. At the time of entering into the agreement EX. 2, the appellant agreed for the appointment of Shri Dhan Raj as the Arbitrator knowing fully well that Ganesh Mal or the firm is indebted to him then, now, at this stage, when the award has gone against him, the appellant cannot be allowed to be released from the bargain which he willingly accepted and cannot be allowed to challenge the award given by Shri Dhan Raj on this count. 11. In the result, the appeal, filed by the appellant, is allowed with costs. 11. In the result, the appeal, filed by the appellant, is allowed with costs. The decree and judgment passed by the learned Additional District Judge, Sirohi, are set-aside.