GHANSHYAMBHAI v. GUJARAT STATE CONSTRUCTION CORPORATION LIMITED
1995-04-10
J.N.BHATT
body1995
DigiLaw.ai
J. N. BHATT, J. ( 1 ) WHETHER the impugned order rejecting an application to extend time for arbitration proceedings exercising powers under Sec. 28 of the Arbitration act, 1940, is legal and valid, is the theme of the present revision application. ( 2 ) BY this revision under Sec. 115 of the Code of Civil Procedure, 1908 (code for short), the petitioner has questioned the order dated 14-12-1988 passed by the learned Civil Judge (S. D.), Ahmedabad (Rural) at Mirzapur, dismissing Civil Misc. Application No. 130 of 1985 submitted by the petitioner-firm for extension of time for arbitration proceedings pending before the Arbitrator. ( 3 ) A few material facts may first be stated to examine and appreciate the merits of this petition. A dispute relating to the tender work for construction of a water reservoir at village Gadkal, near Ankleshwar, between the petitioner-firm and respondent No. 1-Gujarat State Construction Corporation (gscc for short) was referred to respondent No. 2 as a sole Arbitrator. ( 4 ) THE petitioner-firm is a contractor and GSCC had entered into a contract for execution of the aforesaid work of the GSCC in 1977. The contractor had submitted final bill to the GSCC on 25-5-1980. The GSCC raised a contention that execution of the work of the petitioner-firm was not according to the specifications and claimed deduction of Rs. 18,56,816. 00 for the alleged deficient work and also claimed recovery of Rs. 12. 63 lacs. Thus, there was a dispute between the contractor and GSCC. ( 5 ) THE petitioner-contractor by its letter dated 17-11-1981 sought arbitration. After prolonged and considerable correspondence, the dispute between the contractor and GSCC was referred to the sole arbitration of respondent No. 2 on 1-10-1982. The Arbitrator entered the Reference on 3-11-1982. The petitioner-firm filed its statement of claim on 15-1-1983. ( 6 ) RESPONDENT No. 2 sole Arbitrator, Mr. Vakharia by his letter dated 16-2-1983 asked the parties for their consent to extend the time to make an award. The petitioner-firm gave its consent on 20-2-1983 for extension of time till 30- 6-1983 for making an award. GSCC gave its consent on 3-3-1983. ( 7 ) ON 14-3-1983, GSCC applied for time till 21-3-1983 for filing its written statement. The written statement and counter-claim for Rs. 48.
The petitioner-firm gave its consent on 20-2-1983 for extension of time till 30- 6-1983 for making an award. GSCC gave its consent on 3-3-1983. ( 7 ) ON 14-3-1983, GSCC applied for time till 21-3-1983 for filing its written statement. The written statement and counter-claim for Rs. 48. 00 lacs came to be filed by GSCC before the Arbitrator on 21-3-1983; whereas, the contractor-firm filed its reply to the counter-claim on 17-5-1983. The first meeting before the Arbitrator was held on 28-5-1983. The parties had agreed to extend time for making of award till December 1983. Again, at the 6th meeting before the Arbitrator held on 4-12- 1983, the parties had agreed to extend time to make an award till 30-6-1984. ( 8 ) THE parties also went on requesting for adjournment of the proceedings before the Arbitrator on different dates. Proceedings could not be concluded within the period for which time was lastly extended with consent of parties for making of award. It is found from the record of the present case that both the parties went on applying for time on various occasions on diverse grounds due to which respondent No. 2, Arbitrator by his letter dated 30-1-1985 sought concurrence from gscc for extension of time for making of award till 30-6-1985. The Arbitrator was informed by the learned Advocate of GSCC that since the conversant officer was not available, extension of time may be obtained from the Court and requested for fixing next date of hearing on 2-3-1985. ( 9 ) THE petitioner-firm by its letter dated 1-2-1985 conveyed its consent for extension of time for making an award till 30-6-1985. Since consent of respondent no. 1-GSCC for extension of time was not given, hearing of the proceedings came to be postponed by the Arbitrator. The Arbitrator by his letter dated 19-2-1985 conveyed to the parties about the next date of hearing, i. e. , 2-3-1985. ( 10 ) ULTIMATELY, the GSCC by its letter dated 22-2-1985 informed the Arbitrator that with a view to avoid technical objections later on, the parties may be advised to obtain required extension of time from the Court. Therefore, the Arbitrator again adjourned hearing of the arbitration proceedings and directed the parties to obtain extension of time for making the award from the Court.
Therefore, the Arbitrator again adjourned hearing of the arbitration proceedings and directed the parties to obtain extension of time for making the award from the Court. The draft of such application to be submitted before the Court prepared by the petitioner-firm was not signed by GSCC raising various contentions. ( 11 ) WITH the result, the petitioner-firm preferred Civil Misc. Application No. 130 of 1985 before the Court of learned Civil Judge (S. D.), Ahmedabad (Rural) at Mirzapur for extension of time for making award in the pending proceedings of arbitration between the parties. ( 12 ) GSCC raised various contentions by filing written statement, Ex. 12. The request of the petitioner-firm-applicant of that application for extension of time was opposed by GSCC by raising various points including the contention about existence of valid arbitration agreement. They also raised contention that there was no sufficient ground to grant relief for extension of time as prayed for by the petitioner-contractor. ( 13 ) THE paries had not examined any witness and placed reliance on the documentary evidence before the trial Court. Upon hearing the learned Advocates of the parties and considering the facts and circumstances emerging from the documentary evidence, the trial Court rejected the application to enalrge time for making award under Sec. 28 of the Arbitration Act on 14-12-1988. Hence, this revision application at the instance of the present petitioner-orginal applicant, under sec. 115 of the Code. ( 14 ) IT could very well be seen from the facts narrated hereinbefore that respondent No. 2 Mr. Vakharia was appointed and accepted by both the parties as the sole Arbitrator. ( 15 ) THE time came to be extended on various occasions during the course of proceedings, time and again, with the consent of parties. It is not disputed that proceedings before the sole Arbitrator had started in November, 1982 and the parties by mutual consent went on extending time for making award till March 1985. Both the parties applied for adjournments on various occasions before the sole Arbitrator. The Arbitrator by his letter dated 6-2-1985 had requested GSCC to convey its concurrence for extension of time to make the award till 30-6-1985. The contractor had also requested GSCC by writing letter dated 18-2-1985 requesting GSCC to give consent for extension of time for making award till 30-6-1985.
The Arbitrator by his letter dated 6-2-1985 had requested GSCC to convey its concurrence for extension of time to make the award till 30-6-1985. The contractor had also requested GSCC by writing letter dated 18-2-1985 requesting GSCC to give consent for extension of time for making award till 30-6-1985. However, GSCC by its letter dated 20-2-1985 informed the Arbitrator that to avoid technical objections later on, the parties may be directed to obtain required statutory extension order from the competent Court to enlarge time for making award. Accordingly, the arbitrator directed the contractor who preferred the aforesaid Misc. Application for extension of time by invoking powers of the Court under Sec. 28 of the Arbitration act. ( 16 ) SECTION 28 of the Arbitration Act empowers the Court to enlarge time for making award. Thus, power to extend time for making award is vested in the Court. Section 28 has general application and as such, applies both to References made through Court or outside the Court. Section 28 reads as under :"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, the time for making the award. (2) Any provisions in an arbitration agreement, whereby the Arbitrators or Umpire may, except with the consent of all the parties to the agreement enlarge the time for making the award, shall be void and of no effect. " ( 17 ) IT could very well be seen from the aforesaid provisions that Sec. 28 enables the Court to enlarge time fixed for making of award of an Arbitrator. The Court can enlarge, the time for making the award either before or after the time for making award has expired. The power given to the Court is so wide that it can extend time even after the award has been made. The award shall not become invalid even if it is made after expiry of four months period after the Reference if time has been extended by the Court. ( 18 ) SECTION 28 is very wide and confers full discretion on the Court to enlarge time for making the award. There is as such no restriction in the provisions as to on whose application, extension can be granted.
( 18 ) SECTION 28 is very wide and confers full discretion on the Court to enlarge time for making the award. There is as such no restriction in the provisions as to on whose application, extension can be granted. No doubt, the power given to the court under Sec. 28 is required to be exercised judicially. The Court is required to take into consideration all the facts and circumstances before exercising powers under Sec. 28. ( 19 ) THE Court is required to examine and consider as to whether exercise of powers under Sec. 28 by the trial Court by rejecting an application to enlarge time is just and proper and legal or not. The trial Court has refused to enlarge time as prayed for by the petitioner-contractor-firm mainly on the ground that GSCC alleged fraud against the contractor-plaintiff. It was alleged that the contractor-firm during the course of recording of evidence before the Arbitrator had produced some documents fraudulenlty and mischievously. The trial Court found that there is serious allegation of fraud though at that stage, GSCC has not shown or proved any material about the allegation of fraud, but mere allegation is sufficient not to enlarge time for making the award by exercising powers under Sec. 28 of the Act, as held by the trial Court. After having examined the facts and circumstances and the relevant proposition of law, the impugned order passed by the trial Court in not exercising powers to extend time for making the award on the mere allegation of fraud is not only unreasonsble and unjust but is perverse and illegal requiring interference of this Court even in revision under Sec. 115 of the Code. ( 20 ) IT is a settled proposition of law that mere allegation and that too at the stage of recording of evidence unsupported and that too after having given consent by both the parties for extension of time on various occasions, cannot be said to be judicial and sound exercise of power by refusing to enlarge time for making the award under Sec. 28 of the Arbitration Act. Therefore, this Court has no hesitation in finding that the inpugned order is bad and illegal and is required to be quashed. Accordingly, it is quashed and set aside. Much time has passed since making of the application, Ex. 28 seeking enlargement of time for making the award.
Therefore, this Court has no hesitation in finding that the inpugned order is bad and illegal and is required to be quashed. Accordingly, it is quashed and set aside. Much time has passed since making of the application, Ex. 28 seeking enlargement of time for making the award. It is, therefore, necessary to direct the Arbitrator to dispose of the disputes under Reference as expeditiously as possible but not later than four months from the date of receipt of service of notice to both the parties, after receiving writ of this Court and till then, time is extended. In the result, the revision is allowed with no order as to costs. Rule is made absolute to the aforesaid extent. .