Research › Browse › Judgment

Patna High Court · body

1998 DIGILAW 639 (PAT)

Sahara India Limited v. Janak Prasad

1998-09-07

GURUSHARAN SHARMA

body1998
JUDGMENT GURUSHARAN SHARMA, J. Shyampati Devi, wife of Janak Prasad, the sole respondent herein entered into an agreement with Sahara India Limited, the sole appellant herein on 18.7.1986 under the terms and conditions of the scheme of the Company known as "golden key account" and was allotted account no. H-40022. Her husband was the nominee. She died on 26.8.1986. Her husband Janak Prasad applied for death help as per clause 13 of the terms and conditions of the Company's scheme whereby he as nominee of the deceased was entitled to get interest free loan of Rs. 50,000/- from the Company to be returned in installments, which was rejected. 2. As per Clause 14 of the terms and conditions aforesaid any dispute arising between the parties was to be decided through arbitrator. The dispute was, accordingly, referred to the sole arbitrator, appointed by the Company, who submitted his award on 16.9.1991, observing that claim of the deceased nominee was not legal and he was not entitled to get benefit of death help loan. 3. The arbitrator filed award in the court of Subordinate Judge, Patna. The said court having no territorial jurisdiction in the matter, by order dated 19.12.1992 asked the arbitrator to file the award in the court of Subordinate Judge, Bettiah. Thereafter the award was filed there to make it rule of the court and it was registered as Title Suit No. 43 of 1993. By order dated 29.5.1993, Bettiah court issued notice to Janak Prasad to file objection, if any, by 25.6.1993. He appeared on 25.6.1993 and filed a petition for time to file objection. On other two dates i.e., 6.7.1993 and 21.7.93 also prayer was made to grant time to file objection, ultimately on 31.7.1993 objection was filed. 4. By order dated 27.9.1993, learned Subordinate Judge, Bettiah was pleased to set aside the award and directed the parties to suggest the name of arbitrator for fresh award. Newly appointed arbitrator was directed to file his award on the basis of materials and evidence available on the record, which were produced before the previous arbitrator and directed to be put up on 7.10.1993 for suggesting the name of arbitrator. 5. Appellant Company has preferred this Appeal against the said order. 6. Mr. Newly appointed arbitrator was directed to file his award on the basis of materials and evidence available on the record, which were produced before the previous arbitrator and directed to be put up on 7.10.1993 for suggesting the name of arbitrator. 5. Appellant Company has preferred this Appeal against the said order. 6. Mr. Shashi Shekhar Dwivedi, Senior counsel for the appellant submitted that the court below should not have entertained the objection filed by the respondent herein for making the award rule of the Court as it was barred by time. Further the award being a non-speaking one and the mental process of arbitrator was not reflected therein, it was not necessary to re-appreciate the evidence and scope of interference was very limited. The court below could not have sat in appeal over the decision of the arbitrator to examine the correctness of award. The impugned order is, therefore, vitiated and the award may be directed to be made rule of the court. 7. On the other hand, Mr. Subodh Kumar Sinha, counsel for the respondent submitted that the award having been given after expiry of time was invalid and. therefore, was not justified in extending time for making aware. Under Section 28(2) of the Arbitration Act 1940 (hereinafter referred to as "the Ac ') only the court could have extended time for making award. 8. It is not in dispute that hearing of the arbitration proceeding was concluded on 11.9.1991 within four months from 14.5.1991, when the arbitrator entered into the reference, i.e., within time. On the said date as the order-sheet indicated that with consent of both parties the time limit of the proceeding was extended by the arbitrator by two weeks. 9. An occasion for the arbitrator to enlarge the time occurred only after he was called upon to proceed with the arbitration or he entered upon the reference. In my opinion, if the parties agreed to the enlargement of time after the arbitrator had entered on the reference, he had power to enlarge it in accordance with mutual agreement or consent of the parties. In such circumstance, the arbitrator gets the jurisdiction to enlarge the time for making the award only in case where after entering on the arbitration the party to the arbitration agreement consents to such enlargement of time. In such circumstance, the arbitrator gets the jurisdiction to enlarge the time for making the award only in case where after entering on the arbitration the party to the arbitration agreement consents to such enlargement of time. In this regard, reference may be made to a decision of the apex Court in Harikrishna Wattal VS. Vaikunth Nath Pandya ( AIR 1973 SC 2479 ). I, therefore hold that the extension of time by the arbitrator on 11.9.1991 with consent of parties for two weeks to pronounce award was legal, valid and justified. 10. In the present case the arbitrator inadvertently firstly filed the award in the court of 1st Subordinate Judge, Patna for making it rule of the court. Both parties appeared there. Sahara India Limited supported the award and prayed to make it rule of the court, whereas Janak Prasad, the claimant to set aside the same. However, Patna court held that it had no territorial jurisdiction in the matter and by order dated 19.12.1992 returned the award along with the papers filed by the arbitrator for being submitted before the Subordinate Judge, Bettiah for adjudication. 11. Accordingly, the arbitrator presented the award before the Subordinate Judge, Bettiah from where notice was issued to the parties to file objection, if any, to the award in question, by 25.6.1993. The claimant-respondent herein appeared therein on 25.6.1993 and filed an application for granting time to file objection. The court granted time till 6.7.1993. Again on 6.7.1993 on the prayer made by him time to file objection was extended till 21.7.1993 and then after on his request it was extended upto 31.7.1993. Ultimately objection was filed on 31.7.1993. 12. It cannot be disputed that the claimant-respondent herein got knowledge of the award and appeared before the Patna court and objected it. Further on notice he appeared before the Bettiah court on 25.6.1993, but did not file objection under Section 30 of the Act even within a period of thirty days from the date of appearance and went on taking time and ultimately filed on 31.7.1993 i.e., after expiry of the prescribed time limit for filing such objection. 13. Under Clause (b) of Article 119 of the Limitation Act, 1963 the limitation starts from the date of service of notice. 13. Under Clause (b) of Article 119 of the Limitation Act, 1963 the limitation starts from the date of service of notice. Under Section 14(2) of the Act, in order to file before expiry of thirty days of the service of that notice, an application for setting aside an award. In the present case the date of service of notice of filing the award was earlier to 25.6.1993 when the claimant-respondent herein appeared in the court below and thus the application for setting aside the award filed on 31.7.1993, in my opinion, was undisputedly barred by time. There can not be any concession on a question of law. 14. I do not agree with the submission of Mr. Dwivedi that the award in question was unreasoned award. I find that the arbitrator on consideration of the statement and evidence, both oral and documentary adduced by the parties, came to conclusion that at the time of entering into an agreement on 18.7.1986 with the Company in connection with special investment scheme called golden key account and opening her account, Shyampati Devi was above 50 years of age and she was suffering from chronic disease. Accordingly, it was held that her nominee was not entitled to get death loan under Clause 13 of the terms and conditions in this regard. 15. It is well settled that an award can be set aside if it suffers from an error on the face of it. The award being a decision of an arbitrator whether a lawyer or a layman chosen by the parties and entrusted with power to decide the dispute submitted to him is ordinarily not liable to be challenged on the ground that it was erroneous. In my opinion, the court cannot interfere with the award if otherwise proper on the ground that the decision appeared to it to be erroneous. The civil courts which are entrusted with the power to facilitate arbitration and to effectuate awards cannot exercise appellate power over the decision. 16. In my opinion, arbitrator's decision is binding if it was reached fairly after giving adequate opportunity to the parties to place their grievance. The court can not sit in appeal over the decision of arbitrator to examine the correctness of award. 17. In M/s. Allen Berry and Co. 16. In my opinion, arbitrator's decision is binding if it was reached fairly after giving adequate opportunity to the parties to place their grievance. The court can not sit in appeal over the decision of arbitrator to examine the correctness of award. 17. In M/s. Allen Berry and Co. Pvt. Ltd. vs. Union of India ( AIR 1971 SC 696 ) it was held that even when an arbitrator commits a mistake either in law or in fact in determining the matter referred to him, but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it, the award will neither be remitted nor set aside, notwithstanding the mistake. Nothing has been brought to my notice that the claimant has put forward any evidence either oral or documentary to prove that on the date of entering into an agreement and opening an account Smt. Shyampati Devi was below 50 years of age and she was not suffering from any chronic disease. 18. I have, therefore no opinion but to set aside the impugned order whereby the award in question was set aside and a new arbitrator was directed to be appointed to decide the matter afresh. The impugned award is, therefore, confirmed and made rule of the court. 19. In the result, this appeal is allowed, but without costs.