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Ratanji Virpal and Co. Vs. Dhirajlal Manilal - Court Judgment

LegalCrystal Citation
SubjectArbitration;Limitation
CourtMumbai
Decided On
Case NumberO.C.J. Arbitration No. 89 of 1941
Judge
Reported in(1942)44BOMLR175
AppellantRatanji Virpal and Co.
RespondentDhirajlal Manilal
DispositionPetition dismissed
Excerpt:
.....sections 31, 14-indian limitation act (ix of 1908), article 158-award--application to set aside award-award to be filed in court first-procedure.;under the indian arbitration act, 1940, it is not competent to a party to apply to a court for setting aside an award before it is filed in court. - - further, under the present act no proceedings can be taken on the award till after it has been filed, and i fail to see how a party can possibly be prejudiced by the existence of an award which has not been filed in court. but in cases like this the act provides the necessary procedure. under section 14, sub-section (2), it was perfectly competent to mr. but the petitioners chose a procedure which, i am afraid, is clearly wrong. 5. i, therefore, hold that it is not competent to file a..........as far as the party who ultimately wanted to challenge it is concerned. it may be that under the award the party may be directed to do certain things or carry out certain obligations and the party might want to know where exactly he stood with regard to that award. in this very case mr. daphtary has drawn my attention to the fact that the award directs the petitioners to tender to the respondents two hundred tons of java white sugar from the first steamer of the conference line or from any steamer which first arrives in bombay. mr. daphtary says that he wants it to be determined whether the award was binding on him or not and whether he should discharge his obligations under that award. it would be highly prejudicial to him if he did not know his position till such time as the.....
Judgment:

Chagla, J.

1. This is a petition to set aside an award made by Maneklal Ujamsey and Sakalchand G. Shah on October 13, 1941.

2. Mr. Engineer who appears for the respondents takes a preliminary objection to the petition that as the award made by these arbitrators has not been filed, the petition does not lie. Mr. Daphtary for the petitioners argues that before the passing of Act X of 1940 it was competent to a party to a submission to take proceedings in Court to have the award set aside before the award was actually filed under the Indian Arbitration Act, and he contends that that right which a party had has not been taken away by the consolidating Act of 1940. He further relies on the language of Section 31, Sub-section (3), which provides that all applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been, or may be, filed, and to no other Court. Mr. Daphtary's contention is that he is making this application to set aside the award to the Court in which this award may be filed. Under this subsection, according to him, it is not necessary that an award should have been filed. It is enough if the tribunal is the tribunal in which the award may be filed. But Sub-section (3) of Section 31 must be read in conjunction with Sub-section (2) of that section which provides that notwithstanding anything contained in any other law for the time being in force and save as otherwise provided in that Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court. It is clear that under Sub-section (2) the phrase 'the Court in which the award under the agreement may be filed' has reference only to proceedings in connection with the arbitration agreement. If a question arises with regard to the validity, effect or existence of an arbitration agreement, then the question has got to be decided by the Court in which the award which may result from that arbitration agreement may be filed. If the question is with regard to the award itself, then the question has got to be determined by the Court in which the award has been filed. Further, under the present Act no proceedings can be taken on the award till after it has been filed, and I fail to see how a party can possibly be prejudiced by the existence of an award which has not been filed in Court. Under the old Arbitration Act it was competent to a party who obtained an award without filing it to file a suit thereon. Further, the award became enforceable as a decree as soon as it was filed. But under the present Act all proceedings with regard to the arbitration agreement or the award have to be taken as provided by the Act and before the tribunal indicated by the Act. Section 32 specifically provides that no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in the said Act, and under Section 17 of the Act the Court has to pronounce judgment according to the award and a decree follows. It is only this decree that can be executed.

3. Mr. Daphtary has argued that the mere existence of an award without its being filed may in certain circumstances create prejudice as far as the party who ultimately wanted to challenge it is concerned. It may be that under the award the party may be directed to do certain things or carry out certain obligations and the party might want to know where exactly he stood with regard to that award. In this very case Mr. Daphtary has drawn my attention to the fact that the award directs the petitioners to tender to the respondents two hundred tons of Java white sugar from the first steamer of the Conference Line or from any steamer which first arrives in Bombay. Mr. Daphtary says that he wants it to be determined whether the award was binding on him or not and whether he should discharge his obligations under that award. It would be highly prejudicial to him if he did not know his position till such time as the respondents call upon the arbitrators to file the award and if he was compelled to take up proceedings to set aside the award only after the award had been filed. But in cases like this the Act provides the necessary procedure. Under Section 14, Sub-section (2), it was perfectly competent to Mr. Daphtary's clients to call upon the arbitrators to file the award so that they could take the necessary proceedings for having it set aside or under the alternative procedure prescribed in that sub-section the petitioners could have come to the Court and asked the Court to direct the arbitrators to file the award, and on that being done a petition could have been filed to set aside the award. But the petitioners chose a procedure which, I am afraid, is clearly wrong. Mr. Daphtary wants me to set aside an award which has not been filed. But what really clinches the matter is the amendment in the Indian Limitation Act made by Section 49(2) of the Act. In the first schedule to the Indian Limitation Act, 1908, for Article 158 a new article has been substituted which reads as follows :-

Under the Arbitration Act, 1940, to set aside an award or to get an award remitted for reconsideration, the period of limitation is thirty days from the date of service of the notice of filing of the award.

4. Therefore, in amending the Indian Limitation Act the legislature contemplated that an application for setting aside an award could only be made after the date of service of the notice of filing of the award, and therefore the limitation of thirty days is fixed after that particular date.

5. I, therefore, hold that it is not competent to file a petition for setting aside an award till the award has been filed and, therefore, this petition must fail.

6. The petition must be dismissed with costs.

7. Counsel certified.


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