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Lallubhai Brijmohan Vs. Jamnadas Harakhji Sanghavi - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtMumbai
Decided On
Judge
Reported inAIR1930Bom462; (1930)32BOMLR193
AppellantLallubhai Brijmohan
RespondentJamnadas Harakhji Sanghavi
Excerpt:
.....within the period allowed by law or the court. 300 would be a good decision under the present code. the award to enlarge the time under section 15 of the common law procedure act, 1854. it may be stated that section 15 of the common law procedure act provides that for good cause shown the court may enlarge from time to time the time for making the..........court under section 12 of the- act to enlarge the time for making the award.3. section 12 of the indian arbitration act provides that the time for making an award may, from time to time be enlarged by order of the court, whether the time for making the award has expired or not.4. there is nothing in the section itself which fixes or limits the time for making an application to the court for extension of time for making an award. it is clear that the court can enlarge the time even after the time for making the award has expired. the question is whether the court can enlarge the time when the award has in fact already been made.5. it is well known that arbitrators, particularly laymen, often overlook the fact that the award has to be made within the period allowed by law or the court......
Judgment:

Rangnekar, J

1. The summons raises the question whether in a case governed by the Indian Arbitration Act IX of 1899 the Court has, under Section 12 of the Act, power to extend the time for making the award after the time for making the award had expired, and although the award has in fact already been made.

2. Briefly the facts are as follows. The respondent employed the petitioner to carry out some repairs and structural alterations to his building under a written agreement dated February 16, 1927. The petitioner carried out the work, but a dispute arose between the parties as to his bills. Ultimately, on September 17, 1927, all matters in dispute between the petitioner and the respondent were by mutual consent referred to the sole arbitration of an engineer. The agreement to refer contained no provision as to the time within which the award was to be made. The arbitrator entered on the reference on March 8, 1928. It is clear, therefore, that by virtue of Section 6 of the Act the third provision in the first schedule to the Act applied to the reference under submission, and the arbitrator had to make his award within three months after entering on the reference. The arbitrator, however, made his award on July 81, 1928, whereby he awarded a sum of Rs. 1253 in favour of the petitioner. On November 20, 1928, the petitioner filed a suit on the award in the Court of Small Causes to recover the amount due to him under the award. The respondent filed his written statement on February 1,1929, and inter alia, contended that the award was invalid as it was made after the time allowed by law. The Small Causes Court stayed the suit to enable the petitioner to apply to this Court for enlarging the time for making the award. Accordingly the plaintiff has now moved the Court under Section 12 of the- Act to enlarge the time for making the award.

3. Section 12 of the Indian Arbitration Act provides that the time for making an award may, from time to time be enlarged by order of the Court, whether the time for making the award has expired or not.

4. There is nothing in the section itself which fixes or limits the time for making an application to the Court for extension of time for making an award. It is clear that the Court can enlarge the time even after the time for making the award has expired. The question is whether the Court can enlarge the time when the award has in fact already been made.

5. It is well known that arbitrators, particularly laymen, often overlook the fact that the award has to be made within the period allowed by law or the Court. Arbitration is a particular method for the settlement of disputes in a speedy and inexpensive way,, and the Courts generally are inclined, and ought, in my opinion, to be inclined, towards validating the acts of an arbitrator, unless the same are manifestly contrary to law or equity. It is for this pupose that the statute gives power to the Court to extend the time for making the award.

6. The result of holding otherwise would lead to an anomaly. If the date for making the award is, say, January 2, an application made on February 1, for extension of time would be granted normally by the Court, unless there is anything gross in the circumstances of the case which would make it necessary to refuse an application of this nature. If, however, the arbitrator makes an award on January 3, and an application is made, say on January 4, it must be rejected, if the respondent's contention is correct. I am unable to see why. In my opinion, to construe Section 12 of the Act in this manner would tend to defeat the very object which the law and the statute have in view.

7. There is considerable authority for the view I am taking.

8. In Tejpal Jamunadas v. Nathmull & Co. I.L.R. (1919) Cal. 1059 it was held that, under Section 12 of the Indian Arbitration Act, the Court had power to extend the time though the time for making the award had expired, and even though the award had been in fact made. It was pointed out by Sanderson C. J. that Section 9 of the English Arbitration Act, 1889, was in all material respects indentical with Section 12 of the Indian Arbitration Act, and that with reference to that section it was held by the Court of Appeal in Knowles & Sons, Limited v. Bolton Corporation [1900] 2 Q.B. 253 that the Court had jurisdiction to extend the time for making the award although the award had been in fact made. It was urged in that case that the Judicial Committee of the Privy Council in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar I.L.R.(1891) All. 300 had not followed the English cases. Sanderson C. J. with reference to that case observed that the case before the Privy Council was decided entirely upon the construction of the Civil Procedure Code then in force (i. e. the Code of 1882), and, therefore, that decision would not apply to the case before him which was governed by the provisions of the Indian Arbitration Act.

9. Under the Code of 1882, Section 521, an award was not a valid award unless made within the period allowed by the Court. This clause is now omitted from the Code of 1908, and instead thereof we have in para. 15, sub-cl. (c), of the arbitration schedule to the Civil Procedure Code of 1908, the words 'or after expiration of the period allowed by the Court.'

10. The effect of this alteration is that the only remedy now open to the party impeaching an award on the ground that it was made after the expiration of the period allowed by the Court is to apply under para. 15 of the arbitration schedule to the Civil Procedure Code of 1908 to set aside the award. But if a party does not do so, or if his application is not granted, the award though made after expiry of the period is not of itself invalid. The award becomes final under this paragraph, and no appeal will lie from a decree passed upon the award. Therefore, with all respect, it seems to me that it is doubtful if the decision in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar I.L.R. (1891) All. 300 would be a good decision under the present Code.

11. In Tejpal Jamunadas v. Nathmull & Co. an earlier decision of Harington J. in Shib Krishna Dawn & Co. v. Satish Chunder Dutt I.L.R. (1911) Cal. 522 was referred to. In that case the learned Judge held that the Court had no power to extend time so as to validate an award which had been made after the time allowed by the Court had expired. The case was not one under the Indian Arbitration Act, but depended upon the provisions of the Civil Procedure Code.

12. In Sri Lal v. Arjun Das 18 C.W.N. 1325 Chitty J. doubted whether, having regard to the change in the law made by the wording of Section 148, and schedule II, paragraps 8 and 15, of the Code of 1908, the decision in Shib Krishna Dawn & Co. v. Satish Chunder Dutt or the decision of their Lordships of the Privy Council in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar, was binding authority. The learned Judge pointed out that their Lordships of the Privy Council in Har Narain's case held that an award made out of time was invalid, and that the arbitrators by such affliction of time were functi officio. In so doing, they followed the express words of Section 521 of the Code of 1882 which were 'no award shall be valid unless made within the period allowed by the Court.'

13. Apart from this, the present case is governed by the provisions of the Indian Arbitration Act and not by the Civil Procedure Code. l

14. The decision in Tejpal Jamunadas v. Nathmull & Co. was followed by a Full Bench of the Madras High Court in Martirosi v. Subrahmanyam Chettiar I.L.R. (1927) Mad. 103. In that case the award was remitted by the Court for reconsideration of the umpire under a 13 of the Indian Arbitration Act. But the Court did not fix: any time in the order remitting the matter for reconsideration of the umpire for submitting his award. The arbitrator, therefore, had to make his award within three months as required by Section 13 of the Indian Arbitration Act. He did not do so, and it was contended that the award was invalid. The appellant made an application to the Court that the time for the delivery of the award remitted may be enlarged in order to validate the award. The principal judgment of the Full Bench was delivered by Kumaraswami Sastri J. who held that the Court has, according to the decisions, both English and Indian, power to extend the time under Section 12 of the Indian Arbitration Act, which corresponds to Section 9 of the English Arbitration Act, even after the award had been delivered, and there was no reason why when an award was remitted under Section 13 of. the Indian Arbitration Act, a similar power should not exist. With reference to the Privy Council case of Raja Har Narain Singh v. Chrtudhrain Bhagwant Kuar the learned Judge observed that the decision of their Lordships of the Privy Council, which was passed under the Civil Procedure Code of 1882, did not constrain him, in dealing with Sections 12 and 13 of the Indian Arbitration Act, to put a restriction on the power of the Court under Section 13, and to hold that although under Section 13 the Court may extend the time beyond three months, if it did so in the order of remission, it had no power to do so once the award has been passed.

15. It is argued that both the decisions to which I have referred were under Section 13, Clause (2), of the Indian Arbitration Act, and were cases in which the award had come before the Court, and was remitted under Section 13 of the Act. It is to b3 noted, however, that Sanderson C. J. in Tejpal Jamunadas v. B. Nathmull observed that the proposition that the Court had power under Section 12 of the Indian Arbitration Act to extend the time for making an award, even though the award had been in fact made, was not strenuously disputed. But the argument before him was that the jurisdiction given by Section 12 could not be exorcised by the Court after the award had been remitted, as it was in that case, under Section 13 of the Act. That contention was rejected by the learned Chief Justice who held that the power given to the Court by Section 12 was not limited and may be exercised from time to time, and even after the award had been remitted by the Court to the arbitrators.

16. The same view was taken by Kurnaraswaini Sastri J. in the Full Bench decision of the Madras High Court in Martirosi v. Subrahmanyam Chettiar I.L.R. (1937) Mad. 103. Kumaraswami Sastri J. said (p. 110) :-

It seems to me that if the Court could extend the time under section 1 oven after the delivery of the award, there is no reason why it should not have power to do so tinder section 13.

17. It is clear that in both these decisions it was not seriously contended that the Court had no power under Section 12 of the Indian Arbitration Act to enlarge the time oven though the award had in fact been made. And that is the position hero.

18. The position under the English law is the same. I have already pointed out that Sections 12 and 13 of the Indian Arbitration Act are taken almost verbatim from Sections 9 and 10 of the English Arbitration Act. At page 162 Russell (on power and duty of an arbitrator, 11th Edition) observes as follows :-

The power can be exercised although the award has in fact already been made after the period fixed for making it has expired.

19. All the Cases both before the Arbitration Act 1889, and after the Arbitration Act 1889 will be found collected by Russell.

20. I may refer to one of those cases, and that is the case of May v. Harcourt (1884) 13 Q.B.D. 688. It was a case before the English Arbitration Act, 1889. The facts in that case are somewhat similar to the facts before me. There, as here, disputes were referred to two surveyors, one appointed by either party, to measure up and determine the value of the work done by one of them. There was no clause in the reference as to the extension either by the arbitrator or otherwise, of the time for making the award. The award was to be made within one month from the date of the agreement. The arbitrators, however, made their award nearly two months after the time for making the award had expired. The party in whose favour the award was made commenced an action against his opponent, and in that action the defendant moved to set aside the award on the ground that it was made out of time. The plaintiff, on the other hand, moved for enlarging the time for making the award until the day it was actually made. It was held that the Court had power subsequently to the making of. the award to enlarge the time under Section 15 of the Common Law Procedure Act, 1854. It may be stated that Section 15 of the Common Law Procedure Act provides that for good cause shown the Court may enlarge from time to time the time for making the award. It will be seen that the section is in forms similar to Section 12 of the Indian Arbitration Act.

21. The same view was taken in Knowles & sons, Limited v. Bolton Corporation [1900] 2 Q.B. 253 which was a case under the Arbitration Act of 1889. Lord Justice Smith observed that (p. 257):--

There cannot,...be a doubt,...that there was jurisdiction in the Court or a judge to make the order asked for, [under Section 9 of the Act to extend the time for making the award] although the time for making the award had elapsed before the application was made .... and although the award has been in fact made.

22. I am, therefore, of opinion that I have power to extend the time for making the award under Section 12 of the Indian Arbitration Act so as to validate the award.

23. Is there, then, anything in the facts of the case which disentitles the petitioner to the relief sought by him? No arguments on the facts have been addressed by the learned counsel for the respondent, except that ho contended that 1 should not exercise the power in favour of the petitioner as there was delay in this case. Looking to the dates to which I have already referred, I do not think that the plaintiff has boon guilty of delay.

24. In the result, therefore, the summons will be made absolute. Each party to boar his own costs.


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