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Kalva Sudhakar Reddy Vs. Mandala Sudhakar Reddy and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration;Limitation
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revision Petition No. 3014 of 1995
Judge
Reported inAIR2005AP45; 2004(6)ALT431
ActsCode of Civil Procedure (CPC) - Sections 115; Arbitration Act, 1940 - Sections 14, 14(2), 17 and 30; Limitation Act, 1963 - Schedule - Article 119
AppellantKalva Sudhakar Reddy
RespondentMandala Sudhakar Reddy and ors.
Appellant AdvocateB. Narayana Reddy, Adv.
Respondent AdvocateI. Aga Reddy, Adv.
Excerpt:
.....disputes and had taken a stand that the award is bad in law and deserves to be set-aside. the learned counsel also placed strong reliance on saila bala dassi vs .nirmala sundari dassi, [1958]1scr1287 rameswara das bavaji vs. the learned counsel also had placed strong reliance on champalal vs .mst. hajee mohammed hussain rowther (died) and others, air 1964 madras 1. the learned counsel also had distinguished the decision in patel motibhai naranbhai and another vs .dinubhai motibhai patel and others, [1996]1scr239 .the learned counsel also had placed strong reliance on manick chandra nandy vs .debdas nandy, air1986sc446 and also jagan nath biswas vs .the state of west bengal, 1975crilj1329 and state of u. the learned counsel also would submit that even suo motu powers can be exercised..........code of civil procedure, hereinafter referred to as 'code' in short.7. sri b. narayana reddy, the learned counsel representing the petitioners in the application c.r.p.m.p. no. 12285/2004, respondents referred to supra who wanted to be transposed who made an application for transposition as petitioners in the main civil revision petition, would contend that these parties who intend to transpose themselves as petitioners in the present civil revision petition are supporting the arbitration award. the learned counsel also would submit that the award was filed by the arbitrator in the court of subordinate judge, karimnagar with a request to pass a decree in terms of the award which was registered as o.s. no. 44/89 and notices were served to all the respondents and after contest the same.....
Judgment:

P.S. Narayana, J.

1. By order dated 12-12-2001, one of us (P.S. Narayana., J) had referred the following questions to be decided by an appropriate Division Bench :

(a) Whether the umpire or an arbitrator can maintain a Revision under Section 115 of the Code of Civil Procedure ?

(b) What is the period of limitation and whether the suit is within limitation in view of the ratio in CHAMPALAL Vs . MST.SAMRATHBAI : [1960]2SCR810 or whether it can be said to be barred by limitation in view of the decision in PATEL MOTIBHAI NARANBHAI AND ANOTHER Vs . DINUBHAI MOTIBHAI PATEL AND OTHERS : [1996]1SCR239

(c) In the peculiar facts and circumstances of the case, what should be the further procedure to be followed in view of the provisions of the Arbitration Act, 1940 ?

2. Thus the matter is coming up before this Court. At the stage of hearing of the Civil Revision Petition, respondents 1, 3 and the legal representatives of the respondents 8 to 11 moved an application C.R.P.M.P. No. 12285/2004 praying for transposition by deleting their names from the array of respondents by transposing them as petitioners and pass such other suitable orders.

3. The Civil Revision Petition is filed as against the Judgment and decree of the learned Subordinate Judge, Karimnagar, dated 13-7-1995 made in O.S. No. 44/89. The Revision Petitioner in the Civil Revision Petition is the petitioner-umpire in O.S. No. 44/89 stated supra. The Revision Petitioner-plaintiff had instituted the above suit under Section 14(2) of the Arbitration Act, 1940 for pronouncing Judgment and decree in accordance with the award dated 18-3-1986 under Section 17 of the Arbitration Act, 1940 after issuing notice to the respective parties.

4. The brief facts of the case are as follows:-

By an arbitration agreement dated 1-2-1986, respondents 1 and 2 and their father one Lakshma Reddy and respondents 4 to 7 had submitted their difference to an arbitration appointing certain persons as arbitrators and the plaintiff-petitioner as umpire. Lakshma Reddy, Madusudhan Reddy and Venkat Reddy were brothers and they were differences between the families of Lakshma Reddy and Madhusudhan Reddy and respondents 1 to 3 shown in O.S. No. 44/89 represent the family of Lakshma Reddy, described as 1st party and respondents 4 to 7 represent the family of late Madusudhan Reddy, described as 2nd party in the cause-title in the said suit. Lakshma Reddy, who was also a party to the arbitration agreement and the award passed by the arbitrators, died on 25-1-1987 after passing of the award and hence his legal representatives were impleaded as parties. The umpire and other four named arbitrators after necessary enquiries and due deliberations made an award dated 8-3-1986 which was read over to the parties and they had signed the award and had agreed to act upon it. Respondents 1 to 3 in the suit requested the petitioner to file the award into Court and accordingly the petitioner had filed the original award before the District Registrar, Karimnagar on 28-2-1989 for adjudication of the stamp and for impounding if necessary, and however the petition was filed with a Photostat copy of the award. Defendants 1 to 3 in the suit were set-exparte, but during the trial as per the orders in I.A. No. 2076/94, they were permitted to let in evidence. Defendants 4 to 7 in the suit filed written statement and objections to the award dated 8-3-1986. The stand taken is that the umpire was won over by defendants 1 to 3 in the suit and the petitioner-umpire kept quite for a long time till defendants 1 to 3 instructed him and he had neither consulted nor informed defendants 4 to 7 about the alleged request and apart from it, they had raised several factual disputes and had taken a stand that the award is bad in law and deserves to be set-aside.

5. On the strength of the pleadings, the court below had settled the following points:

1. Whether the arbitrators have exceeded their powers, if so, the award is liable to be set-aside ?

2. Whether the suit is barred by limitation under Article 119(a) of the Limitation Act 1963.

3. Whether the objections to the award filed U/s.30 of he Arbitration Act is within time If so, what is the effect ?

4. To what relief ?

6. PW-1 was examined and Exs. A-1 to A-7 were marked on behalf of the petitioner-umpire. PW-1 to PW-4 were examined on behalf of the defendants. The court below at paragraphs 7 to 12 had discussed the oral and documentary evidence relating to Issue No. 1 and came to the conclusion that except on the grounds under Section 30 of the Arbitration Act, 1940, the award cannot be set-aside because it is not the case of defendants 4 to 7 that arbitrators or the umpire to Ex. A-1 misconducted themselves or misconducted the proceedings in passing the award or that it was passed after the issue of an order by the Court; that it was improperly procured by any of the parties to the agreement and though the arbitrators have exceeded their powers in passing Ex. A-6, it cannot be set-aside and it is not liable to be set-aside. At paragraphs 13 to 17 after detailed discussion it was held that the suit is barred by limitation under Article 119(a) of the Limitation Act, 1963. While answering Issue No. 3 at paragraph 18, the court below came to the conclusion that the objections filed are not within time as provided under Article 119(b) of the Limitation Act, 1963 and ultimately while answering Issue No. 3, it was held that the arbitrators have exceeded their powers, but however the award is not liable to be set-aside but the suit filed by the plaintiff is barred by limitation and accordingly the suit was dismissed. Aggrieved by the same, the plaintiff-petitioner-umpire in O.S. No. 44/89 on the file of Subordinate Judge, Karimnagar had preferred the present Revision under Section 115 of the Code of Civil Procedure, hereinafter referred to as 'Code' in short.

7. Sri B. Narayana Reddy, the learned Counsel representing the petitioners in the application C.R.P.M.P. No. 12285/2004, respondents referred to supra who wanted to be transposed who made an application for transposition as petitioners in the main Civil Revision Petition, would contend that these parties who intend to transpose themselves as petitioners in the present Civil Revision Petition are supporting the arbitration award. The learned Counsel also would submit that the award was filed by the arbitrator in the Court of Subordinate Judge, Karimnagar with a request to pass a decree in terms of the award which was registered as O.S. No. 44/89 and notices were served to all the respondents and after contest the same was disposed of and the suit was dismissed mainly on the ground that the award was filed in the Court beyond the period of limitation. The learned Counsel also would submit that after the dismissal of the award at the instance of these parties only the arbitrator as petitioner preferred the present Civil Revision Petition inasmuch as he figured as plaintiff in the suit referred to supra. Inasmuch as the only question involved in the Civil Revision Petition is whether the trial Court had arrived at the correct conclusion on question of limitation, but inasmuch as during the course of arguments the question of competency of the arbitrator to maintain the Revision came up for consideration and in view of the same the same was referred by the learned Single Judge to be decided by an appropriate Division Bench, in such circumstances the present petitioners in this application filed under Order 1 Rule 10 of the Code for transposing them as petitioners in the Civil Revision Petition are the real interested parties and hence in the interest of justice and in order to give effect to the award on merits, the application may be allowed and the said parties may be transposed as petitioners in the Civil Revision Petition. The learned Counsel also placed strong reliance on SAILA BALA DASSI Vs . NIRMALA SUNDARI DASSI, : [1958]1SCR1287 RAMESWARA DAS BAVAJI v. VUPPULURI PURNACHANDRA RAO, AIR 1958 A.P. 494 and BHUPENDRA v. RAJESWAR, AIR 1931 P.C. 162.

8. Sri Aga Reddy, the learned Counsel representing the Revision petitioner had taken this Court through both oral and documentary evidence available on record and the findings recorded by the trial Court in this regard and would contend that the trial Court had totally erred in dismissing the suit on the ground of limitation. The learned Counsel also had placed strong reliance on CHAMPALAL Vs . MST.SAMRATHBAI, : [1960]2SCR810 , J.B. ENTERPRISES Vs . STATE OF KERALA, : AIR1990Ker65 , BALKISHEN Vs . PANNA LAL, : AIR1973Delhi108 and O. MOHAMED YUSUF LEVAI SAHEB v. S.HAJEE MOHAMMED HUSSAIN ROWTHER (DIED) AND OTHERS, AIR 1964 MADRAS 1. The learned counsel also had distinguished the decision in PATEL MOTIBHAI NARANBHAI AND ANOTHER Vs . DINUBHAI MOTIBHAI PATEL AND OTHERS, : [1996]1SCR239 . The learned counsel also had placed strong reliance on MANICK CHANDRA NANDY Vs . DEBDAS NANDY, : AIR1986SC446 and also JAGAN NATH BISWAS Vs . THE STATE OF WEST BENGAL, : 1975CriLJ1329 and STATE OF U.P. Vs . RAM CHANDRA TRIVEDI, : (1977)ILLJ200SC . The learned counsel also had contended that in the light of the decision referred (4) supra, it cannot be said that the decision referred (8) supra, is a binding decision on the point. Even otherwise, the learned counsel had contended that the decision is distinguishable on facts. The learned Counsel also would submit that the revisional powers stand on a different footing when compared to the appellate powers and what had been done by the Umpire is only to file the Revision bringing it to the notice of the Court that question of limitation decided by the trial Court is totally erroneous and since this is only just procedural it cannot be said that this Civil Revision Petition cannot be maintained. The learned Counsel also would submit that even suo motu powers can be exercised while exercising revisional jurisdiction and placed strong reliance on K.ANJAMMA Vs . CHANCHAL DANAIAH, : AIR1994AP44 . The learned Counsel also placed reliance on JOWALA SINGH Vs . MALKAN, to show that an Appeal stands on a different footing when compared to a Revision. The learned Counsel also no doubt made certain submissions relating to the scope and ambit of Sections 14 and 17 of the Arbitration Act 1940. The learned Counsel would conclude submitting that at any rate on a technical flaw the parties who are really interested in seeing that the arbitration award is enforced cannot be deprived of their valuable right on such technical ground and hence the transpose application filed by those parties may be allowed permitting them to contest the matter on merits.

9. Sri Raghuram, the learned Counsel representing the contesting respondents would submit that an Arbitrator is expected to be an impartial and disinterested person and he cannot style himself as an aggrieved party. The learned Counsel also would maintain that the nature of litigation is adversary litigation and even in the Civil Revision Petition it was specifically mentioned as though the Revision petitioner is the aggrieved person and hence there is no question of exercising suo motu powers in such a case. The learned Counsel also contended that pending the litigation the 2nd respondent died and the legal representatives were brought on record by the Revision petitioner. Strong reliance was placed on E.K.ABDUL KHADER HAJI Vs . THALAKKAL KUNHAMMAD, : AIR1986Ker3 and also A.P.AGRICULTURAL UNIVERSITY v. DAN REDDY, 1974(1) ALT 332. The learned Counsel would maintain that the Umpire cannot be said to be an aggrieved person so as to maintain the Revision under Section 115 of the Code. The Counsel also had made certain submissions on the question of limitation.

10. Heard the Counsel on record.

11. Questions (b) and (c) which were referred to be decided by the Division Bench may fall into insignificance if question (a) relating to the maintainability of Revision by an umpire or an arbitrator is decided to the effect that an umpire or an arbitrator cannot maintain a Revision under Section 115 of the Code. There cannot be any controversy that an arbitrator or an umpire is expected to be impartial and disinterested person as far as lis of mediation is concerned. In the decision referred (14) supra, while dealing with the aspect of maintainability of an appeal by an arbitrator, the Division Bench of Kerala High Court held as follows :

'The next question to be considered is whether an arbitrator can file an appeal against an order by which the Court refuses to enlarge the time for making the award. It was contended that the arbitrator cannot be a person aggrieved by the order passed by the Court refusing to enlarge time and hence the appeal filed by him is incompetent. The learned counsel for the petitioners in the petition for transposing, contended that the arbitrator is the representative of all the parties to the agreement for arbitration and hence he is competent to file an appeal from the order in question. In Adi Pherozshah Gandhi V. H.M. Seervai : [1971]1SCR863 the Supreme Court had occasion to consider the scope and ambit of the words 'person aggrieved'. The Supreme Court held:

'It is apparent that any person who feels disappointed with the result of the case is not a 'person aggrieved'. He must be disappointed of a benefit which he would have received if the order had gone the other way. The order must cause him a legal grievance by wrongfully depriving him of something. It is no doubt a legal grievance and not a grievance about material matters but his legal grievance must be a tendency to injure him. That the order is wrong or that it acquits someone who he thinks ought to be convicted does not by itself give rise to a legal grievance.

12. In Corpus Juris Secundem, Vol. IV page 356 1st Edition it has been stated:

'Broadly speaking, a party or person is aggrieved by a decision when, only when it operates directly and injuriously upon his personal, pecuniary and proprietary rights'.

13. In Respondents Riviere's Trade Mark (1884) 26 Ch. D. 48 it has been held:

'......it must be a legal grievance, it must not be a step proceedings ratione voluntas; the applicant must not come merely saying 'I do not like this thing to be done', it must be shown that it tends to his injury, or to his damage, in the legal sense of the word.'

14. In State V. Smt. Ram Sri : AIR1976All121 it has been held:

'In other words, the right to file an appeal against a judgment or decree exists only in the person who is aggrieved or prejudiced thereby. A party, therefore, who would benefit from the change in the judgment has an appealable interest. This interest, of course, should not be contingent, speculative or futuritive. It must be substantial, immediate and pecuniary. Such an interest must have invaded legal rights of the person filing an appeal. It is, therefore, clear that an aggrieved party is one who is injuriously affected by the judgment or whose rights are directly affected by the operation of the same.' 'The important thing which may be noted in this definition is that the person filing an appeal must have 'legal grievance' against the decision which 'wrongfully deprives him of something' or 'affects his title to something'....

'.....it is clear that the mere fact that a judgment is wrong, does not entitle a person to file an appeal against the same. It is necessary that such a person must be deprived of the results of the litigation which he was expecting in his favour in case the judgment went against him.'

15. In the above decisions the Court relied on the following passage from Respondents Sidebotham : Ex. P. Sidebotham (1880) 14 Ch. D. 458 :

'......not really a person who is disappointed of a benefit which he might have received if some order had been made. A 'person aggrieved' must be a man who had suffered a legal grievance, a man against whom a decision has been pronounced which had wrongfully deprived him of something, or wrongfully refused him something or wrongfully affected his title of something.'

16. In A.P. Agricultural University V. Dan Reddy (1974) 1 Andh L.T. 332 Chinnappareddy J, (as he then was) speaking for the Court, has held that a person cannot be said to be directly affected by the judgment of a Court unless some right or liability of his is declared by the Court. An arbitrator is a Judge of the parties own choosing. He is a disinterested person for whose decision the matters in dispute are referred to by the parties. Even though he has been chosen by the parties he cannot identify himself with any of the parties. The moment he does this he will cease to be entitled to continue as arbitrator. So, it goes without saying that an arbitrator cannot represent any of the parties or cannot be a representative of the parties to the arbitration. Under S.28 of the Arb. Act, 1940 the arbitrator or any of the parties to the arbitration agreement can move the Court for enlarging the time to make the award. If the Court declines to enlarge the time the parties to the arbitration can challenge that order in appropriate proceedings but the arbitrator has nothing more to do. As per the agreement for arbitration the arbitrator is to conduct the arbitration within a specified time and make the award. If he was not able to do that and the Court refuses to enlarge the time he will have to leave it there. It is not the arbitrator's job to fight out the matter and get an extension of time. Whether the parties to the arbitration will suffer if the time for making the award is not enlarged, this again cannot be the concern of the arbitrator. He can rest content that the parties will take care of themselves. By no stretch of imagination the arbitrator who is a person disinterested in the dispute, can be aggrieved by the order of the Court refusing to enlarge time for making the award. In this view, the arbitrator cannot be a person aggrieved by the order of the Court refusing to enlarge time. As it goes without saying that an appeal can be filed only by a person aggrieved by the order appealed against the Miscellaneous First Appeal filed by the arbitrator is not maintainable.'

17. It is no doubt true that the opening words of Section 115 of the Code read :

'The High Court may call for the record of any case which has been decided by any Court subordinate to such High Court....'.

18. The object of the Arbitration law and also the duty and obligation of an arbitrator, if taken into consideration, an arbitrator is expected to be a disinterested and impartial person. At any stretch of imagination, taking into consideration the very object of arbitration proceedings and the scope and ambit of the Arbitration Act 1940 as such, an umpire or an arbitrator cannot be said to be an aggrieved party or an aggrieved person who can maintain Revision under Section 115 of the Code. Though a serious attempt was made to convince this Court that this is the normal practice or the normal procedure which is being followed, this Court is of the considered opinion that the same cannot be approved especially taking into consideration the nature of the arbitration proceedings and also the powers, duties and the obligations of an arbitrator or an umpire. Hence this Court is of the considered opinion that an arbitrator or an umpire cannot maintain a Revision as an aggrieved person under Section 115 of the Code as already referred to supra.

19. Questions (b) and (c) need not be answered in the light of the view expressed by this Court in relation to question (a). No doubt certain submissions were made in C.R.P.M.P. No. 12285/2004 which was filed by certain of the respondents who are interested in seeing that the Arbitration award is enforced for transposing them as petitioners in the Civil Revision Petition. In the decision referred (1) supra, it was held that the Court can, if necessary, take action suo motu either under Order 1 Rule 10 or in its inherent jurisdiction and transpose an appellant as respondent in the appeal. In the decision referred (2) supra, while dealing with the principle relating to transposition of parties, the Division Bench held :

'The possibility of transposition, which often amounts to a virtual substitution of a new plaintiff for the plaintiff on record, turns on the question whether the very institution of the suit by the plaintiff is under a bona fide mistake as to his rights, capacity or status. The principle underlying R.10 is to save honest plaintiffs, believing bona fide in the tenability of their claims, being non-suited on a mere technical ground. There are, however, two limitations on the free and unfettered application of this power. One is, that the institution of the suit should have been under a genuine mistake. Secondly, it engrafts on the general power of courts an exception that a valuable right acquired by the other defendants should not be defeated. The expression 'valuable right' of course, means a right other than a claim for rejection of the suit itself on the ground of institution by a wrong plaintiff.'

20. In BHUPENDRA NARAYAN SINHA BAHADUR v. RAJESWAR PROSAD BHAKAT, AIR 1931 P.C. 162 their Lordships of the Privy Council held that the course of adding proforma defendants as co-plaintiffs should always be adopted where it is necessary for a complete adjudication upon the questions involved in the suit and to avoid multiplicity of proceedings.

21. There cannot be any controversy relating to the principle underlying in transposition of parties in suitable and appropriate cases. In the light of the peculiar facts and circumstances and the view taken by this Court that an arbitrator or an umpire cannot be an aggrieved person at all to maintain a Revision under Section 115 of the Code, these parties cannot be permitted to be transposed at this stage. Hence the said application is devoid of merits and accordingly the same is hereby dismissed.

22. In the light of the foregoing discussion about the maintainability of the Civil Revision Petition by an umpire or an arbitrator, this Court holds that the same is not maintainable inasmuch as an arbitrator or an umpire could not be an aggrieved party who would be entitled to maintain the Revision under Section 115 of the Code and accordingly the Civil Revision Petition also is dismissed as not maintainable. No order as to costs.


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