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Ram Kishore Vs. Raj NaraIn Dubey and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 779 of 1960
Judge
Reported inAIR1963All23
ActsArbitration Act, 1940 - Sections 8(1)
AppellantRam Kishore
RespondentRaj NaraIn Dubey and ors.
Appellant AdvocateG.D. Dubey, Adv.
Respondent AdvocateG.P. Singh, Adv.
DispositionRevision dismissed
Excerpt:
.....which parties are free to make prayer to court for appointment of umpire - award given in one month - parties to the dispute could not move court to appoint umpire - held, award invalid. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted under section 8 of the maharashtra act cannot entertain appeals..........8(1)(c) arose, the provisions of para 2 could be treated to be merely directory and failure to appoint an umpire should be treated to be a mere irregularity.2. in this case the parties entered into an agreement to refer their disputes to arbitration on the 20th october 1959. four persons were named as arbitrators. there is nothing in the agreement for the appointment of an umpire. it also does not contain a clause that the decision by the majority shall be binding on the parties. reference to arbitration was made on the 20th november 1959 and the award was filed in court on the 16th december 1959. the plaintiff filed an objection praying for setting aside the award on the ground of misconduct of the arbitrators, as well as on the ground that there being no compliance with para 2 of.....
Judgment:
ORDER

Mithan Lal, J.

1. I have heard learned counsel for the parties rather at some length. The point involved in this revision is whether the provisions of para 2 of Schedule I to the Indian Arbitration Act relating to the appointment of an umpire on the request of the arbitrators, is mandatory or merely directory; and whether in a case where no opportunity for taxing recourse to the provisions of Section 8(1)(c) arose, the provisions of para 2 could be treated to be merely directory and failure to appoint an umpire should be treated to be a mere irregularity.

2. In this case the parties entered into an agreement to refer their disputes to arbitration on the 20th October 1959. Four persons were named as arbitrators. There is nothing in the agreement for the appointment of an umpire. It also does not contain a Clause that the decision by the majority shall be binding on the parties. Reference to arbitration was made on the 20th November 1959 and the award was filed in court on the 16th December 1959. The plaintiff filed an objection praying for setting aside the award on the ground of misconduct of the arbitrators, as well as on the ground that there being no compliance with Para 2 of Schedule I to the Arbitration Act, the award was not a valid award and should not be made the rule of the court.

3. The trial court upheld the objection both on the ground of misconduct of the arbitrators as well as on the ground of illegality due to non-appointment of an umpire. The lower appellate court did not give any specific finding on the misconduct of the arbitrators, but on the question of law it came to the conclusion on the basis of the authority of Jwala Prasad v. Amar Nath, AIR 1951 All 474, that no umpire having been appointed as required by Para 2 of Schedule I the award had been vitiated. It is against this finding that the defendant has come in revision.

4. Para 2 of the First Schedule to the Arbitration Act lays down --

'If the reference is to an even number of arbitrators, the arbitrators shall appoint an umpire not later than one month from the latest date of their respective appointments.'

This para will show that it is open to the arbitrators to appoint an umpire within one month, but in this case they neither appointed any umpire nor any opportunity was given to the parties to take recourse to Sectionq8 (1) (c) for the appointment of umpire. Because after the reference on 20th November 1959, the award was given within one month and was filed in court on 16th December 1959. In cases where the arbitrators fail to appoint an umpire within the aforesaid period, it is open to the parties to make a prayer to the court for appointment of an umpire under Sectionq8 (1) (c). This opportunity never arose in the case because the prayer could only be made to the court if the arbitrators failed to appoint an umpire within one month, and as the award was also given within one month no party coma approach the court for appointment of an umpire as required by Section 8 (1) (c).

The present case stands concluded by the Division Bench authority of AIR 1951 All 474. The facts of that case were similar, except that the award in that case was express provision to the contrary in the agreement, the abrasion Bench of this Court held that where reference is to an even number of arbitrators, then, unless there is an express provision to the contrary in the agreement, the arbitrators are under a statutory obligation under Schedule 1, para 2 to appoint an umpire not later than one month from the latest date of their respective appointments. The provisions of para 2 of Schedule 1 are of a mandatory character and it is clearly the duty of the arbitrators to appoint an umpire. In the absence of the appointment of the umpire, the award made will be invalid.

5. This authority was considered in a later case, Shambhu Nath v. Hari Shanker Lal, 1954 All LJ 332 : (AIR 1954 All 673), and it was laid down that where a party has Opportunity to approach the court under Section 8 (1) (c) of the Act, but neither the arbitrators could appoint an umpire within one month, nor any party has approached the court for appointment of an umpire under Section 8 (1) (c) after the expiry of one month, it shall be deemed that the failure to appoint an umpire is not such a breach of the above provisions as to vitiate the award and could be waived. The facts of that case are quite distinct from the facts of the present case. In the present case no opportunity for the parties to make an application under Section 8 (1) (c) arose because the award itself was given within one month, and consequently neither party could apply for appointment of an umpire. The principle of waiver can have no application to such a case.

6. The learned counsel for the petitioners has also relied on the authority of AIR 1956 Cal 593, United Printing and Binding Works Ltd. v. Kishori Lal. There a single judge of that Court held that Section 8(1)(c) expressly provides for the case where the parties are required to appoint an umpire. Therefore a failure of the arbitrators to appoint an umpire under Clause 2 is a breach curable by the procedure prescribed by Section 8 of the Act itself and if a party fails to follow the procedure permitted by we Statute to remedy the breach and stands by till the award is made he cannot later on put forward non-appointment of an umpire as a ground for setting aside the award. Obviously that was a case in which neither the arbitrators nor the parties made any prayer for appointment of an umpire. The parties failed to make any prayer to the court for appointment of an umpire. It was on this basis that the principle of estoppel was applied and it was held that the parties should not be allowed to challenge the award on this ground, that is, non-appointment of umpire. It was not considered in that case as to what will happen in a case where opportunity to make an application under Section 8 (1) (c) never arose and the award was given within one month of the appointment of the arbitrators.

7. Reference was also made to the authority of A.I.R. 1954 Nag 241, Tikaram v. Hansraj, in which it was held that no universal rule can be laid down for the construction of the statutes as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. When the command of the Legislature is disregarded, nullification may be the usual consequence. But the mere presence of the word 'shall' does not necessarily mean that proceedings in disregard of the requirement of the statute are null and void and the question whether it is so is in the main governed by considerations of convenience and justice. That again is not a case where the award was given within one month of the appointment of the arbitrators. The parties had opportunity to move the court under Section 8(1) (c). The law laid down above, though of genera! application, cannot be deemed to apply in a case where the parties could not get opportunity to make an application under Section 8 (1) (c).

8. The authorities of 1954 All LJ 332 : (AIR 1954 All 673), AIR 1956 Cal 593 and AIR 1954 Nag 241, cited above have, therefore, no application to the present case, nor can they be deemed to lay down a different law. They will apply where the question of estoppel or the question of waiver is involved, but in a case where there was no opportunity for making an application under Section 8 (1) (c) because the award was given within one month of the appointment of the arbitrators, these authorities have no application. The award was rightly held to have been vitiated by non-compliance with para 2 of the Schedule 1 of the Arbitration Act.

9. The result is that the revision fails and is dismissed with costs.


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