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L. Madan Lal Haveliwala Vs. L. Sunder Lal and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberF.A.F.O. No. 30 of 1960
Judge
Reported inAIR1964All38
ActsArbitration Act, 1940 - Sections 14(2), 15, 16, 17 and 33; Limitation Act, 1908 - Schedule - Article 158
AppellantL. Madan Lal Haveliwala
RespondentL. Sunder Lal and anr.
Appellant AdvocateHyder Husain, ;B.N. Khanna and ;Umesh Chandra Srivastava, Advs.
Respondent AdvocateB.K. Dhaon, ;M.K. Seth, ;A.P. Agarwal and ;Ram Krishna Srivastava, Advs. for Respondent No. 1 and ;H.D. Srivastava, ;N. Banerji, ;B.N. Anand, ;G.B. Lal, ;Umesh Chandra, ;M.S. Kotwal, ;A.K. Mittra and
DispositionAppeal dismissed
Excerpt:
arbitration - application under section 33 - section 33 of arbitration act, 1940 - application filed for setting aside award without any prayer for relief - does not contain necessary contents - application filed cannot be considered under section 33. - 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..........to do anything, because it is for them to do what they desire to do. what the court can do to an award filed before it is to modify or correct it under section 15, or remit it to the arbitrators under section 16, or set it aside, or pass a decree in terms of it under section 17.'where the court sees no cause to remit the award ............ or to set aside the award, the court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow'; section 17.the law, therefore, does not contemplate a situation in which an award has not been remitted or set aside and no decree also on its basis has been.....
Judgment:

Desai, C.J.

1. This is an appeal from an order passed by a Civil Judge making an award a rule of the Court and passing a decree in terms of it.

2. The appellant and the respondents are brothers. On 20-5-1955 they agreed to refer certain differences that had arisen amongst them to the arbitration of three persons, (1) Daya Kishan, (2) Bishambhar Dayal and (3) Moti Lal. The arbitrators started arbitration proceedings. On 14-1-56 Daya Kishan addressed a letter to the parties and the other two arbitrators alleging that the arbitration proceedings were conducted unfairly, that he being in a minority had been unable to do anything and that undue influence was being exerted upon him by the other arbitrators and informing them that he had withdrawn from the arbitration and would not take part in the arbitration proceedings.

On 19-1-56 an award was made; it purported to have been made by all the three arbitrators but was signed by only two of them and contained a note to the effect that Daya Kishan, the third arbitrator, had refused to sign it. The respondents filed the award in Court of the learned Civil Judge on 7-9-1967. He ordered a notice of it to be issued to the parties and the notice was served upon the appellant on 30-9-1957. Actually the appellant refused to accept the notice. The notice is not on the record and we do not know what exactly it required the appellant to do. The learned Civil Judge fixed 16-11-57 as the date for the hearing of the case and on 5-11-1957 the appellant filed a written statement.

It must be emphasised at this stage that it was styled as 'objection' and was in all respects a written statement. It contained grounds of attack of the award, contained no prayer and did not seek any relief of any kind. The last words of it were:-

'(43) That the so-called award with respect to the matters beyond the scope of reference is inseparable from the award given on matters within the scope of reference.'

A written statement is exempt from payment of Court fee while an application under Section 33 of the Arbitration Act for the setting aside of an award is to bear a court-fee of Rs. 18/12, vide Article 18 (1) of Schedule II of the Court Fees Act. The document was not stamped at all and obviously it was treated as a written statement.

The learned Civil Judge passed the order under appeal making the award a rule of the Court and passing a decree on its basis. He held that the award was not bad, that the appellant's objection was not maintainable because his remedy was to apply under Section 33 for the setting aside of the award, that there was nothing in the Act like objecting to an award otherwise than by applying under Section 33, that if an award is not set aside or remitted a decree must be passed in terms of it, that an application under Section 33 became time-barred after 30-10-57 and that consequently the objection filed on 5-11-1957 could not be treated as an application under Section 33.

3. We have heard counsel only on the question whether the appellant could prevent the award being made a rule of the Court and a decree being passed on its terms when he did not apply under Section 33 and the limitation for applying under it had expired. If we answer this question in the negative, we must hold that the judgment of the learned Civil Judge was correct and it will not be necessary to go into other matters.

4. When an award is filed in Court it has to give notice to the parties of the filing of it, sea Section 14(2) of the Arbitration Act. The notice is simply of the fact of the filing of the award; it is not to require the parties to do anything, because it is for them to do what they desire to do. What the Court can do to an award filed before it is to modify or correct it under Section 15, or remit it to the arbitrators under Section 16, or set it aside, or pass a decree in terms of it under Section 17.

'Where the Court sees no cause to remit the award ............ or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow'; Section 17.

The law, therefore, does not contemplate a situation in which an award has not been remitted or set aside and no decree also on its basis has been passed. It requires that if an award is not remitted or set aside a decree on its basis must be passed; there is no alternative to it. Section 30 lays down the grounds, on which an award can be set aside and Section 33 lays down that

'any party to an arbitration agreement ...... desiring to challenge the existence or validity of an arbitration agreement or an award ......... shall apply to the Court and the Court shall decide the question.'

The period for such an application is, vide Article 158 of the Limitation Act, 30 days computed from the date of service of the notice given under Section 14(2) of the filing of the award. These are the relevant provisions in the Arbitration Act.

It is clear from them that, when a notice of the filing of an award is given, a party that desires to have the award set aside on any of the grounds mentioned in Section 30 must apply to the Court within the prescribed period and the Court is bound to decide the application. If a party wants to have the award remitted or modified or corrected in accordance with the provisions of Sections 15 and 16 it should make an application for this purpose to the Court. If it does not make any such application and consequently the Court sees no reason to remit the award or to set it aside it is obliged by Section 17 to pass a decree on its basis.

Here the appellant did not apply for the award being remitted or being set aside. The objection did not contain any prayer for any relief and could not be treated as an application under Section 33. There cannot be an application without a prayer for a certain relief. Moreover, the objection had been filed more than 30 days from 30-9-1957 and it could not be treated as an application under Section 33. The right to apply under Section 33 expired on 30-10-57 and the award could not possibly be set aside on an application made after that date. The only right of a party aggrieved by an award suffering from any of the defects mentioned in Section 30 was to apply under Section 33. The words used there are 'shall apply' indicating that he has no alternative remedy.

An award can be impugned only on the ground of certain defects mentioned in Sections 15, 16 and 30. If some of them exist it can be modified or corrected; if some others exist it can be remitted and if the remaining exist it can be set aside. Not only is a particular remedy provided when a certain defect exists, but also no defect not mentioned in the three sections can be taken notice of by the Court. The appellant impugned the award on some of the grounds mentioned in Section 30 and, therefore, his sole remedy was to apply under Section 33, When the time for so applying expired the award became immune from the liability of being set aside and, when concededly there was no case for remitting it, it had to be made a rule of the Court.

5. It was argued by Sri Hyder Husain that the objection of the appellant was defensive and not aggressive in nature, its object being not the setting aside of the award but prevention of its being made a rule of the Court, that Section 33 applies when a party attacks an award by an application for its being set aside, while Section 30 applies when a party in reply to a notice issued under Section 14(2) wants to defend himself against the award being made a rule of the Court and that a party can, without having applied under Section 33- urge that the award should not be made a rule of the Court on the grounds mentioned in Section 30.

We are unable to accept these contentions. In the Arbitration Act there is nothing like a defence to an application for a decree on the basis of an award for the simple reason that it does not contemplate any such application at all. The only application that is contemplated in respect of an award is that it should be filed in Court; no application is required to be made by a party accepting an award for an order under Section 17 upon it. Whatever applications are to be made are to be made by the parties when the Court gives notice of the filing of an award. Since it is the duty of the Court itself to pronounce judgment according to the award and pass a decree upon the judgment, if it does not remit or set aside the award the only application that is required is for remitting the award or setting it aside. Since there is no necessity for an application for pronouncing judgment upon the award etc., there is no question of any defence to such an application.

Every application has to be of an attacking nature; it must attack the award on any of the grounds mentioned in Sections 15, 16 and 30. There is no onus upon any party to prove that the award is free from all defects and, consequently, there cannot be any question of any defence. It is for the party that assails it to show that it is bad and it can assail it only by aft application under Section 33, if it wants it to be set aside, or by pointing out any of the defects mentioned in Sections 15 and 16 and requesting the Court to modify or correct or remit it. Anything like a | written statement is thus completely out of place in a proceeding under the Arbitration Act.

6. Sri Hyder Husain further argued that Section 33 is procedural and Section 30 substantive. We do not know how giving these adjectives to the provisions of the two sections helps him. Even if Section 33 is said to be procedural it provides for the only procedure to be followed by the appellant if he sought the relief of the award being set aside on any of the grounds mentioned in Section 30; he could not get the relief except by applying under it.

7. Sri Hyder Husain next contended that the Court could not possibly pronounce judgment on the award if the appellant had established the existence of any of the grounds mentioned in Section 30. Those grounds are available or relevant only for setting aside an award and, once the award becomes immune from the inability of being set aside by lapse of time, the grounds lose all relevancy and Section 30 becomes a dead section. When there is no question of setting aside an award it is irrelevant to consider on what grounds it can be set aside. Section 30 does not lay down that no judgment can be pronounced upon an award under Section 17 if it suffers from any of the defects mentioned in it. There was nothing to bar the learned Civil Judge's pronouncing judgment on the award even if it suffered from any of those defects actually he should have refused to consider whether any of them existed or not.

8. Sri Hyder Husain also argued that the appellant's right to apply under Section 33 did not become barred by time because he filed the objection before 16-11-1957, the date fixed by the Court in the proceeding. The date was fixed by the Court not for filing an application under Section 33 but for deciding what order to pass on the award. On 16-11-1957 it was to decide whether to remit the award or to set it aside or to pronounce a judgment upon it. The time within which the appellant could apply under Section 33 was fixed by the Limitation Act and could not be altered or extended by the Court. If the appellant had applied within the time the Court could on 16-11-57 set aside the award.

9. Sri Hyder Husain was right in saying that no form is prescribed for an application under Section 33 and that even the words 'under Section 33' need not be written in the application. But it, is quite a different thing to say that a written statement simpliciter containing no prayer at all, bearing no Court-fee and filed after the expiry of the period of limitation for an application can still be treated as such an application.

10. Sri Hyder Husain referred us to a number of decisions of this and other Courts but we do not think that any of them lends support to his contentions. Great reliance was placed upon Ram Alam Lal v. Dukhan, : AIR1950All427 to which one of us was a party, but what was decided there was that an order passed under Section 17 in the circumstances of the case involved an order refusing to set aside an award from which an appeal could lie under Section 39. -The written statement filed in response to a notice issued under Section 14(2) attacked the award as unenforceable and prayed for the relief that the application under Section 14 be dismissed. This Court held that the written statement could be treated as an application under Section 33 and observed at p. 429:

'The law does not require any objection under Section 33 to be filed in addition to the written statement in such a case. It does not require any written statement to be filed at all. All that it requires is that a notice of the filing of the award should be given to the parties and it is for the parties to decide whether to challenge the award under Section 33 or not. If they wish to challenge it, they can do so in any manner they like; Section 33 does not prescribe the manner in which the challenge should come. The written statement serves the purpose of the objection challenging the validity of the award.'

The written statement filed could be treated as an application because it contained a prayer and if it was filed within thirty days of the service of the notice under Section 14(2), it could be treated as an application under Section 33. The written statement in the instant case could not be treated as such an application for the reasons already given. There is nothing in the decision to support the contention that a written statement filed in such a proceeding obviates the necessity of an application under Section 33 regardless of circumstances. Shri Ram v. Shri Pat Singh : AIR1957All106 is rather against the appellant than in his favour. Agarwala and Beg, JJ., observed that within thirty days of the receipt of a notice under Section 14(2) any party can make an application for setting aside the award and that thereupon the Court will hear it and either remit the award or set it aside or pronounce judgment on the award and that the only application to be made by a party desiring a decree on an award is that it should be filed in Court. This exactly is the view that we have taken.

11. Chandu Lal v. Ram Autar : AIR1962All357 did not deal with the question under consideration at all. Mithan Lal, J., observed at page 358:

'The only point which has been canvassed in this case is that an award can be set aside under Section 30 only upon the three specific grounds given in that section.'

The award was alleged to be invalid on the ground that the arbitration agreement itself was defective and the learned Judge held that it was not essential to apply under Section 33 for a finding that? the arbitration agreement was invalid and that the award could be challenged on the ground that the agreement was invalid. The learned Judge did not at all decide whether an award can be set aside without there being any application for the same within the period of limitation prescribed for an application under Section 33.

12. All that Asthana, J., held in Firm Nanak Chand v. Lala Pannalal : AIR1963All68 is that Section 33 relates to procedure which has to be adopted for getting an award set aside, while Section 30 confines the power of the Court to set it aside on the grounds mentioned in it. Nobody disputes this. When the learned Judge said that 'the two sections have to be read together'' he meant that Section 30 will not have to be considered unless there is an application under Section 33 for the setting aside of an award.

13. The facts in Bangarayya v. Ramabhadriraju, AIR 1947 Mad 315 were quite different; it was conceded that an application to set aside the award should have been filed, an objection containing the prayer that the award be set aside and giving the grounds for it was treated as an application under Section 33 and the party filing the objection was found to have been misled by an order of the Court.

14. We may notice the decisions relied upon by the respondents. In Mahadeo Prasad v. Kamala Verma : AIR1956All51 James, J., noticed that though Article 158 Limitation Act, prescribes a period of thirty days for making an application to set aside an award, no such application was made even within eight years and observed that 'the provisions of the Arbitration Act make it abundantly clear that such a challenge is inadmissible without an application.'

15. Uniyal, J,, stated in Mangal Singh v. Nawab Singh : AIR1962All219 :

'Section 33 is the only section under which application can be made challenging the existence, or validity of ............ the award.'

Bishambhar Dayal and Katju, JJ., observed in Om Prakash v. Union of India : AIR1963All242 :

'Section 33 is the only section under which a party has been given the right to apply to the Court to challenge ......... the award.'

The law contained in Sections 15, 16, 30 and 33 was explained by Chakravartti, C. J., in Shah and Co. v. Ishar Singh : AIR1956Cal321 . The points that he made were that applications of various kinds are conceivable as applications under Section 33, that Section 33 does not speak of any particular kind of application and does not specify the form of the relief that may be prayed for, that the validity of an award may be challenged under Section 15 or under Section 16 or under Section 30 that none of the sections provides for the making of an application and the authorityfor making an application in any of these cases is derived ultimately from the general provision contained in Section 33. Chagla, C. J., and Dixit, J., explained' the law as follows in A.R. Savkur v. Amritlal Kalidas : AIR1954Bom293

'Section 33 is the procedural section which lays down the procedure to be followed in making an application ............ for the purpose of setting aside an arbitration agreement ............

............ After an award has been filed an opportunity is given to the party challenging or disputing the award to file an application to set aside the award and the application has got to be filed within the period of limitation. If no application is filed, the party in whose favour the award is made is entitled to a decree upon the award, or if the application is filed and has been dismissed on merits, then also the party ............... is entitled to a decree. It is only when an application to set aside an award having been made in time and the application having succeeded thatthe party ............ is not entitled to a decree interms of the award.

If an award is on the file of the Court, unlesssteps are taken to have that award set aside acertain definite result must follow and that definite result is the result indicated ......... in Section 17.'

16. We are in full agreement with these decisions.

17. We hold that the award could not beset aside or attacked in any other way through anapplication made after the expiry of thirty daysfrom the date on which the notice issued under Section 14(2) was served and that if the award was not set aside and was not remitted judgmenthad to be pronounced upon it. The learned Civil Judge rightly pronounced judgment upon the award and passed a decree according to the judgment.

18. We, therefore, dismiss the appeal with costs.


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