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Kanhaiya Lal Dubey Vs. Smt. Awinash Talwar and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberF.A.F.O. No. 166 of 1966
Judge
Reported inAIR1972All237
ActsArbitration Act, 1940 - Sections 14 and 14(2)
AppellantKanhaiya Lal Dubey
RespondentSmt. Awinash Talwar and anr.
Advocates:Mohanji Verma, Adv.
DispositionAppeal dismissed
Excerpt:
.....- one party refused to comply further stating no arbitration has ever been conducted - copy of award signed by arbitrator and endorsed by both parties, is an evidence - signing by arbitrator means award is operative and enforceable - any party can file it in court. - - it was signed by the arbitrator as well as by both the parties to the disputes. he looked into the accounts as well, and then gave his award on 23-12-1962. he, after signing the award, asked both the parties to sign it. he was subjected to a cross-examination but without success. ' below it, both the parties have signed and dated 23-12-1962. in his written statement, kanhaiya lal also admitted having signed the original as well as copy of the award and having received a copy of the award. ' 5. in paragraph 12 of the..........as to how the evidence on this point is to be assessed.21. in view of our finding, it is unnecessary to discuss further the arguments raised on behalf of the respondent that where an arbitrator having pronounced an award refuses to file it, the court has inherent jurisdiction to accept the award or its copy filed by the parties. we may observe that bench of this court in haji rahmetulla v. chaudhri vidya bhushan, air 1963 all 602 has held that proceedings under section 14(2) can validly be taken when an award has been filed by a party.22. in the result, the appeal fails and is accordingly dismissed with costs.
Judgment:

Satish Chandra, J.

1. Kanhaiya Lal Dubey, the defendant-appellant and Smt. Awinash Talwar, the plaintiff-respondent, carried on business in partnership. On disputes having arisen, they in October, 1962, executed an agreement referring their disputes to the arbitration of Sri Bhusharan Sharma. According to the plaintiff's case, the arbitrator entered on the reference and conducted the proceedings from 15th October to 22nd December. 1962. On 23rd December 1962, the arbitrator pronounced the award. It was signed by the arbitrator as well as by both the parties to the disputes. The arbitrator gave a copy of the award to each party. The award was that Kanhaiya Lal Dubey. the appellant, should pay Rs. 28,000/- to the plaintiff-respondent in instalments. The first instalment was of Rs. 7,000/- payable immediately. On this amount being paid, the appellant was entitled to the possession of the shop where the partnership business had till then been carried on. The same day, namely on 23rd December, 1962, the appellant paid Rs. 7,000/- to the respondent, and the respondent gave possession of the shop to the appellant. The appellant, however, refused to pay the subsequent instalments. On 16th January, 1963, the plaintiff filed an application in court under Section 14(2), Arbitration Act. Thereupon, the appellant filed objections denying that the arbitrator had conducted any proceedings or pronounced an award. On being called upon by the Court, the arbitrator also filed a written statement. Therein, he denied having conducted any arbitration proceedings or made an award. He alleged that the plaintiff's husband had brought certain type-written papers and he just signed them. On 19th October, 1963, the plaintiff-respondent filed a copy of the award along with an application praying that decree be passed on the basis of that copy.

2. The court below held that the arbitrator had. in fact, entered on the reference, conducted the proceedings and had pronounced the award on 23rd December, 1962, a copy whereof was the one filed by the plaintiff. It held that the application under Section 14(2) was maintainable and a decree could validly be passed on the basis of the copy of the award filed by the plaintiff. Aggrieved, the defendant, Kanhaiya Lal Dubey hag come to this court in appeal. He has assailed the findings of fact. It was also urged on behalf of the appellant that the arbitrator not having filed the award and not having authorised the parties to file or cause to be filed the award or its copy, the application under Section 14(2) was not competent.

3. It is admitted between the parties that they carried on business in partnership, that certain disputes arose whereupon they executed an agreement referring them to the arbitration of Sri Sharma. On behalf of the plaintiff, her husband, R.K. Talwar appeared in the witness box along with one Rajendra Nath (P.W. 2). He stated that Shri Sharma had conducted the proceedings in the presence of both the parties. He looked into the accounts as well, and then gave his award on 23-12-1962. He, after signing the award, asked both the parties to sign it. Thereafter each of the two parties stated on the award that they accept ,the award and then they again signed it. The same procedure was adopted in relation to the two copies given to the parties. In terms of the award. Kanhaiya Lal Dubey, appellant, paid to the plaintiff Rs. 7,000/- and obtained possession of the shop from her. The witness proved the receipt (Ext. 3) which was given by Kanhaiya Lal for having obtained possession of the shop and the goods kept in it. He was subjected to a cross-examination but without success.

4. This oral testimony Is corroborated. The copy of the award filed by the plaintiff shows that it was signed by the arbitrator. Thereafter it states. 'Copy of the award received. The award is hereby accepted.' Below it, both the parties have signed and dated 23-12-1962. In his written statement, Kanhaiya Lal also admitted having signed the original as well as copy of the award and having received a copy of the award. In paragraph 11 of the written statement filed by the appellant, it was stated:--

'That on 23-12-1962 Sri Raj Kumar Talwar represented to me at the residence of the opposite party No. 2 at Jhansi and represented to the opposite party that award and had actually given award, showed the original award on stamped paper signed by Sri Bhusharan Sharma and also carbon copy of it signed by Sri Bhusharan Sharma.'

5. In paragraph 12 of the written statement the appellant stated that acting on this misrepresentation, he 'signed the award and endorsed on it his acceptance. The opposite party was given copy of the award and this fact was also endorsed on the original award.' The written statement at least proves two things: that the award was signed by the parties on 23-12-1962 and that the representation alleged to have been made by the plaintiff was made to the appellant at the residence of opposite party No. 2. Opposite Party No. 2 is the arbitrator. So the event of the signing of the award and the copies took place on 23-12-1962 at the residence of the arbitrator. The appellant does not say that the arbitrator was not there at that time. There was no point in the parties meeting at the residence of the arbitrator on 23-12-1962 unless they had some business there. The presence of both the parties on that date corroborates the plaintiff's case that it was the date fixed for the pronouncement of the award. If the appellant's case that the arbitrator refused to enter upon the reference was correct, the appellant should have explained why he went to the residence of the arbitrator on 23-12-1962.

6. The fact that the appellant went to the residence of the arbitrator and that there he signed the original award as well as the copies after stating that he accepted the award, clearly proves the plaintiff's case that till that time there was no dispute between the parties upon the point that the arbitrator had in fact entered upon the reference and after conducting proceedings, had pronounced the award. The appellant had accepted the award. He acted upon it by paying the first instalment and obtaining possession of the shop.

7. If the story put forward by the appellant that the arbitrator initially refused to enter upon the reference, but the plaintiff's husband misrepresented that the arbitrator subsequently agreed and that he also gave the award, were true, then it would have been expected of the appellant, who was a shrewd businessman, to have immediately verified these representations from the arbitrator, because at that time the appellant was at the residence of the arbitrator. Even if the arbitrator was found to have been absent at that time from his residence, the appellant could easily have waited for sometime before not only signing the award but also accepting it and making payment in terms thereof. It is not the appellant's case that the arbitrator had gone out or was not available at all. He was a Railway Official and was on duty at Jhansi.

8. The appellant's oral testimony is not reliable. He changed his story more than once. In the written statement, he had admitted the signing of the award and its copies and receipt of a copy as the endorsement that he accepted the award. In his examination-in chief, he stated that R.K. Talwar told him that the arbitrator had pronounced the award and that the appellant would have to accept it The appellant accepted it and paid Rs. 7,000/- though, he was not given a copy of the award. In cross-examination, he again changed his stand and stated that he was not shown the original award. It is to be noticed that in the statement under Order 10. Rule 2, Civil Procedure Code the appellant had admitted that the original award was shown to him. He then stated that he endorsed and signed the copies because R.K. Talwar threatened to make a complaint against the appellant to M.E.S. authorities about some defective work. This explanation was completely new and was given for the first time in the cross-examination. Even this was not enough. He went on to state that he accepted the award because he was sitting idle and was keen to get the shop as early as possible.

9. The appellant instead of explaining the admissions made by him in his written statement and the statement under Order 10, Rule 2, Civil Procedure Code was caught in the trap of his own lies. No reliance can be placed upon his oral evidence.

10. Rajendra Nath (P.W. 2) only states that he knew the parties and the arbitrator and that he saw the parties at the house of the arbitrator two or three times. Nothing particular was elicited in his cross-examination. In the circumstances of the case, it appears that he is speaking the truth.

11. The defendant produced V.K. Wagre (D.D. 1) and C.N. Chatterjee (D. W. 3). Wagre was a clerk in the Defence Yard. He stated that the arbitrator was also posted in the Defence Yard and that during October and December 1962, the arbitrator was on duty all the 24 hours and that he never went to his house. He also stated that the plaintiff's husband brought few papers to the arbitrator and he signed them. In cross-examination, he admitted that he did not know what the papers were about. He did not see the contents thereof. He could not say whether copy of the award filed in the case was one such document. In his cross-examination. he admitted that it was not necessary that he should have been with Shri Sharma (the arbitrator) all the time. He did not know what Shri Sharma used to do when he was not with Shri Sharma. He had no personal knowledge about the hours of duty of the arbitrator. He stated that since his own duty was round the clock, he thought that the arbitrator may also be living in the yard almost all the tune, Shri Wagre appears to be a chance witness. He stated that he never told anyone that he saw the arbitrator signing some documents brought by the appellant If that be so it is not imaginable how the appellant thought of producing this man as a witness. He has obviously been cooked up for purposes of this case. Shri Chatterjee (P.W. 3) stated that the arbitrator had signed the copy of the award filed by the plaintiff in his presence. Mr. Talwar had brought those papers to Shri Sharma in the Defence Yard. In cross-examination, he admitted that he could not say whether the arbitrator had signed any stamped paper as well. This falsified his testimony because it is admitted between the parties that the arbitrator signed not only the copies but also the original award at the same time. No reliance can be placed upon this witness.

12. In our opinion, the evidence establishes the plaintiff's case that the arbitrator entered on the reference and after conducting the proceedings pronounced the award on 23-12-1962. He signed the two copies. The parties signed the original as well as the copies. They endorsed upon the three documents the fact that they had received copies and had accepted the award. It is also established that in pursuance of the award, the appellant paid Rs. 7,000/- to the plaintiff and that the plaintiff delivered possession of the shop to the appellant. We, therefore affirm the finding of the court below on this point.

13. The next point is whether the application under Section 14(2). Arbitration Act, was maintainable. It was submitted on behalf of the appellant that Section 14(2) provides that the arbitrator shall, at the request of any party, or if so directed by the Court, cause the award or a signed copy thereof to be filed in court. Under this provision, the arbitrator can either himself file the award in court or authorise someone to do so on his behalf. It was urged for the appellant that mere delivery of a copy of the award to the parties does not mean authorising the parties to file it in court. In this connection, reliance was placed upon Amod Kumar Verma v. Hari Prasad Burman, AIR 1958 All 720. In that case, one party filed the award in court along with an application under Section 14(2). Arbitration Act. That application was dismissed as not pressed. Thereafter, the other party made an application under Section 33 of the said Act for the setting aside of the award. As a defence, it was pleaded that the award was valid and should be made a rule of the court. The court upheld the defence case and passed a decree in terms of the award. In appeal, this court held that the application under Section 14(2) had been dismissed and that order had become final. That operated as res judicata in the subsequent suit. No decree could hence be passed on the basis of the award under Section 33. This was enough for the decision of the appeal but the Bench went on to make several observations about the exact procedure to be followed in making an application under Section 14(2). It was held that a decree could be passed only in proceedings arising out of an application under Section 14 and not on application under Section 33. While interpreting Section 14(2), it was observed:--

'The effect of Section 14(2) is the court is bound to receive the award and to proceed as laid down in it and the subsequent sections, but cannot be expected to do so whenever an award is produced before it by any person; therefore the Legislature has laid down that it must be filed or caused to be filed by the arbitrator himself. An arbitrator cannot be said to have caused the award to be filed unless he delivers it to another person with a direction to file it or directs the person, who has custody of it, to file it'.

He must intend to file it and must do an act which results in its being filed. Otherwise he cannot be said to have caused it to be filed. If an arbitrator simply hands over the award to a party even if he knows or has reason to believe that the party will file it in the court and it files it. so long as he has not expressly authorised it to file it, he cannot be said to have caused it to be filed.

If some other person files it he must do so as the arbitrator's agent or as observed by the Supreme Court in Kumbha Mawji v. Dominion of India. AIR 1953 SC 313, he should have his authority. In that case the arbitrators handed over the award to a party and the party filed it in the court yet the Supreme Court held that the arbitrators did not cause it to be filed because the party had no authority from them to file it.

14. In Amod Kumar's case, AIR 1958 All 720 it was found on facts that the court had issued a commission for procuring the award. The Commissioner seized it from the arbitrator and produced it in Court. In the earlier proceedings under Section 14, it was held that if the Commissioner seized it and then produced it in the court, it could not possibly be held that the arbitrators caused it to be filed in court It was also observed that the Commissioner could not be deemed to be the arbitrator's agent.

15. Thus, the decision in Amod Kumar's case. AIR 1958 All 720 is not only distinguishable on facts, but the observations relied on for the appellant were clearly obiter. Here, no body coerced the arbitrator to give a signed copy of the award to the parties. Under the Arbitration Act an arbitrator is not required to obtain an endorsement from the parties that they have accepted the award. The parties need not sign the award. An award is validly pronounced when the arbitrator signs it The parties may however, accept the award and endorse their acceptance of the award. Thereupon the award becomes operative and enforceable at once. The parties can lawfully act upon the award and fulfil its directions. If any party fails to comply with the award, the other party can sue him, treating the acceptance of the award as a fresh agreement (See Kashinathsa Yamosa Kabadi v. Narsingsa Bhaskarsa Kabadi, AIR 1961 SC 1077 Paras 18 or 19; Ram Sahai v. Babu Lal. AIR 1965 All 217. Yet another alternative is for any of the parties to apply to the court under Section 14(2) and, on the award being filed in the court, get a decree on the basis of the award.

16. In the present case, the arbitrator went out of his way to obtain an endorsement from both the parties that they had accepted the award and that each of them had received a copy of the award. Thereupon, the arbitrator delivered a copy of the award to each party. This would show that the arbitrator authorised the parties to enforce the award and act upon it forthwith. This is corroborated by the conduct of the parties as well, because the same day the appellant paid Rs. 7,000/- in terms of the award to the plaintiff and the plaintiff delivered possession, of the shop in pursuance of the directions given, in the award. These transactions were valid in law. Thereafter, the appellant seems to have turned dishonest and refused to pay the amount mentioned in the award. Thereupon, the plaintiff took the matter to court.

17. In our opinion, the conduct of the arbitrator in obtaining these endorsements and then in giving a copy to each party shows an intention that he authorised them to enforce the award in any manner they liked, including by filing thereof in court. Under Section 14(2), Arbitration Act, the arbitrator can also cause to be filed in court a signed copy of the award. That is why the arbitrator delivered to the parties a signed copy containing the signature and endorsement of both the parties.

It is true that the arbitrator In his written statement stated that he had not authorised anyone to file the award or Its copy. But this appears clearly to be an afterthought. If this was true, there was no reason for him to sign the copies after endorsement of the parties and to give them to the parties.

18. The plaintiff has alleged that the arbitrator was in collusion with the appellant, and that is why he has changed his stand. The arbitrator was an educated person. He was a High Railway Official. He was not expected to sign as an arbitrator a document which had been prepared previously by the plaintiff and which had just been brought to him. The stand taken in the written statement appears to be concocted to suit the appellant's case.

19. On the evidence, we are inclined to hold that the arbitrator had by his conduct, authorised the parties to file the copies in court. The filing of the copy of the award was hence in accordance with Section 14(2) of the Act, and the application was maintainable.

20. We are, however unable to agree with the obiter observations of the Bench in Amod Kumar's case that so long as the arbitrator does not expressly authorise a party to file the award in court, he cannot be held to have caused it to be filed. The Arbitration Act or the Rules framed thereunder do not lay down any formula or fixed form in which alone the arbitrator has to direct or authorise a party to file the award in court. The question whether an arbitrator has so authorised a party is one of fact and will depend upon the evidence led in each case. No hard and fast rule can be laid down. There is nothing in the observations of the Supreme Court in AIR 1953 SC 313 to suggest as to how the evidence on this point is to be assessed.

21. In view of our finding, it is unnecessary to discuss further the arguments raised on behalf of the respondent that where an arbitrator having pronounced an award refuses to file it, the court has inherent jurisdiction to accept the award or its copy filed by the parties. We may observe that Bench of this court in Haji Rahmetulla v. Chaudhri Vidya Bhushan, AIR 1963 All 602 has held that proceedings under Section 14(2) can validly be taken when an award has been filed by a party.

22. In the result, the appeal fails and is accordingly dismissed with costs.


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