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Union of India (Uoi) Vs. Ram Nath and Co. and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 254 of 1973
Judge
Reported inAIR1974All296
ActsArbitration Act, 1940 - Sections 28 and 28(1); Evidence Act, 1872 - Sections 115; Code of Civil Procedure (CPC) , 1908 - Sections 151
AppellantUnion of India (Uoi)
RespondentRam Nath and Co. and ors.
Appellant AdvocateLalji Sinha, ;O.S. Shani and ;S.D. Mishra, Advs.
Respondent AdvocateS.N. Kakar and ;R.N. Bhalla, Advs.
DispositionApplication dismissed
Excerpt:
arbitration - extension of time for making award - section 28(1) of arbitration act, 1940 - no compulsion on arbitrators to enter into reference - once entered direction can be made to pass an award within a time frame. - - do not appear to have prayed for time but on 15-7-1972 their statement of claim was received by the arbitrators and on 1-8-1972 asked the union of india through general manager, central railways, to submit their counter-statement by 10-10-1972. the union of india could not submit its statement by that date and prayed for extension of time up to 15-11-1972. time was allowed up to 6-11-1972. by this date as well the union of india could not submit their counter-statement and applied for further extension of time upto 15-12-1972 which was allowed on 13-11-1972. the.....orderc.d. parekh, j.1. in these two civil revisions common questions of facts and law are involved and therefore they were heard together.2. civil revision no. 254 of 1973 arises out of the order dated 26-2-1973 passed by the civil and sessions judge, jhansi, in miscellaneous case no. 82 of 1972 being an application under section 151, civil procedure code read with paragraph 4 of schedules i and ii of the arbitration act, 1940, to restrain the arbitrators from proceeding with the arbitration and to make and publish the award. the learned judge has directed that the umpire shri s. c. goael should proceed with the reference and give his award within two months of the date of the receipt of the papers and directed the parties to the arbitration agreement to appear before the umpire on.....
Judgment:
ORDER

C.D. Parekh, J.

1. In these two civil revisions common questions of facts and law are involved and therefore they were heard together.

2. Civil Revision No. 254 of 1973 arises out of the order dated 26-2-1973 passed by the Civil and Sessions Judge, Jhansi, in Miscellaneous Case No. 82 of 1972 being an application under Section 151, Civil Procedure Code read with paragraph 4 of Schedules I and II of the Arbitration Act, 1940, to restrain the arbitrators from proceeding with the arbitration and to make and publish the award. The learned Judge has directed that the Umpire Shri S. C. Goael should proceed with the reference and give his award within two months of the date of the receipt of the papers and directed the parties to the arbitration agreement to appear before the Umpire on 13-3-1973. It was further directed that the record lying in his court be sent to the Umpire for determination and adjudication of the dispute between the parties. The arbitrators were restrained from proceeding with the arbitration. The parties were directed to bear their own costs of the case.

3.-4. Civil Revision No. '255 of 1973 arises out of the order dated 26-2-1973 passed by the Civil and Sessions Judge, Jhansi, on an application purported to be under Section 28 of the Arbitration Act, 1940 being Civil Misc. Case No. 4 of 1973 for extension of time to the Arbitrators. This application has been dismissed by the Civil Judge and he has directed the parties to bear their own costs.

5. The facts giving rise to these two separate revisions may briefly be stated thus:--

M/s. Ramnath and Co., of 91 Cantt. Jhansi, through their Managing Partner Shri V. K. Sood, on 17-2-1968 entered into an agreement with the Union of India, representing Central Railways, for the construction of bridges, between Jiron-Dailwara (doubling) which lies within the territorial jurisdiction of district of Jhansi. The agreement, besides the work and the manner in which it was to be carried, also contained arbitration clauses for the settlement of dispute if any, which may arise between the parties. The arbitration clause inter alia provided that the question of dispute or difference between the parties, in case where the claim be below Rs. 50,000/- would be referred to a sole arbitrator who shall be the General Manager of the Central Railways of the Union of Ridia and if the claim related to the amount exceeding Rs. 50,000/- it would be referred to two arbitrators to be appointed by the General Manager. The appointment of the Arbitrators is not in dispute in this case. It is admitted that the dispute in this case between the parties was for more than Rs. 50,000/- and, therefore, in terms of the agreement the General Manager, Central Railways appointed Shri V. Giridhari Das, Senior Deputy General Manager Central Railways Bombay V. T. and Shri G. M. Gidwani, F. A. and C. A. O., Western Railways Church Gate, Bombay as Arbitrators. After the appointment of the aforesaid Arbitrators M/s Ramnath & Co. by letter dated 18-2-1972 required them to appoint an Umpire in terms of Schedule I paragraph 2. The Arbitrators on 3-3-1972 intimated their acceptance of appointment as Arbitrators and informed M/s Ramanath & Co. to submit their statement of claim. It is admitted that Shri S. C. Goeal was nominated as Umpire by the Arbitrators. On 13-3-1972 M/s. Ramnath and Co. requested the Arbitrators to direct the Railways to prepare their final bill but the Arbitrators feeling their inability to do so, declined to make such a direction., M/s. Ramnath and Co. do not appear to have prayed for time but on 15-7-1972 their statement of claim was received by the Arbitrators and on 1-8-1972 asked the Union of India through General Manager, Central Railways, to submit their counter-statement by 10-10-1972. The Union of India could not submit its statement by that date and prayed for extension of time up to 15-11-1972. Time was allowed up to 6-11-1972. By this date as well the Union of India could not submit their counter-statement and applied for further extension of time upto 15-12-1972 which was allowed on 13-11-1972. The facts aforesaid are admitted by the parties.

6. The plea of M/s. Ramnath and Co., before the court below was that after the appointment of the Arbitrators they were served with notice dated 18-2-1972 to enter into reference and perform their functions as provided in the Arbitration clause and the Arbitrators on 3-3-1972 called upon them to file their statement of claim and, therefore, the arbitrators entered into reference on either of these dates. Their further plea was that the Arbitrators could make their award and publish the same within a period of four months from the date of entering into reference, which period according to M/s. Ramnath and Co., if computed either from 13-2-1972 or from 3-3-1972 had expired either on 17-6-1972 or on 2-7-1972. According to the plea of M/s. Ramnath and Co. after the expiry of the period prescribed by law the Arbitrators became functus officio. Their further case was that the Arbitrators had committed judicial misconduct by granting unwarranted and improper latitude to the General Manager, Central Railways or the Union of India, in granting abnormal time for the submission of their counter-statement, to their prejudice and thus they called upon the Umpire on 16-11-1972 to enter on reference and decide the dispute between the parties. They therefore, prayed before the court below that the Arbitrators be restrained from proceeding with the case, the record of the Arbitrators be taken possession of by the Commissioner to be appointed by the Court, the Umpire be directed to proceed with the case and make and publish his award and the cost of the proceedings be awarded to them.

7. The application was opposed by the Union of India. Various pleas were raised in defence. They had justified their stand in asking for the time and the stand of the Arbitrators in granting time. They had also justified the stand of the Arbitrators in declining to accept the request of M/s. Ramnath and Co. for the direction to the Central Railways to prepare the final bill. The case of the Union of India was that the Arbitrators had not entered on reference on the dates aforesaid and the Umpire could not enter on reference nor for directions sought for could be made by the court. Further contention on their behalf was that the time, if any, that had passed in entering into the reference by the arbitrators was for the reasons of omission and commission of M/s. Ramnath and Co., and they are estopped from raising such questions and they had waived the period, if any.

8. The Civil Judge - determined the question whether the Arbitrators had become functus officio by allowing the statutory period of four months to expire in making and publishing the award or not. He also adverted to the question whether the court could direct the Umpire to proceed with the arbitration and make and publish the award or not: the question of jurisdiction of the court was also decided. The Civil Judge held that the Arbitrators had become functus officio by allowing the statutory period of four months to expire in making and publishing the award. He has also held that it would be just and proper to allow time to the Umpire to proceed, with the reference and give its award after receipt of the papers from the Court. As for the jurisdiction of the court, he has held that the court was competent to direct the Umpire to proceed with the reference in lieu of the Arbitrators. The other question was also considered by the Court whether the time of the Arbitrators be extended further or not. In the opinion of the court since the Arbitrator had become functus officio and, therefore, it was not proper to allow time to the Arbitrators to make and publish the award.

9. In Civil Revision No. 255 of 1973 the question about the extension of time of the Arbitrators was directly involved. On the application of the Union of India under Section 28 of the Arbitration Act the learned Civil Judge by his order dismissed the application for the reasons which he has expressed while dealing with the said point in Civil Revision No. 254 of 1973. Although the order is elaborate one the conclusion is the same.

10. Aggrieved by the orders aforesaid the Union of India has filed these two civil revisions.

11. It has been urged on behalf of the applicant (1) that the Arbitrators did not enter into reference either on 18-2-1972 or on 3-3-1972 and, therefore, the court erred in passing the order under revision; (2) that even if it be assumed that the Arbitrators had entered into reference the responsibility of passing out of the period of four months lay squarely on M/s. Ramnath and Co. and they were estopped from taking such a plea and laying the burden at the door of the Arbitrators. It was also submitted in his connection that since the extension of time was initially allowed to M/s. Ramnath and Co., they waived the period required by law for making and publishing the award by the Arbitrators. Thirdly, it was also urged that the Umpire had not entered into reference nor there was any application as contemplated by Section 28 of the Arbitration Act for extension of time of the Umpire and, therefore, the order passed by the Court below was without jurisdiction.

12. Before I deal with the points aforesaid it may be of use to refer to the relevant provisions of the Indian Arbitration Act, 1940 cited before me. Section 5 of the Arbitration Act reads thus:--

'The authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the court, unless a contrary intention is expressed in the arbitration agreement.'

Section 28 of the Arbitration Act reads thus:--

'The court may, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarge from time to time, the time for making the award. (2) Any provision in an arbitration agreement whereby the arbitrators or umpire may, except with the consent of all the parties to the agreement, enlarge the time for making the award, shall be void and of no effect.'

Under Schedule I to the Act Clauses 3, 4 and 5 which are subject to Section 3 of the Arbitration Act, have also been relied upon by the learned Counsel for the applicant, Clause 3 reads thus:--

'The arbitrators shall make their award within four months, after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow.'

Clause 4 reads thus :--

'If the arbitrators have allowed their time to expire without making an award or have delivered to any party to the arbitration agreement or to the umpire a notice in writing stating that they cannot agree, the umpire shall forthwith enter on the reference in lieu of the arbitrators.'

Clause 5 reads as follows:--

'The Umpire shall make his award within two months of entering on the reference or within such extended time as the Court may allow.'

13. From the legal position as may be spelled out from the aforesaid provisions of law relied upon by the learned Counsel for the applicant, it has to be seen whether the Arbitrator did or did not enter into reference either on 18-12-72 or on 3-2-72 and if they had entered into reference on either of these dates their authority had come to an end unless the court extended the time to enable them to make the award, and if the Umpire had entered into reference the question of extension of time under Section 28 of the Arbitration Act to the Arbitrators did arise or not. The Court below has, thus, rightly assessed the legal position that the case was either the arbitrators should perform their duties or the Umpire be allowed to perform his duty. Therefore, on the facts if proved the Umpire undoubtedly under Clause 4 of Schedule I could act in lieu of the Arbitrators.

14. Learned Counsel for the applicant for the purposes of clarifying the expression 'entering into reference' has placed reliance on a case reported in : AIR1973Cal253 Ramnath Agarwalla v. Goenka and Co. and has invited my attention to paragraph 29 of that case law. It has been held in that case that 'entering into reference refers to the first step that the arbitrator takes in the reference, that is to say, when he begins to deal with the reference. The Arbitrator, under the Act, may have to do various ministerial acts but the doing of any of the ministerial acts is not entering on the reference. It is only when he first applies the mind to the dispute referred to him that he enters on the reference. When, however, in a particular case, he first applied his mind to the dispute would depend, on the facts and circumstances of that case.' Reference has also been made to a case reported in : [1962]2SCR720 , Hari Sanker Lal v. Shambhu Nath and my attention was drawn to paragraph 11 of this case where it has been held that on a proper interpretation of Rule 3 the legal position may be formulated thus: (a) notice to act may be given before or after the Arbitrators entered upon the reference, (b) If notice to act is given before they entered upon the reference, the four months would be computed from the date they entered upon the reference. (c) If a party gives notice to act without four months after the arbitrators entered upon the reference, the arbitrators can make an award within four months from the date of such notice. And (d) in that event, after the expiry of the said four months the arbitrators become functus officio, unless the period is extended by court under Section 28 of the Act, such period may also be extended by the court, though the award has been factually made. Citation has also been made of a case reported in (1922) 20 All LJ 272 = (AIR 1922 All 106), (Firm Sardar Mal Hardat Rai v. Firm Sheo Baksh Rai Sri Narain) where the expression 'entering on the reference' has also been explained by a Division Bench of this court. On the basis of an English case law Baker v. Stephens, (1867) 2 QB 523 it was decided that 'entering upon the reference' means 'not when an arbitrator accepts the office, or takes upon himself the duty, but when he actually enters upon the matter of the reference, when the parties are before him, or under some peremptory order compelling him to conclude the hearing ex parte.' According to the learned Counsel for the applicant in the instant case the arbitrators did not apply their mind and, therefore, they had not entered into reference. It has also been submitted in this connection that the Umpire too did not enter into reference. The letter dated 16-11-1972 by M/s. Ramnath and Co. and the letter of the Umpire dated 26-11-1972 have been referred to and on the basis of these two letters it has been argued that the Umpire did not enter into reference. In the alternative it has also been submitted that the court below was not justified in extending the period of making the award by the Umpire without any application to that effect. Reliance has been placed by the opposite party on paragraph 8 of the statement of facts as contained in the order of the court below. Paragraph 8 runs thus:--

'That according to the petitioner, the respondents Nos. 2 and 3 as arbitrators, had entered upon the reference on 3-3-1972. The Central Railway had also accepted the position during the hearing of this petitioner. Therefore the respondents Nos. 2 and 3 as arbitrators were required to make and publish the award within four months from 3-3-1972 i.e., by 2nd July, 1972.'

Having made this concession in favour of the fact that the Arbitrators had entered upon reference on 3-3-1972 the submission on behalf of the opposite party is that it docs not He now to the applicant to challenge the fact and to get the position (sic) respondent on a question of fact whether the Arbitrators entered into reference or not. The finding even though based on concession made on behalf of the Union of India, is based on a concession of fact whether the Arbitrators acted or had applied their mind to the' dispute on that date or not. In my opinion when the Union of India had made a concession that the Arbitrators had entered into reference on 3-3-1972 it means that they had agreed that the Arbitrators had applied their mind to the dispute. It is, therefore, no more open to them now to question the fact and go behind the same. The learned Counsel for the applicant argued that even if the concession may have been made the fact remains that the concession was against law and, therefore, the Union of India is not estopped from arguing or taking the plea once again in this Court that the Arbitrators had not entered into reference on 3rd of March, 1972. Examining the question of fact for the sake of argument that there is no estoppel against the statute the orders under revision do not appear to be without jurisdiction. On 3-3-1972 the Arbitrators Shri V. Girdhar Das and Shri G. M. Gidwani informed M/s. Ramnath and Co. that they were prepared to arbitrate in the case and called upon M/s. Ramnath & Co. to submit then: full claim and statement of facts with copies of relevant letters indicating clearly the monetary value of each claim, in duplicate and further M/s. Ramnath & Co. were advised to send a copy of such a statement of claim to the General Manager, Central Railways Bombay. M/s. Ramnath & Co. were further informed that on receipt of the documents from both the parties the Arbitrators would fix up a date for hearing. This act of the Arbitrator was an act which according to the Union of India did not show that they had applied their mind to the dispute referred to them, but according to them these were only ministerial acts and a ministerial act is not 'entering on reference.' The argument is that even if any concession was made the Union of India is not estopped from raising the question once again before this Court and to show that it was only a ministerial act and not an act in which the Arbitrators had applied their mind on 3-3-1972. The fact that concession was made by the Union of India conceding that the Arbitrators had entered into reference when they called upon M/s. Ramnath & Co. for filing their statement of claim and also supplying the copy to the General Manager, Central Railway, Bombay may be said to be a ministerial act but that was not the end of it. The Arbitrators did other acts as well before receipt of the request for direction to the Central Railways for preparation of final bill, allowed ex parte tune to them and to the Railways. When it was conceded that the Arbitrators had enterad into reference the cumulative effect of the acts of the Arbitrators appears to have been considered and no further evidence to the effect whether they had entered into reference or not could be led by M/s. Ramnath & Co. and, therefore, the basic fact, if conceded by the Union of India that the Arbitrators had applied their mind by entering into reference, is sufficient to oust the plea, that in spite of the concession made it is still open to them to show to this Court that the Arbitrators did not apply their mind nor did they enter into reference on 3-3-1972. The plea in my opinion is not a pure plea of law but is a mixed question of law and fact. The fact that the Arbitrators applied their mind on 3-3-1972 was conceded and the question whether they had entered into reference on facts is established, it is now a closed question and in my opinion the Union of India is also estopped from taking up the same question once again before this Court. The lower Court as well on the basis of this concession made by the Union of India, based its findings that the Arbitrators had become functus officio on 2nd of July and/or after 15th of July 1972, and thereafter they had no authority to act as such in the case without the order of the Court, Assuming that the Arbitrators had not entered into reference in that case the provisions of Section 28 would not be attracted because there will be no failure of the Arbitrators to make the award. The failure would be to enter into reference itself. The language of Sub-section (1) of Section 28, therefore, would not be attracted. The language as employed clearly means that the time for making the award can be extended but if the Arbitrator or Arbitrators have not entered into reference i. e. when there is an inaction on their part, in my opinion, provisions of Section 28 will not be attracted. Clause 3 of Schedule I provides that the Arbitrators shall make their award within four months after entering on the reference. This clause is an implied term of the arbitration agreement and in case the Arbitrator or Arbitrators have not entered into reference, it will not help the defaulting arbitrator or Arbitrators. In my opinion, therefore, Section 28 of the Arbitration Act gives power to the Court to enlarge time for making the award but it does not empower the Court to give a direction to the Arbitrator or Arbitrators to enter into reference and thereafter enlarge the time to make the award. The Court, in my opinion invested with the powers under Section 28, cannot compel the Arbitrator or Arbitrators to enter into reference or in other words to apply their mind to the dispute before them. Thus as well' the argument that the lower Court erred in passing the order in revision is devoid of force. For these reasons as well the first point urged before me by the learned counsel for the applicant does not hold good.

15. Point No. 2 relates to the estoppel and waiver that has been urged before me on the facts and circumstances of the case. The rule of evidence governs estoppel but it does not create any substantive right. Therefore, it is a matter only of proof. It is a matter of conduct of the person concerned who by his representation to another has induced the latter to alter his position. On the other hand waiver is contractual and may constitute a cause of action when a person agrees to waive his right. The facts thus giving rise to the plea of estoppel and waiver relied upon by the learned counsel for the applicant are that on 10th January, 1972 the Arbitrators were appointed. On 18-2-1972 letter was sent by M/s. Ramnath and Co. to appoint Umpire. On 1-3-1972 the Umpire was nominated and on 2nd of March, 1972 he accepted his nomination. On 3-3-1972 M/s. Ramnath and Co. were required by the Arbitrators to submit their claims. On 1st of August, 1972, the Central Railways were required to file the counter statement to the claim submitted by M/s. Ramnath and Co. by 10th of October, 1972. Central Railways applied for extension of time up to 15th November, 1972, Time was extended up to 6th of October, 1972. The Railways again prayed for extension of time and the time was extended up to 15-12-1972. On 16-11-1972 before the Railways could submit their reply to the claimant and file their counter-statement M/s. Ramnath and Co. wrote to the Umpire and made a complaint that the acts of the Arbitrators were unwarranted and stated that the Arbitrators have committed acts of judicial misconduct by allowing improper latitude to the Railways by granting them abnormal length of time for submission of their reply and counter-statement which had the prejudicial effect. It was also pointed out to the Umpire that the Arbitrators had allowed their time to expire without making the award. They therefore, invoked the provisions of Clause 4 of Schedule 1 of the Arbitration Act, 1940, and requested the Umpire to enter on reference forthwith in lieu of the Arbitrators and adjudicate upon the dispute referred to them. On this letter, the Umpire Shri S. C. Gohel on 26-11-72 called for the reply of the Arbitrators to enable him to decide the matter. The Umpire also requested the Arbitrators to send the abstract of papers with them to enable him to verify the facts and submissions made by M/s. Ramnath and Co. in their said letter. The Arbitrators by their letter dated 28-11-1972 informed the Umpire that for the reasons given in their letter they were not bound by the reference made to the Umpire by one of the parties and would be proceeding with the Arbitration under the powers vested in them. Having received this reply of the Arbitrators it appears M/s, Ramnath And Co. filed the application on 2-12-1972 before the Court and ad interim injunction was issued against the arbitrators on 4-12-1972. The submission of the learned counsel is that M/s. Ramnath and Co. are themselves responsible for delaying the matter beyond four months, to be computed from 3-3-1972 and, therefore, they are estopped from taking this plea that the Arbitrators allowed the time to expire. Their alternative case is that at no point objection was taken to the extension of time allowed to the Central Railways by the Arbitrators for filing their counter-Statement, and, therefore, M/s. Ramnath and Co. have waived their right if any and cannot complain that the Arbitrators had undue leaning towards the Union of India or the Central Railways. According to the learned counsel both the parties to the arbitration agreement took time from the Arbitrators to prefer the claim and for the counter-statement, therefore, the plea of estoppel and waiver is there. Reliance has been placed on : AIR1961All180 , (Shambhu Nath v. Smt. Surja Devi). My attention has been drawn to para. 4 of this ruling where it has been held that 'the combined effect of Section 3 and condition No. 3 of the 1st Schedule of the Arbitration Act is that every arbitration agreement contains a condition as to time which is of the essence of the agreement.

If this condition is broken either party to the agreement can treat the arbitration as at an end. But a condition in an agreement has not the same effect as a statutory condition which goes to the root of the jurisdiction of a Court or any other authority. It is like any other condition in an agreement and can be waived by the parties. This general principle under the law of contract is given statutory recognition by Section 28(2). The time limit of four months can be waived with the consent of both the parties. Where after the expiry of four months, a party did not inform the arbitrator and the other party that the arbitration proceedings were at an end and that he would not be bound by any award made by the arbitrator after that date, but on the contrary he appeared before the arbitrator and led evidence without protest, and his counsel addressed arguments on his behalf and when the arbitrator sent him a notice that he had made and signed the award, he did not invoke condition No. 3 even at that stage, and merely asked for a copy of the award and it was only when he found that the award was not to his liking, that he decided to avail of condition No. 3 it is not either just or equitable that he should be allowed to do so. A party to an arbitration agreement who voluntarily takes part in the arbitration proceedings after the expiry of the period of four months will be deemed to have waived the conditions as to time.'

To the instant case it is true that M/s. Ramnath and Co. filed their claim beyond the statutory period. It is also true that they did not file any protest in writing to those orders by which time was allowed to the Union of India or the Central Railways. But they did not consent the Arbitrators taking proceedings and drew their attention that the time had passed and they had become functus officio and, therefore, they should not act. Thus they treated their appointment to have come to an end. From the evidence on record it is clear that their claim statement was taken by the Arbitrators on 15-7-1972 but they did not apply for extension of time. No such application or letter was shown to me. As for the time that was taken by the Central Railways they could not file any objection as they had no opportunity to file objection because the time was granted to the Railways without any prior notice to them. After the extension of time information appears to have been sent to them. For these reasons it cannot be said that M/s. Ramnath and Co, participated in the arbitration proceedings and, waived the statutory period. Both the parties as well as the Arbitrators allowed the statutory period to expire. M/s. Ramnath and Co. submitted their claim on 15-7-1972 much after the expiry of the statutory period and the Railways were allowed time till 15-12-1972 but before that date could reach M/s. Ramnath and Co. moved the Court on 2-12-1972. Therefore, the conduct of both the parties as against each other if at all, is tantamount to estoppel by conduct against each other. The question of waiver, that the time was waived by M/s. Ramnath and Co. appears to be unfounded. The Central Railways took time for filing their claim after the expiry of the period and at best it can be said that the Central Railways tried to waive the statutory period of time. No party to the dispute in my opinion could extend the period by waiver. If the time had expired it could only be extended by the Court. In the circumstances the finding arrived at by the Court below and on the facts involved in the case neither M/s. Ramnath and Co. are estopped nor the waiver can come to the rescue of the Union of India nor the Arbitrators could proceed with the arbitration, in either case whether they had entered into reference or not.

16. It was next urged on behalf of the applicant that the Umpire had not entered into reference nor there was any application as contemplated by Section 28 of the Arbitration Act and, therefore, the order passed by the Court below is without jurisdiction. According to the learned counsel the Court can only extend the period or enlarge the same from time to time for making the award but it cannot direct the Umpire to enter into reference if he had not entered into reference as contemplated by law. According to the learned counsel Clause 4 of 1st Schedule of the Arbitration Act requires the Umpire to enter into reference in Hen of the Arbitrators forthwith provided the Arbitrators have allowed time to expire without making an award. The learned counsel stressed the fact that the Umpire had not entered into reference and that the act of the Umpire in calling for the explanation from the Arbitrators and the record are not sufficient acts to hold that he had applied his mind. The Umpire by the letter aforesaid had made a reference of the letter received by Ramnath and Co. and directed the Arbitrators to make their comment. By that act, the submission is that it cannot be said that the Umpire had entered into reference in lieu of the Arbitrators. In my opinion the submission may have some force, if the Umpire had not entered into reference or in other words he had not applied his mind except doing the ministerial act. The Court cannot, therefore, have directed the Umpire to proceed with the reference when the Umpire himself had not entered into reference and to give award within two months. Section 28 only contemplates about the extension of time for making an award but it does not contemplate direction to either the Arbitrators or to the Umpire for entering into reference. The Court, in my opinion cannot compel either the Arbitrators or the Umpire under Section 28 to enter into reference, but if once either of them has entered into reference the Court may direct to complete the proceedings and make the award. 17. It has been argued on behalf of the opposite party that this was an application under Section 151, Civil P. C. and the orders under Section 151, Civil P. C. are discretionary orders and the scope of the revisional jurisdiction of this Court under Section 115, Civil P. C. is only to see as to whether the discretion that was vested in the Court below has judicially been exercised or is wanton or arbitrary.

18. I have given my thoughtful consideration to both sides of the matter as stated above and in my opinion the order under Section 151, Civil P. C. may be well reasoned but if it is not supported by any statutory provision and is outside the scope of the statutory provisions involved in the proceedings that order cannot be supported under the garb of due exercise of discretion. Cases on circumstances not covered by the express provision of the Code may justify a Court to pass an order under its inherent power where the circumstances require it to do so to act according to justice, equity and good conscience. In the instant case the Court was required to pass orders under the Arbitration Act and not under the Code of Civil Procedure and if there was lack of express provision under the Arbitration Act the Court, in my opinion, could not substitute a provision and pass the order under its inherent powers under Section 151, Civil P. C. As I have pointed out above the order does find support under Section 28 of the Arbitration Act. The order by the Court below can well be justified under Clause 4 of Schedule I to the Arbitration Act. The Arbitrators allowed their time to expire without making an award, the Umpire was served with notice dated 16-11-1972 imimating him that the Arbitrators have allowed the time to expire without making an award on which the Umpire Shri Gohel by letter dated 26-11-1972 called upon the Arbitrators to send their reply to enable to decide the matter. The Umpire also asked the Arbitrators to send the abstract of papers with them to verify the facts and submissions made by M/s. Ramnath and Co. The fact that the Umpire has entered into reference is apparent by his letter addressed to the Arbitrators. From that letter it is clear that on receipt of that letter of M/s. Ramnath and Co. to enter into reference forthwith the Umpire was satisfied that the Arbitrators have allowed their time to expire and he was called upon to enter into reference forthwith, the Umpire applied his mind and called upon the Arbitrators to send him the abstract of papers with them to verify the facts and the submissions made by M/s. Ramnath and Co. At least prima facie he found the facts to be correct. In my opinion there was sufficient exercise of mind by the Umpire. Ex facie it so appears from his letter dated 26-11-1972. In my opinion the Umpire did exercise his mind on receipt of the notice and entered reference forthwith under Clause 4 of the Schedule I of the Act.

19. In the result I uphold both the orders passed by the Civil Judge, Jhansi. Both the revision applications are dismissed with costs.


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