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Bhagwant Kuar and ors. Vs. Har NaraIn Singh - Court Judgment

LegalCrystal Citation
SubjectArbitration;Civil
CourtAllahabad High Court
Decided On
Judge
Reported in(1888)ILR10All137
AppellantBhagwant Kuar and ors.
RespondentHar NaraIn Singh
Excerpt:
.....two arbitrators nominated by the defendant-appellant before us, deposes in most explicit terms to janki prasad's having taken part in the arbitration proceedings, to his having been present at every meeting and to his having taken an intelligent share in the proceedings. it is not my business now to determine whether upon the story he tells, if true, he was guilty of such misconduct as would have warranted the court below in setting aside the award, for i do not believe it, and i prefer the statements of the three arbitrators and the umpire, who very plainly gave an account of all that transpired in the cause of the arbitration proceedings, and certainly leave the impression on my mind that janki prasad took a conscious, intelligent and voluntary part in the proceedings, this disposes..........of lalas bansidhar and jagannath prasad, nominated by the plaintiffs, and lalas radhe prasad and janki prasad, nominated by the defendant, with lala sukhan lal as umpire, was filed in court, and on the 17th of july an order of reference was made by the subordinate judge, the 19th august 1884, being fixed therein for the hearing of the ease by this court, or in other words, such last-mentioned date was that fixed for the delivery of the award. on the 9th august the time for delivery of the award was enlarged to the 5th november, and again on the 4th november to the 30th of the same month. on the 5th of december, there was an application for further extension, and this was granted until the 5th january 1885. on the 5th january, the umpire having put in a report, a further extension of.....
Judgment:

Straight, J.

1. The suit to which this appeal relates was instituted by the plaintiffs-respondents on the 8th February 1884, in the Court of the Subordinate Judge of Agra, for the recovery of certain valuable property of various kinds and for money from the defendant-appellant. On the 16th July 1884, an agreement to refer all matters in difference in the suit to the arbitration of Lalas Bansidhar and Jagannath Prasad, nominated by the plaintiffs, and Lalas Radhe Prasad and Janki Prasad, nominated by the defendant, with Lala Sukhan Lal as umpire, was filed in Court, and on the 17th of July an order of reference was made by the Subordinate Judge, the 19th August 1884, being fixed therein for the hearing of the ease by this Court, or in other words, such last-mentioned date was that fixed for the delivery of the award. On the 9th August the time for delivery of the award was enlarged to the 5th November, and again on the 4th November to the 30th of the same month. On the 5th of December, there was an application for further extension, and this was granted until the 5th January 1885. On the 5th January, the umpire having put in a report, a further extension of time was granted until the 19th January 1885. Subsequently, the arbitrators having met, an award was made by them on the 23rd March 1885. That award was filed in Court, and to it certain objections were taken by the defendant upon the 2nd April 1885. The defendant's pleaders were heard in support of those objections, ultimately upon the 6th April. The Subordinate Judge disallowing them, passed a decree in accordance with that award. From that decree the appeal now before us was preferred to this Court upon the 2nd May 1885.

2. There are three grounds of appeal which in substance are, first, that the award was not a valid award; second, that one of the arbitrators having refused to act, either a fresh arbitrator should have been appointed in his place or that the order of reference should have been superseded, and that this not having been done, there was no valid award; third, that Janki Prasad was an unwilling arbitrator and acted against his will, and the arbitration proceedings and award were therefore void.

3. The appeal came before my brother Tyrrell and myself upon the 29th March 1886, and in reference to the pleas that had been taken, more particularly the plea which had reference to Janki Prasad, one of the arbitrators, the matter was remitted to the Subordinate Judge for him to take evidence and to report to us whether Janki Prasad had acted judicially and voluntarily in the arbitration proceedings. That evidence has been taken and is before us, and in addition thereto we have a report from the Subordinate Judge in regard to that evidence. The appeal now comes before us for disposal in reference to the pleas taken in the memorandum of appeal with the light thrown upon them by the materials supplied us by the Subordinate Judge.

4. Mr. Conlan and Pandit Sundar Lal, who argued the case on behalf of the defendant-appellant, have substantially put their case upon two grounds. First of all, they say there was no valid award, because on the 5th December, when the third extension of time was granted, the prior period of extension had expired, and next, because in the order of the 5th January no date was fixed as the date by or upon which the award was to be delivered. The second ground upon which the award is assailed is that as Janki Prasad had tendered his resignation as arbitrator, and as it is obvious from the evidence that he did not act willingly and freely in the arbitration proceeding, such proceeding was invalid and the award arising out of it void.

5. Now as to the first of these objections, that has been argued in reference to the terms of Sections 508 and 514 of the Civil Procedure Code, read in conjunction with the last paragraph in Section 521. It is contended by Mr. Conlan as a primary proposition of his argument, that under Section 508 it is the imperative duty of a Court directing an arbitration by its order of reference to fix a time for the delivery of the award He says that the word 'shall' as used therein is not merely directory but mandatory, and that if a Court directs a reference without fixing a date in the order for the delivery of the award, the order of reference falls through and any arbitration proceedings held under that order are ineffectual and bad. Starting with this proposition, Mr. Conlan then contends that under Section 514, when a time has been fixed by the Court for the delivery of the award, it is only competent for such Court to further enlarge the time on some day within the original period fixed for the delivery of the award, or within any subsequent period to which such original period has been extended. He accordingly argues that the Subordinate Judge in the present case, when he made his order of the 5th December, had no jurisdiction to do so, because the 30th November being the last date covered by the preceding order of extension, his power in the matter had ceased, and the authority of the arbitrators to deal with the case had lapsed.

6. Now there can be no doubt that looking to the whole scope and purpose of the earlier sections of Chapter XXXVII of the Civil Procedure Code relating to arbitrations held under the sanction of a Court of justice, the Court which makes the order of reference is intended to have complete control in the matter. The words in Section 514 are 'the Court may if it thinks fit'; it does not require it to act only upon the application of the parties or of either of them, and it is obvious that the Court may of its own motion grant an enlargement of time. No doubt in Section 508 the words are 'shall fix such time,' &c.;, but it seems to me that this amounts to no more than the imposition of a public duty on the presiding officer of a Court of justice, and that as the neglect of it, through mistake or error on his part, could not affect the substantiality of the proceedings of the arbitrators or their award, they may reasonably be regarded as not mandatory but directory only. To hold otherwise would in my opinion 'involve general inconvenience or in justice to innocent persons without promoting the real aim and object of the enactment.' (Maxwell on the Interpretation of Statutes, p. 452). If this is the correct view, then the same construction may be placed on Section 514. In this connection I have directed my attention to certain English rulings which seem to me to some extent to be in pari materia. Now there is a provision to be found in the Common Law Procedure Act of 1854 that has received interpretation in the Courts in England, which to my mind has some bearing on the point before us. Those decisions have reference to Section 15 of that Act, (17 and 18 Vic, c. 125). The first of those cases is Lord v. Lee, L. R., 3 Q. B., 404. There the learned Judges, more particularly Mr. Justice Blackburn, who was the senior presiding Judge, went very fully and clearly into the principles governing arbitration proceedings. There an arbitrator appointed by a private agreement in writing, which contained no limit of time made his award more than three months after he had entered upon the reference. The submission was then made a rule of Court, and a learned Judge to whom application was made in chambers enlarged the time. The award was taken up by the successful party and he brought an action upon it. That action was tried before Mellor, J., at the sittings in Middlesex after Trinity term, 1867. It appeared that there being matters in difference between the plaintiff and defendant, an agreement of reference was made and signed on the 8th August 1866. No time for making the award was mentioned in the submission. The arbitrator entered upon the reference at once. On the 17th January 1867, he made his award, and gave notice the same day that he had made it. On the 7th February the submission was made a rule of Court; and on the 11th March a Judge's order was obtained directing ' that the time for the arbitrator to make his award be enlarged till the 15th March instant.' The award was taken up on the 14th March and was in favour of the plaintiff. A verdict was directed for the plaintiff for the amount awarded, with leave to move to enter it for the defendant. A rule was obtained accordingly, on the ground that the time for making the award had not been duly nor legally enlarged by the arbitrator, and the Court or Judge had no power to enlarge the time after the award had been made.

7. It will be seen that in this case no time was fixed in the agreement of arbitration. But the statute law stepped in to fix the time. By Section 15 of the Common Law Procedure Act it was enacted that 'the arbitrator...shall make his award under his hand and (unless such document or order respectively shall contain a different limit of time), within three months after he shall have been appointed and shall have entered upon the reference or shall have been called upon to act by notice in writing from any party; but the parties may by consent in writing enlarge the time for making the award; and it shall be lawful for the superior Court of which such document or order is or may be made a rule of Court or of any Judge thereof for good cause to be stated in the rule or order from time to time to enlarge the term for making the award.'

8. Therefore in that case there was the following state of facts: That there was no mention in the agreement of any time; that under the terms of the statute the time applicable would be three months after the appointment of the arbitrator and his entering upon the reference, that he did not promulgate his award within three months from that date; that he did promulgate it long after the statutory period; that after such award have been so promulgated, the agreement of the parties was made a rule of Court; and that even after that, the Court thought fit and proper to enlarge the period for making the award. In that case Mr. Justice Blackburn in a judgment which put the matter most clearly, pointed out the principle which was applicable to such cases, and upon which that statute proceeded, and those remarks seem to me applicable to the statute with which we have to deal here. He says: 'I feel no doubt that, under the clause in the section which says that 'it shall be lawful for the Court or Judge for good cause, from time to time, to enlarge the time for making the award' the Judge may at any time give such further time to the arbitrator to make his award as he shall think fit under the circumstances, so as to make it as if the further time had been originally given in the submission. Thus, if the time originally limited was twelve months, and the Judge gives six months more, it is the same as if the time had been from the first eighteen months, and the effect is to make any step taken by the arbitrator within eighteen months valid.'

9. Then he proceeds to go on and discusses what the state of things was with reference to arbitration under the common law, and he says: 'So if an arbitrator omits to enlarge the time limited for making his award, but continues to act as if he had enlarged it, even to making his award, although in fact he has no authority, yet he is a person animo agendi, and if the parties afterwards choose, to ratify his act by agreeing that the time shall be enlarged or otherwise, though the act was not enforcible yet, if ratified, it would be just as binding as if done with the original authority. It was argued for the defendant that such an enlargement of the time amounted only to the making of a fresh submission, but that is not so; the act having been done under the professed authority of the previous submission, the enlargement of the time is a ratification in the shape of a continuation of the original authority.'

10. Then he goes on and refers to Section 15 of the Common Law Procedure Act (17 and 18 Vic. c. 125) and says: 'The Common Law Procedure Act, Section 15, after limiting the time to three months, when the submission is silent as to the limit of time, gives the parties themselves power to enlarge the term; and the effect of this enlargement of the term under the statute would be the same as at common law, that is, it makes it as if the extended time had been originally inserted in the submission. The same construction must be given to the clause giving power to the Court or Judge to enlarge the time, and if an enlargement by consent of parties amounts to a ratification of all that has been done in the interval, inasmuch as it amounts to saying that the submission shall be read as if the extended time had been originally inserted, then the award, which had been made in the interval after the three months had expired, and before the order for enlargement was made, as it purported to be made under the authorities of the parties, would be valid; if the authority were subsequently ratified by the parties by enlargement. The same power is given to the Judge, in his discretion, from time to time to enlarge the term, notwithstanding the parties do not consent, and it must have the same effect as an enlargement by consent, namely, amount to a ratification. The evils of an opposite construction are obvious. Suppose the arbitrator inadvertently to have neglected to enlarge the time, and several meetings to have been held in the interval before the omission is discovered: if the subsequent enlargement of the time had only the effect of a new submission, all the witnesses must be recalled, and all the expense must be incurred again. It happens in the present case that the award was made before the oversight was discovered and the order obtained. Surely it is a very salutary enactment which enables a Judge to cure a defect which he thinks a mere defect of form, and which the parties might have cured themselves. I am, therefore, clearly of opinion that the section gives power to the Judge to enlarge the term for making the award at any time, and under any circumstances, in which he thinks there is good cause for his intervention, (of course he would not grant an order if he saw that injustice might be done thereby), and the effect of the enlargement is the same as if it had been by the parties ; it amounts to a ratification, and is as if the enlarged time had been originally in the submission.'

11. It seems to me that the case, which is supported by another to which I need only give reference namely, May v. Harcourt, L. R., 13 Q. B. D., 688, goes to show that there is nothing unreasonable in the view that we are prepared to take, that the provisions of Section 514 do allow of the Court at any period of its own motion or on the application of the parties, granting an enlargement, as was done in the present case by the order of the 5th December 1884.

12. Then arises the further question as to whether the terms of the order of the 5th January, by which no positive date was fixed within which the award was to be filed, are fatal to the validity of the award. I do not think they are. I think that the same principle of interpretation which I have stated as applicable to Section 508 and the word 'shall' therein is applicable, and that the neglect or omission of the Court cannot prejudice the proceedings before the arbitrators or their award. If this be so, then there would be no time appointed within which the award could be filed, which would bring into operation the provision contained in the last paragraph of Section 521. At any rate, whatever defects there may have been in the order of the Subordinate Judge of the 5th January 1885, they were in my opinion defects that could be cured, and I hold that the adoption by the Subordinate Judge of the award must be taken to amount to an enlargement of the time for the delivery of the award to the date on which it was in fact delivered and to ratification of what had been done by the arbitrators. Moreover, no objection was taken by either of the parties to his acceptance of the award on the ground now urged, and it seems to me not unreasonable to assume that any such objection was waived by them.

13. The second question which was argued by Mr. Sundar Lai relates exclusively and entirely to the arbitrator Janki Prasad having refused to act, that the Court should have appointed either a new arbitrator in his place or have superseded the arbitration, and further that after his refusal to act he was incompetent to act any further in the matter. Now I have very carefully read through all the evidence that has been taken by the Subordinate Judge upon this particular point....I do not see the slightest ground for supposing that Janki Prasad did not take a complete and full part in all the proceedings of the arbitrators held in respect of the differences between the parties to the suit. It is to be noted that all the other three arbitrators have been called and examined, and I may more particular notice that Radhe Lal, the first of the two arbitrators nominated by the defendant-appellant before us, deposes in most explicit terms to Janki Prasad's having taken part in the arbitration proceedings, to his having been present at every meeting and to his having taken an intelligent share in the proceedings. Then there is the statement of Sukhan Lal, the umpire, to the effect that he and Janki Prasad examined the account-books together, Janki Prasad, as a mahajan having been selected as an arbitrator more particularly for this part of the work. I have also read very carefully through the various representations that were made to the Court and the umpire for the purpose of obtaining adjournment, and I find nothing to satisfy me that any arbitration meeting was held without the presence of Janki Prasad. It is said by Mr. Sundar Lal that looking to the terms of the order of the Subordinate Judge which was passed upon the 24th January 1885, Janki Prasad was frightened into coming and attending the arbitration proceedings, and no doubt there are indications that the Subordinate Judge thought that Janki Prasad's excuses for absenting himself wore not bona fide, and though he had no power to compel him to serve, it seems to me he was at least erring on the right side in endeavouring to get him to join his colleagues and hold the arbitration. At any rate it is clear that after Janki Prasad sent in his resignation he did meet Sukhan Lal, the umpire, and the three other arbitrators, and had a conversation with them, the result of which was that he reconsidered his determination and withdrew his resignation. In this connection I may refer to the authority of their Lordships of the Privy Council, which lays down in very explicit terms that the mere circumstance that an arbitrator had first tendered and then withdrawn his resignation, did not formally divest him of his character of arbitrator: Maharajah Joymungul Singh Bahadoor v. Mohun Ram Marwaree, 23 W. R., P. C., 429.

14. In the Court below when the objection that I am now dealing with was taken for the first time, it was not suggested that there had been misconduct on the part of this man Janki Prasad. What was suggested was that he was an unwilling participator in the arbitration proceeding. It is not my business now to determine whether upon the story he tells, if true, he was guilty of such misconduct as would have warranted the Court below in setting aside the award, for I do not believe it, and I prefer the statements of the three arbitrators and the umpire, who very plainly gave an account of all that transpired in the cause of the arbitration proceedings, and certainly leave the impression on my mind that Janki Prasad took a conscious, intelligent and voluntary part in the proceedings, This disposes of the second objection. I therefore am of opinion that the award was a good award, and that we have no right to interfere with the decree which was passed in accordance with that award. The appeal is dismissed with costs.

Tyrrell, J.

15. I concur.


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