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Hazi Rahmetulla Vs. Chaudhari Vidya Bhusan - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 599 of 1958
Judge
Reported inAIR1963All602
ActsArbitration Act, 1940 - Sections 14, 14(2) and 17; Code of Civil Procedure (CPC) , 1908 - Sections 35 and 115; Limitation Act, 1908 - Schedule - Articles 178 and 181
AppellantHazi Rahmetulla
RespondentChaudhari Vidya Bhusan
Appellant AdvocateJagdish Mohan Pant, Adv.
Respondent AdvocateB.N. Katju, Adv.
DispositionRevision allowed
Excerpt:
.....had been wrongly headed as an application under section 14, and the confusion in regard to the question of limitation arising in the case appears to have arisen, in our view, because of that error which was committed on behalf of rahmatullah by heading his application of the 3rd february, 1955, as one under section 14. there is authority for the view which we are taking in decisions of other high courts, but we are of the view that it would be unnecessary for us to encumber our judgment by referring to those cases inasmuch as the point was perfectly plain on a reading of section 14 of the indian arbitration act and a reading of article 176 of the indian limitation act. we shall assume that it did for the purposes of our present investigation, for we find that even if this article..........party no objection was raised on behalf of that party that the award had not been properly filed by rahmatullah in court, nor was it even hinted that when rahmatullah filed the award he filed it surreptitiously or that there was no authority ot the arbitrators with rahmatullah to file the award. so tnat, there were no circumstances which could even remotedly indicate that the award had been improperly filed or that there was anything in the terms of section 14 of the arbitration act which could preclude the court taking into consideration the award for purposes of acting under the powers- conferred on the court under section 17. 8. the question of limitation that was next raised for determination was raised possibly under a slight misappre- hension of the true facts. the question.....
Judgment:

Mukerji, J.

1. This Civil Revision has been referred to a Bench by a learned Single Judge. The order of the learned Single Judge indicates that he has made the reference to a larger Bench for the disposal of the revision, even though he has formulated three points which, in his view, merited consideration for the purposes of the determination of the revision on the merits.

2. The three questions which the learned Single judge formulated were, to quote his words:--

'1. Whether in a case, where a party files the award along with his application, it can make an application under Section 17 of Arbitration Act for making the award a rule of the Court, without making a prayer for the filing of the award as required by Section 14(2) of the Arbitration Act?

2. Whether Article 178 of the Limitation Act applies to? such a case?

3. If it does, whether in the present case the flung of the petition in the Court of the Munsif amounted to prosecuting a remedy with due diligence under Section 14 ot the Indian Limitation Act and the period should have been condoned under Section 14 of the Indian Limitation Act?'

3. In order to appreciate the points which the learned Single Judge stated, it is necessary to know a few facts. On the 15th of August 1954 there was an arbitration agreement between the parties of this revision. That arbi-tration agreement also provided that in the event of there being a difference between the arbitrators appointed the difference was to be referred to an umpire, who was to be appointed, for his decision. On the 17th of January 1955 an award was made and in that award the applicant was to get a sum of Rs. 4476/8/-. This award however, was not filed by the arbitrators in the Court, nor did any or the parties to the arbitration agreement of the award make an application to the Court in accordance with the provisions of Section 14(2) of the Arbitration Act.

4. On the 3rd of February 1955 Haji Rahmatullah made an application to the Court of the Munsif, Nainital along with a copy of the award which was made on the 17th of January 1955, referred to above, with a prayer that we award be made the rule of the Court and that a decree for a sum of Rs. 4476/8/- be made along with costs of the application. This application the revisionist purported to make under the provisions of Section 14 of the Indian Arbitration Act for just before the recitals in the application, what was recorded on the application was this:

'Application under Section 14 of Indian Arbitration Act'.

Prima facie this was not correct for Section 14 did not provide for granting the relief which was sought by this application.

The appropriate section for the relief which was sought apparently was provided for by Section 17 of the Indian Arbitration Act. Section 17 of the Arbitration Act is in these words:

'Where the Court sees no cause to remit the award or any of the matters referred to arbitration for consideration 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 refus-ing it, proceed to pronounce judgment according to the award and upon the judgment so pronounced a decree snail follow and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with, the award.'

5. The first question that had to be determined in this case was whether the award which was before the Court could be made the rule of Court under the provisions of Section 17 of the Indian Arbitration Act, when the award had not come before the Court as a result of any specific proceedings being taken under the provisions of Section 14 of the Arbitration Act. This question was pointedly raised before the learned single Judge and this question has also been pointedly raised before ,us. Section 14 of the Arbitration Act provides for the methods by which an award can come on the record of the Court as a preliminary step to giving the Court jurisdiction to make a decree on the basis of that award. The award can, as the provisions of Section 14 indicate, come on the record on an application by a party to have the arbitrator file the award along with the necessary enclosures to the award on the direction of the Court, the award can also come to the Court on the arbitrator taking action in respect of the filing of the award suo mtitu. Under the second category, the arbitrator could place the award before the Court through the agency of one of tne parties because the section dees not lay down that it is only the arbitrator personally that can file the award nor is any particular method of filing the award prescribed. Indeed, Sub-section (2) of Section 14 uses the words 'cause the award to be filed in Court'. In this particular case we know it for a fact that the original award, along with an the necessary annexures to it, namely, evidence etc., which the arbitrators took before making their award, was filed in Court by Rahmatullah, the applicant before us. The application that he made he purported to make under the provisions of Section 14, though he prayed in that application for taking action which the Court could take only under tne provisions of Section 17 and not under Section 14.

6. Reliance was placed on Amod Kumar Varma v. Hari Prasad Burman, AIR 1958 All 720 for contending that an award could only be taken notice of for the purposes or Section 17 if an application within time was made under Section 14. This case was clearly distinguishable and therefore we were not called upon to express any opinion as to whether the decision in Radha Kishen v. Madho Krishna, AIR 1952 All 856 or the decision noticed earlier was right. We may, however, mention that we did not see any real inconsistency between the two decisions, for each expressed the law in relation to the facts of that particular case.

7. When notice was issued to the opposite party no objection was raised on behalf of that party that the award had not been properly filed by Rahmatullah in Court, nor was it even hinted that when Rahmatullah filed the award he filed it surreptitiously or that there was no authority ot the arbitrators with Rahmatullah to file the award. So tnat, there were no circumstances which could even remotedly indicate that the award had been improperly filed or that there was anything in the terms of Section 14 of the Arbitration Act which could preclude the Court taking into consideration the award for purposes of acting under the powers- conferred on the Court under Section 17.

8. The question of limitation that was next raised for determination was raised possibly under a slight misappre- hension of the true facts. The question of limitation that was raised was whether Article 178 of the Indian Limitation Act applied to the application which was before the Court ana which had been made by Rahmatullah on the 3rd February, 1955. Article 178 of the Indian Limitation Act reads thus:

'Under the Arbitration Act, 1940, for thefiling in the Court of an award.

Ninetydays.

The dateof service of the notice of the making of the award.'

On the words of the Article quoted above it was manifest that the Article could only apply to an application for the filing of the award and that application could be only one under the provisions of Section 14 and that too when the prayer in that application was for a direction to the Arbitrator by the Court to file the award. Article 178 would not apply to a case where the award was already on the record of the Court: when there could be no question of having the award to be filed. As we pointed out earlier, the application of Rahmatullah made on the. 3rd February, 1955, had been wrongly headed as an application under Section 14, and the confusion in regard to the question of limitation arising in the case appears to have arisen, in our view, because of that error which was committed on behalf of Rahmatullah by heading his application of the 3rd February, 1955, as one under Section 14. There is authority for the view which we are taking in decisions of other High Courts, but we are of the view that it would be Unnecessary for us to encumber our judgment by referring to those cases inasmuch as the point was perfectly plain on a reading of Section 14 of the Indian Arbitration Act and a reading of Article 176 of the Indian Limitation Act.

9. The application which Rahmatullah made was, in substance and in respect of its prayer, not an application under Section 14 and, therefore, for such an application the Limitation Act did not prescribe any. specific period of limitation, nor did the Arbitration Act prescribe any period of limitation. Therefore, no question of limitation could arise in respect of such application unless, of course, it was held that Art, 181 of the Limitation Act applied. We shall assume that it did for the purposes of our present investigation, for we find that even if this Article applied, the application, which the Court below came to consider was well within three years of the date when the right to apply accrued, The right to apply could only accrue to a party on the making of an award and not before it, and we know that the award in the instant case had been made on the 17th January, 1955. The question of limitation was slightly complicated in the Court below because of the procedure which appears to have been resorted to for we find that the application which Rahmatullah made on the 3rd February, 1955 was made in the Court of the Munsif, Nainital which application was subsequently ordered to be returned to Rahmatullah on the 8th March, 1956. This application was taken back by Ranma-tullah on the 22nd March, 1956. We were unable to find a judicial order by the Munsif showing the reasons for the return, but we find that on the application some columns have been drawn and filled up by some ministerial authority of the Court cf the Munsif, and in the last column we find recorded under the heading 'Reason of Return' this:

'For want of jurisdiction'.

In this column we find that there is somebody's signature and under that signature or intial there is a rubber stamp-which reads 'Munsif, Nainital'. This endorsement apparently is in pursuance' of some rule in the General Rule (Civil) which govern the procedure of Courts below in respect of Civil causes. On return, the application of Rahmatullah appears to have been filed, we presume, in the Court of the Civil Judge on the 22nd March, 1955, for the Civil Judge decided that application and the question of limitation was raised before the Civil Judge because of its having been filed in that Court on the 22nd March, 1956. Rahmatullah attempted to bring his case within limitation by invoking the provisions of Section 14 of the Limitation Act. In the view we have taken it was thoroughly unnecessary to determine this question, for if there was no period of limitation prescribed or if the period prescribed was three years, for making the type of application that Rahmatullah did the then it did not matter whether he could get the benefit of Section 14 of the Limitation Act or not for his application was certainly within three years of the date on which the right to apply accrued to him.

10. The question on which a good deal of controversy was raised on behalf of the opposite party was whether the Court could act on the award in the sense of making a decree on the basis of it when the award had been filed in Court through the hand of one of the parties, namely, Rahmatullah. It was contended by Mr. B. N. Katju that it was essential for a party when it filed an award in Court to allege specifically that it was filing the award under the authority of the Arbitrator, and unless there was such a specific allegation and unless it was specifically found by the Court that the award had been filed by the party under the authority of the Arbitrator, the Court could not act on the award but it had to ignore it completely. Mr. Katju relied for his submission on the Supreme Court decision in Kumbha Mawji v. Dominion of India, AIR 1953 SC 313 wherein their Lordships in the particular setting of that case observed as follows:

'Where, as in this case, the originals are said to have teen handed over to both the parties, it cannot be assumed that the mere handing over of the awards to the parties necessarily implies the authority of the umpire to file the same into Court on his behalf. That authority has to be specifically alleged and proved,'

Mr. Katju contended that the opinion of their Lordships quoted above was a general statement of law and had to be given effect to in every case. We are unable to agree with this contention of Mr. Katju, for in that very case their Lordships pointed out later that in the circumstances of that particular case it was clear to their Lordships that it was incumbent on the appellant to allege categorically that under the terms of Sub-section (2) of Section 14 he had the requisite authority of the umpire.

11. The question whether a party had the authority of the umpire or the arbitrator to file the award in Court as his agent or on his behalf was a question of fact annas all questions of fact, it had to be determined on the evidence and circumstances of each particular case. As we pointed out earlier, in this particular case, we find that the original award had been filed along with the record of all the proceedings taken before the Arbitrators by Rahmatullah in the Court We also find that the other party never made any objection as to the competence of Rahmatullah to file the award In Court. No question was raised as to there being any want of authority in Rahmatullah for his having acted in the manner in which he did act. The Arbitrators were examined in the case and it was never suggested to them that Rahmatullah had surreptitiously filed the award in Court, or at any rate, he had done so without their specific authority. The Arbitrators came to give evidence and they supported the award. The opposite-party challenged the award on all possible grounds but not on this ground, namely, that the award had not been properly filed. Further, the point was neither raised before the Civil judge nor before the learned single Judge who made this reference to us. Therefore, in such circumsta'nces it could not but be held that the award when it was filed by Rahmatullah was filed with the authority of the Arbitrator and that the award could be acted upon by the Court for the purpose of making a decree on its basis.

12. We feel we should not part with this case without recording the fact that we were reminded in this case of the observations of P. B. Mukherji, j., in Sana and Co. v. Ishar Singh Kripal Singh and Co., AIR 1956 Cal 321 at p. 341 (FB), where Mukherji, J. observed as follows:

'The law of arbitration is the law of private Courts. It was born with high hope for simplicity but exists today In despair in a miscellaneous patchwork of complex decisions which no private arbitrator can be expected to master to avoid their mischiefs or obey their salutary commands. It suffers today under a fourfold curse. So far as the arbitrators are concerned, the situation is one of helplessness verging on resignation.

So far as the Courts are concerned, arbitration appears as a prolific source of litigation where commonsense always fights a losing battle with an increasingly technical jurisprudence. As for the disputants themselves before the arm-tralors, the attitude is one of heads I win and tails you lose, and if the head does not go the way a party wants, he immediately takes resort to the public Courts of the land to upset the apple cart.'

We had, in this case, the same feeling which MuKherji, J. expressed in picturesque language. The substance of the matter is that the parties agreed to an arbitration by arbi-trators of their own choice. The Arbitrators after a careful -- we say very careful -- investigation gave a very detailed award. The award unfortunately could not be in favour or both the parties, so it had to go against one party, and that party who lost before the Arbitrators attempted to undo what their own agreement wanted done, namely, a binding decision on the merits by a tribunal of their own choice. Courts should be chary and are chary to interfere with such decisions unless the conscience of the Court is in any sense touched by a palpable injustice. No such injustice was, however, brought to our notice in the present case. Indeed, the learned civil Judge went into all those questions of misconduct, etc., which were raised by the party who lost in the arbitration, and his views were on all those points against the losing party. Therefore, there is a clear-cut decision of a Court that there was no misconduct and that the award was obtained and made properly. There fore, we have seen absolutely no reason) to think that the opposite party to this revision could ever succeed on technicalities, as even those technicalities which were raised had no merits.

13. As we pointed out earlier the whole case has been referred to us for decision and, therefore, no question arose for us to answer any questions. The questions, as we pointed out, were formulated by the learned single Judge for the purpose of focussing attention to the questions that caned for determination in the case. We have considered those questions and have come to the conclusion that this revision must be allowed and that the order of the Court below refusing to make the award the rule of Court must be set aside and the award made the rule of the Court, and a decree on the award should follow in accordance with theprovisions of Section 17 of the Arbitration Act. We order accordingly.

14. The question arises whether we should allow the costs of the revision to the successful party. We consider that the fight that was raised by the opposite party against the award was an unjustified fight and it led to unjustified expenditure by the applicant. We, therefore, think and direct that the applicant should have the costs of this revision and the costs incurred by him in the Court below.


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