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industrial Development Corporation of Orissa Ltd. Vs. Jajodia Overseas (Pvt.) Ltd. - Court Judgment

LegalCrystal Citation
SubjectArbitration;Limitation
CourtOrissa High Court
Decided On
Case NumberCivil Revn. No. 123 of 1978
Judge
Reported inAIR1979Ori1; 46(1978)CLT623
ActsArbitration Act, 1940 - Sections 14(2) and 30; Orissa High Court Rules - Rules 3 and 13; Limitation Act, 1963 - Schedule - Article 119
Appellantindustrial Development Corporation of Orissa Ltd.
RespondentJajodia Overseas (Pvt.) Ltd.
Appellant AdvocateB. Roy, ;B.M. Patnaik and ;A. Patnaik, Advs.
Respondent AdvocateS.B. Mukherjee, ;R.K. Rath and ;Asok Misra, Advs.
DispositionRevision dismissed
Cases ReferredMst. Puinbasi Majhiani v. Shiba Bhue
Excerpt:
.....the learned court below would occasion failure of justice and the same is also illegal and full of material irregularities. roy, the learned counsel for the petitioner, contends that rule 2 (e) of the rules made by the orissa high court provides that applications under sections 14(2) and 20 (1) of the act shall, if the court is satisfied that the petition is in order, be numbered and registered as regular suit. rule 13 (ii) clearly shows that where an award is filed by the arbitrators or umpire under section 14(2) of the act, they shall send to the court under sealed-cover the award or a signed copy thereof together with any proceedings or depositions and documents which may have been taken along with the copy of the notice given to the parties under section 14(1) of the act. as i have..........is averred in para 2 (ix) that on 13-2-1978 a petition was filed by the petitioner to register the award filed under section 14(1) of the arbitration act as a regular suit as per rule 2 (e) of the rules made under the arbitration act, but the said petition was rejected and the case was posted to 27-2-1978 for hearing. in para 2 (x), it is also stated that on 27-2-1978 the petitioner filed a petition reiterating his prayer to register the filing of the award under section 14(2) of the arbitration act as a regular suit. admittedly, the impugned order relates to rejection of the said petition.3. the learned subordinate judge has held that an application filed under section 20 of the arbitration act is uniformly registered as a suit. when the award is received from the arbitrator, it is not.....
Judgment:
ORDER

N.K. Das, J.

1. This is a petition under Section 115 of the Code of Civil Procedure challenging the order dated 28-2-1978 passed by the learned Subordinate Judge, Bhubaneswar in Misc. Case No. 250 of 1975 under Section 33 of the Arbitration Act arising out of Original Suit No. 6 of 1972 (I). The opposite party entered into an agreement with the petitioner for supply of M.S. rounds. There is a clause in the agreement providing reference of all disputes to the Chief Secretary of Orissa. As dispute arose and the named arbitrator did not decide the same, application was filed by the present opposite party on 10-2-72 under Section 20 of the Arbitration Act for reference of the dispute to the arbitrator. This application was registered as O.S. No. 6/72 (I). After hearing, the application was allowed and the dispute was referred to the arbitrator. The arbitrator passed award on 24-9-75 and after due notice to the parties, the award was filed by the arbitrator in Court along with the relevant records of the preceding before him. Thereafter the petitioner filed an application under Section 30 read with Sections 31 and 33 of the Arbitration Act for setting aside the award . It is alleged by the petitioner that during the course of hearing, an application was filed by the petitioner stating that the award should be deemed to have been filed under Section 14 of the Arbitration Act and the misc. case should be registered as an original suit. The said application was rejected on 28-2-78 and the present revision has been filed against that order stating that the order of the learned court below would occasion failure of justice and the same is also illegal and full of material irregularities.

This application is challenged by the opposite party.

2. In the petition filed in this court, it is admitted by the petitioner that after the arbitration proceeding was over, the arbitrator filed his award along with relevant records of the arbitration proceeding in Court and thereafter the petitioner filed the application under Section 30 read with Sections 31 and 33 and other provisions of the Arbitration Act for setting aside the award of the arbitrator (vide para 1). In paras 2 (iii) and (iv) of the petition, it is stated that the arbitrator, after conducting the arbitration proceeding, filed his award on 24-9-75 before the learned Subordinate Judge and soon after the filing of the award, in Nov. 75 the petitioner filed an application under Sections 30, 31 and other provisions of the Act for setting aside the award of the arbitrator on grounds inter alia that the arbitrator misconducted the proceeding and the award was vitiated by error of law apparent on the 'face of it. This application was registered as Misc. Case No. 250 of 1975.

It is averred in para 2 (ix) that on 13-2-1978 a petition was filed by the petitioner to register the award filed under Section 14(1) of the Arbitration Act as a regular suit as per Rule 2 (e) of the Rules made under the Arbitration Act, but the said petition was rejected and the case was posted to 27-2-1978 for hearing. In para 2 (x), it is also stated that on 27-2-1978 the petitioner filed a petition reiterating his prayer to register the filing of the award under Section 14(2) of the Arbitration Act as a regular suit. Admittedly, the impugned order relates to rejection of the said petition.

3. The learned Subordinate Judge has held that an application filed under Section 20 of the Arbitration Act is uniformly registered as a suit. When the award is received from the arbitrator, it is not registered as a separate suit, but it is treated as continuation of the original suit in which the arbitrator has been appointed. Objections to the award under Section 30 or 33 of the Act when received, are registered as misc. cases and the same practice has been followed in this case. After the objection by the petitioner was filed, the same was registered as a misc. case on 24-11-1975 and the said misc. case was being heard. For the first time, on 13-2-1978 a petition was moved for converting the said misc. case to a suit and necessary orders were also passed. He has further held that the question whether an award received from the arbitrator is to be registered as a suit or a misc. case has no relevancy for disposing of the objection filed by the petitioner under Section 33 of the Arbitration Act for setting aside the award. The provisions in the G.R. & C.O. (Civil) regarding registration of suits and misc. cases are made for making an assessment of the work of the Court for statistical purposes and non-registration of an award as a suit in no way affects the merits of the contention raised by the parties and also there would be no change of position if it was registered as a suit. In the last petition, a prayer was made for examination of witnesses and the same was rejected by the Court below as it was a belated attempt. The learned Subordinate Judge has held that the case was being unnecessarily dragged on.

4. The sole point urged on behalf of the petitioner is that filing of award by arbitrator must be accepted to have been done under Section 14(2) of the Arbitration Act and as per Rules 2 (e), 3 and 13 (i) of the Rules made by the Orissa High Court under the Arbitration Act, the award has not been properly filed by the arbitrator, inasmuch as the arbitrator has not followed the rules of this Court in filing the award. So, it should be registered as an original suit.

In this connection, it is necessary to consider the development of the case before the learned court below from time to time. From order dated 30-9-75, it appears that the arbitrator filed the award in Court and the Court ordered for issue of notice to the defendant fixing 24-10-75 for hearing of the matter. On 23-10-75, the defendant filed a petition praying to serve a notice of the filing of the award on the advocate for the defendant, and a power was filed on that date. On the next day, a memo was filed on behalf of the defendant stating that notice of the filing of the award was received by the advocate for the defendant and he applied for a copy of the award. The case was fixed to 15-11-75 for filing objection, if any. Objection was filed by the defendant on 22-11-75. On 23-11-75, after hearing counsel for both sides, the petition was registered as Misc. Case No. 250/75. On 28-1-76, the plaintiff filed an affidavit for passing decree as per the award. As the misc. case had been started on the application of the defendant, it was ordered that this would be considered along with objection of the defendant. On 6-2-76, the defendant contended that Misc. Case No. 250/75 should be put up along with the original suit for hearing. This prayer was allowed. Arguments were heard on 13-8-76 and after some adjournments, again arguments were heard on 31-8-76 and the case was posted to 2-9-77. On 2-9-77, two petitions were filed praying to set aside the award and to record necessary order. The order dated 13-2-78 shows that the plaintiff filed a petition that the case was being unnecessarily dragged on and the petition of the defendant for converting the misc. case to an original suit was rejected. This order dated 13-2-78 was not challenged by the defendant. The case was thereafter posted to 27-2-78. On that date, again another petition was filed reiterating the very same prayer for converting the misc. case to a suit. This was also rejected and that is the impugned order in this revision.

5. The fact that the arbitrator filed the award in Court is admitted. It is also admitted that the present petitioner filed objection under Section 30 read with Sections 31 and 33 of the Arbitration Act praying to set aside the award. Arguments were also advanced on two dates. A petition was filed for converting the misc. case to an original suit and that was rejected on 13-2-78. That order not being challenged, stands as valid. The case was thereafter posted to 27-2-78 and another petition was also filed with the very same prayer. This would show that the prayer was once rejected which was not challenged and again another petition was filed with the same prayer. Rejection of the second petition does not amount to illegality nor does it amount to material irregularity in exercise of jurisdiction. The learned Subordinate Judge has made it clear in his order that no prejudice would be caused in any way to the present petitioner by not converting the misc. case to an original suit,

6. Section 14(1) provides that when the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award. There is no dispute between the parties in the present civil revision about the arbitrator taking recourse to this provision. Clause (2) of Section 14 provides that the arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award.

It is admitted by the petitioner that the arbitrator filed the award in Court and the Court also issued notice to the parties and the petitioner filed a memo in Court admitting receipt of notice of filing of the award. Mr. Roy, the learned counsel for the petitioner, contends that Rule 2 (e) of the Rules made by the Orissa High Court provides that applications under Sections 14(2) and 20 (1) of the Act shall, if the Court is satisfied that the petition is in order, be numbered and registered as regular suit. Other applications under the Act shall be numbered and registered as miscellaneous judicial cases. It is to be noted that the application filed by the present opposite party under Section 20 of the Act has been registered as an original suit. The award was -also filed in the original suit. The objection filed by the petitioner for setting aside the award has been registered as a misc. case in the original suit. The petitioner also prayed that the misc. case might be put up along with the original suit and the Court had allowed the prayer.

Mr. Roy contends that Rule 3 provides that all applications under the Act shall be made by petition and shall be presented to the proper Court in the same manner as plaints or other applications and the petition shall be verified. According to Mr. Roy, the arbitrator should have filed an application along with the award and that application should have been verified. For this, he relies on Rule 13 (i) which provides that the arbitrator or umpire or any of the parties to the arbitration may cause an award or signed copy thereof to be filed in Court in the manner prescribed in Rule 3 and, therefore, contends that as the arbitrator has not filed the application as provided in Rule 3, it should be deemed that there has been no proper filing of the award.

7. Section 14(2) provides 'cause the award to be filed in Court' and this envisages that it must be at the request of a party to the agreement or any person claiming under such party or if so directed by the Court. This provision does not make any bar for arbitrator to file the award himself in Court, or through any authorised person. Section 14(2) relates to filing of award either on the application of a party or on the direction of the Court. Rule 13 (ii) clearly shows that where an award is filed by the arbitrators or umpire under Section 14(2) of the Act, they shall send to the Court under sealed-cover the award or a signed copy thereof together with any proceedings or depositions and documents which may have been taken along with the copy of the notice given to the parties under Section 14(1) of the Act. It can also be sent under registered cover with acknowledgement due and the award so filed shall form a part of the record. Rule 13 (i) refers to 'cause an award to be filed.' This is in consonance with the provision of Section 14(2) of the Arbitration Act. There is no inconsistency between Section 14(2) and Rule 13 (i). Both these provisions relate to 'cause the award to be filed' on the application of a party or on the direction of the Court. In such cases, only Rule 3 is to be followed. But Rule 13 (ii) has made it clear that no formality is necessary when the arbitrator himself files the award in Court. It is not a case of 'causing the award to be filed.'

8. The Supreme Court in State of Madhya Pradesh v. Saith and Skelton (P) Ltd., AIR 1972 SC 1507, has held that there is no prohibition in the Act, particularly in Section 14(2), against the arbitrator filing suo motu his award in Court. The Supreme Court rejected the contention that the award should be filed only if the parties make a request to the arbitrator to file the award or make an application to the Court for that purpose. The Supreme Court also approved the decision of the Nagpur High Court in Narayan Bhawu v. Dewajibhawu, AIR 1945 Nag 117. Mr. Mukherjee, the learned counsel for the opposite party, has also relied on several decisions of different High Courts of India in this regard. In Puppalla Ramlu v. Nagidi Appalaswami, AIR 1957 Andh Pra 11, it has been held that Section 14(2) of the Act comes into operation if the arbitrator does not file the award and the party can obtain order of the Court directing the arbitrator to file the award and it has further been held (at p. 12):--

'In my opinion that section can apply only to a case where the help of the Court is sought for getting the award into Court by calling upon the arbitrators to do it.'

A Division Bench of the Allahabad High Court in Amod Kumar Verma v. Hari Prasad Burman, AIR 1958 All 720, has also observed that Section 14(2) contemplates the filing of the award in the Court by the arbitrator; it is not essential that he should himself take it to the Court and it is enough if he causes it to be filed. No formality in the act of filing the award is required. The arbitrator need not make an application for permission or leave to file the award. He can just file the award in the Court without any application, but the act of filing must be his or on his behalf. The effect of Section 14(2) is that the Court is bound to receive the award and should proceed as laid down in it. In course of discussion, the Division Bench has referred to a case of the Patna High Court in Lachhmi Prasad v. Gobardhan Das, AIR 1948 Pat 171, wherein it has been observed that the filing of an award by an arbitrator is a mere ministerial act, that no solemnity attaches to it and that when he files the award he is doing an act which the statute requires him to do. In Balwant Singh v. Partap Singh Jawala Singh, AIR 1968 Punj & Har 265, it has been held that no application is necessary in law for an arbitrator for filing the award in Court. The decision reported in AIR 1945 Nag 117 (supra) has also been reiterated.

9. Mr. Roy contends that there is nothing in those decisions to show that any rule was prepared by the High Court on this aspect. As I have already pointed out, the Rules framed by the Orissa High Court are in consonance with the provision of Section 14(2) of the Act, and Clause (ii) of Rule 13 clearly says that an arbitrator can directly file an award and the formalities as embodied in Rule 3 are not required. The contention of the petitioner, therefore, is not sustainable.

Reliance has also been placed by the petitioner on the decision reported in Mst. Puinbasi Majhiani v. Shiba Bhue, (1967) 33 Cut LT 13: (AIR 1967 Orissa 41). But this decision has no application to the facts and circumstances of the present case.

10. It may also be mentioned that in 1975 the award was filed and the defendant (petitioner in this revision) had already notice of filing of the award. Any objection to the award is to be filed within thirty days from the date of service of the notice of making of the award as provided in Article 119 of the Limitation Act. The present application was filed near about three years after the notice and, as such, the application is also barred by limitation.

11. In the result, the civil revision has no merit and is accordingly dismissed with costs. The records be remitted back to the lower court immediately.


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