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Narsing Das Hiralal Ltd. and anr. Vs. Bisandayal SatyanaraIn Firm - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtOrissa High Court
Decided On
Case NumberCivil Revn. No. 248 of 1951
Judge
Reported inAIR1954Ori29
ActsArbitration Act, 1940 - Sections 28, 28(1) and 30
AppellantNarsing Das Hiralal Ltd. and anr.
RespondentBisandayal SatyanaraIn Firm
Appellant AdvocateM.S. Rao, Adv.
Respondent AdvocateB.N. Das and ;S.C. Chakravarty, Advs.
DispositionRevision allowed
Cases ReferredAbdul Hakim Khan v. Lahore Improvement Trust
Excerpt:
.....what provision of the indian arbitration act it exercised the power of extending the statutory time limit for the making of the award. 5. the lower appellate court has clearly misdirected itself. if the award made in this case was otherwise a good award and there was no legal impediment to its being filed, the learned subordinate judge ought to have reserved consideration of this point at a later stage, when after the evidence had been led by the parties on the merits he would have been in a better position to exercise the discretionary power given by section 28.'in the present case the first additional subordinate judge exercised his discretionary power at the stage pointed out by the calcutta high court, after evidence had been led by the parties on merits, similarly in -amar nath..........modi, narsingdas bhowsinka and joharimal. in the arbitration agreements executed by the parties no time limit was fixed for the giving of the award and consequently the provisions of para 3 of the first schedule to the arbitration act would apply and the award should be made within four months after the arbitrators have entered on the reference. as already stated, the award was given only on 13-12-47 in which it was stated that a sum of rs. 3898/8/- was due from the defendant to the plaintiffs.3. several objections were taken up both in the trial court and in the lower appellate court against the award. but the only point that need be considered now is whether the delay of more than four months in the making of the award was sufficient for the court to set it aside. the trial court held.....
Judgment:
ORDER

Narasimham, J.

1. This revision petition is against the appellate judgment of the Additional District Judge of Cuttack reversing the judgment of the First Additional Sub-Judge of Cuttack and setting aside an award given by the arbitrators and the judgment and decree following the award.

2. The opposite party was the defendant in Suit No. 57/8 of 1949-48 in the Court of the 1st Additional Sub-Judge, Cuttack. That suit was brought under Sections 14 and 17, Indian Arbitration Act, 1940 by the petitioners-plaintiffs for a judgment in terms of an award said tr have been given by the arbitrators appointed by the parties, on 13-12-47. The plaintiffs and the defendant executed separate arbitration agreements (ekrarnamas) dated 13-3-47 and 11-3-47 respectively referring their dispute to three respectable merchants of Cuttack, namely, Rangalal Modi, Narsingdas Bhowsinka and Joharimal. In the arbitration agreements executed by the parties no time limit was fixed for the giving of the award and consequently the provisions of para 3 of the First Schedule to the Arbitration Act would apply and the award should be made within four months after the arbitrators have entered on the reference. As already stated, the award was given only on 13-12-47 in which it was stated that a sum of Rs. 3898/8/- was due from the defendant to the plaintiffs.

3. Several objections were taken up both in the trial Court and in the lower appellate Court against the award. But the only point that need be considered now is whether the delay of more than four months in the making of the award was sufficient for the Court to set it aside. The trial Court held that the delay was mainly due to the defendant himself and that he had asked the arbitrators for adjournments on 26-3-47, 13-4-47 and 28-4-47 for the purpose of adducing his evidence. That Court also believed the oral evidence of one of the arbitrators to the effect that on several other dates also the defendant orally asked for adjournments. As late as 20-7-47 the defendant filed certain documents. The trial Court came to a finding that the delay in giving the award was due mainly to the defendant's action in taking time on successive occasions from the arbitrators. One of the main grievances of the defendant against the award was that the arbitrators did not afford sufficient opportunities to him to present his case (vide para 11 of his written statement). The trial Court, therefore, thought that in the interests of equity it should extend the period of four months prescribed in para 3 of the First schedule to the Arbitration Act.

The Court, however, omitted to state clearly under what provision of the Indian Arbitration Act it exercised the power of extending the statutory time limit for the making of the award. But it is obvious that this power wasexercised under Sub-section (1) of Section 28, Arbitration Act.

4. The lower appellate Court, however, thought that the statutory time limit fixed in para 3 of the First sch. to the Arbitration Act can be extended only if there was an agreement in writing by both parties for extension of the time limit and that in the absence of such an agreement the Court had no jurisdiction to extend the time. It, therefore, came to the conclusion that the arbitrators were guilty of legal misconduct inasmuch as the award was not made within the prescribed statutory period and therefore set aside the award.

5. The lower appellate Court has clearly misdirected itself. Its assumption that the trial Court acted under the provisions of Sub-section (2) of Section 28, Arbitration Act is not warranted. There is no doubt that under the provisions of that sub-section the time for making an award cannot be enlarged except with the consent of all the parties to the agreement and the arbitrators cannot on their own motion extend the time limit. But any discussion about the scope of Sub-section (2) of Section 28 is academic in the present case inasmuch as the trial Court purported to act under Sub-section (1) of Section 28. The appellate Court had therefore to consider only the' following two important questions.

(i) Whether the trial Court had jurisdiction to enlarge the time for making the award in exercise of the powers conferred by Sub-section (1) of Section 28.

(ii) Assuming that the trial Court had the power, whether the Court exercised its discretionary power properly in the facts and circumstances of the present case.

6. Sub-section (1) of Section 28 is as follows:

'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.'

It will be noticed that the language of the subsection is very wide and confers full discretion on the Court to enlarge the time limit for making the award at any time. That power can be exercised even though the time for making the award has expired and also even after the award has been made.

It will be useful to compare the provisions of this sub-section with the corresponding provisions of the previous statutory enactments dealing with arbitration. Section 12 Indian Arbitration Act, 1899 was as follows :

'The time for making an award may, fromtime to time, be enlarged by order of theCourt, whether the time for making theaward has expired or not.'

Para 8 of Schedule 2, Civil P. C., 1908 was as follows:

'Where the arbitrators or the umpire cannot complete the award within the period specified in the order, the Court may, if it thinks fit, either allow further time, and from time to time, either before or after the expiration of the period fixed for the making of the award, enlarge such period;'

It is true that in Schedule 2, Civil P. C., 1908 no statutory period was fixed for the making of an award as in para 3 of Schedule 1, Arbitration Act, 1940. But it will be noticed that though in Section 12, Indian Arbitration Act, 1899 and para 8 of Schedule 2, Civil P. C. 1908, it is expresslystated that the power of the Court to enlarge the time limit may be exercised whether the time for making the award has expired or notit is not further stated that this power can be exercised even after the award has been made.

In Sub-section (1) of Section 28, however, any doubt about the power of the Court to enlarge the time limit even after the award has been made, has been set at rest by the use of the following words: 'whether the award has been made or not'. Apparently those words were inserted with a view to give statutory recognition to the principle of English Law decided in --'Lord v. Lee', (1867) 3 QB 404 (A) and ---- 'Knowles v. Bolton Corporation', (1900) 2. QB 253 (B), where it was held that the Court had jurisdiction to extend the time for making an award even though the award had in fact been made. A similar view was taken in --'Tejpal Jamunadas v. B. Nathmull & Co.', AIR 1920 Cal 115 (C), while construing Section 12, Arbitration Act 1899.

7. Thus on a question of mere construction of Sub-section (1) of Section 28, Arbitration Act, 1940 and giving due importance to the words 'whether the award has been made or not' deliberately inserted in that sub-section when the law of arbitration was re-enacted in 1940, I must hold that the power of the Court to enlarge the time limit is not limited to any particular stage of the arbitration proceeding and that it can be exercised at any time. In the present case the trial Court purported to exercise this power while hearing the petition under Sections 14 and 17, Arbitration Act for the purpose of deciding whether the judgment should be given in terms of the award.

8. Mr. Das, however, urged that the power of the Court under Sub-section (1) of Section 28 can be exercised only till the date of the filing of the award and not afterwards. In support of this argument he relied on a Privy Council decision reported in 'Har Narain Singh v. Bhagwant Kuar', 18 Ind. App 55 (PC) (D). But that case was decided on a construction of Sections 514 and 521, Civil P. C. 1882 where the words 'whether the award has been made or not' were not found. Consequently, that decision is inapplicable to the present case. In -- 'AIR 1920 Cal 115 (C)', while construing Section 12, Arbitration Act, 1899, it was pointed out that the aforesaid decision of the Privy Council was inapplicable in construing that provision of the Arbitration Act of 1899. The same reasoning would apply with greater force in construing Sub-section (1) of Section 28 of the Arbitration Act, 1940.

9. There is also sufficient authority in subsequent Indian decisions to support the aforesaid view. In -- 'Nani Bala v. Ram Copal', AIR 1945 Cal 19 at p. 21 (E), it was pointedout

'But if an arbitrator makes an award beyond time, the delay may be condoned at any time by the Court in a proper case, for Section 28 of the Act gives power to the Court to extend time even after the award had been made. If the award made in this case was otherwise a good award and there was no legal impediment to its being filed, the learned Subordinate Judge ought to have reserved consideration of this point at a later stage, when after the evidence had been led by the parties on the merits he would have been in a better position to exercise the discretionary power given by Section 28.'

In the present case the First Additional Subordinate Judge exercised his discretionary power at the stage pointed out by the Calcutta High Court, after evidence had been led by the parties on merits,

Similarly in -- 'Amar Nath v. Uggar Sen', AIR 1949 All 399 (F), it was pointed out that Sub-section (1) of Section 28 gave unrestricted power to the Court to extend time for making an award irrespective of whether the award has been made or not. I am therefore unable to find any indication either in the Arbitration Act or in any authority to the effect that once an award is filed before the Court it has no power under Sub-section (1) of Section 28 to enlarge the time for making the award.

10. If, however, the Court refuses to extend the time limit there may be some justification for holding that the arbitrators are guilty of legal misconduct in making the award after the expiry of the statutory period and the award may be liable to be set aside. Mr. B. N. Das relied on -- 'Kuppuswami Chetty v. Anantharamier', AIR 1948 Mad 40 (G); -- 'I. G. H Ariff v. Bengal Silk Mills Ltd.', AIR 1949 Cal 350 (H) and -- 'Abdul Hakim Khan v. Lahore Improvement Trust', AIR 1950 Lah 32 (I)'. But these decisions are clearly distinguishable because in none of them did the Court concerned exercise its discretionary power under Sub-section (1) of Section 28 to extend the time limit. Those decisions, therefore, have no application to the present case where the trial Court has stated in its judgment that in the interests of equity it considers it proper to allow the period to be extended beyond four months.

11. The next question for consideration is whether the trial Court exercised its discretion properly in thus extending the time limit. I have already shown that the defendant was mainly to blame for the delay in making the award. The arbitrators were constrained to give repeated adjournments, mainly at the instance of the defendant, though on some occasions the plaintiffs also took time. Even after the award was given by the arbitrators on 13-12-47 the defendant seems to have felt aggrieved on the ground that adequate opportunities were not given to him for presenting his case. In his objection petition in the trial Court also he never objected to the validity of the award on the ground that it was made beyond the statutory time limit. Under these circumstances I think the trial Court exercised its discretion properly in extending the time limit.

It is true that there was no specific prayer by the plaintiffs to the Court for extending the time limit and the Court granted that extension while writing out its judgment after considering the entire evidence on record. But Sub-section (1) of Section 28 does not say that the Court cannot exercise the power conferred by that sub-section suo motu. In -- 'AIR 1949 All 399 (F), it was held that the absence of an application for the extension of time was a mere irregularity which may be waived by conduct. It was also held that where the arbitrators were not responsible for the delay in making the award they were not guilty of misconduct in conducting the proceeding. In considering whether the discretion was properly exercised by the trial Court I should take note of the conduct of the petitioners in submitting themselves to the jurisdiction of the arbitrators on20-7-47 after the expiry of the statutory period, of four months and their omission to state in their objection petition that the award was invalid on the ground that it was made after the expiry of the statutory period. It appears that they waived this objection by their conduct and taking all the facts and circumstances of this case into consideration I am not prepared to say that the trial Court exercised its discretion improperly.

12. For the above reasons the order of the lower appellate Court is set aside and the order of the trial Court is restored. The opposite party should pay costs of the lower appellate Court the trial Court and also of this Court to the petitioners. Hearing fee is assessed at two gold mohurs.


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