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Hari Chand Vs. Lachhman Das and ors. - Court Judgment

LegalCrystal Citation
CourtPunjab and Haryana
Decided On
Reported inAIR1948P& H11
AppellantHari Chand
RespondentLachhman Das and ors.
Cases ReferredImam Din v. Allah Rakha
Excerpt:
.....special statute only provide for an appeal to the high court. it has not made any provision for filing appeal to a division bench against the judgment or decree or order of a single judge. no letters patent appeal shall lie against a judgment/order passed by a single judge in an appeal arising out of a proceeding under a special act. sections 100-a [as inserted by act 22 of 2002] & 104:[dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] writ appeal held, a writ appeal shall lie against judgment/orders passed by single judge in a writ petition filed under article 226 of the constitution of india. in a writ application filed under articles 226 and 227 of constitution, if any order/judgment/decree is passed in exercise of jurisdiction under article 226, a writ appeal will lie. but,..........barred by time. the learned counsel conceded that according to the words of article 158, time for filing objections to an award would start not from' the date on which the award is put in court but from the date when notice of its filing is given to the parties concerned, but he urged that since in the present cases the respondents counsel was present when the court made a note that the, awards had been filed, no formal notice waft necessary. he further contended that the orders of the court dated 29-11-1943 recorded in the presence of the respondents' counsel implied a notice of the filing of the award and accordingly objections to the award should have been put in within 30 days of those orders. the contention appears to me to be wholly devoid of force. it, was under section 14,.....
Judgment:

Teja Singh, J.

1. These are two connected Letters Patent Appeals from the judgments of a learned single Judge of the Lahore High Court. The facts of the litigation giving rise to the appeals are given in detail in the judgments under appeal and need not be recapitu ated here. Briefly it may be mentioned that contracts for the purchase of sugar were entered into between the firm Hari Chand-Sat Pal on one side and the other two firms, namely, Lachhman Das-Mul Raj and Lachhman Das-Shadi Ram on the other. The said two firms paid certain amounts to the first firm as earnest money and it was agreed between them that the sugar to which the contracts related would be supplied to them in the months of June, July, August and September 1939 on receipt of instructions from them by the 2lst of the month in question. Term No. 8 of the Bought Note was to the effect that if no instructions were received by the appointed dates, Hari Chand and Kat Pal would be free to forfeit the earnest money and to cancel the contracts. There was also a provision in the contracts that in case of any difference or disputes between the parties the matter would be referred to the arbitration of two persons, one to be appointed by each of the contracting parties. It was alleged on behalf of the firm Hari Chand-Sat Paithat no instructions for the despatch of the sugar were received by them by the appointed dates and accordingly they sold the sugar to which the contracts related on various dates in August-and September and since the transactions resulted into loss to them they were en-titled to recover the amount of loss from the other two firms. On 30th July 1942 they sent notices to the firms of Lachhman Das-Mul Raj and Lachhman Das-Shadi Ram informing them that they had appointed separate arbitrators to decide the questions in, dispute between them and calling upon them to appoint their arbitrators within the time allowed by law. These notices having been refused fresh notices were issued and when the other firms did not appoint any arbitrator, the arbitrators appointed by Hari Chand-Sat Pal proceeded to dispose of the masters referred to them as sole arbitrators and gave their awards. The proceedings in the cases started on the applications of the arbitrators praying that the awards be filed and decrees be passed in terms thereof. The firms of Lachhman Das-Mul Raj and Lachhman Das-Shadi Ram had been dissolved in the meanwhile and consequently their partners, viz., Lachhman Das and Mul Raj in one case and Laehbman Das and Shadi Ram in the other along with Hari Chand, who was said to he the sole proprietor of the firm Hari Chand-Sat Pal, were impleaded as defendants. When notices of the applications were issued to the defendants, Hari Chand supported the applications while the other defendants opposed them on various grounds. The trial Sub-Judge spurned all the objections to the applications and the awards and made the awards the rules of the Court in both the cases. Lachhman Das alone preferred appeals from the orders of the trial Court. The learned single Judge accepted the appeals and set aside the orders of the Court below, leaving the parties to bear their own costs throughout.

2. My opinion is that the appeals must be dismissed on the short ground that the appointments of the arbitrators were not valid but before I set out the grounds in support of this view, I must dispose of the contention of the appellants' counsel that the objections raised by the contesting defendants to the awards were barred by time and accordingly they should not have been taken into consideration. Under Article 158, Limitation Act, as it now stands amended by Act, 10 of 1940, objections to the award have to be put in within 30 days from the date when the award is filed in Court and notice of the filing has been given to the parties. The records of the eases go to show that the arbitrators produced their awards in Court on 29-11-1943. The orders of the Court of that date read as follows: 'The arbitrator's counsel has put in the award. (The case?) To come up on 26-1-1944 for reply.' The word used is 'Jawab' and probably what the Court meant was 'written statement'. On the 26th Lachhman Das filed written statements raising a, preliminary objection to the jurisdiction of the Court. He pleaded that the entire cause of action had accrued at Moga in the district of Ferozepore and accordingly the Courts in Jullundur had no jurisdiction to hear the suits A note, was appended to the written statements that the objections would be put in after the question of jurisdiction had been decided. On 29-5-1944 the Court decided that it had jurisdiction to hear the cases and called upon the defendants to put in detailed written statements on 26-6 1944. The same day it recorded another order in the following words in each case:

The arbitrator has filed the award in Court. Notice, of it has been given to the parties. They should put in. objections regarding the award and reference on 26-7-1944.In accordance with this order Lachhman Das filed detailed objections to the awards and references on 26-7-1944, but he also put in certain objections on 26th June wherein he denied that the arbitrators had been appointed in accordance-with the provisions of law and pleaded inter alia, that the arbitrators awards were not legal, that the proceedings conducted by them were invalid and that they were guilty of misconduct. The point urged by the appellants counsel Before us was that since Lachhman Das had notice of the filing of the awards on 29-11-1943, all objections put in by him, including the preliminary written statements of 36-1-1944,even if they be regarded as objections to the award, were barred by time. The learned Counsel conceded that according to the words of Article 158, time for filing objections to an award would start not from' the date on which the award is put in Court but from the date when notice of its filing is given to the parties concerned, but he urged that since in the present cases the respondents counsel was present when the Court made a note that the, awards had been filed, no formal notice waft necessary. He further contended that the orders of the Court dated 29-11-1943 recorded in the presence of the respondents' counsel implied a notice of the filing of the award and accordingly objections to the award should have been put in within 30 days of those orders. The contention appears to me to be wholly devoid of force. It, was under Section 14, Arbitration Act, that the, arbitrators applied to the trial Court and Sub-section (2) of that, section definitely lays down that after the award has been filed in Court, 'the Court shall thereupon give notice to the parties of the filing of the award.' This is a statutory provision, and it is futile to urge that any Court can dispense with it. The learned Counsel drew our attention to certain observations made by Tek Chand, J. in Imam Din v. Allah Rakha 29 A.I.R. 1942 Lah. 190. In that case, the arbitrator had given his award to the Reader of the Court, in the absence, the parties and; on a day on which the presiding officer of the Court was on leave. On 28-6-1940 when the presiding officer came, he passed he order directing the parties to file objections to the award, if any, within the time prescribed by law. Objections were put in within ten days of this order. The learned Judge while holding that time under Article 158 for filing objections commenced not from, the date on which the arbitrate made over his award to the Reader of the Court but from 28-6-1940 and after referring to a few cases remarked as follows:

In order to put the matter beyond doubt Article 158 was amended in 1919 and it was enacted that the date from which the period of ten days begins to run is when the award is filed in Court and notice of the filing has been given to the parties, By this amendment the legislature made it clear that 'filing' the award is not equivalent to its 'submission' to the Court, and the terminus a quo is the date of service on the parties of the notice of the filing. The notice, of coarse, need not necessarily be in writing, formally delivered to the parties: it might be given orally if the parties are present in Court personally or by authorised agent at the time of the filing of the award.(The amendment of Article 158 whereby the period/of limitation was increased from ten days to, thirty days was made after this case). I do not agree with the learned Counsel that this ruling can help him in any way. On the other hand, it goes against him to some extent, inasmuch as it lays down that the time for filing objection starts from the date of service on the parties of the notice of the filing of the award. As regards the proposition that notice need not be in writing and may be oral, I respectfully accept it as correct, but the question is whether any oral notice was given to the parties by the Court On 29-11-1943 or whether such a notice can be implied from the orders recorded by the Court on that day. I have no hesitation in holding that the answer to the question must be in the negative. The orders no doubt record the presence of the parties but they do not say that any notice of the filing of the award was given to them. Nor could the notice be implied from the mere mention of the fact that the award had been filed, because a reference to the orders of the, Court dated 26-6-1944 makes it clear that it did not intend to give any notice. The words of the latter orders, which have been reproduced above, leave no doubt in my mind whatever that it was only on that day that the Court thought of giving the notice of the filing of the award to the parties, gave a verbal notice to them and explicitly mentioned this fact in its orders. And the reason for all this was? that the Sub-Judge either because of inadvertence or because of ignorance did not fully realise the significance of the proceedings pending, before him, which were under the Arbitration Act, and was probably all along thinking of the procedure laid down in Schedule 2, Civil P.C. It appears to me that not only the Sub-Judge but even the arbitrator's counsel, who made the applications on his behalf, also laboured under the same mistake and though Section 14, Arbitration Act, was cited in the headings of the applications, he appeared to think that the procedure for Such applications, was the same as that under Schedule 2, Civil P.C. Under Section 14, all that an arbitrator is to do is to cause his award or a signed copy of it, together with any depositions and documents which may have been taken and, proved before him, to be filed in Court. It is true that this an arbitrator can do only by means of a formal application but the law does not require that any notice of the application should be given to the parties. The notice laid down in Sub-section (2) of Section 14, has to be, of the filing of the award. The case of an arbitration without the intervention of a Court under the old law was governed by para. 20, of Schedule 2, and when an application for filing an award was made to the Court, first notice was given to the parties to show why the award should not be filed and after the award had been filed, time was granted for putting in objections to the award. The procedure observed by the Sub-Judge in the present oases was similar to that laid down in proceedings under para. 20, Schedule 2, and it was for this reason why he first recorded a formal order stating that the award had been filed and then gave a notice of this fact to the parties and called upon them to put in objection. This may be unfortunate but it shows without doubt that no notice of the filing of the award was contemplated by, or could be implied from, the order of 29th November 1948. It was on 26th June 1944 that notice was given and reckoning the time from that date, the objections of 26th une 1944 and even of 26th July 1944 were within time.

3. As regards, the appointment of the arbitrator, it is conceded that each party was to nominate its own arbitrator and notices were given to the other two firms by the counsel of the firm Hari Chand-Sat Pal that they had appointed separate arbitrators to settle the disputes. It is also conceded that the other side were given fifteen days time to appoint their arbitrators but they failed in this. The procedure that is to be followed in cases of this kind is laid down in Rule 9, Arbitration Act. The relevant part of it may be quoted with advantage:

Where an arbitration agreement provides that a reference shall be to two arbitrators one to be appointed by each party, then, unless a different intention is expressed in the agreement....(b) If one party fails to appoint an arbitrator, either originally or by way of substitution as aforesaid, for fifteen clear days after the service by the other party of a notice in giving to make the appointment, such other party having appointed his arbitrator before giving the notice, the party who has appointed an arbitrator may appoint that arbitrator to act as sole arbitrator in the reference, and his award shall be binding on both partice as if he had been appointed by consent. Provided that the Court may set aside any appointment as sole arbitrator made under Clause (b) and either, on sufficient cause being shown allow further time to the defaulting party to appoint an arbitrator or pass such other order as it thinks fit.It will be seen from Clause (b) that after the other side had refused to appoint their arbitrator within fifteen days of the service of, the notice upon them, it was open to the appellants' counsel to appoint their own arbitrators as sole arbitrators in the reference, but they did nothing of the kind. The appellants' learned Counsel argued that there was no necessity of a formal appointment of the arbitrator previously appointed as sole arbitrator but I do not find it possible to agree with him. The words of Clause (b) appear to me to be very clear and as I read them, my opinion is that unless there is a formal appointment in the words of the clause the arbitrator appointed by one party cannot arrogate to himself the functions of a sole arbitrator and has no jurisdiction to proceed with the reference. The words of the proviso to the section strengthen this conclusion. It lays down that after an arbitrator appointed by one of the parties hag been appointed as the sole arbitrator under Clause (b) a special right accrues to the other party to have that appointment cancelled by the Court and to apply for being granted further time for appointing his own arbitrator, and to hold that no formal appointment need be made, would be to deprive the other party of that right.

4. Last of all it was argued by the appellants' counsel that the notice given by the arbitrators in each case to the other side that they are going to act as solo arbitrators in the respective cases should be regarded as substantial compliance with the provision of Clause (b) of Section 9, but there is no substance in this argument either, because there was no mention in the notices of the fact that the arbitrators had been appointed sole arbitrators. All that was mentioned in them was that they intended to act as sole arbitrators, but this they could not do unless they had been duly appointed. The result is that the appeals fail and are dismissed with costs.

Achhru Ram, J.

I agree.


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