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S.D. Ghai and Co. Vs. Punjabi University, Patiala - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtPunjab and Haryana High Court
Decided On
Case NumberF.A.F.O. No. 59 of 1970 with Civil Misc. No. 6751 of 1970
Judge
Reported inAIR1973P& H410
ActsArbitration Act, 1940 - Sections 2, 14(2), 21, 28, 30 and 33
AppellantS.D. Ghai and Co.
RespondentPunjabi University, Patiala
Cases ReferredTejpal Jamunadas v. B. Nathmull
Excerpt:
.....to enlarge the time. without commenting on the affidavit, the grounds of appeal and the application clearly show that the argument of the appellant that a request was made at the time of arguments for enlarging the time is an after thought......against the said order has come up in appeal to this court.4. the first contention of the learned counsel for the appellant is that the arbitrator cannot be said to have entered on reference on august 9, 1968, as he had not applied his mind on that date and no proceedings were taken by him. he has drawn my attention to the letter dated august 9, 1968, which was written by the arbitrator to the appellant in which he had stated that his claim had been registered. he has further submitted that registration of claim would not tantamount to entering on the reference. the learned counsel for the appellant submits that the arbitrator entered on the reference on april 29, 1969, when he fixed may 6, 1969, as the date of hearing of the case. he has also urged that the letter written by.....
Judgment:

1. This judgment of mine will dispose of F. A. O. No. 59 of 1970 and Civil Miscellaneous Application No. 6751 of 1970.

2. The Punjabi University, Patiala, (hereinafter referred to as 'the University') invited tenders for construction of Physics Block in the Campus of the University. The appellant submitted a tender in reply to the invitation which was accepted by the University and a formal agreement was executed on November 5, 1965, between the appellant and the University in accordance with which he started construction work. There was clause 25-A in the agreement by which the disputes between the parties were to be referred to the Superintending Engineer, P.W. D. (Buildings and Roads) Patiala (hereinafter referred to as 'the Arbitrator). After the completion of work, some dispute arose between the parties and the appellant made a reference of the dispute to the Arbitrator. The appellant sent his claim along with a letter to the Arbitrator on August 1, 1968, and also sent a copy thereof to the University. The Arbitrator on August 9, 1968, wrote a letter to the appellant that this claim had been entered at Serial No. 187 and on the same day wrote a letter to the University that the appellant had referred a claim (copy enclosed) for arbitration in respect of the work cited as subject stated to have been executed by him. The University was also requested to submit its statement in duplicate on the date of hearing of the case which was to be fixed after one month from the date of issue of this reference. The Arbitrator on April 29, 1969, wrote to the parties that May 6, 1969, had been fixed by him as date of hearing. They should appear on that date and if they failed to do so, ex parte proceedings would be taken against them. After the adjournment of the case on some of the hearing the Arbitrator gave his award on August 20, 1969. The appellant filed an application in the Court that the Arbitrator be ordered to file an award in the Court and the same May be made the rule of Court. The Arbitrator sent the award to the Court of Senior Subordinate Judge, Patiala, vide his letter dated August 28, 1969. The Senior Subordinate Judge, Patiala, sent notices to both the parties. The University in response to the notice filed objections under Section 30 read with Section 33 of the Arbitration Act 1940 (hereinafter referred to as 'the Act') against the award. One of the objections was that the award was not made within a period of four months. The University also made allegations regarding the conduct of the Arbitrator and raised an objection that he had misconducted himself and the proceedings. The appellant controverted the pleas of the University and the following issues were framed:--

'1. Whether the award is null and void as it was not within time?

2. Whether the arbitrator has misconducted himself or the proceedings as alleged.

3. Relief.'

3. The Trial Court held that the award had been made after a period of four months after entering on the reference and, as such, it was unenforceable. It decided issue No. 2 against the University. The objection petition was, however, allowed on the decision of issue No. 1 and the award was ordered to be set aside. The Contractor having felt aggrieved against the said order has come up in appeal to this Court.

4. The first contention of the learned counsel for the appellant is that the Arbitrator cannot be said to have entered on reference on August 9, 1968, as he had not applied his mind on that date and no proceedings were taken by him. He has drawn my attention to the letter dated August 9, 1968, which was written by the Arbitrator to the appellant in which he had stated that his claim had been registered. He has further submitted that registration of claim would not tantamount to entering on the reference. The learned counsel for the appellant submits that the Arbitrator entered on the reference on April 29, 1969, when he fixed May 6, 1969, as the date of hearing of the case. He has also urged that the letter written by the Arbitrator to the University did show that he asked the University to file a statement against the claim. He, however, stated that in case the appellant would have been intimated that the University had been called upon to file the statement, in that case, in view of the decided cases, it could be said that the Arbitrator entered on the reference. The learned counsel on the other side has controverted this position. It will be useful to notice Rule 3 of Schedule 1 which is in the following terms:--

'The arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any part to the arbitration agreement or within such extended time as the Court may allow?'

5. The above rule has thus three ingredients, namely, (i) the arbitrators shall make their award within four months after entering on the reference or (ii) they shall make the award within four months after having been called upon to act by notice in writing from any part to the arbitration agreement, or (iii) within such extended time as the Court may allow. The argument of the learned counsel is that his case falls under sub-clause (i). The matter has now been settled by a string of authorities in which the words 'entering reference' have been interpreted. In Soneylal Thakur v. Lachminarain Thakur, AIR 1957 Pat 395, the Bench of Patna High Court observed as follows:--

'An arbitrator does not enter upon a reference the moment he accepts to work as an arbitrator, nor can it be said that he enters upon a reference only when he actually hears the reference. An arbitrator enters upon a reference when, after having accepted the reference, he applies his mind and does something in furtherance and execution of the work of arbitration. The exact date as to when an arbitrator enters on a reference in a particular case, however, has to be determined on the facts and circumstances of the case.'

6. In the above case, the Arbitrator had sent a letter on April 30, 1952, to the parties under a registered cover by which he fixed May 20, 1952, for hearing the matter. It was held that April 30, 1952, was the date on which the Arbitrator entered on the reference. The ratio is that the date on which the Arbitrator applied his mind and wrote to the parties that they should appear before him is the date on which he entered on the reference. In support of his proposition, the learned counsel for the appellant has also relied on Ramsahai Sheduram v. Harishchandra Dulichandji, AIR 1963 Madh Pra 143 and Assadullah Makhdoomi v. Lassa Baba, AIR 1966 J and K 1. From the reading of the first clause of Rule 3 and the aforesaid cases, it is clear, that the period of four months prescribed for giving the award starts from the date when the Arbitrator enters on the reference but no specific date can be laid down as to when the Arbitrator be said to enter on reference. It depends on the facts of each case and is, therefore, a question of fact. One thing, however, is clear that the Arbitrator should do some judicial act for progress of the reference pending before him. The order that the University should file the statement in reply to the claim of the appellant, in my opinion, is such an act, by which it can be inferred that the Arbitrator entered on the reference. It is not necessary that intimation of that orders should have been sent to appellant as the rule does not provide so anywhere. A similar matter also came up for decision in Harish Chandra Saksena v. Union of India, ILR (1966) 1 Punj 1 wherein Gurdev Singh, J., observed as follows:--

'Held that an arbitrator enters on the reference when he takes upon himself the office of the arbitrator and exercises some functions as arbitrator. When the arbitrator fixes the date of hearing and issues directions as to pleadings, he exercises the functions of an arbitrator and from that date he should be treated as having entered on the reference. It is not necessary that both the parties must be before him or that there must be some previous peremptory order compelling the arbitrator to conclude the hearing ex parte. Issuing mandatory directions for pleadings or for particulars or for interrogatories or fixing peremptory dates for hearing can only be done by the arbitrator when he has begun his work as such and taken upon himself the functions of an arbitrator.'

7. The case in hand is similar to the case which was decided by Gurdev Singh, J. In this case, a notice was issued by the Arbitrator to the respondent on August 9, 1968, that he should file a statement to the claim. This letter shows that the Arbitrator applied his mind on that date and entered on the reference. It is not necessary that the intimation of entering on the reference should be sent to the other party also. Even if no intimation was sent by the Arbitrator tot he appellant that he had ordered the University to file a statement, it does not mean that he had not entered on the reference. In case the intention of the Legislature was that both the parties should be intimated regarding the date of entering on the reference, it could have specifically provided so. In my view, the Arbitrator entered on the reference on August 9, 1968. If we take the limitation from that date the award has been made beyond four months and, I, therefore, affirm the finding of the Trial Court on this point.

8. The next argument which has been advanced by the learned counsel for the appellant is that under Section 28 of the Act, this Court has got powers to extend the period of limitation. Section 28 of the Act is in the following terms:--

'(1) 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 time from time to time for making the award.

(2) Any provision in an arbitration agreement whereby the arbitrators or umpire may, except with the consent of all the parties to the agreement, enlarge the time for making the award shall be void and of no effect.'

9. The learned counsel submits that 'the Court' has been defined in sub-section (c) of Section 2 of the Act which means a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court. The learned counsel for the appellant states that the definition of 'court' is wide enough to include the Courts of appeal and revision. In support of his proposition, he has relied on Nachiappa Chettiar v. Subramaniam Chettiar, (1960) 2 SCR 209=AIR 1960 SC 307). Their Lordships while interpreting Section 21 of the Act observed that the words 'suit', and 'court' in Section 21 of the Arbitration Act, 1940, include Appellate Court proceedings and Appellate Court, respectively. Subsequently, following this decision, the Supreme Court again observed in State of Madhya Pradesh v. M/s. Saith and Skelton (P) Ltd., (1972) I SCC 702=(AIR 1972 SC 1507) that the expression 'Court' in Section 14(2) of the Arbitration Act also includes the Appellate Court. In that case, an Arbitrator was appointed by the consent of the parties by the Supreme Court. The award was filed in the Supreme Court by the Arbitrator. One of the parties raised an objection that it could not be filed in that Court. The learned Judges came to a conclusion that that award had been properly field. In view of the aforesaid decisions, I hold that this Court is a Court also for the purpose of Section 28 of the Act and has got the power to enlarge the time for making the award.

10. The learned counsel for the appellant then submitted that the Advocate made an oral request to the Court for enlarging the time for making the award. In support of his allegations, he also filed an application under Section 28 of the Act in this Court wherein after giving the history of the case, he has stated that the principles of waiver and estopped should have full application as the University authorities allowed the Arbitrator to proceed with the making of the award. It is also stated therein that the date on which the first Arbitrator entertained the claim was not the starting the point of time for making the award. It is also stated that the Advocate requested repeatedly during the course of proceedings for extending the period for making the award by the Arbitrator. The relevant para of the application is as follows:--

'That even otherwise oral request was repeatedly made to the trial Court on behalf of the applicants by the counsel Shri Prem Parkash Mehra, Advocate during the course of proceedings for extending the time for making the award by the Arbitrator. An affidavit to this effect of the counsel is attached herewith.'

The learned counsel for the respondent has controverted this fact and has submitted that neither any such oral application was made nor any oral application could be made. The first question that arises is whether the appellant could make an oral request that the period for making the award should be enlarged. Section 28 does not mention that an application should be made in writing. I do not find from the reading of the said section that it necessary that the application in writing should be filed by the party who wants that the time for making award should be enlarged. In this view I am supported by a decision of the Bombay High Court reported as Sakalchand Moti v. Ambaram Haribhai, AIR 1924 Bom 380, wherein it has been observed that a written application is not necessary for extension of time for filing the award. The learned counsel for the respondent has also relied on Sowaran Singh v. Municipal Committee, Pathankot, AIR 1963 Punj 427, wherein Shamsher Bahadur, J., made observations to the effect that the enlargement of time can be obtained only by motion to the Court. The word 'motion' does not mean that the application should be moved. The word motion has been defined in the Shorter Oxford English Dictionary, 1968 Edition, at page 1287 to mean 'process of moving'. The process of moving means moving the Court orally or by a written application. The learned counsel for the respondent has not been able to point out as to how this authority helps him. He only submits that from word 'motion', the only interpretation that can be accepted is moving the Court by an application. This contention of Mr. S. K. Sayal, in my view, has got no force. I am of the view that an application need not be made in writing and the Court can even be requested orally to enlarge the time.

11. The next question that arises for determination is whether the Court was requested to enlarge the time orally. In the grounds of appeal, in para 10, it has been stated by the learned counsel for the appellant as follows:--

'That at any rate taking into consideration the facts and circumstances of the present case the Trial Court ought to have enlarged the time for making the award under Section 28 of the Act. This request was repeatedly made to the Trial Court on behalf of the appellant during the course of the proceedings in the said Court.'

12. The reading of para 10 of the grounds of appeal as well as that of the application shows that a request was repeatedly made to the Trial Court on behalf if the appellant during the course of the proceedings in the said Court to enlarge the time. In case, the repeated requests were being made to the Court during the Whole of the trial and the Court was not favourable to enlarge the period, the appellant should have moved the application under Section 28 of the Act. There was no point in making repeated requests to the Court without moving any application. In the miscellaneous application, the plea of waiver etc., were also raised which, however, were not pressed subsequently. The miscellaneous application was filed after a period of about three months. No affidavit of the counsel was filed at the time of filing of the appeal. The learned counsel for the respondent has also submitted that the counsel in this case was the son-in-law of the proprietor of the appellant-firm and his affidavit should not be taken notice of. Without commenting on the affidavit, the grounds of appeal and the application clearly show that the argument of the appellant that a request was made at the time of arguments for enlarging the time is an after thought. In view of the above circumstances, I am not inclined to hold that the learned Subordinate Judge was requested to extend the period of limitation and he has not considered this request in his order.

13. The learned counsel for the appellant has also submitted that this Court has got ample powers to enlarge the time and the Court should exercise its discretion under Section 28 of the Act. He has referred to Tejpal Jamunadas v. B. Nathmull & Co., AIR 1920 Cal 115 and Union of India v. M/s. K. D. Mehta Manohar Singh and Co., (1965) 67 Punj LR 166. Those cases are distinguishable from the present one. In those cases, a request was made to the trial Court for extension of time but that was refused. On appeal, the High Court came to the conclusion that in the circumstances of the aforesaid cases, the time should have been enlarged. In the present case, in my opinion, as no request was made before the trial Court and the matter was not considered by it, the request cannot be taken into consideration for the first time in this Court. I do not find any force in this submission of the learned counsel for the appellant.

14. In view of my above findings, I uphold the order of the trial Court and dismiss the appeal. In the circumstances of this case, I, however, leave the parties to bear their own costs.

15. Appeal dismissed.


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