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United India Fire and General Insurance Co. Ltd. Vs. Bhagat Singh - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Revn. No. 43-D of 1953
Judge
Reported inAIR1954P& H171
ActsArbitration Act, 1940 - Sections 17, 30 and 33
AppellantUnited India Fire and General Insurance Co. Ltd.
RespondentBhagat Singh
Appellant Advocate Ranbir Sawhney, Adv.
Respondent Advocate H.R. Khanna, Adv.
DispositionPetition allowed
Cases ReferredBalwant Singh v. Ram Charon Singh
Excerpt:
.....passed by a single judge in exercising powers of superintendence under article 227 of the constitution. - if after near-ing the parties, the court comes to the conclusion that the award was not invalid, it is perfectly justified in pronouncing judgment in accordance with the award......was presented on 17-1-1952 and an application under section 30 for the setting aside of the award was presented on 12-2-1952. in other words, the petitioner in the present case took advantage of both the remedies available to him under the law for challenging the validity of the award, namely by means of an application under section 30 and fay means of an application under section 33. the application under section 20 was held by the court below to be barred by time. the application under section 33 was dismissed on the short ground that only one application lies for securing a declaration that the award was invalid. the view taken by the court below appears to me to be wholly misconceived for the petitioner has been deprived of the right, which has been conferred upon him by the.....
Judgment:
ORDER

Bhandari, C.J.

1. Two questions arise for decision in the present case, namely, (1) whether me petitioner's application under Section 30, Arbitration Act was presented within time; and (2) whether the Court was justified in declining to adjudicate upon the petitioner's application under Section 33 of the said Act.

2. The petitioner in this case is the United India Fire and General Insurance Company Limited, Calcutta, while the respondent is S. Bhagat Singh, a resident of New Delhi. The respondent took out an insurance policy from the petitioner on 2-9-1948. He was convicted of an offence under Section 304A, Penal Oode and was sentenced to pay a fine of Rs. 300/-. On 15-6-1949 he put in a claim for the recovery of Rs. 300/-on account of fine paid by him, RS. 500/- on account of counsel's fee for his defence in the criminal case and for the recovery of costs. The company repudiated the claim of the respondent on the ground that the Company never stipulated to reimburse the respondent for the fine which was paid by him on account of the commission of a criminal offence or for defending him in connection with the charge which was brought against him.

The respondent, however, relied upon the arbitration clause appearing in the policy of insurance and appointed a person by the name of S. Rajin-der Singh as his arbitrator in the case. The Company appeared before the arbitrator under protest and on the 31-5-1950 the arbitrator made his award. This award was filed in Court on 18-7-1951. The Court issued a notice to the petitioner on 28-9-1951 and the service of this notice was effected on 26-10-1951. On 17-1-1932 the petitioner presented an application under 8. 33, Arbitration Act in which he challenged the validity of the arbitration agreement, and on 12-2-1952 he presented an application under Section 30 in which he raised various objections. The trial Court dismiss-ed both the applications, the application under Section 30 on the ground that it was barred by time. In regard to the application under Section 33 it observed as follows:

'Two different applications have been filed for the same purpose, one under Section 30 and the other under Section 33, Arbitration Act. It is obvious chat only one application for the same purpose lies. The application should be under Section 33 of the-aforesaid Act and not under Section 30.....'

3. There can be no doubt concerning the correctness of the decision given by the Court below in regard to the dismissal of the application under S 30. Article 158, Limitation Act provides that an application for the setting aside of an award must be presented within a period of thirty days from the date of service of the notice of filing the award. The notice of filing the award was served, on 26-10-1951 but the objections under Section 30 were not presented till 12-2-1952, that is, till after the expiry of about 110 days. The application must therefore be regarded as hopelessly barred by time.

4. The second question, namely, whether it was-incumbent upon the Court to adjudicate upon the application under Section 33 is slightly more difficult, in order to appreciate the point at issue it would be desirable to set out the appropriate provisions of the Arbitration Act. Clause (c) of Section 30 provides that an award may be set aside if it has been improperly procured or 'is otherwise invalid'. Section 33 appears to provide a similar remedy. The relevant portion of this section is in the following terms:

'Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits.'

Section 17 declares that where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration 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 refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall 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. According to the procedure which was in force immediately before the commencement of the Act of 1940 it was open to a party to file an award in Court; it was open to the party aggrieved by the award to put in his objections to the same; and it was open to the Court after dealing with the objections to pronounce Judgment in accordance with the terms of the award. A person aggrieved by the decree was at liberty to challenge the validity of the award by means of a separate suit. If the arbitrator had acted wholly without jurisdiction or if his award was invalid for any other reason, then, as pointed out by their Lordships of the Privy Council in -- 'E. D. Sassoon and Co. v. Ramdutt Ramkisan Das', AIR 1922 PC 374 (A), his award could be questioned by means of a separate suit.

The procedure prescribed under the old law was tedious and cumbersome and the Legislature accordingly enacted Section 32, Arbitration Act 1940, which provides that no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award and that no arbitration agreementor award shall be set aside, amended, modified or in any way affected otherwise than as provided in this Act. As the remedy by suit was taken away, the Legislature empowered the aggrieved party to contest the validity of an arbitration agreement or an award by means of an application under Section 33 of the statute. As pointed out in -- 'Balwant Singh v. Ram Charon Singh', AIR 1944 All 188 (1) (B), Section 33 was enacted to provide a speedy remedy to a party objecting to a reference or an award and to save it the trouble and expense of having to file a separate suit for that purpose.

6. Let us now consider the facts of the case in the light of the provisions to which reference has been made in the preceding paragraphs. The award in the present case was filed in Court on 18-7-1951, an application under Section 33 for challenging the validity of the arbitration agreement was presented on 17-1-1952 and an application under Section 30 for the setting aside of the award was presented on 12-2-1952. In other words, the petitioner in the present case took advantage of both the remedies available to him under the law for challenging the validity of the award, namely by means of an application under Section 30 and fay means of an application under Section 33. The application under Section 20 was held by the Court below to be barred by time. The application under Section 33 was dismissed on the short ground that only one application lies for securing a declaration that the award was invalid. The view taken by the Court below appears to me to be wholly misconceived for the petitioner has been deprived of the right, which has been conferred upon him by the Legislature, to challenge the validity of the arbitration agreement, and therefore the validity of the award in a Court of law.

The learned counsel for the respondent invites my attention to the provisions of Section 17 which declares that where the Court sees no reason to remit the award on any of the matters referred to arbitration 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 refusing it, proceed to pronounce judgment according to the award. It is contended that this section refers only to the objections made under Section 30 and not to objections made under Section 33, Arbitration Act. I regret I am unable to concur in this contention. Section 17 requires the Court to pronounce judgment in accordance with the award unless it decides 'to set aside the award'. Now, an award can be set aside either under Section 30 or under Section 33. Clause (c) of Section 30 declares in unambiguous language that an award can be set aside on the ground that it is invalid. Section 33 also provides that an aggrieved party is at liberty to challenge the existence or validity of an arbitration agreement or an award.

It seems to me therefore, that when a Court proceeds to dismiss an application under Section 30 on the ground that the application is barred by time, it is incumbent upon the Court to pronounce upon the application under Section 33 and to decide whether the arbitration agreement, and consequently the award which was given in pursuance of that agreement was or was not invalid. If after near-ing the parties, the Court comes to the conclusion that the award was not invalid, it is perfectly justified in pronouncing judgment in accordance with the award. The action taken by the Court in the present case in not proceeding to consider the objections of the petitioner in regard to the validity of the award was, in my opinion, contrary to the express provisions of law.

7. For these reasons, I would accept the petition, set aside the order of the Court below and remit the case to the trial Court for decision of the application under Section 33, Arbitration Act.


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