1. This appeal is directed against the order of the Senior Sub-Judge, Chandigarh, dated 6th September, 1975, where-by objections filed on behalf of the appellant against the award dated 3-11-1973 were dismissed.
2. Briefly stated, the facts are that on 12-5-1964, an agreement was executed between the Governor of Punjab and the appellant Sarabjit Singh on the stipulation that the Government would furnish requisite guarantee to the Bank on behalf of Sarabjit Singh and Sarbjit was to complete a usual full length picture in Hindi and English versions for commercial exploitation and its script etc. were mortgaged with the Government. According to clause 10 of the agreement, all disputes and differences arising out of or in any way touching the agreement were referable to the sole arbitration of the Chief Parliamentary Secretary, Punjab.
3. Disputes and differences arose between the parties and by an order of the Court, on an application under Section 20 of the Arbitration Act, the matter was referred to the Chief Parliamentary Secretary, Punjab. However, it was found that at the relevant time there was no Parliamentary Secretary and as such a fresh agreement was executed between the parties on 24th March, 1971 (Exhibit R.3) by which in supersession of clause 10 of the agreement dated 12-5-1964, it was agreed that all the disputes and differences arising out of or in any way touching the agreement dated 12-5-1964 were referable to the sole arbitration of the Finance Minister, Punjab. The other terms and conditions of the earlier agreement remained unchanged. In pursuance of the new agreement, the matter was referred to the then Finance Minister, Punjab (Shri Balwant Singh) but before he could make his award, the Ministry of which he was a member, quitted office. The new Ministry of which Shri Hans Raj Sharma was the Finance Minister, took office in 1972 and the parties agreed to refer the matter for arbitration to the said Shri Hans Raj Sharma. Ultimately, he gave his award on 3-11-1973 by which he directed that Rs. 4,07,813.67 shall be paid by Sarbjit Singh appellant to the Government and upon the said payment, relevant material of the picture shall be returned to him.
4. An application to make the said award the rule of the Court, was filed on behalf of the State of Punjab, on which Sarbjit Singh appellant preferred objections against the award. It was alleged, inter alia, that the Arbitrator did not consider the documentary evidence produced before him, that he made the award after the expiry of the period prescribed under section 28 of the Arbitration Act; that the Arbitrator did not consider the statements of the objector and accepted the version of the State of Punjab without going into the facts; that he erred in giving his opinion by holding that the picture had no commercial value; that he gave undue consideration to the State of Punjab by awarding a huge amount; that he misconstrued the evidence; that the real point in controversy was not decided; that the award was improperly procured and that there was no legal reference to the Arbitrator. An objection was also raised that the award being unstamped was not enforceable in law. This objection was resisted on behalf of the State of Punjab and the allegations were denied. On the pleadings of the parties, the following issues were framed:-
1. Whether the arbitrator has no jurisdiction to given the award?
2. Whether the arbitrator has misconducted himself, as alleged in para 1 of the objector's petition, as such the award is liable to be set aside?
3. Whether the award has been improperly procured ?
4. Whether the award is invalid, the same being not on a stamp paper ?
5. Under issue No. 1, the Court found that the appellant Sarbjit Singh took part in the proceedings before the Arbitrator without any objection and, therefore, he submitted to the jurisdiction of the Arbitrator to which the parties had agreed to make the reference. Issues Nos. 2 and 3 were discussed together and it was found that no misconduct has been established as alleged in the objection-petition. Under issue No. 4, the learned Senior Sub-Judge held that the award being an instrument as defined in section 2(14) of the Stamp Act, was exempted from the stamp duty in view of the second proviso of section 3 of the Stamp Act. Ultimately, the objection petition was dismissed and the award was made the rule of the Court and a decree for recovery of Rs. 4,07,813.67 was passed in favour of the State. As observed earlier, dissatisfied with the same, the objector has filed this appeal in this Court.
6. Learned counsel for the appellant, in the first instance, vehemently contended that issue No. 4 has been wrongly ecided by the trial Court. The award given by the Arbitrator requires stamp duty and, since it was not paid, the award could not be held to be a valid one. In support of his contention, he referred to an unreported judgment of the Delhi High Court in Suit No. 352-A of 1973 (Union of India v. Delton Cables Co., Delhi) decided on 3-1-1974 (Since reported in ILR (1975) 2 Delhi 142), an uncertified copy of which was filed in this Court along with the appeal.
7. It is not disputed that an award given by the Arbitrator is an instrument as defined in section 2(14) of the Stamp Act. Second proviso to Section 3 of the said Act provides that no duty shall be chargeable in respect of any instrument executed by or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument. Article 12 of Sch 1-A added by Punjab Act No. VIII of 1922 and later on replaced by new Schedule 1-A by Punjab Act 13 of 1958, provides that an award directing a partition, on a reference made otherwise than by an order of the Court in the course of a suit, shall bear the same stamp duty as a 'bond' for such amount as per Article 15 of the Schedule. Of course, the contention raised on behalf of the appellant is supported by the judgment of the Delhi High Court referred to above, yet, with due respect to the learned Judge, I do not subscribe to the view taken by him. It is not denied, rather conceded, that an award does fall within the definition of the term 'instrument' as defined in section 2(14) of the Stamp Act. The term 'execution' has been further defined in section 2(12) of the said Act, which means 'signed' and 'signature'. Thus, for the purposes of stamp duty, the award in the present case is de jure an instrument executed by the Arbitrator in favour of the Government and hence exempted under the second proviso to S. 3 of the Stamp Act. Accordingly, I do not find any illegality in the finding of the learned Senior Sub-Judge under issue No. 4. In any case, an unstamped arbitration award contravenes Article 12 of the Schedule to the Stamp Act but will only be defective and not invalid within the meaning of section 30 of the Arbitration Act, as held in Pradip Trading Co. v. State of Biahr, Air 1974 Patna 315. Hence this objection is of no consequence at this stage.
8. It was next contended that the authority of the Arbitrator, i.e. of Shri Balwant Singh, the then Finance Minister, could not be revoked except with the leave of the Court. Since no orders were obtained from the Court for making reference to Shri Hans Raj Sharma, the then Finance Minster, any award given by him was invalid and without jurisdiction. Reference was made to section 5 of the Arbitration Act, which is in the following terms:
'The authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court, unless a contrary intention is expressed in the arbitration agreement'.
9. I do not find any force in this contention either. Section 5 of the Arbitration Act relates only to an Arbitrator who is appointed by the Court and any revocation subsequently will be with the leave of the Court and not otherwise. In the present case, admittedly, Shri Hans Raj Sharma was appointed an Arbitrator with the consent of both the parties. It could not be denied that the parties themselves could refer the matter to the arbitrator appointed by them and, therefore, the order of the Court as such was not required. Thus, there was nothing wrong if the parties mutually agreed to appoint Shri Hans Raj Sharma as their Arbitrator before whom no such objection was ever taken and the proceedings were allowed to culminate in the award given by him.
10. The third contention raised on behalf of the appellant is that the Arbitrator has given the award beyond the scope of the reference. No meaningful argument could be raised in support of this contention. Even before the Arbitrator, no such objection was taken on behalf of the objector and, therefore, the interest was rightly allowed by the Arbitrator in the award. The amount of interest was claimed in the claim-application filed by the State of Punjab and, in reply thereto, it was never objected that this was not the scope of the reference. Thus this contention also fails.
11. Lastly it was argued that the view taken by the Arbitrator was wrong and, on the evidence before him, no such award could be given. I am afraid, in proceedings to set aside an award, the Court cannot sit in appeal over the conclusion of the Arbitrator by re-examining and reappraising the evidence considered by the Arbitrator and hold that the conclusion reached by the Arbitrator is wrong. This was so held in Union of India v. Kalinga Construction Co. (P) Ltd. AIR 1971 SC 1646.
12. No other point arises nor has been argued.
13. For the reasons recorded above this appeal fails and is dismissed with costs.
14. Appeal dismissed.