(1) In furtherance of an application under Section 14 of the Arbitration Act, 1940, the award made by Shri B.S. Sekhon and dated 6th Oct. 1975, was failed in court. Thereafter, the applicant plaintiff filed 1. A. No. 927/76 objecting to the award. The two main grounds raised were that the award had been made export and after the date for making the same had expired. It appears on the facts that the parties had at one time agreed to the extension of time for making the award, but the extended time also expired on 30th Nov., 1974, whereas the award was given on 6th Oct., 1975.
(2) Both these points were contested on behalf of the Union of India and the following issues were framed on the pleadings :
1. Whether the award is bad because it was made 3' years after the appointment of the arbitrator without extension of time 2. Whether the arbitrator has mis-conducted the proceedings 3. Whether he award is liable to be set aside on any of the grounds covered by issue I and 27 4. Whether the award is liable to be remitted to the arbitrator 5. Relief.
(3) The parties agreed that the arbitrator record may be read in evidence and affidavits may be filed. The point arising in this case is actually concerned with the manner in which the arbitrator deal with this case. It would appears from the application that there were only seven dates of hearing vig. 29th March 1974, 5th August 1974, 5th Sept. 1974, 12th Nov. 1974, 2nd Aug. 1975 and 6th Oct. 1975, of these hearings, the petitioner only attended the first three i.e. the last hearing attended was 5th Sept. 1974. The parties had agreed to the time for making the award being extended up to 30th Nov. 1974. The award was made after that time and so the first question is whether the award has been made within the extended time or has it to be set aside on this ground. The relevant section of the Arbitrator Act enables the time for making the award being extended either by the court under Section 28(1) or there may be an agreement by which the parties may extend the time under Section 28(2). It has also been held that even if there is no agreement, the parties may agree to the extension of the time. The parties did agree to the extension of time up to 30th Nov. 1974, but not thereafter. It is the condition of the learned Counsel for the union of India that the time could be presumed to be extended because there was no objection at any later hearing after 30th Nov. 1974. The basis of this argument are two decisions which are reported as Seth Shambar Nath v. Smt. Surja Devi and others, : AIR1961All180 and M/s Bokaro and Rangur Ltd. V. Dr. Parsun Kumar Banerjee, : AIR1968Pat150 . The point decided by these two cases is that if the parties voluntarily take part in the proceedings after statutory period has expired, then they can not later on say that the time has been not extended because by conduct their acquiescence to the extension of time has to be persumed. This is a principle from which 2 would not differ in the circumstances of this case. The real point which requires consideration is whether there has been any conduct by the petitioner which could possibly lead to his consent to the extension of time being infired. As I have pointed out, the case was adjourned on 5th Sept., 1974, after framing of issues to 12th Nov. 1974. On that date, it is said the case was adjourned since die, but on checking the record I find that this is not correct. The case was never taken up on 12th Nov. 1974 as the order sheet in the arbitration proceedings reveals. In fact, in arbitrator passed order as follows : 28-9-74 B.S. Sekhon Adjourn the aforesaid date of hearing sine die.
(4) In thus appear that the arbitrator cancelled the date 12th Nov. 1974, and never took up the case on that date. In the meantime, the extended time up to 30th Nov. 1974, also expired. But the arbitrator took up the matter himself and issued notifies to the parties for 2nd August, 1975. The claimant wrote that this date did not suit him and to the case was again adjourned without fixing any date. Then on 4th Sept. 1975, the arbitrator took up the matter himself and issued notices to the parties for 2nd Aug. 1975. The claimant wrote that this date did not suit him and so the case was again adjourned without fixing any date. Then on 4th Sept. 1975 the arbitrator fixed a date, 6th Oct. 1975, but when the party objected to this date also, the arbitrator gave an exparte award rejecting the claim. It is obvious from the sequence of dates that at no time was any evidence record and the case has merely resulted in the dismissal of the claim without any actual commencement of the hearing except that issues had been framed at an earlier date.
(5) The law relating to extension of time for making awards has been analysed in the judgment of Supreme Court reported as Hari Shanker Lal v Shambu Nath & others, : 2SCR720 . It has there been held that an award made after the time for making the same has expired is a voidable document which is non ext unless the court extends the time. The present is such a case. Either he Court has to extend the time under Section 28 or there may be an extension of time either based on some mutual consent express or implied. As I have previously referred to two judgment where an implied consent has been found from the conduct of the parties. It may well be necessary to ask in the present case whether such an implied consent can be found from the conduct of the parties. It is noteworthy that at no time did the petitioner participate in the proceedings except that he asked for adjournment twice. Learned counsel for the Union of India contends that even asking adjournment amounts to acquiscence in the extension of time. I am not prepared to accept his in the circumstances of the case. It may well be that an adjournment has been asked for merely to raise the objection that the arbitrator is now functus officio. The aforementioned judgment of the Supreme Court states at Page 82 of the report as preposition (C) as follows :
'If a party gives notice to act within 4 months after the arbitrator entered upon the reference, the arbitrators can make an award within 4 months from the date of such notice.'
Then the following appears as proposition (d) :
'AND(d) in the event, after the expiry of the said 4 months the arbitrators become functus officio, unless the period is extended by court under S. 28 of the Act, such period may also be extended by the court, though the award has been factually made.'
(6) In addition of this course the parties themselves can extend the period by agreement, I find it difficult to the proposition that they expended the time because in the circumstances of this case the applicant has not acquired to any extension of time, if any adjournment had been given and the petitioner had appeared on any date, after 12th Nov. 1974, he may have acquiesced or he might not have acquiesced. We do not know what he would have done, he as he was never given a chance to appear, it must be held that he had not acquiesced.
(7) Assuming that the applicant had acquiesced. The issues framed in this case relate to the question whether there has been misconduct. In the sence that the arbitrator has not given the applicant a chance to prove this case. I think this objection has to be upheld. The facts show that after framing of issues, the arbitrator never took up the case on 12th Nov. 1974, instead he adjourned the case sine die by order dated 28th Sep. 1974. This is what I find from the arbitrator record. Thereafter he issued a notice that he would take up the case on 2nd Aug. 1975 and 6th Oct. 1975. On both these dates the applicant made a request for adjournment. On the first date he personally made a request by letter staling that his counsel was out iof station and he himself had to attend a marriage. On the second date, it appears that his wife wrote to the arbitrator that the applicant was not available and could not be traced. It was certainly a case for allowing on adjournment. Considering the fact that the arbitrator himself had adjourned the case sine die without any date and had taken up the case himself without any application from the applicant. I fail to understand why adjournment was not given. Especially, as this case was at a very early stage, it does not appear to me that it can be held that the applicant was in any way to blame for not being available on the dates fixed. In as much as the claim has been rejected without any evidence being recorded, it seems that there is breach of Natural Justice and the word cannot be sustained.
(8) I would like here to point out that issues No. 1-2 are inter-connected. Issue No. 1 relates to the extension of time. The extension is being presumed by the answering respondent from the circumstances that the petitioner applied for an adjournment. This is being treated as consent for the purpose of extension of time because the arbitrator cannot take an inconsistent position. Either he is functus officio on 6th Oct. 1975, because the time for making the award his elapsed or he has been given or opportunity of proceeding further with the hearing because of the consent of the parties in which case he should have granted the adjournment. In either event, the award cannot be sustained.
(9) I would, thereforee, hold- that as the award has been given after the extended time, it is to be set aside as not being is accordance with law and, thereforee, cannot be made a rule of the court. Alternatively, it must be held that the award has been given without giving the objector a reasonable opportunity. In either event the award has to be set aside. I would accept 1.A. No. 927/76. The objector to get costs. At the same time I do not revoke the arbitrator clause, but direct the matter to be re-submitted under clause 25 of the contract, the chief engineer should appoint either the same arbitrator or a new arbitrator under clause 25 of the agreement. The appointment to be made within three months.