Skip to content


Union of India Vs. Khan Chand Bhagat Ram JaIn and Sons - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberFirst Appeal No. 126 of 1931
Judge
Reported in6(1970)DLT460
ActsArbitration Act, 1940 - Sections 28(1)
AppellantUnion of India
RespondentKhan Chand Bhagat Ram JaIn and Sons
Advocates: B.B. Kishore and; S.S. Chadha, Advs
Cases Referred(see Penukonda Rathakrishnamwty v. Messrs Ganamukals Changalraya Chetty Chalamayya Chetty and Co
Excerpt:
.....months after the arbitrator entered on the reference - it was also observed that the final award was made within time - hence, the court could act suo motu in the said matter - - the award was, thefore, bad; unless, however, the arbitration agreement expresses a contrary intention, he may make an interim award and an interim award may well be final as to some of the claims referred. (9) the third objection of the learned counsel for the appellant is clearly without substance. the grivance of the appellant in this respect is clearly an after-thought and without any substance......for making the award has expired or not and whether the award has been made or not enlarge from time to time the time for making the award.' it is, thus. clear that the award is required to be made within four months after the arbitrator enters on the reference or within such extended time as the court may allow. in this case, the learned sub- judge came to the conclusion that the matter having been referred to the court for its opinion, the arbitrator could not make his award earlier. the opinion of the court, which though pronounced on may, 25, 1959 was communicated to the arbitrator on july 28, 1959. the final award made on november 19, 1959 was, thereforee, within four months from the receipt of the opinion from the court, and was accordingly held to be within the allowable time......
Judgment:

P.N. Khanna, J.

(1) Disputes arose between the parties out of a contract for construction of two lakhs Gallon capacity storage tank at Delhi Cantt. as per contract . No. CWE/D-18-1955-66. The matter having been referred to arbitration, the sole arbitrator made his first award on November 4, 1958. One of the points in controversy, not included in the said award, was referred by him, as a special case, for the opinion of the court, under section 13(b) of the Arbitration act, here in called the Act'. The parties put in, appearace before the court, which by order dated May 25, 1959 gave its opinion on July 26, 1959 the letter communicating the court's opinion, was sent to the arbitrator, which was received by him on July 28, 1959. On the same date the arbitrator issued notices to the parties, requiring them to furnish further details. On August 5, 1959 a request was.made on behalf of the appellant, Union of India, for an extension of time up to September 10, 1959 for furnishing, the deteails. As the appellant was unable to do anything even by the extended, period, another request was made on its behalf for further time up to, October 15, 1959. This request was also granted. On October 17, 1959 a request for further adjournment was made on behalf, of the appellant. On October 24, 1959 the arbitrator gave to the appellant the final opportunity to furnish details, if any, up to November 10, 1959. Nothing was done by the appellant. Ultimately, on November 19, 1959, the Arbitrator made his final award.

(2) The award was filed in court, which however, was remitted back to the arbitrator for certain corrections. After this was done, the award was again filed in court. On notice of the filing of the award being served on the parties, the appellant filed objections under section 80 and 38 of the Act. The said objections were controverter by the respondent and the following issues were struck;

1. Whether the award in question is liable to be set aside as par grounds mentioned in the objection? Opd 2. Whether the applicant is also entitled to interest on the amount awarded to him. If so since when and at what rate? 3. Relief.

(3) The learned Sub-Judge, Delhi, held that the award was not liable to be set aside on any grounds mentioned in the petition. Issue No. 2 was not pressed by the respondent. No interest was, thereforee, awarded. The objection petition in view of this was dismissed with costs and the award was made a rule of the court. The Union of India has come up in appeal against the said order dated August, 2, 1981 of the Sub. Judge, 1st Class, Delhi.

(4) On behalf of the appellant, Mr. Brijbans Kishore, its learned counsel, raised three objections; firstly that the award was not pronounced within four months after the arbitrator entered on the reference. The award was, thefore, bad; secondly, that the arbitrator having published his award on 4th November 19S8 was not competent to give the second award dated November 19, 1959; and thirdly, that the appellant was not allowed time to challenge the opinion of the court by way of a revision in the High Court against the order of the learned Sub-Judge.

(5) These objections, however, have no substance. Under section 3 of the Act, an arbitration agreement is deemed to include provisions set out in the First Schedule, in so far as they are applicable to the reference. No different intention having been expressed in the arbitration agreement para 3 of the First Schedule is deemed to be a part of the agreement itself. According to this para the arbitrator is to make his award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the court may allow. Section 28(1) of the Act reads as follows:-

'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 from time to time the time for making the award.' It is, thus. clear that the award is required to be made within four months after the arbitrator enters on the reference or within such extended time as the court may allow. In this case, the learned Sub- Judge came to the conclusion that the matter having been referred to the court for its opinion, the arbitrator could not make his award earlier. The opinion of the court, which though pronounced on May, 25, 1959 was communicated to the arbitrator on July 28, 1959. The final award made on November 19, 1959 was, thereforee, within four months from the receipt of the opinion from the court, and was accordingly held to be within the allowable time. The delay. It any, has been caused, according to the learned Sub-Judge, by the carelessness and negligence of the appellant itself; the same was, thereforee, specifically con. doned. The objections of the appellant, accordingly, have no basis, as the court under section 28 of the Act has the power, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, to enlarge from time to time, the time for making the award which has been done in this case.

(6) The learned counsel for the appellant submitted that no application asking for the enlargement of time was made on behalf of the respondent. The court had no jurisdiction to enlarge time suo motu. The older of the court, said the learned counsel, was, thereforee, not sustainable. In support, the learned counsel relied upon Sowaran Singh v. Municipal Committee, where it was observed that the enlargement of time can be obtained only by a motion to the court. A reading of the judgment, however, makes it clear that the observation relied upon by the learned counsel was made in the context of the facts of that case. The representative of the Municipal Committe, one of the parties of the arbitration in the case before the Punjab High Court, consented to the arbitrator proceeding with the reference after the statutory period of four months had expired. The learned Judge of the Punjab High Court held that the language of para 3 of the First Schedule and section 28 of the Act made it clear that the court alone had to be moved for enlarging the time for making the award, meaning thereby that the parties could net by themselves enlarge the time. If the parties wanted to extend the time for making the award they had to make an approach to the court. The learned Judge was not dealing with the question whether the court had the jurisdiction to enlarge time acting suo motu or whether the court could act only on an application filed by one of the parties. On the other hand, Mr. S. S. Chaddha, the learned counsel for the respondent has placed reliance on Sakalchand Moli v. Ambaram Haribhai, where it was hold that a written application was not necessary for the court to extend time for miking an award It was conceded by Mr. Brijbans Kishore that in Bombay it was npces?aiy, according to the rules of that court, to make an application for the purpose, inspire of that the Bombay High Court was of the opinion that orders could be passed even on an oral request. In Narsing Das Hiralal Ltd. v. Bisandayal Satyanarain Firm, time for making the award was extended during the hearing of the petition under sections 14 and 17 and after the parties had led their evidence on merits. A reading of para 3 of the First Schedule makes it clear that the court can act suo motu to extend time for making the award. To the same effect is section 28(1) of the Act, as reproduced above. It is the court which may enlarge time for making the award if it thinks fit. The section does not require any application to be made for the purpose. Nothing having been said in the Act in this connection. It is not permissible to limit the jurisdiction of the court in this regard. The first objection of Mr.Brijbans Kishore, thereforee cannot be accepted.

(7) The second objection that the arbitrator could not make a second award dated November 19, 1959 after having made the first award dated November 4, 1958 ignores the provisions of section 27 of the Act. The arbitrator if he thinks fit can always make an interim award unless a different intention appears in the arbitration agreement. After the first award was made in the instant case, a point was referred as a special case, to the court for its opinion without any objection or protest from the appellant. In fact, the appellant put in appearance before the court and convassed its view point at length. After the opinion of the court was daly communicated, the appallant continued putting in appearance before the arbitrator and applied on a number of occassions, for time to be extended to enable it to furnish further details and particulars. At no stage was any protest raised or objection made that the arbitrator had become functus officio. There was, thus an agreement between the parties that the proceedings before the arbitrator should continue till the second award dated November 19, 1959 was made. It is, thereforee a clear case whether according to the intention it the parties, the first award, which was made by the arbitrator on November 4, 1958, was only an interim award. The learned counsel for the appellant submitted that an interim award could be of a provisional nature. The arbitrator in the present case, had finally decided the matters in controversy between the parties by his award dated November 4, 1958 leaving out only one item in respect of which he had sought the opinion of the court. The first award thereforee, could not be said to be an interim award. There is, however, no bar to the interim award finally deciding the matters referred to therein. Russell on Arbitration (15th edition, page 208) dealing with the power to make more than one award says :

'AN arbitrator can make only one final award, in the absence of some special authority to make more than one. Unless, however, the arbitration agreement expresses a contrary intention, he may make an interim award and an interim award may well be final as to some of the claims referred.'

(8) In a case before the Madras High Court, the arbitration was for five contracts. The arbitrators agreed regarding two contracts and disagreed with regard to the remaining three. Two awards were made, first upon the two contracts and second in respect of the three contracts upon which they had disagreed. The latter was referred to the Umpire for decision. These were held to be interim awards and were held to be valid (see Penukonda Rathakrishnamwty v. Messrs Ganamukals Changalraya Chetty Chalamayya Chetty and Co, It is thus clear that the arbitrator has power to make interim awards, which may be final in respect of the matters referred to therein. The second objection, thereforee, is without any basis.

(9) The third objection of the learned counsel for the appellant is clearly without substance. The order of the court pronouncing its opinion is dated May 25, 1959. No appeal is provided against such an order under section 39 of the Act. If the matter was to be taken up in revision in the High Court, the appellant could have moved this court before 19th November 1959, which gave it approximately six months time to do the needful. The grivance of the appellant in this respect is clearly an after-thought and without any substance.

(10) In view of the above, threre is no merit in the appeal and the same is dismissed with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //