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Edakkavil Karimbuvalappil Abdulkhader Haji Vs. Thalakkal Kunhammad and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKerala High Court
Decided On
Case NumberC.M.F. No. 32366 of 1984 and M.F.A. No. 547 of 1978
Judge
Reported inAIR1986Ker3
ActsArbitration Act, 1940 - Sections 20, 28 and 39; Code of Civil Procedure (CPC) , 1908 - Order 1, Rule 10 - Order 22, Rule 3
AppellantEdakkavil Karimbuvalappil Abdulkhader Haji
RespondentThalakkal Kunhammad and ors.
Appellant Advocate P.N.K. Achan,; K. Vijayan,; N.N. Sugunapalan and;
Respondent Advocate M.K. Narayana Menon,; C.D. Jose,; T.V. Ramakrishnan
Cases ReferredIn Union of India v. K.L. Bhalla
Excerpt:
.....- when arbitrator dies pending appeal can any of parties get himself transposed as appellant - held, arbitrator's right is personal and appeal filed against order will not survive to any of the parties to agreement. - - the applicant must not come merely saying 'i do not like this thing to be done',it must be shown that it tends to his injury, or to his damage, in the legal sense of the word. it operates in a limited class of actions ex delicto such as actions for damages for defamation, assault or other personal injuries not causing the death of the-party, and in other actions where after the death of the party the relief granted could not be enjoyed or granting it would be nugatory. , air 1945 bom 11 it has been held :although the original plaintiff might not be entitled to..........v. benarashi, air 1968 cal314 it has been held that in the case of the death of parties to an award filed in court before judgment the court has inherent power to bring on record the legal representatives. in sitamony v. sivarajan, 1976 ker lt 263 : (air 1977 ker 83) (fb) it has been held :'the provision in rule 10 of order xxii indicates that the right of the assignee to seek to continue the suit is not absolute as it is for the court to consider whether leave is to be granted. in appropriate cases the court may grant leave to continue the suit. such an assignee is bound by the previous proceedings in the suit and his right is only one of further prosecution of the suit. it seems to be plain from the scheme of order xxii that an assignee can make an application for leave to.....
Judgment:

Narendran, J.

1. Questions of considerable importance in the law of Arbitration arise for consideration in this case. The questions are : (1) Whether the dismissal by court of an original petition by the Arbitrator under Section 28 of the Arbitration Act, 1940 to enlarge the time for making the Award, will amount to 'superseding an arbitration' and whether an appeal will lie under Section 39 of the Act from the order of dismissal; (2) whether the Arbitrator can file an appeal from an order of the Court refusing to enlarge the time for making the Award; and (3) when the Arbitrator dies pending the appeal can any of the parties to the Arbitration agreement get himself transposed as the appellant. A question whether an Award passed in violation of an injunction restraining the Arbitrator from passing an Award has to be ignored also arises in the case.

2. This appeal was filed by the Arbitrator against the order of the Court below dismissing his original petition for enlargement of time for making the Award under Section 28 of the Arb. Act, 1940. By the same order the Court also dismissed the interim application by which the appellant Arbitrator filed in court the Award he made pending the Original Petition for time to make the Award.

3. As per an Arbitration agreement dt. 24-6-1973 the respondents appointed the appellant as the, sole Arbitrator for deciding certain disputes and for partition of the properties scheduled to the Original Petition. The Original Petition for extension of time was filed in the court below on 28-2-1974. On 14-8-1974 the court granted time up to 23-12-1974. On 18-11-1974 the 6th respondent who was ex parte filed an interim application for setting aside the ex parte order alleging that the Arbitrator and the first respondent colluded and obtained an extension of time for making the Award. On 18-11-1974 itself the 6th respondent filed an application for injunction restraining the Arbitrator from making the Award. Though the interim order of injunction issued by the court on 18-11-1974was attempted to be served on the Arbitrator on 19-11-1974 he refused to accept the same. The Arbitrator then passed the Award and the same is purported to have been signed by him on 22-11-1974. On 17-1-1975 the ex parte order against the 6th respondent was set aside. Though the Arbitrator challenged the above order in a civil revision before this Court the same was dismissed by this Court on 26-5-1975. On 17-11975 the interim order of injunction also ceased to be in force. On 31-2-1975 the Arbitrator gave notice to the parties except the 6th respondent, of the making of the Award. On 19-2-1975 the Award was filed in court along with I.A. 208 of 1975. On 8-4-1975 the 6th respondent, filed a counter challenging the making and filing of the Award in Court.

4. The Court below dismissed the Original Petition for extension of time for making the Award and I.A. 208 of 1975 filing the Award in court holding :

'In the case on hand, the arbitrator has not given notice of filing the award. However, the court issued notice on 15-3-1975 and the 6th respondent filed a counter challenging the award on 8-4-1975. Hence the objection is filed within time. That apart, the award was made at a time when interim injunction was in force. Moreover, when the award was made the period had expired and the application for extension of time was not allowed by the Court. Hence the award sought to be canvassed in I.A. No. 208 of 1975 is a nullity. Since the award is made even before the extension of time, O.P. No. 7/1974 becomes infructuous.

5. As already mentioned the Arbitrator , filed this Miscellaneous First Appeal against the above order of the Court below. Pending the appeal the Arbitrator left this world on 9-10-1984. On 11-11-1984 the legal representatives of the Arbitrator filed C.M.P. No. 30226 of 1984 to implead them as supplemental appellants in the appeal. The 3rd respondent in the appeal opposed the impleading by contending that when the Arbitrator died no cause of action survived to his wife and children as the right is purely personal and hence the wife and children have no locus standi to come in. The contentions of the 3rd respondent were upheld and the application for impleading was dismissed, holding that the arbitrator when appointed is an officer and the right is a personal one andin an appeal filed by him against an order in an Original Petition for extension of time for making an Award the right to prosecute the appeal will not survive to his legal heirs.

6. Then respondents 1 and 2 in the appeal filed C.M.P. 32366 of 1984 to transpose them as appellants in the appeal and allow them to continue the appeal. Respondents 3, 4 and 9 to 15 in the appeal opposed the C.M.P. A counter-affidavit was filed by the 3rd respondent contending that the appeal by the Arbitrator was incompetent and the right to sue at any rate will not survive after the death of the Arbitrator.

7. The first question to be considered is whether an appeal lies under Section 39 of the Arb. Act, 1940 from an order of the Court refusing to enlarge time for making the award. Section 39 of the Arb. Act enumerates the orders from which the appeal lies under the section and one of those orders is an order superseding an arbitration. So, if the order refusing to enlarge time for making the award is in effect an order superseding an 'arbitration, an appeal will lie under Section 39 of the Act, The effect of an order refusing to enlarge time for making the award is that the arbitration as per the agreement of the parties appointing the arbitrator comes to a grinding halt. If the order becomes final, it goes without saying that there can be no arbitration as per the agreement of the parties appointing the arbitrator. Though the order does not say in so many words that the arbitration is superseded, there cannot be any arbitration as per the agreement after the Court refuses to enlarge time for making the award. So, it has to be taken for granted that by refusing to enlarge the time for making the award the Court really supersedes an arbitration and an order under Section 28 of the Arb. Act refusing to enlarge time for making the award is really an order superseding an arbitration. Hence it goes without saying that there is an appeal from such an order passed by the Court under Section 28 of the Arb. Act. Counsel on both sides relied on a number of authorities in support of their contentions. In Martirozi v. Subramaniam Chettiar AIR 1928 Mad 69 (FB) it has been held :

'An order refusing to enlarge the time forthe submission of an award remitted to theumpire on an application under Section 13, Arb.Act is a judgment and is appealable.' :

It has to be pointed out that in the above decision what the High Court of Madras has held is that an appeal will lie under the Letters Patent (Madras) Rules and not an appeal under the provisions of the Arb. Act. In Bhaiyalal v. Sawai Singhai Pannalal AIR 1944 Nag. 152 it has been held :

'The order allowing leave to revoke the authority of the appointed arbitrator is not an order superseding the arbitration such as can be appealed against.

In S.N. Agarwall v. Baidyanath Mandal AIR 1972 Pat 29 it has been held : 'Mr. Chatterjee then contested the impugned order. He drew out attention to Section 39 of the Act which gives a list of the orders against which appeal may lie. That section provides that an appeal shall lie from those orders as given therein and from no others. The first in the list of orders is an order superseding an arbitration. In my view, the impugned order amounts to supersession of an arbitration. Therefore, the appeal was maintainable.' (Para 13)

In Chandra v. Godavari AIR 1972 Pat 340 it has been held :

Under the Act the phrase 'superseding an arbitration' in Clause (i) of Sub-section (1) of Section 39 has got to be assigned a meaning with reference to the power of the Court to supersede an arbitration under Section 19 of the Act...............Inmy opinion, therefore, the order recalling the reference is not appelable under Section 39 of the Act. I am of the opinion in the first instance that when the Court has got power to make a reference under Section 23 of the Act, it must be assumed that the Court has got power to recall the reference...........But here, an order makinga reference under Section 23 of the Act is, undoubtedly, not appealable and, therefore, an order recalling a reference also is not appealable.' (Para 2)

In the above case, the reference was under Section 23 of the Arb. Act at the instance of the Court and it was not an arbitration in pursuance of an agreement for arbitration. In R. N. Rice Mills v. State of Orissa, AIR 1959 Orissa 4 it has been held :

'I am of the opinion that refusal to extend time by the court on the application of the arbitrators or the party does not amount to an order superseding the arbitration so as to beappealable under Clause (1) of Section 39 of the Arb. Act of 1940.' (Para 5)

In Shiv Omkar v. Bansidhar, AIR 1956 Bom 459 it has been held :

'It is true that the application made by the respondent for extending time was consolidated with the appellant's application for setting aside the award. But this consolidation cannot give the appellant a right to challenge an order which, under the law, is not appealable. Therefore, in our opinion, it is unnecessary for us to consider whether the learned Judge was right or not in extending time for making the award.'

By no stretch of imagination the above order will amount to an order superseding an arbitration. In M.H. Tejani v. Kulsumbai AIR 1967 Bom 300 it has been held (Paras 5, 6) :

'From this scheme it is clear that although the language employed in Sections 19 and 25 is not identical with the language employed in Section 12(2) in substance the power contained in the two sections is identical, namely the power to order that there will be no arbitration with respect to the difference referred and that the arbitration agreement shall cease to have effect. In other words, when the court orders that the arbitration agreement shall cease to have effect, in effect it sets aside the arbitration agreement with respect to the difference referred. When the court orders that the arbitration agreement is superseded, the court in terms makes an order that the arbitration agreement shall cease to have effect. Therefore, an order by the court that the arbitration agreement shall cease to have effect with respect to the difference referred is in law an order superseding the arbitration and is, therefore, appealable under Section 39(1)(i) of the Act.'

8. The next question to be considered is whether an arbitrator can file an appeal against an order by which the Court refuses to enlarge the time for making the award. It was contended that the arbitrator cannot be a person aggrieved by the order passed by the Court refusing to enlarge time and hence the appeal filed by him is incompetent. The learned counsel for the petitioners in the petition for transposing, contended that the arbitrator is the representative of all the parties to the agreement for arbitration and hence he iscompetent to file an appeal from the order in question. In Adi Pherozshah Gandhi v. H.M. Seervai (AIR 1971 SC 385) the Supreme Court had occasion to consider the scope and ambit of the words 'person aggrieved'. The Supreme Court held :

'it is apparent that any person who feels disappointed with the result of the case is not a 'person aggrieved'. He must be disappointed of a benefit which he would have received if the order had gone the other way. The order must cause him a legal grievance by wrongfully depriving him of something. It is no doubt a legal grievance and not a grievance about material matters but his legal grievance must be a tendency to injure him. That the order is wrong or that it acquits someone who he thinks ought to be convicted does not by itself give rise to a legal grievance.

In Corpus Juris Secundum, Vol. IV page 356 Ist Edition it has been stated :

'Broadly speaking, a party or person is aggrieved by a decision when, only when it operates directly and injuriously upon his personal, pecuniary and proprietary rights.'

In Re Riviere's Trade Mark (1884) 26 Ch. D. 48 it has been held :

'..........it must be a legal grievance, it mustnot be a stet pro ratione voluntas; the applicant must not come merely saying 'I do not like this thing to be done', it must be shown that it tends to his injury, or to his damage, in the legal sense of the word.'

In State v. Smt. Ram Sri AIR 1976 All 121 it has been held :

'In other words, the right to file an appeal against a judgment or decree exists only in the person who is aggrieved or prejudiced thereby. A party, therefore, who would benefit from the change in the judgment has an appealable interest. This interest of course, should not be contingent, speculative or futuritive. It must be substantial, immediate and pecuniary. Such an interest must have invaded legal rights of the person filing an appeal. It is, therefore, clear that an aggrieved party is one who is injuriously affected by the judgment or whose rights are directly affected by the operation of the same.'

'The important thing which may be noted in this definition is that the person filing an appeal must have 'legal grievance' against thedecision which 'wrongfully deprives him of something' or 'affects his title to something'..........

'..........it is clear that the mere fact that ajudgment is wrong, does not entitle a person to file an appeal against the same. It is necessary that such a person must be deprived of the results of the litigation which he. was expecting in his favour in case the judgment went against him.' (Paras 8, 9 & 10)

In the above decision the court relied on the following passage from Re Sidebotham : Ex. P. Sidebotham (1880) 14 Ch D. 458 :

'..........not really a person who isdisappointed of a benefit which he might have received if some order had been made. A 'person aggrieved' must be a man who had suffered a legal grievance, a man against whom a decision has been pronounced which had wrongfully deprived him of something, or wrongfully refused him something or wrongfully affected his title of something.'

In A. P. Agricultural University v. Dan Reddy (1974) 1 Andh LT 332 Chinnappa Reddy J. (as he then was) speaking for the Court, has held that a person cannot be said to be directly affected by the judgment of a Court unless some right or liability of his is declared by the Court. An arbitrator is a Judge of the parties own choosing. He is a disinterested person for whose decision the matters in dispute are referred to by the parties. Even though he has been chosen by the parties he cannot identify himself with any of the parties. The moment he does this he will cease to be entitled to continue as arbitrator. So, It goes without saying that an arbitrator cannot respresent any of the parties or cannot be a representative of the parties to the arbitration. Under Section 28 of the Arb. Act, 1940 the arbitrator or any of the parties to the arbitration agreement can move the Court for enlarging the time to make the award. If the Court declines to enlarge the time the parties to the arbitration can challenge that order in appropriate proceedings but the arbitrator has nothing more to do. As per the agreement for arbitration the arbitrator is to conduct the arbitration within a specified time and make the award. If he was not able to do that and the Court refuses to enlarge the tune he will have to leave it there. It is not the arbitrator's job to fight out the matter and get an extension of time. Whether the parties to the arbitration will suffer if the time for makingthe award is not enlarged this cannot be the concern of the arbitrator. He can rest content that the parties will take care of themselves. By no stretch of imagination the arbitrator who is a person disinterested in the dispute, can be aggrieved by the order of the Court refusing to enlarge time for making the award. In this view, the arbitrator cannot be a person aggrieved by the order of the Court refusing to enlarge time. As it goes without saying that an appeal can be filed only by a person aggrieved by the order appealed against this Miscellaneous First Appeal filed by the arbitrator is not maintainable.

9. Respondents 1 and 2 in the appeal filed by the arbitrator have applied for transposing them as appellants in the place of the arbitrator who passed away pending the appeal. So, the question is whether this can be allowed and whether they can be permitted to prosecute the appeal. If the appeal abated by the death of the arbitrator, no question of transposing arises. Even if the appeal did not abate if no purpose will be served by transposing, then also transposing need not be done. No question of transposing also arises in an incompetent appeal. In Aiyappan v. Kesavaru AIR 1953 Trav Co. 545 (FB) it has been held :

'Abatement is a legal consequence flowing from the omission to take the necessary steps within the time limited by law to implead the legal representative of the deceased plaintiff and a formal order of the court is not necessary for such a consequence to happen. That must be the reason why the framers of the Code chose to use the expression that the suit shall abate so far as the deceased plaintiff is concerned in Order 22 Rule 3(2) instead of the expression that the 'court may pass an order that the suit shall abate' as contained in Section 366 of the old Code.' ..............The effect of theseprovisions is only that the abatement takes place by operation of law and it does not depend on any order of the court.' (Page 548)

In P.V. Sarma v. S.C. Riy. Employees Co-op. Cr. Socy. AIR 1977 Andh Pra 319 it has been held :

'In order to decide whether a particular right of action survives to the legal representatives or not the correct approach is to consider what the right claimed in the proceeding is. If the right is purely a personal one then the right to sue cannot survive. Themere fact that there is a possibility of the petitioner obtaining further reliefs in case he succeeds in establishing the right which he claims in the particular proceeding cannot be taken into account in determining whether the right to sue survives or not.' (para 9)

In Girijanandini v. Bijendra Narain, AIR 1967 SC 1124 it has been held :

'A claim for rendition of account is not a personal claim. It is not extinguished because the party who claims an account or the party who is called upon to account dies. The maxim 'actio personalis moritur cum persona' a personal action dies with the person, has a limited application. It operates in a limited class of actions ex delicto such as actions for damages for defamation, assault or other personal injuries not causing the death of the-party, and in other actions where after the death of the party the relief granted could not be enjoyed or granting it would be nugatory.' (para 14)

In T.K. Amma v. M.K. Ravunni Nair, AIR 1965 Ker 303 it has been held that there will be no abatement of a representative suit by the death of the plaintiff. The same view has been taken by the Supreme Court in Charan Singh v. Darshan Singh (1975) 1 SCC 298 : (AIR 1975 SC 371). In Sm. Saila Bala Dassi v. Sm. Nirmala Sundari Dassi, AIR 1958 SC 394 it has been held that a transferee pendente lite can continue an appeal filed by the transferor. In Santuram Hari v. Trust of India Assurance Co., AIR 1945 Bom 11 it has been held :

'Although the original plaintiff might not be entitled to maintain, the suit, it is competent to the Court exercising its discretion under Order 1, Rule 10 to transpose a party defendant to the place of the plaintiff, such a parly being entitled to maintain the suit, and pass the decree in favour of the newly added plaintiff though in most cases the Court would not exercise its discretion in transposing defendants as party plaintiffs where a valuable right acquired by one of the defendants is likely to be taken away or defeated.'

In Ramnibas v. Benarashi, AIR 1968 Cal314 it has been held that in the case of the death of parties to an award filed in Court before judgment the Court has inherent power to bring on record the legal representatives. In Sitamony v. Sivarajan, 1976 Ker LT 263 : (AIR 1977 Ker 83) (FB) it has been held :

'The provision in Rule 10 of Order XXII indicates that the right of the assignee to seek to continue the suit is not absolute as it is for the court to consider whether leave is to be granted. In appropriate cases the court may grant leave to continue the suit. Such an assignee is bound by the previous proceedings in the suit and his right is only one of further prosecution of the suit. It seems to be plain from the scheme of Order XXII that an assignee can make an application for leave to continue the suit so long as there is a suit, so far as it concerns the assignee, on the file of the court. In a suit which is not subsisting there is no scope for seeking continuance. It is only logical that in a case where the suit has abated the assignee cannot thereafter seek to be added as a party to the action. If the assignee seeks to be impleaded in the proceedings before the suit abates and the legal representatives also seek to be impleaded whether the court would allow the assignee to come on record is a different question. That will depend upon consideration of many matters. But the assignee cannot claim to come on record as a matter of right since leave is not to be granted as a matter of course. Rule 10 begins with the words in other cases'. The reference is to cases other than those mentioned in Rr. 2, 3, 4, 7 and 8 of Order XXII of the C.P.C. The provision enables only continuance and that by leave of the court. There would be no scope for continuance where by reason of the operation of Rule 3 or Rule 4 as the case may be, there is abatement and consequently termination of the proceedings. In such a situation there is no scope for the assignee to make application under Order XXII Rule 10, C.P.C. In other words it means that no motion will succeed under Rule 10 when once there is abatement of the suit as against the party as whose assignee motion is made under Order XXII, Rule 10.' (Headnote)

In this case, by the death of the arbitrator appellant, the appeal has abated because the appeal arose from an order of the Court refusing to enlarge the time for making the award. The award is something which the appellant alone can make and he cannot make it once he has left this world. So, in this case, the personal action died with the person and the right to sue cannot survive. Not only that, no purpose will be served by transposing the respondents petitioners as appellants. Even ifthe appeal is allowed and the time for making the award is enlarged, they cannot step into the shoes of the arbitrator and make the award. There is another reason also. Only in a pending appeal a respondent can be transposed as an appellant. Here, the appeal abated on the death of the appellant. Over and above all these, the appeal itself being an incompetent appeal in the sense that it was filed by a person who cannot be an aggrieved person, no question of transposing arises in such an appeal.

10. The only question that remains to be considered is whether the passing of the award by the Arbitrator after the time for making the same had expired and when there was an injunction from Court restraining him from making the award in force, can in any way help the respondents petitioners in getting themselves transposed as the appellants in the place of the deceased appellant-arbitrator. In Hari Shanker Lal v. Shambhu Nath, AIR 1962 SC 78 it has been held :

'The legal position may be formulated thus :

(a) A notice to act may be given before or after the arbitrators entered upon the reference. (b) If notice to act is given before they entered upon the reference, the four months would be computed from the date they entered upon the reference. (c) If a party gives notice to act within 4 months after the arbitrators entered upon the reference, the arbitrators can make an award within 4 months from the date of such notice. And (d) in that event, after the expiry of the said 4 months the arbitrators become functus officio, unless the period is extended by court under Section 28 of the Act; such period may also be extended by the court, though the award has been factually made.' (para 11)

In Union of India v. K.L. Bhalla ILR (1973) 1 Delhi 160 it has been held :

'I have, therefore, to hold that the learned Subordinate Judge had the power to consider the question of extending the time for filing the decision of the arbitrator notwithstanding the fact that the decision had been filed after the expiry of the time previously fixed by the court.'

In this case, admittedly, the award was not made within the time allowed for making thesame. But the award was, as a matter of fact, later made and filed in Court. But before making the award something very relevant happened. The appellant-arbitrator moved the Court for enlarging the time for making the award and got an order enlarging the time colluding with some of the respondents. So, the order of the Court enlarging the time was later set aside by the Court at the instance of the 6th respondent who was earlier declared ex parte. The 6th respondent along with the petition to set aside ex parte, moved an application for injunction and obtained an injunction restraining the arbitrator from making the award. The injunction order when taken to the arbitrator was refused by him. The arbitrator then made the award. So, the award made by the arbitrator was one made when he was, as a matter of fact, restrained by the Court by an injunction from making the award In the case of such an award, the question is whether the Court will be justified in passing a subsequent order for enlarging the time for making the award. As it goes without saying that the award is one made in violation of an injunction issued by the Court, no Court will pass an order enlarging the time for making the award and legalise the award made in flagrant violation of a Court order. For the above reason, even if the respondents-petitioners get themselves impleaded as appellants in the place of the deceased arbitrator, it will only be a futile exercise as the award passed by the arbitrator cannot be treated as an award in the eye of law.

11. In the result, C.M.P. 32366 of 1984 the petition for transposing respondents 1 and 2 as appellants in the appeal is dismissed. The Miscellaneous First Appeal which has abated, is dismissed. No costs.


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