Skip to content


Puthivapuravil Pocker and ors. Vs. V. Khalid and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKerala High Court
Decided On
Case NumberA.S. Nos. 93 and 143 of 1968
Judge
Reported inAIR1974Ker121
ActsEvidence Act, 1872 - Sections 114; Arbitration Act, 1940 - Sections 14
AppellantPuthivapuravil Pocker and ors.
RespondentV. Khalid and anr.
Appellant Advocate V. Rama Shenoi and; R. Rava Shenoi, Advs.
Respondent Advocate M.A. Manhu and; K. Chandrasekharan, Advs.
DispositionAppeals allowed
Cases ReferredSrinivasa Bao v. Venkata Narasimha Rao
Excerpt:
.....16 and clause 3 of first schedule to arbitration act, 1940 - award made by arbitrator on requisite stamp paper - award made within time - clause 3 only requires making of award within specified period - no limitation prescribed under act for registering award once award made - limitation if any must be found elsewhere - no case that award not registered within time - registration necessarily has to be performed by arbitrator after making of award - registration done in present case - course adopted by arbitrator proper. - - that would be against well-established principles of the law of arbitration. be-fre we refer to the decision of the andhra pradesh high court we may refer here to a decision of the madras high court which according to the decision of the andhra pradesh high court..........be allowed. that decision is challenged in these appeals.3. the court below has assumed that the stamp papers being those purchased on 2-3-1965 only, it must be taken that the award, though dated 2-3-1965. wag really made only later and further, since, admittedly, the registration of the award was subseauent to 2-3-1965 it was inoperative as according to the court, stating of the award after it was mada and registering it are not ministerial acts. if they be not such ministerial acts then the arbitrator would be incompetent to so act as he would have become functus officio by the 2nd march, 1965. in support of the stand taken by it the court below relied on the decision ofsupreme court in rikhabdass v, ballabhdas, air 1962 sc 551.4. the reasoning in the order of the court below that.....
Judgment:

Subramonian Potf, J.

1. A. S. No. 93 of 1968 is an appeal against the decision in O. P. No. 218 of 1965 and A. S No. 143 of 1968 is against the decision in O. P. No. 44 of 1965. Both the appeals are by the same parties.

2. O. P. No. 44 of 1965 was filed for an order directing the first respondent in that petition who was an arbitrator appointed under the Arbitration Act, 1940 to file the Award in Court, to eive notice to the parties regarding the filim Of the Award, hear the objections of the petitioners to the Award so as to makemodifications to the Award and to pass a decree on the basis of the Award. The first respondent was, at the relevant time, an advocate and he was appointed as an arbitrator to decide certain disputes concerning allotment of property to the parties to the dispute. He is seen to have made the award Exhibit B-l, which is seen dated 2nd March, 1965. Under Clause 3 of the First Schedule to the Arbitration Act. 1940 the arbitrator has 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. The time Of four months was being extended from tune to time and such extended time was to expire on 2nd March, 1965. The Award was registered on 24-3-1965. O. P. No. 44 of 1965 was filed by the appellants in A. S. No. 143 of 1968 for directing the filing of the Award in Court and for passing a decree on the Award with certain modifications. The Award was actually filed in Court on 9th August, 1965. The second respondent appeared only on 11-10-1965 and he filed an obiection to the petition on 28-10-1965. He later filed a petition O. P. No. 218 of 1965 seeking to set aside the Award for certain reasons. The petitoners in O. P. No. 44 of 1965 are respondents 2 to 12 in the subsequent petition. theyobjected to the oetition on several grounds including the ground of limitation. While both the petitions were pending in the Court below that Court decided the case by the order impugned in these appeals holding that since the Award was not made within time and was not registered also within the time, namely, on or before 2nd March, 1965, it was not possible to act upon that Award. As a result, the Court held that the Award had to be set aside and it was so set aside. Naturally, therefore, O. P. No. 44 of 1965 had to be dismissed and O. P. No. 218 of 1965 had to be allowed. That decision is challenged in these appeals.

3. The Court below has assumed that the stamp papers being those purchased on 2-3-1965 only, it must be taken that the Award, though dated 2-3-1965. wag really made only later and further, since, admittedly, the registration of the Award was subseauent to 2-3-1965 it was Inoperative as according to the Court, stating of the Award after it was mada and registering it are not ministerial acts. If they be not such ministerial acts then the arbitrator would be incompetent to so act as he would have become functus officio by the 2nd March, 1965. In support of the stand taken by it the Court below relied on the decision ofSupreme Court in Rikhabdass v, Ballabhdas, AIR 1962 SC 551.

4. The reasoning in the order of the Court below that the document could not have been executed on 2-3-1965 does not appear to us to be sound. Ext. B-l is seen dated 2nd March, 1965, The stamp papers on which the document is written are also seen purchased on 2-3-1965. There is no circumstance to indicate that nevertheless it should have been prepared only later. There is the initial presumption that, a document is executed on the day mentioned in the document as the date of execution. Prima facie the date shown in the document mav be accepted as the date of such execution and it is for the party who contends that the document was executed on a different date to show that it was so. We need refer onlv to the decision in Kepong Prospecting Ltd. v. Schmidt, 1968 (2) WLJR 55.

5. We do not see why the Court below should have assumed that if the stamp papers for Exhibit B-l was Purchased on 2nd March, 1965 the document could not have been executed on that day. Such an approach appears to be quite illogical. Some discrepancy is pointed out between the schedules and the description of the properties in the schedule in Exhibit B-l on the one hand and that in Exhibits A-l and B-2 on the other. It appears that the arbitrator had sent copies of the schedules showing the allotment of the properties to the parties and Exts. A-l and B-2 are such copies sent to them. The argument is that the description of the properties in Exts. A-l and B-2 do not tally with the description in Exhibit B-l, the Award, thereby suggesting that when Exhibits A-l and B-2 were issued Exhibit B-l was possibly not ready or available. This would have some force if it was shown that Exhibits A-1 and B-2 were issued before 24th March, 1965 because at any rate by that time the document must have come into existence as the document had been registered and if there was any discrepancy between the description in the schedule in Exhibit B-l on the one hand and Exhibits A-l and B-2 on the other, that could not be because Exhibit B-l had not come into existence at that time. There has been no attempt to show that Exhibits A-l and B-2 were delivered prior to 24th March, 1965. In the absence of any evidence the Court below was certainly in error in assuming that the document was executed on a day different from that mentioned in it. The arbitrator has not been examined. No attempt has been made to adduce any evidence and therefore the Court below could haveonly held that the document was executed on the day mentioned in it. namely, on the 2nd March. 1965. That was so executed on stamp paper and therefore it is not oPen to the objection that the document was not properly stamped.

6. Then the onlv other objection is that concerning the registration of the document subsequent to 2nd March, 1965. How far the decision of the Supreme Court on which reliance has been placed by the Court below would iustifv holding that the registration cannot be made when once the Award has been signed is the Question which we have to consider.

7. The Supreme Court in AIR 1962 SC 551 was considering a case where the award was unstamped and unregistered. This Award had been filed In Court when an objection was taken to a decree being passed on such Award. Thereupon, the trial Court remitted the Award to the arbitrator for re-submiting it to the Court on a duly stamped paper and after getting it registered. It was this that was under challenge. The question that was urged before the Supreme Court was the correctness of the stand that want of a stamp would be an illegality apparent on the face of the Award, and therefore in exercise of the power under Section 16(1)(c) of the Arbitration Act, 1940 the Court would be justified in remitting the Award to the arbitrator for reconsideration. Section 16(1)(c) of tha Act is in these terms:

'16 (1) The Court mav from time to time remit the award or any matter referred to arbitration to the arbitrators or umpire for reconsideration upon such terms as it thinks fit ----

xxxxx (c) Where an objection to the legality of the award is apparent upon the face of it'.

The Court took the view that when the document was not prepared on a stamp paper as it ought to be any remit to the arbitrator cannot be for reconsideration as there is nothing to reconsider excepting re-writing of the Award on a stamp paper which cannot be characterised as a reconsideration. It is in this view that the Supreme Court held that in such a case a remit to the arbitrator would not be proper. That of course mav not have anv relevance for the purpose of this case but the Supreme Court proceeded to consider another contention urged in the case which we mav have to mention here. The contention was that even though the case may not fall within Section 16(1)(c) of the Arbitration Act, 1940 such a remit mav be called for and justified by a reference to the inherent power of the Court saved under Section 151 of the Civil Procedure Code, Dealing withthis the Supreme Court observed that when once the Award had been made by the arbitrator he had become functus officio and if he was to be called upon to re-write the Award on a stamp paper It would be calling upon the arbitrator to prepare another Award which would be incompetent. The Court said;

'In the present case, ex hypothesi, the award has already been made and the arbitrator has therefore become functus offlcio. It is that award which required stamp. Section 151 of the Code cannot give the Court power to direct the arbitrator to make a fresh award: that would be against well-established principles of the law of arbitration. It would again be useless to have another copy of the award prepared and stamped for the copy would not be award and no action in a Court can be taken on it. The order cannot therefore be supported by Section 151 of the Code',

We may notice here that the Court was dealing with a case where there wag no Award prepared on a stamp paper. The Court held that to prepare a fresh Award by wav of re-writing the earlier award on a stamp paper would mean passing of a fresh Award and that would be incompetent when the Arbitrator had already made the Award earlier when It was signed on an unstamped paper. The question whether the Arbitrator could have registered the Award and whether the fact that the Arbitrator had become functus officio would affect his capacity to register were not matters considered by the Supreme Court in that decision. There was no occasion tq consider these questions. We are particularly stating this because in a Bench decision of the Andhra Pradesh High Court it seems that it has been assumed that the Supreme Court has spoken on this. Be-fre we refer to the decision of the Andhra Pradesh High Court we may refer here to a decision of the Madras High Court which according to the decision of the Andhra Pradesh High Court must be held to be no longer good law in view of the decision of the Supreme Court

8. We are referring to the decision of the Madras High Court in Desaratha Rao v. Ramaswarmr Iyengar, AIR 3956 Mad 134. The question there was whether when once the Award had been pronounced the Arbitrator would be competent to re-write the Award on stamp paper and get it registered. Dealing with this the Court said:

'The proposition that when once the award has been pronounced, the arbitrators having done what they were called Upon to do under the submission, become functus offlcio thereafter, in reaardto the reference, cannot be disputed. But there remain certain ministerial acts such as the engrossing of the award on stamp paper and getting the award so engrossed registered which acts cannot be put on the same footing as proceedings in connection with the pronouncement of the award.

If the arbitrators are to be deemed to have become functus officio even with regard to the carrying out of such ministerial acts, then the resultant situation would be extremely untenable: as the arbitrators In such a case would be precluded from doing anything by wav of even formal acts required in connection with the award pronounced. Even the question of giving notice to the parties to the award or the filing of the award in Court may also be said to be acts done at a stage when the arbitrators have become functus officio, if the argument is pushed to its logical conclusion'.

We see considerable force in the contention that in the light of what the Supreme Court has said in the decision to which we have adverted, the view taken by the Madras High Court that the rewriting of the award on proper stamp paper was only a ministerial act mav no longer be the correct view. But we do not think that there is anything in the decision of the Supreme Court regarding the other aspect of the question, namely, about the steps taken by the arbitrator to register the award subsequently,

9. The award is made when the decision of the arbitrator is recorded and he signed the award. He becomes functus officio to the extent the decision on the dispute has to be taken by him and that decision so taken is final so far as he is concerned. The Arbitration Act reserves in him certain powers such as correction of clerical mistakes but there mav be yet other things to be done. That an award which affects interests in immovable property as in the case of an award partitioning immovable property should be registered can no longer be in dispute in view of the pronouncement on this question by the Supreme Court in Satish Kuraar v. Surinder Kumar, AIR 1970 SC 833. It must also be said that necessarily the registration must alwa be only subsequent to the making of the award. Unlike in the case of preparing an award on stamp paper which must necessarily precede the making of the Award itself, in the case of registration it is necessarily a subsequent act. If so, it cannot be said that since by making the award the Arbitrator becomes functus officio he cannot register the document. That would mean that in no case could the award be registered at all. He becomes functus officio only for the purpose of deciding the dispute referred to him for Arbitration. That cannot be reopened. Necessarily the steps he has to take for registering the award subseauently would not be affected merely because the Award has already been made. The Supreme Court in the decision in AIR 1962 SC 551 was speakinp only with reference to the incompetency of the Arbitrator to prepare an Award afresh on stamp paper. What has been said therein cannot be taken as in any way indicating that in the case of registration the Arbitrator will not be competent to act when once he has made the Award, That is why we consider that the decision of the Madras High Court just now adverted to is right sq far as it concerns the question of registration but that will have no bearing on the facts of that case because that was a case where there was both the defect of the Award being not prepared on proper stamp paper and beina not registered,

10. The Hieh Court of Andhra Pradesh in Srinivasa Bao v. Venkata Narasimha Rao, AIR 1963 Aridh Pra 193 was dealing with a case where an Award prepared on an unstamped paper was sought to be made good by a subsequent Award duly prepared on stamp paper and duly registered. That was a copy of the original Award itself. True it is that applying the decision of the Supreme Court the Court could have only held that the Award was invalid as it was not only not registered but also not prepared on stamp paper. In that case, attention was drawn to the decision of the Madras High Court in AIR 1956 Mad 134 in support of the contention that the re-writina of the Award on fresh stamp papers and presenting it. for registration was a ministerial act, but the Court observed that the decision was on-posed to the recent decision of the Supreme Court and therefore that, was not being followed. Of course, the Andhra Pradesh Hish Court had no occasion to consider the effect of non-registration by itself.

11. We have already held that when the award was made by the Arbitrator it was made an requisite stamp paper. It was made within time, Clause 3 in the schedule requires only the making of an Award within the period specified. Once that is so made, there is no limitation prescribed under the Arbitration Act itself for registering it and limitation if any must be found elsewhere. There is no case that It was not registered within time. Registration is an act which the Arbitrator has necessarily to perform after the making of the Award and he has done so. We see no objection to the course adopted and hence on that scorethe Award ought not to have been set aside.

We therefore allow both the appeals and set aside the order of the Court below and remit the matter to the Court below for considering both the petitions afresh on the merits. In the circumstances of the case, we direct parties to suffer costs in both these appeals.


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