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Bai Mangu D/O. Shah Trikamlal Harivallabhdas Vs. Shah Parshottamdas Trikamlal - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtGujarat High Court
Decided On
Judge
Reported in(1963)4GLR184
AppellantBai Mangu D/O. Shah Trikamlal Harivallabhdas
RespondentShah Parshottamdas Trikamlal
Cases ReferredIn Palaparthi Venkataramayya v. Duggina Papayya A.I.R.
Excerpt:
.....under section 14(1) of the arbitration act of the making and signing of an sward cannot make the award itself invalid. but the failure to give notice may result in affecting the rights of certain parties and if the failure of the arbitrator to give notice prejudicially affects the rights of any party the court may interfere and see that the rights are not defeated. 1943 madras 718 the question whether the failure to give a notice as required by the act was a material irregularity and would vitiate the decree which followed the award was considered. observed that he was not at all sure that the failure to comply v with the mandatory provisions of the arbitration act did not lead to an injustice in preventing the defendants from raising objections to the award. as the parties clearly..........and see that the rights are not defeated. but the award itself does not become invalid. whether an award is invalid or not depends on what happened before the making of the award and not on what happened after it is made and signed.4. in palaparthi venkataramayya v. duggina papayya a.i.r. 1943 madras 718 the question whether the failure to give a notice as required by the act was a material irregularity and would vitiate the decree which followed the award was considered. the question whether it vitiated the award itself and whether it was therefore necessary to set aside the award was not considered. horwill j. observed that he was not at all sure that the failure to comply v with the mandatory provisions of the arbitration act did not lead to an injustice in preventing the defendants.....
Judgment:

V.B. Raju, J.

1. The applicant's application to set aside an award on the ground that no notice was given as required by Section 14( 1) of the Arbitration Act, 1940, and on some other grounds, was rejected by the 6th Joint Civil Judge, Junior Division, Ahmedabad. But, in appeal, the learned Extra Assistant Judge, Ahmedabad, before whom three submissions were made by the opponent rejected the first two contentions and accepted the last one which was that the award should be set aside on the ground that no notice had been given under Section 14(1) of the Arbitration Act. On that ground alone the learned Extra Assistant Judge in appeal set aside the award and directed that the suit must proceed in accordance with law.

In revision it is urged that the order of the Extra Assistant Judge in appeal is erroneous. In this case admittedly a notice required by Section 14(1) of the Arbitration Act had not been given but a notice required by Section 14(2) had been given by the Court. Section 14(1) and 14(2) of the Arbitration Act read as follows:

(1) When the arbitrators or umpire have made their award they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award.

(2) The arbitrators or umpire shall at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award cause the award or a signed copy of it together with any depositions and documents which may have been taken and proved before them to be filed in Court and the Court shall thereupon give notice to the parties of the filing of the award.

2. There are provisions in the Arbitration Act in Sections 15 and 16 regarding the power of the Court to modify an award and power to remit an award. Section 17 provides for judgment and decree in terms of the award. Section 30 of the Arbitration Act deals with the question of setting aside awards and reads as follows:

An award shall not be set aside except on one or more of the following grounds namely

(a) that an arbitrator or umpire has misconducted himself or the proceedings;

(b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under Section 35;

(c) that an award has been improperly procured or is otherwise invalid.

The appellate Court set aside the award on the ground that no notice had been given by the arbitrator to the parties about having made the award and having signed it. The question is whether this is included within the scope of Section 30 of the Arbitration Act. Obviously that would not fall under Clause (a) or Clause (d) of Section 30 or under first part of Clause (c) of Section 30 of the Arbitration Act. But it is contended that it would fall under the scope of second part of Clause (c) of Section 30. The expression is otherwise invalid is used in the second part of Clause (c) of Section 30 of the Arbitration Act. The question is whether failure to give notice under Section 14(1) of the Arbitration Act makes the award otherwise invalid.

3. It is clearly provided Section 14( 1) that a notice must be given by the arbitrator to the parties about having made the award and having signed the award. As this is clear in the section itself it is not necessary to refer to the cases cited at the bar namely: (1) Ram Bharosey v. Pearey Lal : AIR1957All265 Holaram v. Governor General of India-in Council A.I.R. 1947 Sind 145 and (3) Bai Laxmibai v. Shridhar Manik Patel 45 Bombay Law Reporter 416 The real question for determination is whether the failure to give such a notice makes the award otherwise invalid within the meaning of that expression in Section 30 of the Arbitration Act. This question has not been considered in any of these cases. The date of informing the parties of the making and the signing of the award for which there is a provision in Section 14(1) of the Arbitration Act is necessary. Similarly the Court informs the parties of the filing of the award as provided in Section 14(2) of the Arbitration Act. According to Articles 158 and 178 of Schedule I of the Limitation Act limitation runs from these two dates. Under Article 158 of the Limitation Act limitation to make an application to set aside an award or to get the award remitted for reconsideration is 30 days from the date of service of the notice of the award. Under Article 178 of the Limitation Act limitation for filing an award in Court is 90 days from the date of service of the making of the award. In view of these provisions of the Limitation Act these two dates are important. But the failure to give a notice under Section 14(1) of the Arbitration Act of the making and signing of an sward cannot make the award itself invalid. An award is first made then it is signed and then it is published by the arbitrator by giving a notice to the parties. Then the Court gives a notice under Section 14(2). As soon as the award is made there is an award and whether it is invalid or not depends on whether it is invalid as soon as it was made. What happens subsequently cannot affect the question of the validity of the award made. Any question relating to the publication of the award by the arbitrator or the notice by the Court cannot affect the validity of the award when it was made. But the failure to give notice may result in affecting the rights of certain parties and if the failure of the arbitrator to give notice prejudicially affects the rights of any party the Court may interfere and see that the rights are not defeated. But the award itself does not become invalid. Whether an award is invalid or not depends on what happened before the making of the award and not on what happened after it is made and signed.

4. In Palaparthi Venkataramayya v. Duggina Papayya A.I.R. 1943 Madras 718 the question whether the failure to give a notice as required by the Act was a material irregularity and would vitiate the decree which followed the award was considered. The question whether it vitiated the award itself and whether it was therefore necessary to set aside the award was not considered. Horwill J. observed that he was not at all sure that the failure to comply v with the mandatory provisions of the Arbitration Act did not lead to an injustice in preventing the defendants from raising objections to the award. He therefore set aside the decree which followed the award. But at the same time he observed as follows:

As the parties clearly have notice of the passing of the award it is unnecessary now for the arbitrators to issue notice. When the records are received by the Lower Court it should give such notice to the parties as is required in Section 14(2) of the Act and dispose of the suit afresh.

That was a case where a notice was not given either under Section 14(1) or under Section 14(2) of the Arbitration Act and the Madras High Court directed that only the notice under Section 14(2) of the Act should be given. In the instant case the award was signed on 31-1-1958 and it was also filed in the Court on 31-1-58 and the objections to the award were filed on 25-2-58 after a notice under Section 14(2) was given by the Court to the parties. The defendants therefore were not prejudiced at all by omission to give a notice under Section 14(1) of the Arbitration Act.

5. I therefore hold that the order passed by the appellate Judge is erroneous. He acted in the excess of his jurisdiction in passing an order setting aside the award under Section 30 of the Arbitration Act when that section was not attracted. The revision application is allowed the order of the appellate Court is set aside and the order of the first Court dismissing the application to set aside the award is restored. There will be no order as to costs.


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