J.M. Sheth, J.
1. This appeal arises out of the judgment and order passed by the learned judge of the City Civil Court, Ahmedabad, Mr. H. B. Shah, dated 7th April, 1970, in Review Applications Nos. 71 of 1970 and 72 of 1970, below Ex. I. He has allowed the review applications and set aside the order made by him on 16-1-1970. He has allowed Application No. 275 of 1968 and directed that a decree be passed in terms of the award of the arbitrators, and dismissed application No. 354 of 1969. He has also further passed an order that there will be no order as to costs either in review applications or in application No. 273 of 1968 or 354 of 1969.
2. The facts leading rise to this appeal, briefly stated, are as under : the aforesaid review applications had been made for reviewing the orders made in application No. 273 of 1968 and application No. 354 of 1969 on 16-1-1970. Application No. 273 of 1968 was filed in the city civil court, Ahmedabad, by the arbitrators for passing a decree in terms of an award under Section 14 of the Indian arbitration Act, 1940 (which will be hereinafter referred to as 'the Act'). Application No. 354 of 1969 was filed by present appellant Ravindra Motilal Shah for setting aside the award made by the arbitrators. Both those applications were heard together and disposed of, by a common order on 16-1-1970.
3. Respondent No. 1 Chinubhai Chimanlal Dalai was a member of the stock exchange, Ahmedabad. He had a claim against the present appellant ravindra motilal shah in respect of some transactions for the sale and purchase of the shares. And stocks in the stock exchange, Ahmedabad according to respondent No. 1, he had to recover an amount of Rs. 4,621/- from the appellant. He had filed Civil Suit No. 1883 of 1966 in the city civil court at Ahmedabad on 29-6-1966. The present appellant filed an application under Section 34 of the Act for the stay of the suit. The suit was stayed by the court by an order dated 21-9-1967. Respondent No. 1 thereafter filed an application with the secretary of stock exchange, Ahmedabad, for referring the dispute to the arbitration under the rules, regulations and bye-laws of the stock-exchange on 7-10-1967. Notices to the parties were issued by the secretary, stock exchange, on 15-12-1967 and the parties appeared before the arbitrators and filed their statements. The arbitrators called upon the parties to appear before them and heard them in 21-12-1967 and made their award thereafter on 20-4-1963. They informed the parties of the making of the award thereafter and filed the application on 17-6-1968 before the court under Section 14 of the Act.
4. As said earlier, the present appellant filed his objections on receipt of notice from the court by a separate application referred to above. The validity of the award was challenged on two grounds. The first grounds that the last transaction entered into between the parties was dated 1-7-1963 and the reference was made by the plaintiff on 7-10-1967, and therefore, it was patently beyond a period of three years and was clearly barred by law of limitation. That contention was negatived by the court. The second contention was, that the arbitrators had entered upon the reference on 15th December, 1967 and they were bound to make their award within a period of four months under Rule 3 of the first schedule the Act and since they have made the award on 20-4-1968, it was bond a period of four months from their entering upon a reference and, therefore, an award was made without jurisdiction and therefore, it was invalid and void. That contention of his found favour with the learned trial Judge and on that ground the award of the arbitrators was held to be a nullity and was declared to be null and void and the order dated 16-1-1970 came to be passed, as said earlier.
5. The present review applications came to be filed by the present respondent No. 1 on the ground that the delay in making the award was not a ground covered under Section 30 of the Act. Furthermore, even if there was such a delay in making the award, the court exercising jurisdiction under the Act has the power to enlarge the time for making the award. The jurisdiction vested in the court under Section 28 of the Act is exercisable suo motu as the said section does not contemplate the giving of an application for the enlargement of time. However, the applicant could not submit this vital proposition of law on the subject at the hearing of the application before the trial court. The absence of submission of the aforesaid provision of Section 28 of the Act, on the part of the present respondent No. 1 has resulted into an order dated 16-1-1970, which suffers from a patent error of law and consequently that order should be reviewed. Respondent No. 1 having not pointed out that position to the court, the order in question has happened to suffer from a patent mistake of law and the said order should, therefore, be reviewed condoning the delay.
6. The learned trial judge accepted these contentions and found that he had over-looked the provisions of Section 28 of the Act. If his attention was drawn to the provisions of Section 28 of the Act, he would have, without any hesitation, condoned the delay and would not have declared the award invalid on the ground held by him in the earlier order. The court has suo motu powers to enlarge the time. No application of the party is necessary for exercising that power under Section 28 of the Act. The circumstance, that in the relevant bye-law framed by the stock exchange Ahmedabad, president or the governing board having powers to enlarge the time, would not come in the way of the powers of the court. He, therefore, negatived all the contentions raised on behalf of the present appellant and passed the impugned order.
7. Mr. R.M. Vin, appearing for the appellant, has contended that the learned trial judge was not competent to review the impugned order dated 16-1-1970. This argument of his was based on the ground that the present case was not a case where it could be said that the order was sought to be reviewed on account of some mistake or error apparent on the face of the record or for any other sufficient reason as provided in Order 47, Rule 1 of the code of civil procedure (which will be hereinafter referred to as 'the code'). Mr. Vin has submitted that it could not be said that there was any error apparent on the face of the record.
8. Mr. Vin has invited my attention to the decision of the Supreme Court in Han Vishnu Kamath v. Ahmad Ishaque : 1SCR1104 , after referring to certain observations made in english decisions and the decision of the Supreme Court in : 1SCR250 :
It may therefore, be taken as settled that a writ of 'certiorari' could be issued to correct an error of law. But it is essential that it should be something more than a mere error; it must be one which must be manifest on the face of the record. The real difficulty with reference to this matter, however, is not so much in the statement of the principle as in its application to the facts of a particular case. When does an error cease to be mere error, and become an error apparent on the face of the record? Learned Counsel on either side were unable to suggest any clear-cut rule by which the boundary between the two classes of errors could be demarcated.
At page 249, in page 38, it is observed:
In the result, we must hold that in maintaining the election of the first respondent on the basis of the 301 votes which were liable to be rejected under Rule 47(1 )(c) the tribunal was plainly in error. Mr. Chatterjee would have it that this error is one of jurisdiction. We are unable to take this view, because the tribunal had jurisdiction to decide whether on a construction of Section 100(2)(c) it could go into the fact of breach of Rule 23, and if it committed an error, it was an error in the exercise of its jurisdiction and not in the assumption thereof. But the error is manifest on the face of the record, and calls for interference in 'certiorari',
9. Mr. Vin has also invited my attention to the decision of Chagla, C. J., in S.P. Awate v. C.P. Fernandas, 60 Bombay Law Reporter 1354. The relevant observations are:
The powers of review enjoyed by the High Court are very limited. When a decision is challenged on the ground that there is an error apparent on the face of the record, the error contemplated must be an error so manifest, so clear that no court would permit such an error to remain on the record. The error must not be an error which could be demonstrated by a process of ratiocination. When two views on a question of law are possible and the court has taken one view, the fact that the other view is a more acceptable view would not render the first view an error apparent on the face of the record.
The High Court decided a case on the view of the law that the wages to which a railway servant was entitled was according to the rules in the railway code and not according to the provisions of the payment of wages Act. In a review application to the High Court it was contended that the court should take the view that the Act constitutes social legislation and that legislation must prevail even over a special legislation dealing with a social class of citizens;
It was held, that the points urged could not be urged on a review application but could be advanced before a High Court in appeal.
In the instant case, as found by the learned trial Judge, the learned trial Judge overlooked the provisions of Section 28 of the Act which empowered the court to enlarge the time even after the award is made. The advocate appearing for the party concerned also did not point out those relevant provisions of the Act and the mistake came lo be committed. The question for consideration is, whether such an error can be said to be an error apparent on the face of the record or at any rate it can be said that there is sufficient cause shown for review as indicated by the provisions of Order 47, Rule 1 of the code.
10. Mr. S.K. Zaveri, appearing for respondent No. 1. Has invited my attention to the decision of the Supreme Court in K.M. Shanmugam v. The S.R.V.S. (P.) Ltd. : 1SCR809 , the decision of the Supreme Court in Hari Vishnu Kamath's case : 1SCR1104 , has been referred to, and the observations made by Das Gupta, J., in Satyanarayan v. Mahikarjun : 1SCR890 , have been quoted, and in that context observed:
The learned judge here lays down the complex nature of the arguments as a test of an apparent error of law. This test also may break, for what is complex to one judicial mind may be clear and obvious to another: it depends upon the equipment of a particular judge. In the ultimate analysis the said concept is comprised of many imponderables: it is not capable of precise definition, as no objective criterion can be laid down, the apparent nature of the error, to a large extent, being dependent upon the subjective element. So too, in some cases the boundary between error of law and error of fact is rather thin.... We do not, therefore, propose to define with any precision the concept of 'error of law apparent on the face of the record'; but it should be left, as it has always been done, to be decided in each case....
It was also pointed out that the order made and the direction issued under Section 43-a of the Act cannot obviously add to, or substract from, the consideration prescribed under Section 47 thereof on the basis of which the tribunal is empowered to issue or refuse to issue a permit, as the case may be. It is, therefore, clear that any direction given under Section 43-a for the purpose of considering conflicting claims for a permit by applicants can only be to enable the regional transport authority to discharge its duties under Section 47 of the Act more satisfactorily, efficiently and impartially. To put it differently, the directions so given cannot enlarge or restrict the jurisdiction of the said tribunal or authority but only afford a reasonable guide for exercising the said jurisdiction.
It was, therefore, stated that overlooking of those directions would amount to overlooking the provisions of law and that would be an error of law apparent on the face of the record.
11. Mr. Zaveri has also invited my attention to the decision of the Supreme Court in Gulam Abbas v. Mulla Abdul Kadar 1970 (3) Supreme Court Cases 643. At page 646, in para 11, the relevant observations made are:
Since an important amendment of the law of limitation was totally disregarded by the learned Single Judge, a review of his judgment and decision clearly lay as failure to consider an important provision of law materially affecting the result of the suit would be an error of law apparent on the face of the record.
I need not dilate on this point as there is one apposite case of the federal court dealing with the provisions of Order 47, Rule 1 of the code, with which we are concerned. In Sir Hari Sankarpal v. Anath Nath Mitter , the relevant observations made are:
That a decision is erroneous in law is certainly no ground for ordering review. If the court has decided a point and decided it erroneously, the error could not be one apparent on the face of the record or even analogous to it. When, however, take court disposes of a case without adverting to or applying its mind to a provision of law which gives it jurisdiction to Act in a particular way, that may amount to an error analogous to one apparent on the face of the record sufficient to bring the case within the purview of Order 47, Rule 1, Civil P.C. No reference to the provisions of order 41, Rule 33, Civil P.C, occurs in the judgment of the High Court which was delivered on 12th December 1944. After holding that the landlords were entitled to twenty-five limes the yearly rent as their share of the compensation money, the judgment of the High Court goes on to say that the appellants, who had one-third share of the proprietary right vested in them, would be entitled to one-third of the total amount which the lessors would get on that computation. It is said then that the proprietors to the extent of the remaining two-thirds share, as they have preferred no appeal, were not entitled to claim the benefit of this decision.
Order 41, Rule 33, Civil P.C., is a purely enabling provision which enables the appellate court to exercise certain powers in favour of a party who has not filed the appeal if the circumstances of the case and the interests of justice so requires. The powers being discretionary, no court can be compelled to make an order under this rule; but if the appellate court, while it allows the appeal, refuses to make any order in favour of a non-appealing party, whose position is identically the same as that of the successful appellant, without applying its mind to the provisions of Order 41, Rule 33, Civil P.C, and without considering whether it should or should not exercise its powers under that rule, we do not think that the court is incompetent to rectify its omission and reconsider the matter if and when it is brought to its notice by way of an application for review.
There are no materials in the record to show that any point under Order 41, Rule 33, Civil P.C, was raised before the learned judges when they heard the appeal. The judgment, at any rate, does not throw any light on that point. The application for review has not been printed in the paper book and we cannot ascertain what exactly were the grounds put forward in support of the same. The subsequent order made on the application for review is of a summary character and gives no indication of the reasons which induced the learned judges to reconsider their previous decision. From such materials as we have got, we are bound to say that in fact there was an omission on the part of the court to consider the clear provision of Order 41, Rule 33, Civil P.C, when the original judgment was passed; and such omission, which appears on the face of the judgment, would constitute a sufficient ground analogous to those mentioned in Order 47, Rule 1, Civil P.C, and the court was not incompetent to reconsider the matter if it so desired.
In the instant case, neither the advocate appearing for the party concerned nor the court had in mind the provisions of Section 28 of the Act which give the power to the court to enlarge the time even after the award is made. That was pointed out at the time of the review applications and the court has candidly admitted the aforesaid position and has in terms observed that if the said provisions would have been pointed out, it would have no hesitation in enlarging the time in the circumstances of the case. It is, therefore, evident that such omission which appears on the face of the judgment (earlier orders) would constitute sufficient ground analogous to those mentioned in Order 47, Rule 1 of the code. The review applications were, therefore, competent. This submission made by Mr. Vin, therefore, fails.
12. The second submission by Mr. Vin is, whether such time can be enlarged by the court without there being any written application filed by the party concerned. In the submission of Mr. Vin, no such time can be extended without any written application filed by' the party concerned. In support of his argument, Mr. Vin has invited my attention to the rules framed by the Gujarat High Court for regulating the practice and proceedings relating to the awards and reference to the arbitration in suits and matters instituted in the Ahmedabad City Civil Court.
13. Rule 1, under the caption 'title of application', reads:
(a) save as hereinafter provided, all applications, affidavits and proceedings under the Act shall be instituted in the matter of the Act, and in the matter of the arbitration.
(b) applications under chapter iv of the Act shall be instituted in the suit or matter in which order of reference is made.
(c) applications under Section 34 of the Act shall be instituted in the suit which the applicant seeks to have stayed.(d) xxx xxx xxx
14. Chapter IV of the Act, deals with 'arbitration in suits'. Rule 2, under the caption 'mode of application' reads:
(a) save as hereinafter provided, all applications under the Act shall be made by a verified petition.
(b) xxx xxx xxx.(c) applications for extension of time for an arbitrator or umpire to make his award in any suit or matter filed in court, when not consented to by all parties, shall be made by chamber summons.
When such applications are consented to by all parties, they may be made in chambers by presenting a consent order supported by an affidavit verifying the consent of parties.
Mr. Vin has learned heavily on Clause (c) of Rule 2 of these rules and has submitted that an application for extension of time has got to be made and if it is not consented to by all the parties, it has to be made by chamber summons. In the instant case, no such application has been made and no such chamber summons was taken out.
15. Mr. Vin has further invited my attention to Rule 35 of the Ahmedabad City Civil Court Rules which deals with 'chamber work'. That rule only enumerates the matters the judge of the city civil court can dispose of in chambers. Clause (w) of it, which is material for our purposes, refers to applications in all matters arising under the Indian arbitration Act and generally in the matter of any Act, unless otherwise provided in the Act itself or by the rules thereunder or by these rules. This rule only indicates that applications in all matter arising under the Indian arbitration Act can be disposed of, by a judge of the city civil court in chambers. That rule does not assist us in any manner for the decision of the question that is posed in the instant case. The crucial question is, whether the powers under Section 28 of the Act can be exercised by the court only if the party interested in the award or the arbitrator files an application and not otherwise.
16. Section 28 of the Act reads:
(1) 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.
(2) any provision in an arbitration agreement whereby the arbitrators or umpire may, except with the consent of all the parties to the agreement, enlarge the time for making the award, shall be void arid of no effect.
A mere glance at the wording of Section 28(1) of the Act clearly indicates that it is the court which can exercise such powers if it thinks fit. It does not state that it is only on the application of the party concerned or an umpire or an arbitrator that such powers can be exercised by the court. It is significant to note that in several section of the Act, wherever the legislature intended that such application would have to be given, it has made the necessary provisions.
17. Section 8(2) of the Act refers to making of an application by the party Section 11 of the Act also empowers the court to remove arbitrators or umpire in the application of any party to a reference. Section 12 of the Act empowers the court to appoint persons to fill the vancancies in cases where an umpire or arbitrator is removed or his authority is revoked by the court. Section 20 of the Act refers to an application to be filed in the court on arbitration agreement. Section 21 of the Act refers to an application to be made for order of reference when the parties in the suit agree that any matter in difference between them in the suit be referred to arbitration. Section 33 of the Act also refers to the arbitration agreement or award to be contested by application. Section 34 of the Act refers to an application to be made for staying of the suit by a party to an arbitration agreement. Section 38 of the Act refers to an application in regard to disputes as to arbitrator's remuneration or costs.
18. It is thus evident on considering the scheme of the Act that the legislature has referred to moving the court by an application in certain cases. There is no such provision made in Section 28 of the Act. It cannot, therefore, be said that the court cannot enlarge the time without any application of the party concerned. As said earlier, the relevant rules framed by the High Court, refer to applications for extension of time for an arbitrator or umpire to make his award in any suit or matter filed in the court. It does not state that without any application made, the court suo motu has no power to enlarge the time in the exercise of the powers under Section 28 of the Act.
19. Mr. Vin has invited my attention to the decision of a Division Bench of the Bombay High Court in Shivji Poonja Kothari v. Ramjimal Babulal A.I.R. 1931 Bombay 125. At page 126, the relevant observations made are:
The matter then came on for hearing on 18th November, and counsel for the respondents apparently asked the court itself to extend the time, if in fact the award was out of time and the order of the learned judge was:
I do enlarge the time for making the award till 1st day of February 1929, and I do further order that the petition be and it is hereby dismissed.
Now, there was no substantive application to the learned judge to extend the time, and the appellants say that they were taken by surprise.
Rule 373 of the rules of this Court provides that all applications under the arbitration Act, other than under Section 19 shall be made by petition except as thereinafter otherwise provided; and Rule 377 provides that every petition or a copy thereof shall specify the persons affected thereby, and upon whom notice has to be served as thereinafter provided. Then Rule 378 provides for the service of the notice on persons specified in the petition. In my view if an application was to be made to the learned judge to extend the time for making the award, particular as the application was long after the award had in fact been made, there ought to have been a substantive application by petition which should have been served on the other side, and the matter could then have been argued.
At page 127, in the judgment of Blackwell, J., it is observed:
Then comes the question whether that being the position, the respondents were entitled themselves to ask the judge to enlarge the time under Section 12, Arbitration Act in my opinion, it was not open to the Judge having regard to Rule 373 of the High Court rules, to accede to the oral application made by the respondents at the hearing of the appellant's petition. He ought, if he had thought that the respondents should have an opportunity of making an application, to have granted them an adjournment to enable them to raise the matter in a proper form by petition which would be duly served upon the other side. Instead of adopting that course, the learned Judge dealt with the matter there and then and refused an application by the petitioners' counsel for an adjournment to show cause why time should not be extended. In my opinion even assuming that the learned judge could have dealt with the matter in the absence of a petition in that behalf by the respondents, the petitioners ought to have had an opportunity of placing on affidavit such facts as they deemed necessary to enable the Judge to exercise his discretion oh the point of extension of time. They have had to such opportunity; arid quite part from the fact that in my opinion a petition by the respondents was necessary, I should have thought it necessary to send the matter back to the learned judge on that ground alone, namely, that the petitioners had no opportunity of meeting the point.
20. In rules and forms of the Bombay High Court (on the original side) in its several jurisdiction, 1957, corresponding rule appears to be Rule 391, which reads:
(a) all applications under the Act other than those mentioned in Sub-rule (c) herein shall be made by petition and, when they are not under Sections 17, 20 and 34 of the Act, shall be presented to the silting judge in chambers.
(b) applications under Sections 17, 20 and 34 shall be made by motion in open court in the arbitration, suit, or matter, as the case may be.
(c) applications for extension of time for an arbitrator or umpire to make his award in any arbitration, suit or matter, when consented to by all parties, may be made in chambers by presenting a consent order supported by an affidavit verifying the consent of parties.
In the instant case, as said earlier by me, the scheme of the Act clearly indicates that whenever the legislature wanted that the court should be moved by an application, it has made the provisions specifically. So far as Section 28 of the Act is concerned, no such application has been specifically referred to. The court, in my opinion, can, therefore, when it finds that it should Act suo motu can enlarge time even without any application as contemplated under these rules referred to, by Mr. Vin.
21. Mr. Vin has invited my attention to the decision of a single Judge of the Andhra Pradesh High Court in Kasiraju Lakshmikanta Rao v. Dendukuri Venketeswarlu : AIR1960AP576 , it is observed..But in 1945, the Madras High Court has, in exercise of the powers conferred by Section 44 of the arbitration Act, 1940, framed rules which appear in chapter xiv of the civil rules of practice, entitled 'rules under the arbitration Act, 1940'.
Rules 1 and 2 prescribe the form of applications under the arbitration Act. Rule 1 provides that all applications and proceedings under the Act shall be headed in the matter of the Act and of the arbitration and save as otherwise provided shall be made by petition. Rule 2 states that every petition shall be in writing, signed and verified in the same manner as a pleading under the C.P.C. specifying the name, description and place of residence of the petitioner and the respondent and shall contain a statement of the material facts and the nature if the relief prayed for and shall specify the persons liable to be affected thereby.
From a reading of these rules, it is manifest that such applications have to be made in the form of original petitions; and as already stated, Article 11(m) of schedule ii, Andhra court-fees and suits valuation Act, makes specific provision for payment of court-fee on all applications filed under the arbitration Act. Rules 1 and 2 framed under the arbitration Act require that application should be in writing. Article 11(m) of the court-fees Act prescribes the payment of court-fee. On a combined reading of those provisions, it is clear that the mere filing of objections -SI an oral application will not satisfy the requirements of law.
This conclusion receives further support from the language of the proviso to Section 33, which provides that where the court deems it just and expedient, it may set down the application for hearing on other evidence also, and may pass such orders for discovery and particulars as it may do in a suit. It will be seen that there is no question of an oral application being set down for hearing. Therefore, to give effect to the argument of the Learned Counsel for the defendant, that neither a written application nor the payment of court-fee on such an application is a prerequisite for setting aside the award would have the result of rendering all the aforesaid provisions atiose.
It is significant to note that Section 33 of the Act itself dearly refers to filing of such application. That decision, therefore, cannot be of much use in deciding the question that is posed before me.
22. In Sakaklchand Moti v. Ambaram Haribhai A.I.R. 1924 Bombay 380, a Division Bench of the Bombay High Court, after referring to the following observations made in Monji Premji Set. v. Maliyakel Koyassan Koya Hail (1880) 3 Madras 59:
We must accept the declaration made by the subordinate Judge that extensions of the period for the submission of the award were from time to time granted, though we may observe that applications for such extensions should ordinarily be in writing, and that most certainly orders thereon should be.
It cannot possibly be deduced from those words that an oral application to the court is void, and that any order passed thereon, even though in writing, as in this case, was equally void.
23. In Madura Mills Co. Ltd. v. N.M.S. Krishna Ayyar : AIR1937Mad405 , while considering the provisions of Section 12 of the old arbitration Act, 1899, the High Court observed:
Section 12 Arbitration Act, enables the court to enlarge the time for making an award whether the time for making the award has expired or not. There is nothing in the section to suggest that the court should not exercise this power unless it has been expressly asked by a party to do so. So where arbitration proceedings are unduly delayed but the court thinks fit to refuse leave to the petitioner to revoke the submission, there is no other alternative but to extend the fame for the making of.
24. In Amarnath v. Uggar Sen : AIR1949All399 , a Division Bench of the Allahabad High Court consisting of wanchoo and Bhargava, JJ., has, at page 491, observed in para 12:
The award filed after the expiry of the prescribed period was not invalid. The application for revocation of the agreement having been rejected, the reference remained in force and the arbitrators could proceed with the arbitration. The parties contoued to participate in the proceedings and thereby consented to the arbitrators continued the proceedings. True, there was no formal application made to the court time but that by itself could not affect the validity of the award.
In para 14 it is further observed:
The appellant's Learned Counsel next contended that the award was otherwise invalid, but we see no force in this contention either. The absence of an application for extension of time was a mere irreqularity. It as not an illelity.... Applying this test, the omission to make a formal application for extension of time was a mere irregularity which the parties had waived by their conduct. Moreover, in face of the order, dated 23rd December 1943, which the court had jurisdiction to pass under Section 28 of the Act, the delay in filing the award did not render it invalid.
25. In Narsing Das Hiralal Ltd. v. Bisandayal Satyanarain Firm : AIR1954Ori29 , a single Judge of the Orissa High Court, after referring to the provisions of Section 28 of the Act, has observed:
It will be noticed that the language of the sub-section (Sub-section (1) of Section 28) is very wide and confers full discretion on the Court to enlarge the time limit for making the award at any time. That power can be exercised even though the time for making the award has expired and also even after the award has been made.
It will be useful to compare the provisions of this sub-section with the corresponding provisions of the previous statutory enactments dealing with arbitration. Section 12, Indian arbitration Act, 1899, was as follows:
'The time for making an award may, from time to time, be enlarged by order of the court, whether the time for making the award has expired or not.' Para 8 of Schedule 2, Civil P.C. 1908 was as follows:
Where the arbitrators or the umpire cannot complete the award within the period specified in the order, the court may, if it thinks fit, either allow further time, and from time to time, either before to after the expiration of the period fixed for the making of the award, enlarge such period.
It is true that in schedule 2, civil P.C. 1908 no statutory period was fixed for the making of an award, as in para 3 of schedule 1, arbitration Act, 1940. But it will be noticed that though in Section 12, Indian arbitration Act, 1899 and para 8 of schedule 2, civil P.C. 1908, it is expressly stated that the power of the court to enlarge the time limit may be exercised whether the time for making the award has expired or not it is not further stated that this power can be exercised even after the award has been made.
In Sub-section (1) of Section 28, however, any doubt about the power of the court to enlarge the time limit even after the award has been made, has been set at rest by the use of the following words: 'whether the award has been made or not'. Apparently those words were inserted with a view to give statutory recognition to the principle of English law decided in the cases referred to therein.
Thus on a question of mere construction of Sub-section (1) of Section 2. Arbitration Act, 1940 and giving due importance to the words 'whether the award has been made or not deliberately inserted in that sub-section when the law of arbitration was re-enacted in 1940, I must hold that the power of the court to enlarge the time limit is not limited to any particular stage of the arbitration proceeding and that it can be exercised at any time. In the present case the trial court purported to exercise this power while hearing the petition under Sections 14 and 17, arbitration Act for the purpose of deciding whether the judgment should be given in terms of the award.
At page 31, in para 11, it is observed:
It is true that there was no specific prayer by the plaintiffs to the court for extending the time limit and the court granted that extension while writing out its judgment after considering the entire evidence on record. But Sub-section (1) of Section 28 does not say that the court cannot exercise the power conferred by that sub-section suomotu in : AIR1949All399 , it was held that the absence of an application for the extension of time was a mere irregularity which may be waived by conduct.
26. In my opinion, those decisions correctly lay down the position of law that the court can exercise its power under Section 28 of the Act even without an application of the party. As said by me earlier, the rule, relied upon by Mr. Vin only refers to the case when an umpire or an arbitrator moves the court for enlargement of time. In the instant case, the court has, in exercise of its power thought fit to enlarge the time and condoned the delay. It cannot, therefore, be said that the order of the court is bad as time has been enlarged without any such written application filed by the party concerned. Submission No. 2 of Mr. Vin, therefore, fails.
27. Submission No. 3 of Mr. Vin was, that it was obligatory upon the Judge, in case Section 28 of the Act applied, to follow the known procedure, as provided in the arbitration rules framed for the Ahmedabad City Civil Court by the High Court. I have already referred to Rule 35 of the Ahmedabad city civil court rules which refers to the position that applications in all matters arising under the Act can be heard by the Judge in chambers. That rule has no bearing to the question that is posed before me. In the instant case, the arbitrators themselves filed an award in the court, following the procedure prescribed under those rules. Affidavit was also filed. The registrar issued notices to the parties concerned and thereafter the present appellant filed his objections by making an application which was separately numbered. Arbitrators' application' for making the award a rule of the court was also separately numbered. Both the applications were heard together and a common order came to be passed and the award was held to be null and void only on the ground that it was made beyond the period of four months from the date of the arbitrators entered upon the reference. Submission No. 3 of Mr. Vin is also, therefore, not well founded.
28. Submission No. 4 made by Mr. Vin was, that the extension of time was not a mere formality. It was an exercise of a judicial discretion. Mere circumstance that the delay is for five days is immaterial. Court has to apply its mind and issue notice to the ether side to show cause why the delay should not be condoned. In the instant case, submitted Mr. Vin, no such notice was given and no ground was shown for condoning the delay. The order is, therefore, bad. It is no doubt true that the discretion under Section 28 of the Act, if Section 28 applies, is not to be used arbitrarily. It has to be used judicially. Other party has got to be heard. In the instant case, in the review applications grounds were made out for condoning the delay and it was especially pointed out to the court how the mistake crept in. The provisions of Section 28 of the Act were earlier overlooked, both by the court and the advocate concerned. It is significant to note that in the earlier proceedings, the main bone of contention between the parties was as to when this period prescribed will commence.
29. Para 3 of the first schedule to the Act, which is material for our purposes, reads:
3. The arbitrators shall make their 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.
One party's contention before the learned trial judge was, that the period of four months should be computed from 21-12-1967, the date the parties were heard on arbitrators calling upon them to appear before them and not on 15-12-1967, the date the notices to the parties were issued by the secretary, stock exchange, Ahmedabad. The court, in the earlier order dated 16-1-1970, found that the time commenced from 15-12-1967 and not from 21-12-1967 and so the award dated 20-4-1968 was not made within a period of four months. In the review applications, respondent No. 1 prayed for condoning this delay. Notices of the review applications were given to the present appellant, and he also filed his written statement and after hearing the parties, the impugned order has been passed and the delay has been condoned and the time has been extended for making the award by the learned trial Judge.
30. Mr. Vin has invited my attention to the decision of my learned brother S.H. Sheth, J., in Aniruddh Asharam Vyas v. Deepak Kantim Gftiya 13 Gujarat Law Reporter 228. It is observed therein:.The very fact that the parties did not consent outside the court to enlargement of time pre-supposes some controversy between them in the matter of enlargement of time. If that is so, it is necessary that the controversy or the dispute relating to the enlargement of time between the parties must be adjudicated upon by the court when an application is made under Sub-section (i) of Section 28 of the arbitration Act for the purpose of enlargement of time for making the award. In that view of the matter, I am of the opinion that the court cannot, on a mere application made by an arbitrator, enlarge time without issuing notice to the parties and without hearing them. In this case the trial court extended time on a bare application made by the arbitrator without issuing notice to the parties and without hearing them. In that view of the matter, in my opinion, the order made by the trial court is not in accordance with law and in conformity with the provisions of Sub-section (1) of Section 28.
It is significant to note that in that case, the court without issuing notice to the parties and without hearing them had passed the impugned order regarding enlargement of time and that is why it was held that the order was bad. In the instant case, both the sides have been heard and after that, this order has been passed. That decision has, therefore, no application. Furthermore, that decision does not lay down that the court can exercise power under Section 28 of the Act only on the application made by the party concerned. It cannot be said in the instant case, that the learned trial judge has condoned the delay and enlarged the time for making the award without any application of mind, as has been suggested by Mr. Vin. The court has stated in clearest terms that if these provisions of Section 28 of the Act had been pointed out to it at the time of earlier order passed by it, it would have no hesitation in enlarging the time and condoning the delay in the circumstances of the case. The real bone of contention was, as to the date when the period of four months prescribed commenced. It is not only the case of delay of five days, but the delay is on account of a mistake as to when the period will commence. The learned trial judge, in the circumstances of the case, was fully justified in condoning the delay and in extending the time for making the award. His order will not be a bad order if the provisions of Section 28 of the Act can be availed of.
31. The important and interesting question that requires consideration and remains to be considered is whether in view of the provisions of Section 46 of the Act and on account of the existence of the bye-laws made by this stock exchange, Ahmedabad, the powers of the court under Section 28 of the Act are taken away. There is a controversy between the parties as to whether the said bye-laws have the force of law, meaning thereby, whether those bye-laws are statutory bye-laws. Furthermore, whether the provisions contained therein would over-ride the provisions of the Act and furthers more, whether there are any provisions in the bye-laws which are inconsistent with the provisions of the Act in this behalf.
32. Section 46 of the Act reads:
The provisions of this Act, except Sub-section (1) of Section 6 and Sections 7, 12, 36 and 37, shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as this Act is inconsistent with that other enactment or with any rules made thereunder:
In the instant case, we are not concerned with Sub-section (1) of Section 6 and Sections 7, 12, 36 and 37 of the Act. We are concerned with the provisions contained in Section 28 of the Act. The question, therefore, that falls for consideration is, whether the arbitration referred to, in the relevant bye-law made by the Ahmedabad stock exchange association can be said to be a statutory arbitration. If it is a statutory arbitration, whether there are any provisions contained therein which are inconsistent with the provisions contained in Section 28 of the Act with which we are concerned.
33. This Section 46 of the Act deals with those statutory arbitrations where the statute itself is looked upon as an arbitration agreement. This Section Further lays down that its provisions apply only to the extent that they are not inconsistent with the other enactment or with the rules made thereunder. Thus, where an Act and the rules made thereunder are a complete code, so far as arbitration in matters relating to a particular party, as, for instance co-operative societies, are concerned, the provisions of this Act cannot be made applicable.
34. In Nanda Kishore Goswami v. Bally Co-operative Credit Society Ltd. a Division Bench of the Calcutta High Court had to deal with Rule 22 of the rules framed under Section 43 of the Co-operative Societies Act, 1912. Looking to the entire scheme of the Act, at page 256, the relevant observations made are:
The whole scheme of these provisions is to oust the jurisdiction of the civil court throughout the arbitration proceedings and the application to the civil court is necessary only for the purposes of enforcing the award which has been given the same force and effect as the decree of a civil court. In our opinion, the machinery and the procedure indicated by these provisions are totally inconsistent with the provisions contained in chapter 2, arbitration Act. The civil court has got no jurisdiction to appoint an arbitrator in a proceeding under Rule 22 as framed under Section 43, cooperative societies Act, as it can certainly do under Section 8, arbitration Act, nor can it remove an arbitrator as can be done under Section 11. The whole thing has got to be done without any intervention of the court. The court cannot modify an award as laid down in Section 15, arbitration Act, nor is there any necessity of filing an award in court, as is contemplated by Section 14, and we are definitely of opinion that it is not necessary to have a judgment and award as indicated in Section 17, arbitration Act. If there is no necessity for filing the award, Article 178, limitation Act, can obviously have no application, and the amended provision regarding limitation as it occurs in schedule 4, arbitration Act, is also inapplicable.
In the instant case, it is an admitted position that such an award given by an arbitrator has to be filed in the court and if the court makes it a rule of the court, that award can be enforced. It is also significant to note that in the earlier proceedings, the period of four months for making the award was suggested on the basis of para 3 of schedule I to the Act. It is only at this stage, in this appeal against the order passed in the review applications, Mr. Vin has urged that the period of four months is suggested in view of the relevant bye-law of the stock exchange association and it is the President or the governing board that has been given power to extend the period of giving the award and consequently the powers of the court are taken away in view of the provisions of Section 46 of the Act. I have referred to the aforesaid Calcutta decision only for the purpose of emphasising that there is no such self-contained code and the said bye-laws do not say that the award passed by an arbitrator is to be enforced as a decree of the court without filing the award in the court as required under Section 14 of the Act to make it a rule of the court.
35. It is necessary at this stage to refer to the material provisions of the Securities Contracts (Regulation) Act, 1956 (which will be hereinafter referred to as 'the regulation Act'). 'Contract' has been denned in Section 2(a) as under:
(a) 'contract' means a contract for or relating to the purchase or sale of securities.' In Section 2(e) 'prescribed' has been denned as under:
'(e) 'prescribed' means prescribed by rules made under this Act.' in Section 2(f) 'recognised stock exchange' has been defined as under:
'(f) 'recognised stock exchange' means a stock exchange which is for the time being recognised by the Central Government under Section 4,' Section 2(g) defines 'rules' as under:
(g) 'rules', with reference to the rules relating in general to the constitution and management of a stock exchange, includes, in the case of a stock exchange which is an incorporated association, its memorandum and articles of association.
Section 2(j) defines ' stock exchange' as under:
(j) 'stock exchange' means any body of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities.
36. Section 3 of the regulation Act deals with application for recognition of stock exchanges. Sub-section (2) of it indicates that every application made under Sub-section (1) shall contain such particulars as may be prescribed and shall be accompanied by a copy of the bye-laws of the stock exchange for the regulation and control of contracts.... It is, therefore, evident that when any stock exchange which is desirous of being recognised for the purposes of the said Act, makes an application for that purpose the application is required to be accompanied by a copy of the bye-laws.
37. Section 4 of the regulation Act further indicates that the Central Government has to satisfy itself after making inquiry as may be necessary in this behalf and after obtaining such further information, if any, as it may require, that the rules and bye-laws of a stock exchange applying for registration are in conformity with such conditions as may be prescribed with a view to ensure fair dealing and to protect investors. Mr. Vin is right in his submission that these bye-laws have to be confirmed to a particular pattern prescribed. But the requisite conditions are prescribed with a view to ensure fair dealing and to protect the investors. There is nothing in that section or in any of the provisions of the regulation Act itself that such disputes, as have arisen in the instant case between the appellant and respondent No. 1, shall be referred to arbitration. No doubt, Section 9 of the regulation Act empowers any recognised stock exchange to make bye-laws for the regulation and control of contracts subject to the previous approval of the Central Government. Sub-clause (n) of Sub-section (2) of Section 9 in terms states:
9(2) in particular, and without prejudice to the generality of the foregoing power, such bye-laws may provide for-
(n) the method and procedure for the settlement of claims or disputes, including settlement by arbitration.
It cannot be deduced from these provisions that there is statutory arbitration. This section empowers any recognised stock exchange to make bye-laws for the regulation and control of contracts, and in particular, such bye-laws may also provide for the method and procedure for the settlement of claims or disputes, including settlement by arbitration. Sub-section (3) of Section 9 of the regulation Act reads:
(3) the bye-laws made under this section may-
(a) specify the bye-laws the contravention of which shall make a contract entered into otherwise than in accordance with the bye-laws void under Sub-section (1) of Section 14;
(b) provide that the contravention of any of the bye-laws shall render the member concerned liable to one or more of the following punishments, namely:
(ii) expulsion from membership;
(iii) suspension from membership for a specified period;
(iv) any other penalty of a like nature not involving the payment of money.
It thus indicates that the penalty is provided for the contravention of any of the bye-laws made, against a member. Further, it is provided that the bye-laws made under this section may specify the bye-laws the contravention of which shall make a contract entered into otherwise than in accordance with the bye-laws void under Sub-section (1) of Section 14. Sub-section (4) of it deals with publication of such bye-laws in the official gazette.
38. Section 14 of the regulation Act reads:
(1) any contract entered into in any state or area specified in the notification under Section 13 which is in contravention of any of the bye-laws specified in that behalf under Clause (a) of Sub-section 13) of Section 9 shall be void-
(i) as respects the rights of any member of a recognised stock exchange who has entered into such contract in contravention of any such bye-law, and also
(ii) as respects the rights of any other person who has knowingly participated in the transaction entailing such contravention.
(2) nothing in Sub-section (1) shall be construed to affect the right of any person other than a member of the recognised stock exchange to enforce any such contract or to recover any sum under or in respect of such contract if such person had no knowledge that the transaction was in contravention of any of the bye-laws specified in Clause (a) of Sub-section (3) of Section 9.
It is significant to note at this stage, that there is no provisions in this regulation Act itself that the disputes regarding such contracts shall have to be referred to arbitration. Section 30 of the regulation Act empowers the Central Government to make rules for the purpose of carrying into effect the object of this Act (regulation Act), and such rules, in exercise of the powers, have been framed by the Central Government and those rules are known as 'the securities contracts (regulation) rules, 1957'. In those rules also, no such provision is made.
39. I will now consider the bye-laws made by the stock exchange, Ahmedabad. Bye-law No. 226, which is at page 225 of The Book-The Stock Exchange Rules, Bye-laws and Regulations, 1957, Ahmedabad-reads:
226 (a) all contracts made by a member for or with a non-member for the purchase or sale of securities in which dealings arc permitted on the exchange shall in all cases be deemed made subject to the rules, bye-laws, regulations and usages of the exchange which shall be a part of the terms and conditions of all such contracts and they shall be subject to the exercise by the governing board and the president of the powers with respect thereto vested in it or him by the rules, bye-laws and regulations of the exchange.
This will only mean that all such contracts shall be deemed to be made subject to the rules, bye-laws, regulations and usages of the exchange and they should form a part of the terms and conditions of all such contracts.
40. Under the caption 'arbitration other than between members', at page 235, bye-law No. 248 reads:
248(a) all claims (whether admitted or not), differences and disputes between a member and a non-member or non-members (the terms 'non-member' and 'non-members' shall include a reinsure, authorised clerk or employee or any other person with whom the member shares brokerage) arising out of or in relation to dealings, transactions and contracts made subject to the rules, bye-laws and regulations of the exchange or with reference to anything incidental thereto or in pursuance thereof or relating to their construction, fulfillment or validity or relating to the rights, obligations and liabilities of remisiers, authorised clerks, employees or any other persons with whom the member shares brokerage in relation to such dealings, transactions and contracts shall be referred to and decided by arbitration as provided in the rules, bye-laws and regulations of the exchange.
41. Bye-law No. 254 reads:
the arbitrators shall make their award within four months after entering on the reference or after having been called upon to Act by notice in writing from any party or within such extended time as the arbitrators may fix with the consent of the parties to the reference or as the governing board or the president may allow.
Bye-law No. 259 deals with the filing of an award in the court. Bye-law No. 261, on which considerable emphasis has been laid by Mr. Vin, reads:
261. The governing board or the president may if deemed fit whether the time for making the award has expired or not and whether the award has been made or not extended from time to time the time for making the award by a period not exceeding one month at a time from the due date or extended due date of the award.
Bye-law No. 263 reads:
263. The fees to be paid, the forms to be used and the procedure to be followed in connection with a reference to arbitration under these bye-laws and regulations shall be such as are prescribed in the relative Regulation (Regulation 15) or such other as the governing board may from time to time prescribe in addition thereto or in modification in substitution thereof.
Such regulation 15, framed under bye-law No. 263, which deals with 'arbitration other than between members', finds place at page 451 and 452 of this book. Regulation No. 15.3 deals with nomination and notice of appointment. Regulation No. 15.13 which deals with extension of time for making award, reads:
15.13 the arbitrators or umpire may from time to time apply (form No. 11) to the governing board or the president for extension of time for making the award.
It prescribes the procedure for moving the governing board or the president by the arbitrators or umpire for extension of time for making the award. This book deals with 'arbitration between members' at page 247 and onwards. Bye-law No. 288 reads:
All claims, complaints, differences and disputes between members arising out of or in relation to any bargains, dealings, transactions or contracts made subject to the rules, bye-laws and regulations of the exchange or with reference to anything incidental thereto or anything to be done in pursuance thereof and any question or dispute whether such bargains, dealings, transactions or contracts have been entered into or not shall be subject to arbitration and referred to the arbitration committee as provided in these bye-laws and regulations.
In the instant case, we are not concerned with the arbitration between members. This bye-law in terms states that such disputes between members shall be subject to arbitration and referred to the arbitration committee as provided in these bye-laws and regulations. In case of arbitration other than between members, the party concerned has to appoint an arbitrator. In case of dispute between members, the dispute has to be referred to the arbitration committee.
42. These are the material provisions which have to be borne in mind for understanding the scheme of these bye-laws and the distinction in case of arbitration between members and in case of arbitration other than between members. Mr. Vin has submitted that even though the regulation Act does not contain any provision that such disputes have got to be referred to arbitration, in view of the relevant provisions of the bye-laws referred to above, such contracts are subject to such bye-laws and the material bye-law states that the matter has to be referred to arbitration. It will be nonetheless a statutory arbitration. In my opinion, this argument is not well-founded. It cannot be said to be a statutory arbitration. In view of the provisions of the bye-laws, in such cases it is to be deemed that in the contract there is such an agreement to refer the matter to arbitration as these contracts are deemed to be subject to such rules, regulations and bye-laws.
43. Mr. Vin, in support of his submission in this behalf, has laid considerable emphasis on the decision of Kania. J. (as he then was), in Shivchandrai Jhunjhun Walla v. Mussamat Panno Bibi 45 Bombay Law Reporter 392. The second contention raised before Kania, J. Was that the chairman of the East India Cotton Association, Ltd., Bombay, had no jurisdiction to extend the time without the consent of the parties in view of the provisions contained in Section 28 of the Act. It has been observed Kania, J.:
The bye-laws framed under the Bombay cotton contracts Act, 1932, by virtue of Section 4(1) read with Sections 5 and 6, are statutory bye-laws, and are therefore excepted from the operation of the Indian Arbitration Act, 1940.
Accordingly, the last para of bye-law 38-a of the East India Cotton Association Bye-laws, empowering the chairman of the association to extend the time for making an award, is valid.
In the body of the judgment, the relevant observations made at page 393 and 394 and relied upon by Mr. Vin, are:
In support of the second ground it was argued that Section 28 of the Indian arbitration Act (x of 1940) will be applicable and any provision in the arbitration agreement giving power to the arbitrator or umpire, except with the consent of the parties, to enlarge time for making the award, is void. By the first part of that section the court is empowered to enlarge the time for making the award, whether the time originally fixed had expired or not. It is pointed out that in this case time was not extended by the court and the application of the umpire to the chairman of the association to extend time was without jurisdiction. On the other hand Section 46 of the Indian arbitration Act is relevant. Under that section provisions of the arbitration Act, in so far as they are inconsistent with another Act or with rules made thereunder are considered inapplicable. Having regard to this section it is necessary to consider the effect of the bye-laws of the association and the Bombay cotton contracts Act under which the bye-laws have been framed. Under Section 4 that Act (Bombay IV of 1932) a cotton association will be recognised provided it complies with certain regulations. Sub-section (7) of that section provides that the East India Cotton Association, Ltd., is a recognised cotton association and the articles and bye-laws of the said association shall so far as they relate to matters for which bye-laws may be made under the provisions of Sections 5 and 6 be deemed to be bye-laws of a recognised cotton association. Under Section 6 the board of directors, subject to the sanction of the governor-in-council, is authorised to make from time to time bye-laws for the regulation and control of transactions in cotton, and without prejudice to the generality of the principle, Sub-section (2), Clause (g), empowers the board to frame bye-laws providing for the terms, conditions and incidents of contracts and the form of such contracts as are in writing.
In the present case the original contracting parties were both members of the association. It is clear that the bye-laws framed under Section 6 would be statutory bye-laws by reason of the provisions of Section 4(7) of the said Act.
It will be profitable at this stage to refer to Sub-section (7) of Section 4 of the Bombay Cotton Contracts Act, 1932. It reads:
(7) it is hereby declared that the east India cotton association, limited, is a recognised cotton association for the purposes and subject to the provisions of this Act and the articles and bye-laws of the said association shall, so far as they relate to matters for which bye-laws may be made under the provisions of Sections 5 and 6, be deemed to be bye-laws of a recognised cotton association.
It is thus evident that by that sub-section, the East India Cotton Association, Limited, was taken to be a recognised cotton association for the purposes and subject to the provisions of that Act and the articles and bye-laws of the said association were deemed to be the bye-laws of a recognised cotton association. Furthermore, Sub-section (2) of Section 5 of that Act, which is material for our purposes, reads:
Bye-laws made, added to, varied or rescinded under Sub-section (1) shall be laid before each of the chambers of the provincial legislature at the session hereof next following and shall be liable to be modified or rescinded by a resolution in which both chambers concur. If any bye-law is so modified or rescinded, the provincial Government may sanction such modified bye-law and re-publish the same accordingly or may sanction such rescission.
In the bye-laws in question there is no such provision requiring the bye-laws to be placed before the legislature. No doubt, control has been kept with the Central Government and the Central Government can suggest modifications and after consulting the Government body, such modifications can be made at the instance of the Central Government.
44. It is further observed at page 394 by Kania, J., in the aforesaid decision of the Bombay High Court:
one of the conditions of the contracts, which is settled by the board of directors with the sanction of the governor-in-council as required by Section 6, is that there shall be compulsory arbitration. If so, it seems to me that within the meaning of Section 46 of the Indian arbitration Act such special provisions as are contained in the bye-laws framed by the East India Cotton Association, Ltd., are operative, in spite of the provisions of the Arbitration Act. It is not disputed that the Action of the umpire in requesting the chairman to extend time was according to the bye-laws. Bye-law 38-a (last paragraph) provides as follows:
'The umpire shall make his award within ten days from the date of his appointment unless the time is extended by the chairman.' It may be noted that if this bye-law is inapplicable it must be conceded also that the bye-law which limits the time within which the arbitrators and the umpire had to make the award should also be considered inapplicable, and if the time fixed by the arbitration Act alone was taken into consideration, for deciding whether the award of the umpire was within time, it seems that the award is still within time. On the second point therefore it seems that the bye-laws framed under the Cotton Contracts Act by virtue of Section 4(7) read with Sections 5 and 6 are statutory bye-laws and therefore are excepted from the operation of the arbitration Act.
45. If we now refer to the material provisions of the Bombay cotton contracts Act, 1932, which was the subject-matter of consideration in that case, Section 4 deals with recognition and a cotton association, desirous of being recognised for the purpose of that Act, has to submit bye-laws for the regulation and control of transactions in cotton to the provincial Government. Section 5(1) empowers a recognised cotton association to make bye-laws providing for, (a) the constitution of the board of directors, (b) the powers and duties of the board of directors, and the manner in which its business has to be conducted.... Section 6 empowers the board of directors, subject to the sanction of the provincial Government, to make and, from time to time, add to, vary or rescind bye-laws for the regulation and control of transactions in cotton. Clause (j) of Sub-section (2) of Section 6 provides for the settlement of claims and disputes by arbitration and appeals against awards. Section 8, which is material for our purposes and which deals with void contracts, reads:
(1) save as hereinafter provided in this Act. Any contract (whether either party thereto is a member of a recognised cotton association or not) which is entered into after the date on which this Act comes into operation and which is not in accordance with the bye-laws of any recognised cotton association shall be void.
It is thus evident that mere is material difference between the wording of Section 8 of the Bombay Cotton Contracts Act and Section 14 of the regulation Act. Sub-section (2) of Section 8 of the Bombay Cotton Contracts Act reads:
(2) no claim shall be allowed in any court for the recovery of any commission, brokerage, fee or reward in respect of any such contract.
In my opinion, in view of the different provisions contained in these two, Act, it would not be proper to reach the conclusion in regard to the bye-laws in question on the basis of the bye-laws framed by the East India Cotton Association, Ltd. Apart from that, it is significant to note that in the aforesaid decision of the Bombay High Court, Kania, J., had not to deal with the question regarding powers of the court. The question was, whether the power under the bye-law given to the governing body or the chairman who had exercised the jurisdiction to enlarge the time, would be without jurisdiction, in view of the provisions of Section 28 of the Act. In the bye-laws in question, there are no provisions which say that the powers of the court are taken away. There are no provisions which could be said to be inconsistent with the provisions of the Act. Even if Section 46 of the Act had application, there is nothing in the bye-laws which could be said to be inconsistent with the provisions of the Act so that the provisions contained in Section 28 of the Act giving power to the court to extend time even after the award is made, can be said to have been taken away.
46. Mr. S.K. Zaveri, appearing for respondent No. 1, has urged the bye-laws in question cannot be said to be statutory bye-laws. His submission is, that to give the character of subordinate legislation it must have been delegated by the legislative body to have authority of person to legislate to that extent. The regulation Act does not give that authority. The bye-laws in question pertain to the business. No doubt, some control is kept by the Central Government. Bye-laws have to be confirmed to a particular pattern, meaning thereby, that the bye-laws will have to be consistent with the provisions of the Act. That by itself will not mean, submitted Mr. Zaveri, that these bye-laws are the statutory bye-laws. Mr. Zaveri has submitted that the stock exchange, Ahmedabad, was not a creature of statute. It was, not a statutory body, bye-laws, therefore, framed by it, even though the Act empowers by Section 9 such associations to frame bye-laws which may contain the provisions providing for settlement of disputes by arbitration, these bye-laws cannot be said to be statutory bye-laws having the force of law.
47. In support of his submission, Mr. Zaveri has invited my attention to the majority judgment of the Supreme Court in Sukhdev Singh v. Bhagatram Sardarsingh Raghuvanshi : (1975)ILLJ399SC . After referring to the provisions of the oil and natural gas commission Act, 1959, provisions of the life insurance corporation Act, 1956, and provisions of industrial finance corporation Act 1948, at pages 432 and 433 the observations made regarding subordinate legislation are as under:
Subordinate legislation is made by a person or body by virtue of the powers conferred by a statute. Bye-laws are made in the main by local authorities or similar bodies or by statutory or other undertakings for regulating the conduct of persons within their areas or resorting to their undertakings. Regulations may determine the class of cases in which the exercise of the statutory power by any such authority constitutes the making of statutory rules.
The words 'rules' and 'regulations' are used in an Act to limit the power of the statutory authority. The powers of statutory bodies are derived, controlled and restricted by the statutes which create them and the rules and regulations framed thereunder. Any Action of such bodies in excess of their power or in violation of the restrictions placed on their powers is ultra vires. The reason is that it goes to the root of the power of such corporations and the declaration of nullity is the only relief that is granted to the aggrieved party.
In England subordinate legislation has, if validly made, the full force and effect of a statute, but it differs from a statute in that its validity whether as respects form or substance is normally open to challenge in the courts.
Subordinate legislation has, if validly made, the full force and effect of a statute. That is so whether or not the statute under which it is made provides expressly that it is to have effect as if enacted therein. If an instrument made in the exercise of delegated powers directs or forbids the doing of a particular thing, the result of a breach thereof is, in the absence of provision to the contrary, the same as if the command or prohibition had been contained in the enabling statute itself. Similarly, if such an instrument authorises or requires the doing of any Act, the principles to be applied in determining whether a person injured by the Act has any right of action in respect of the injury are not different from those applicable whether damage results from an Act done under the direct authority of statute re. Langlois and Biden (1891) 1 Q.B. 349; and Kruse v. Johnson (1898) 2 Q.B. 91.
The authority of a statutory body or public administrative body or agency ordinarily includes the power to make or adopt rules and regulations with respect to matters within the province of such body provided such rules and regulations are not inconsistent with the relevant...law the rules and regulations comprise those Actions of the statutory or public bodies in which the legislative element predominates. These statutory bodies cannot use the power to make rules and regulations to enlarge the powers beyond scope intended by the legislature. Rules and regulations made by reason of the specific power conferred on the statute to make rules and regulations establish the pattern of conduct to be followed. Rules are duly made relative to the subject-matter on which the statutory bodies Act subordinate to the terms of the statute under which they are promulgated. Regulations are in aid of the enforcement of the provisions of the statute. Rules and regulations have been distinguished from orders or determination of statutory bodies in the sense that the orders or determination are Actions in which there is more of the judicial function and which deal with a particular present situation. Rules and regulations on the other hand are Actions in which the legislative element predominates.
At page 438, in para 33, it is observed:
there is no substantial difference between a rule and a regulation inasmuch as both are subordinate legislation under powers conferred by the statute. A regulation framed under a statute applies uniform treatment to every one or to all members of some group or class. The oil and natural gas commission, the life insurance corporation and industrial finance corporation are all required by the statute to frame regulations inter aha for the purpose of the duties and conduct and conditions of service of officers and other employees. These regulations impose obligation on the statutory authorities. The statutory authorities cannot deviate from the conditions of service. Any deviation will be enforced by legal sanction of declaration by courts to invalidate Actions in violation of rules and regulations. The existence of rules and regulations under statute is to ensure regular conduct with a distinctive attitude to that conduct as a standard. The statutory regulations in the cases under consideration give the employees a statutory status and impose restriction on the employer and the employee with no option to vary the conditions.
It is significant to note that in the instant case, Section 9 of the regulation Act only enables and empowers a recognised stock exchange to make bye-laws which may provide for referring such disputes to arbitration. It is not obligatory upon it to frame a bye-law that such disputes shall be referred to arbitration. In my opinion, in, the instant case, it is not necessary to finally decide whether these bye-laws have the statutory force as contended by Mr. Vin, as in the instant case there is no question of any statutory arbitration, as observed by me earlier. Furthermore, there are no inconsistent provisions in the regulation Act or the bye-laws framed, indicating that the court will not have such powers to enlarge the time for making of an award.
48. Russell, on the Law of Arbitration, 18th Edition, by Anthony Walton, at page 8, under the caption 'particular exclusions', makes the following statement:
The Act applies to arbitration under other statutes only 'except in so far as this Act is inconsistent with that other Act, or with any rules or procedure authorised or recognised thereby.
49. It will be profitable at this stage to refer to that relevant section of the English Arbitration Act, 1950. Section 13 of it deals with the power of the Court to extend time for making award. It reads:
(1) Subject to the provisions of Sub-section (2) of section twenty-two of this Act, and anything to the contrary in the arbitration agreement, an arbitrator or umpire shall = have power to make an award at any time. F,-
(2) The time, if any, limited for making an award, whether under this Act or otherwise, may from time to time be enlarged by order of the High Court or a judge thereof, whether that time has expired or not,
Section 31 of it deals with application of part i to statutory arbitration. It reads:
(1) Subject to the provisions of section thirty-three of this Act, this part of this Act, except the provisions thereof specified in Sub-section (2) of this section, shall apply to every arbitration under any other Act (whether passed before or after the commencement of this Act) as if the arbitration were pursuant to an arbitration agreement and as if that other Act were an arbitration agreement, except in so far as this Act is inconsistent with that other Act or with any rules or procedure authorised or recognised thereby.
In our Act, this latter expression 'or procedure authorised or recognised thereby' is absent.
50. Reverting back to the statement made by learned author russell at page 8, it is stated:
modern statutes commonly contain an express exclusion, if not of the whole arbitration Act at least of particular sections. In addition, exclusion may be implied where the inconsistency is clear; but the arbitration Act is not to be regarded as 'inconsistent' with another statute merely because it adds something to the provisions of that other statute, 'the appellants were accordingly constrained to argue that whenever the provisions of the arbitration Act are found to add to the enactments of any other statute regulating arbitrations, they are in the sense of the exception inconsistent with it. To hold that the legislature intended to attach that meaning to the word 'inconsistent' would be to defeat the object of the leading enactment in Section 24. In my opinion the object of the legislature was to add to the remedies open to the parties under a statutory arbitration; and the sole purpose of the exception was to prevent the application of the powers conferred upon the court by the Act of 1889 to arbitrations under any 4 statute whose provisions, either expressly or by reasonable implication, excluded the exercise of such powers'.
It is further observed at page 9:
the Act may be excluded by 'rules authorised or recognised' by another Act; but mere general authority for the making of regulations as to arbitration under a statute does not import authority to make a regulation excluding-the Act.
51. In Knowles & Sons, Limited v. Bohon Corporation (1900) 2 Queen's Bench Division 253, the court of appeal has observed:
Section 180, Sub-section (9), of the Public Health Act, 1875. Which enacts the time for making an award by arbitrators or an umpire under that Act shall not in any case be extended beyond the period of two months from the date of the submission to arbitration or the date of the reference of the matters to the umpire respectively, deals only with the power of the arbitrators or umpire to extend the time, and does not affect the jurisdiction of the court. Under Section 9 of the Arbitration Act, 1889. The court or a Judge has jurisdiction to extend the time for making an award under the public health Act, 1875, although the time for making the award has expired.
There in also, Section 24 of the arbitration Act, 1889, which was similar to Section 31 of the English arbitration Act, 1950, was sought to be relied upon and it was held that the court had jurisdiction to enlarge the time for making the award even though the time for making the award had elapsed before the application was made at chambers, and the award had been in fact made. It was argued:.By reason of Section 180, Sub-section (9), of the Public Health Act a fetter is imposed upon the power of the court or a judge, and that they have not as extensive a jurisdiction as they would otherwise have. But, upon consideration of that sub-section, I do not find that the court is in any way fettered; there is no allusion made in it to the Court or a Judge. When that Act was passed the jurisdiction of the court or a judge in these matters must be taken to have been known to the legislature, and there is no mention made of their jurisdiction in that section. Reading through Section 180, I find that in all its numerous sub-sections it is dealing with arbitrators and umpires, and with no one else; and when we come to Sub-section (9), the legislature enacts that 'the time for making an award by arbitrators under this Act shall not in any case be extended beyond the period of two months from the date of the submission'; that clearly means that the time cannot be extended by the arbitrators.
52. In the Tabernacle Permanent Building Society v. John Knight 1892 appeal cases 298, at pages 301 and 302, it is observed:
The later statute makes the provision which I have first referred to apply to every arbitration under any Act passed before or after the commencement of the Act itself (1889), and only excepts from its operation any Act inconsistent with the Act regulating the arbitration or with any rules or procedure authorised or recognised by that Act.
If the two provisions may stand together I am unable to follow the argument that the one Act is inconsistent with the other, and the whole argument depends upon the word 'inconsistent' in the later statute. It is obvious to inquire, where is the inconsistency if both may stand together and both operate without either interfering with the other?
It explains as to when one provision can be said to be inconsistent with the provision of another Act.
53. In R. & W. Paul, Limited v. The Wheat Commission 1937 appeal cases 139, the privy council has observed:
'By Section 5, Sub-section (1), the wheat commission are empowered to make bye-laws for giving effect to the provisions of the Act. By Sub-section (2): 'without prejudice to the generality of the power conferred by' Sub-section (1), 'bye-laws made under this section shall in particular provide...for the final determination by arbitration of disputes arising as to such matters as may be specified in the bye-laws'.
Purporting to Act under this section the wheat commission made a bye-law, numbered 20, providing that 'any dispute arising between the wheat commission and any other person as to whether any substance is flour shall be referred to arbitration,' as therein provided, 'and the decision of the referee as to the matter in dispute 'shall be final and conclusive. The following provisions shall have effect n relation to any reference under this bye-law: The Arbitration Act, 1889, shall not apply'-
At page 153, it is observed:
It should mention that under Section 5, Sub-section (1), all bye-laws require to be approved by an order of the minister of agriculture and fisheries and the secretaries of state concerned with agriculture in Scotland and Northern Ireland respectively, acting jointly, and that under Section 18 Sub-section (1), all bye-laws require to be laid before Parliament, and if either House within the prescribed time resolves that any bye-law the annulled it shall forthwith be void. It is understood that this procedure was duly observed and that no objection was taken to bye-law No. 20.
Both Roche, J. and all the learned Judges in the Court of Appeal unanimously found the bye-law in questionto be ultra vires of the Wheat Commission. They agree in affirming the general principle that the subject cannot be deprived of his right to resort to the Courts of law of his country except by express enactment, and they find in the statute no words expressly ousting the jurisdiction of the Courts of expressly authorizing the Wheat Commission to frame bye-laws which shall have this effect.
Their Lordships of the Privy Council examined the question from another view point and observed at page 154:.The Arbitration Act is a statute of general application and it confers a valuable and important right to resort to the courts of law to exclude an arbitration is to deprive the parties to the arbitration of the rights which the Act confers. When a public general statute provides for the reference of disputes to arbitration it is to be presumed that it intends them to be referred to arbitration in accordance with the general law as to arbitrations, with all the attendant rights which the general law confers. I do not think that when Parliament enacts by one statute that disputes under it are to be referred to arbitration it can be presumed to have empowered by implication the abrogation of another statute enacted for the conduct of arbitrations. Rather the contrary if the express words to that effect are in my opinion essential, and there are here no such express words. I am accordingly of opinion that the wheat their powers when they made a bye-law that every dispute as to whether any substance is flour should be determined by an arbitration to which the Arbitration Act should not apply.
54. In my opinion, on examining the relevant provisions of the Regulation Act as well as the provisions of the bye-law Stock the exchange. Ahmedabad it cannot be said that there is statutory arbitration. A recognised association has been empowered to make bye-laws which, inter alia, may provide for settlement of such disputes by arbitration. It does not mean that there are any provisions in these bye-laws themselves which indicate in any manner that the powers of the court to enlarge time even after the award is in fact made for making the award are in any manner curtailed. The provisions under the bye-laws only refer to the authority or person which/who can extend the time even of the award it is not necessary in the instant case as said by to decide whether these bye-laws are statutory bye-law and have of law. Suffice it to say, that the learned trial Judge has rightly reached the conclusion that these powers vested in the court under Section 28 of the Act are not taken away and the court has jurisdiction to condone the delay for making the d an extend the time for making the award even after the award has been made. As said earlier by me, these bye-laws do not contain a complete said case in the aforesaid Calcutta decision. In the instant case, for enforcement of the award, the award has to be filed in the Court made a rule of the Court. The Court, when making an order under Section 14 and 17 of the Act if it finds fit to enlarge the time for making the award, is empowered to enlarge it and that has been done in the instant case, and in my opinion, it has been rightly done.
55. Coming to the last submission of Mr. Vin, that in view of the provisions of Section 17 of the Act, it was first necessary to give a judgment on the basis of an award and it is only after that intervening step is taken, a decree can be drawn up on the basis of that judgment. In the instant case, submitted Mr. Vin, in the review applications, at the time of allowing the review applications, after extending the time for making the award, the court has straightway passed a decree making the award a rule of the court. Prescribed procedure under the Ahmedabad City Civil Court Rules, 1961, in that behalf, which, in his submission, is a mandatory procedure, has not been complied with. Mr. Vin has invited my attention to Clause (w) of Rule 35 of the Ahmedabad City Civil Court Rules, which enumerates the matters that may be disposed of, by a Judge of Chambers. That Clause (w) indicates, that applications in all matters arising under the Indian Arbitration Act and generally in the matter of any Act, unless otherwise provided in the Act itself or by the rules thereunder or by these rules, may be disposed of, by a Judge in Chambers. He has also invited my attention to Rule 9 of the rules under arbitration Act, 1940, framed by the High Court to be applicable in such matters instituted in the Ahmedabad City Civil Court. It reads:
'An application for judgment in terms of an award shall be made by motion and shall be accompanied by a certificate from the registrar that no application has been made to remit the award or any of the matters referred to arbitration for reconsideration, or to set aside the award, or, if made that has been disallowed.' No such notice of motion was taken out, submitted Mr. Vin, and consequently, the order is bad.
56. It is significant to note, that in the instant case, it was the arbitrators who moved the city civil court for filing of an award under Section 14 of the Act. That application was supported by an affidavit as per the procedure prescribed. Thereafter, notice was issued to the parties interested. The present petitioner filed objections. One of his objections was found to be untenable and another was found to be tenable and the award was declared to be invalid. It is thereafter that the present review applications had been filed and the court passed the impugned order.
57. Section 17 of the Act, on which considerable emphasis has been laid by Mr. Vin, reads:
Where the court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of or not otherwise in accordance with, the award.
In the instant case, as said earlier, the award has been held to be invalid in the earlier proceedings as the award given four months after the arbitrators had entered upon the reference. In these review applications the court found that the court would have extended time in case it was pointed out to the court that under Section 28 of the Act the court had powers to extend the time. Parties were heard on that point and in the review applications also ground was made out and after hearing the parties, the court passed the impugned order. It was on this ground alone that the award was earlier declared to be invalid. I, therefore, find that the trial Court has not committed any error of law which would justify the interference from this Court in straightway passing a decree for the award.
58. Mr. Vin has invited my attention to the decision of a Division Bench of the Allahabad High Court in Amod Kumar Verma v. Had Prasad Burman : AIR1958All720 . It is observed therein:
Where an application of one of the parties under Section 14 has been dismissed with the consent of the party and the orders have become final and the party through review application, expressly seeks a decree on the award, he cannot, apart from the doctrine of res judicata contained in Section 11 Civil P.C. be allowed to apply again for a decree. If he cannot apply for a decree again, he certainly cannot get a decree on somebody else's application. It is immaterial that the first application was dismissed with his consent. Court cannot even pass a decree suo motu after having refused to pass it in previous proceedings.
It is significant to note that the aforesaid observations were made in the context that in an earlier proceeding, an application of one of the parties under Section 14 of the Act had been dismissed. No doubt, with the consent, and that order had become final. In the instant case, these very orders passed in the earlier proceedings in which an award had been held to be invalid on the aforesaid ground, were sought to be reviewed. It is not that any application for filing of an award under Section 14 of the Act had been dismissed and that order had become final. In paras 5 and 6, at page 723, it is observed:
The award can be enforced only through a decree passed under Section 17; so long as there is no decree passed on its basis the appellants are not aggrieved by its mere existence. In view of the statements made by counsel of the appellants we did not think it necessary to hear them at this stage on the question whether the award was fit to be set aside or not; we heard them only on the question whether the decree would be passed on its basis.
59. We have heard Shri Jagdish Swarup appearing for the respondent Hari Prasad and I am satisfied that the trial court had no jurisdiction to pass the decree. For the reasons that I shall give presently I am of the view that a decree on the basis of an award can be made only under Section 17, that the provisions of Section 17 can be applied only in a proceeding started with an application under Section 14 and that in a proceeding started under Section 33, when no proceeding started under Section 14 is pending, no decree can be passed and the only order that can be passed is one refusing to set aside the award.
Even apart from the question of jurisdiction I am of the view that the trial court had no justification to pass the decree without any prayer for the same by any of the parties to the arbitration agreement, without the question whether a decree could be passed or not being discussed or considered, without hearing the appellant on the question and in spite of the dismissal of the suits of Gopal Lal and Hari Prasad under Section 14.
Chapter II of the arbitration Act lays down the provisions dealing with arbitration without intervention of a court. When the arbitrators have made their award they are required by Section 14(1) to sign it and to give notice to the parties of the making and signing it. Under Sub-section (2) they are required at the request of any party or at the direction of the court and upon payment of their fee's and charges to cause the award or a signed copy of it to be filed in the court whereupon the court has to give notice to the parties of the filing.
This decision has no application whatsoever. It is significant to note that at page 727, in paras 14, 15 and 16, the relevant observations made are:
The learned judges followed the decision in the case of Balwani Singh : AIR1944All188 , and observed that Section 17 does not require that whenever a court passes an order refusing to set aside the award, it must pass a decree on the basis of the award. I respectfully differ from the contrary view taken in the case of Lachmi Prasad A.I.R. 1948 Patna 171. I do not understand how an application under Section 33 can be treated as an application under Section 14 for the filing of the award merely because it is within the prescribed period of limitation.
Whether an application is under one provision or another depends upon it? Contents and not upon whether it is within the period of limitation prescribed for an application under one provision or the other.
Rightly or wrongly the applications of Gopal Lal and Hari Prasad under Section 14 had been dismissed and the orders have become final Hari prasad expressly sought a decree on the basis of the award through his review application and it was rejected. There must be an end to litigation and apart from the doctrine of res judicata contained in Section 11, C.P.C., Hari prasad could not be allowed to apply again for a decree. If he could not apply for a decree he certainly could not get a decree on some-body else's application.
It is immaterial that his application was dismissed with his consent. Even if he had withdrawn his application he would have been estopped from bringing a second application. In any case it was unsound on the part of the trial court to pass a decree suo motu. After having refused to pass it in a previous proceeding.
There is no judgment pronounced by the trial court. It has only passed an order refusing to set aside the award and at once passed a decree. The decree is null and void in the absence of a judgment. After refusing to set aside the award the trial court ought to have pronounced a judgment on the merits of the disputes between the parties as settled by the award.
These observations made in para 16 at page 727, cannot be pressed into service in the instant case. In the instant case, as said earlier, an application for filing an award and been made. At that stage the award was held to be invalid, it having been given by the arbitrators more than four months after they entered upon the reference. In the review applications, the court, in exercise of its powers under Section 28 of the Act, has extended that period. The court was, therefore, fully justified in passing a decree by making the award a rule of the court. This last submission made by Mr. Vin, therefore, also fails. The result is, that the appeal fails.
60. The appeal is dismissed. In view of the peculiar circumstances of the case, east-party is ordered to bear its own costs in this appeals.