1. The appellant Seth Ramrichhpal Sirya, on behalf of himself and as manager and karta of the joint Hindu family known as Tilokchand Dilsukhrai, resident of AJmer, has filed this appeal under Section 39 of the Arbitration Act (hereinafter referred to as the Act) against the order of the Senior Civil Judge, Ajmer, dated 16-2-1960, overruling the appellant's objections to the validity of the award and making award a rule of the Court and directing a decree In terms oj the award.
2. The facts giving rise to the appeal are briefly these
The respondent M/s. Ajmer Traders, a registered partnership firm, Naya Bazar, Ajmer, through its partner Birdhichand of Ajmer put in an application in the Court of the Senior Civil Judge, Ajmer, on 18th March, 1958, against Seth Ramrichpal Sirya of Ajmer, praying for a judgment and decree on the basis of an award. The respondent-applicant's case was that the respondent and the appellant having had some dispute in regard to certain shon situated outside Railway Goods-shed, Ajmer, known as 'Sirya Market Ajmer' referred their dispute for arbitration to Shrl Krishna Gopal Garg under an agreement dated 25-7-1956. The arbitrator Shri Krishna Gopal Garg gave his award on 25-10-1956. The respondent produced the awardwith the application and, as stated earlier, prayed for a judgment and decree on its basis.
It appears that without notice to the appellant the court began ex parte proceedings. On 19-11-1958, the appellant appeared before the court and applied for setting aside the ex parte proceedings. The court by its order dated 17-11-1959 set aside the ex parte proceedings and the appellant was granted time to file his objections on or before 21st December, 1959. The appellant actually filed his objections on 18-12-1959 urging various grounds against the validity of the award and prayed for either setting aside of the award or for remitting it for reconsideration.
Apart from these objections the appellant also raised a legal objection that the award having not been filed by the arbitrator or by anybody else acting under the authority of the arbitrator, there was no proper filing ot the award in court and, therefore, the court could not entertain an application for making the award a rule of the court and passing a decree in terms of the award.
The respondent in its turn pleaded that the appellanthaving failed to file a proper application for setting asidethe award within the period of 30 days from 19-11-1958,.these objections were barred by limitation. The trialJudge formulated the following three points for its determination--
(1) Whether the application of the applicant for getting the decree according to the terms of the award is valid under Section 14 of the Arbitration. Act or under any other section of the Act?
(2) Whether that application is within limitation?
(3) Whether the objections filed by the opposite party are time-barred?
On the first point, the trial Judge substantially held that the respondent's application could not be treated as an application under Section 14 of the Act. However, on the basis of a few cases, namely, Jai Kishen v. Ram Lal Gupta, AIR 1944 Lah 398, Radha Kishen v. Madho Krishna, AIR 1952 All 856 and Gangaram v. Radha Kishan, (S) AIR' 1955 PunJ 145, he held that Section 14(2) of the Act is not exhaustive and that independently of that an application can be made by a party to the arbitration for making the award rule of the court if the award can be produced and that Section 14 of the Act would not come into play in such a case. Such an application, according to him, was maintainable under Section 17 of the Act.
3. On the second point, he held that Article 178 of the Limitation Act applies only to applications under Section 14 of the Act and cannot govern an application which does not request for the filing of an award but which merely prays for a judgment and decree in terms of an award and which is accompanied by the award itself. Such a case, according to the trial Judge, would be governed by three years rule prescribed by Article 181 of the Limitation Act.
4. With regard to the third point, the trial Judge held that the Act contemplates only one application to get the award set aside and that such an application must be filed within 30 days of the date of the service-of the notice of filing of the award under Article 158 of the Limitation Act. Purporting to hold that the parties received notice of the filing of the award on 17th November, 1959, the respondent's objections having been filed on 18th December, 1959, i.e., one day after the expiry of 30 days, he treated the objections as time-barred. In the result, he made the award a rule of the court and passed a decree in terms thereof. The appellant haschallenged this judgment and decree of the trial Judge in this appeal.
5. Mr. jindal, appearing for the appellant, contended that it is not open to a party to obtain a judgment and. decree on the basis of an award without causing the award to be filed under the provisions of Section 14 of the Act by merely putting an application along with an award and praying for judgment and decree in terms thereof. The view of the law taken by the trial Judge, according to him is clearly erroneous. He mainly relied upon Amod Kumar Verma v. Hari Prasad Burman, AIR 1958 All 720, and, Kumbha Mawji v. Dominion of India, AIR 1953 SC 313.
6. In the alternative, he contended that if an application for making the award the rule of the court and praying for a judgment and decree on the basis of the award be treated as maintainable, the opposite party should be held entitled to raise all objections to the validity of the award in its written statement irrespective of the period of 30 days prescribed by Article 158 of the Limitation Act. Article 158 of the Limitation Act is applicable to a case where an award is properly filed under Section 14 of the Act and notice of filing the award had been served on the parties. Where filing of the award Is not relied upon as in the present case, Article 158 of the Limitation Act cannot be attracted.
7. Mr. Chand Mal supported the judgment of the trial Judge and relied upon the authorities referred to in the judgment of the trial Judge as also on Vissanna v. Viswabrahmam, AIR 1957 Andh Pra 25 and some observations in M. Gulamali Abdulhussein and Co. v. Vishwambharlal Ruiya, AIR 1949 Bom 158.
8. The first and the principal question emerging for determination is: Whether an application for making an award the rule of the court and praying for a judgment and decree on its basis is maintainable without causing the filing of the award under the provisions of Section 14 of the Act? There is some conflict of judicial opinion on this point; the absence of exhaustiveness of the Act providing materials for the said conflict,
For a proper determination of the question it will be useful and convenient to refer to Sections 14 to 17 and 30 of the Act and Article 158 of the Limitation Act as, they, In our opinion, disclose a proper scheme for securing an enforcement of an award or getting it set aside or remitted for reconsideration and that under this scheme alt proceedings, whether by way of enforcing the award or for getting it set aside or remitted should commence with the filing of the award under Section 14 of the Act.
Section 14, the commencing section in connection with proceedings in court consequent on an award, purports to regulate the procedure after the making of the award. Sub-section (1) enjoins upon the arbitrators or umpire to sign the award and give notice in writing to the parties of the making and signing thereof. Sub-section (2) requires that at the request of any party to the arbitration agreement or any person claiming under such party the arbitrators or the umpire shall cause the award or a signed copy thereof together with certain specified documents to be filed in court. This sub-section also contemplates a move by a party to secure the help of court for securing the filing of the award if an award is not filed at his request and provides for a direction by the court to the arbitrators or umpire to cause the filing of the award. Reference may also be made at this stage to Article 178 of the Limitation Act as amended by the Arbitration Act providing limitation for the applications for the filing in court of an award. These two provisions takentogether provide the machinery for securing the filing of the award in court. Lastly, the sub-section also requires the court to give notice of the filing of the award to the parties.
The scheme and the provisions of Section 14, namely, (1) creating an obligation on the part of the arbitrator or umpire to file the award, (2) recognition of a right of a party to secure the help of court in getting an award filed and the prescription of a period of limitation in this behalf, and (3) requirement that the court shall give notice of the filing of the award to the parties; appear to suggest that the filing of the award has been intended to bring it within the jurisdiction of the court for appropriate action contemplated on the subsequent sections of the Act, and that this (i. e., filing of an award) should be the commencement of all proceedings in court and no steps either for enforcing the award or for getting it set aside or remitted can be contemplated without the filing of the award. This suggestion is not negatived by the subsequent provisions but stands re-enforced by them.
Section 15, enumerates the grounds on which the court may modify or correct an award. Section 16 then provides the grounds on which the court may remit it for reconsideration. Section 30 specifies the ground on which the court may set aside the award. Article 158 of the Limitation Act, which prescribes the period of limitation for applications for purposes of Sections 16 and 30, reads as follows--
Period of limitation
Time from which period begins torun
158. Under the Arbitration Act,1940, to set aside an award or to get an award remitted for reconsideration.
The date of service of notice offiling of the awards.
9. It is clear from the language of the Article that three things are necessary for starting of the period of limitation, namely,
(1) The award must be filed (evidently under Section 14);
(2) It must be filed in court.
(3) Notice of the filing of the award must be given to the parties.
We may now indicate two conclusions appearing to follow from the above review:
(1) A move for setting aside the award or getting It remitted or for its correction and modification contemplates a prior filing of the award and the law fixes date of service of notice of filing of the award as the date on which the right accrues to a party to put in an application for these purposes.
(2) In the light of the order of the various provisions of (the Act ) the term 'the court' referred to in Sections 15, 16 and 30 which can pass appropriate orders should be understood with reference to the court as used in Section 14 as the court where the award has been filed. The final conclusion to be arrived at is that an application for setting aside the award cannot be made unless the award is filed. There is abundant authority for the above proposition, namely, Ratanji Virpal and Co. v. Dhirajlal Manilal, AIR 1942 Bom 101, Bengal Jute Mills v. Jewraj Heeralal, AiR 1944 Cal 304, Janardhanprasad v. Chandrasekhar, AIR 1951 Nag 198 and lastly, Firm Shriram Harachandas, Khamgaon v. President, Cotton Seed Forward Delivery. Managing Association Ltd. Khamgaon, AIR 1954 Nag 236. In the last mentioned case after a reference tothe earlier three cases it was observed that the law on the point was settled. If the filing of the award is necessary even for getting it set aside, there is all the greater need for the filing of the award for its enforcement by judgment and decree.
10. Next comes section 17, which provides for the pronouncement of a judgment in accordance with the award to be followed by a decree. An analysis of Section 17 will show that the following conditions must be complied before a Court can pronounce a judgment on the basis otan award --
(1) A notice of the filing of the award must begiven to the parties.
(2) A period of 30 days prescribed under Article 158 of the Limitation Act must be allowed to expire after thedate of the service of the notice of the filing of theaward.
(These two conditions are deducible from the followingwords of the section --
'the Court shall, after the time for making art application to set aside the award ex parte has expired). (3). In case of an application having been made forsetting aside an award the application must be disposed of and disallowed.
The necessary implication of the position stated above is that a judgment and decree on the basis of an award is not permissible without the proper filing of the award under Section 14 of the Act. In fact, the idea of an application accompanied by an award containing a mere prayer for judgment and decree on the basis of an award without causing the award (to be?) filed under Section 14 is foreign and repugnant to the language of Section 17 because such an application does not contemplate the filing of an award and giving notice thereof to the parties. In such a case, there can be no commencement of the period of limitation for an application under Article 158 of the Limitation Act to get the award set aside or remitted. It follows that a period of limitation, therefore, would never expire with the result that on giving proper effect to the language of Section 17 a Judgment and decree cart never be passed on such an application.
11. On a consideration of the various provisions in conjunction we have no hesitation in coming to the conclusion that an application for judgment and decree in terms of the award without causing the filing of the award is not contemplated by Section 17 and is unmaintainable. It is, however, necessary in all fairness to the trial Judge and the learned Advocate appearing for the respondent to notice and discuss the cases which have taken the contrary view.
12. The first case relied upon is AIR 1944 Lah 398. The facts in that case were 'An award was made by the arbitrator in the presence of the parties to the application on 30th July, 1940. They were accordingly asked by the arbitrator to sign the award and did so. Theaward was then handed over to the petitioner in whose favour it was made while a copy of the same was given to the other party i. e. respondent. As the respondent did not carry out the terms of the award, the petitioner applied on 8th November, 1941 (i. e. after the expiry of 90 days), for making it a rule of the Court. Since, the original award was filed by him along with his application, the petitioner did not ask for an order for the filingof it but only asked for it to be made a rule of the Court, The award baving been obviously filed after 90 days, thetrial Court dismissed the application under Article 178 of the Limitation Act.
On revision, Abdur Rehman J. found it difficult to treat the petitioner producing the award with the application as an agent of the arbitrator and filing the award as an agent'. He observed,
'It is impossible to suggest that when, he made the application for the award to be made a rule of the Court, he did so as an agent on behalf of the arbitrators or in any capacity other than his individual one in which, he was entitled to enforce the award and to have for that purpose a decree passed in accordance with the award. If he did not make that application as an agent, how could he-be deemed to have attached the award to the application or filed the award in Court as an agent of the arbitrators?'
In his judgment, the application of the petitioner could not be taken as one for filing the award. He thus overruled the applicability of Article 178 of the Limitation Act in the facts of that case. In answer to an argument that if that application was not under Section 14 of the Act, it could not be competent at all and was liable to be dismissed as not being provided by the Actr the- learned Judge observed,
'But, the Arbitration Act is not in my opinion exhaustive in the sense that an application like this could be thrown out as incompetent in the absence of a clear provision in the Act. Moreover, 1 cannot forget that the petitioner had asked for the award to be made a rule of the Court or in other words for a judgment and a decree to be passed in accordance with the award and this is distinctly provided in Section 17, Arbitration Act.'
With great respect, we are unable to agree with the above observations of the learned Judge. In the earlier part of judgment we have discussed the scheme disclosed by the relevant provisions of law and have recorded a conclusion that Section 17 does not contemplate a judgment or a decree on the basis of an award without a proper filing of the award under Section 14 of the Act, and we do not feel persuaded to modify our conclusion.
13. The other case referred to in the judgment of the trial Judge, namely, AIR 1952 All 856 has merely followed the case AIR 1944 Lah 398 cited earlier and does not at all advance the respondent's case.
14. The third case relied upon by the lower Court is (S) AIR 1955 Punj 145. That case originally came before Harnamsingh J. before whom it was argued that the Act does not empower a party to the arbitration to file an award and that Rule 10 made, under Section 44 of the Act in force in the Punjab State permitting the filing of the award by a party, being inconsistent with the provisions of the Act was ultra vires and that in any case the application was barred by limitation.
The learned Judge referred the case to a Division Bench and indicated the following two questions --
1. Whether the rules framed by the High Court under Section 44 of the Act are inconsistent with the. provisions of the Act?
2. Whether Article 178 of the Limitation Act provides period of limitation for applications made by the parties to the reference?
The case was then heard by the same Judge and Kapoor J. Harnamsingh J. after referring to the right of a party to obtain possession of the award under Section 38 of the Act and the judgment in John B. Paesv. Soomar Umer, AIR 1943 Sind 33 felt no doubt that the party must have a right to file the award in Court. In this view of the matter, he held that Rule 10 as intra vires and further expressed the view that in a case failing within Section 14(2) of the Act the arbitrator is called upon to file the award while in a case falling within Rule 10 the award may be filed by any of the parties to the arbitration in the manner prescribed in Rule 3.
Kapoor J. while concurring that the appeal should be dismissed, does not appear to have gone to the extent of holding that a party can also file an award. He, however, held an application for the enforcement of the award maintainable and made the following observations in this connection --
'The applications for enforcement of the awards are not confined to Section 14 alone but such applications are possible even outside that section, because Section 14 deals with filing of the awards by an arbitrator or an umpire and this section does not cover art application made by a party for the enforcement of the award'.
Both the Judges relied upon AIR 1944 Lah 398 and AIR 1952 All 856, and Kapoor J. further sought support from the observations in AIR 1949 Bom 158, Now, so far as the filing of the award by a party is concerned, the point stands concluded by the following pronouncement of the Supreme Court in AIR 1953 SC 313 --
'A party can not file an award without the authority of the arbitrators or the umpire authorising the party to' file the award'.
The Supreme Court also held that where the awards were handed over to the party, it cannot be assumed that the mere handing over of the awards necessarily implies the authority of the umpire to file the same into Court on his behalf. That authority has to be specifically alleged and proved. In the absence of such, authority, the filing of the awards by the party cannot be the filing by the umpire.
15. In the face of this authoritative decision, we find it difficult to agree with, the proposition that a party can also file an award. In this connection 1 may also observe that Lobo J. who decided the case AIR 1943 Sind 33 and the learned Judges of the Punjab High Court seem to have given undue importance to Section 38 of the Act. From a mere fact that a party can obtain an award from the arbitrator or the umpire it is hardly fair to necessarily conclude that he can circumvent the provisions of Section 14 and file the award himself so as to permit further proceedings in accordance with the other sections of the Act. It is possible to conceive of various purposes other than the filing of it in Court for which the party may obtain the original award and we find it difficult to hold merely on a consideration of Section 38 that a party can file an award.
16. As regards the maintainability of an application merely for the enforcement of the award, the learned Judges relied upon the cases noticed earlier and also on the inexhaustiveness of the provision? of Section 14 of the Act.
In the view which we have taken of the provisions of Section 14 and the subsequent sections, ws do not feel persuaded to follow the view taken in (S) AIR 1955 PunJ 145 case.
Referring to AIR 1949 Bom ,158 relied upon by Kapoor J. in (S) AIR 1955 Punj 145, the precise question for determination in that case was whether an application for a declaration as to the existence or validity ofthe arbitration agreement was barred or not, Chagla C. J. and Tendolkar J. upholding the maintainability of such an application under Section 32 of the Arbitration Act observed :
'When the Legislature enacted Section 32 and barred all suits with regard to the existence effect or validity ot an arbitration agreement, the object ot the legislature was that all questions with regard to these matters should be dealt with under the Arbitration Act, and not by substantive suits, and it is open to a party to make any application with regard to which a suit is barred under Section 32. Section 33 is merely one instance of such an application. The Legislature cannot conceivably deal with all possible applications that may arise with regard to which suits ara barred under Section 32. The right to make such applications is implicit in the very terms of Section 32 itself'.
The general observations made in this case cannot be of any help in the present case.
According to the scheme of the Act, as noticed above, the proper procedure for enforcing the award is to take appropriate steps to get the award filed under Section 14 for further action in accordance with the provisions of Sections 15 to 17 and 30. This procedure appears to have been approved of by Chagla J. as he was then in an earlier Bombay case AIR 1942 Bom 101 referred to above wherein it was held that an award cannot be set aside without getting it filed. The above procedure cannot be circumvented with the help of the above general observations with an argument that as a suit for enforcement of the award is barred a party can present an application for the enforcement of the award under a plea of bar of a suit and dispense with the requirement of law as to the filing of the award. It cannot be said that the Act makes no provision whatsoever for securing the enforcement of an award so as to recognise an implicit rigtit of an application on a plea of a bar of a suit. Indeed, It would bg illogical to maintain that a party by omitting to adhere to procedure for filing the award can secure as if an independent right of seeking the enforcement of the award.
17. In the last case relied upon by Mr. Chand Mal, namely, Puppalla Ramulu v. Nagidi Appalswami, AIR 1957 Andfi Pra 11 the facts were as follows --
The petitioner and respondent referred their dispute to arbitration and an award was made on 4-3-1950, under which the respondent had to give the petitioner 14 bags of paddy. The award was delivered by the arbitrator to the petitioner. After an unsuccessful suit the petitioner applied on 21-12-51 for passing a decree in terms of an award. The respondent pleaded bar of limitation under Article 178 of the Limitation Act and the trial Court accepting the plea of limitation dismissed the application. On a revision by the petitioner, a preliminary objection was raised that as the order was appealable the revision was incompetent. The learned Judge first proceeded to determine whether the application was under Section 14(2) or under Section 17 and observed in this connection --
'Under Section 14(2) If the arbitrators do not file the awardthe party can obtain an order of the Court directing the arbitrator to file the award. Can it be extended to a case where the award is already in the Court, no doubt, in connection with some other proceeding?
In my opinion that section can apply to a cause where the help of the Court is sought for getting the award into Court by calling upon the arbitrators to do it.'
18. With these observations, the application was treated as one under Section 17. The learned Judge further heldthat the order dismissing the application was not appealable and at the time expressed the opinion that the order would be not appealable even if the application was as one under Section 14. The precise question whether an application for decree in terms of the award without a prior filing of the award is not maintainable was not raised and determined by the Judge. The observations were primarily made to show that the order was not appealable. There is also an observation in the judgment to the following effect --
'Setting aside an award would arise only after the award is filed in Court'.
The observation accords with the process of reasoning which led us to the conclusion as to the underlying scheme of the relevant provisions of the Act and should be taken to indicate that the learned Judge was not pronouncing any definite opinion on the question which is before this Court.
19. Further, in determining whether the petitioner's application before the Civil Judge was barred, the learned Judge no doubt observed that Article 178 was not attracted but also held that as no notice containing the particulars referred to in Section 14 was served on parties after the signing of the award, Article 178 did not debar the petitioner from obtaining relief claimed by him. We are clearly of the opinion that in the back ground of the facts of the case the learned counsel for the respondent cannot derive any assistance from the general observation made in connection with the elucidation of some other point and this case also need not affect our conclusion.
20. We now take up the cases relied upon by Mr. Jindal in support of his contention.
21. The first case is AIR 1953 SC 313. In that case, the umpire made two awards on or about 20-7-1949 in favour of the appellant making certain directions. The umpire was said to have made over each of the two awards in original to each of the parties. On 10th August, 1949, the respondent (before the Supreme Court) filed an application under Section 14(2), Arbitration Act, before the Court of Subordinate Judge, Gauhati, in Assam, praying that the umpire may be directed to file both the awards in Court so that the petitioner may get an opportunity for filing objections thereto. On this application, notice was issued to the umpire to file the awards into that Court before 24th August, 1949. The umpire sent a letter dated 18th August, 1949 to the Subordinate Judge submitting therewith the two awards. The Subordinate Judge passed an order directing the respondent to file his copy of the award in his possession on 3-9-49 which the respondent did on 3-9-49. Meanwhile, on 17th August, 1949, i. e. a week after the respondent made its first application in the Gauhati Court, the appellant's solicitors submitted a letter to the Registrar of the High Court. Original Side, producing the original awards for the purposes of filing them and thus purported to have initiated proceedings under Section 14(2) of the Act.
The respondent raised objections to the jurisdiction of the Calcutta High Court as also to the validity of the award. The High Court on the Original Side held that the award must be taken to have been filed earlier in the Calcutta High Court and not in Gauhati Court and, therefore, the Calcutta High Court had exclusive jurisdiction.
On an appeal, a Division Bench of the High Court disagreed with the trial Judge and held that there had been no due filing of the award in the Calcutta High Court under Section 14 inasmuch as the awards were not filedby the umpire nor was it shown that the filing of them was under his authority.
On an appeal, the Supreme Court upheld the view of the Division Bench of Calcutta High Court and made observations which have already been quoted above. Mr. Zindal's argument is that the production of the original award in the High Court having been considered of no avail the Supreme Court should be deemed to have impliedly held that under the Arbitration Act an application can be made for the enforcement ot the award under Section 14 only and that there is no other method which is available to a party for the purpose of getting a judgment and decree in accordance with the award. On the other hand, Mr. Chandmal contended that the question whether an application merely for the enforcement of the award is maintainable under Section 17 or not, was not specifically raised and argued before the Supreme Court and should not be deemed to have been impliedly decided.
We do not propose to express any final opinion on this controversy joined by the learned Advocates for the parties and need only observe that the decision of the Supreme Court is entirely consistent with and in a way helpful to the case set up by Mr. Zindal.
Leaving the matter at this stage, we must observe that the other case AIR 1958 All 720 fully supports the contention of Mr. Zindal and the view which we have taken on consideration of the scheme of the Act. The learned Judges have carefully examined the scheme of the Act and have come to the conclusion that the provisions of Section 17 can be applied only in proceedings started in an application under Section 14 only, and with great respect we agree with their conclusions as also with the reasons therefor.
The learned Judges in that case had referred to some difficulties which may arise on account of contingencies like the death of the arbitrator or the umpire before the filing of the award but observed that the arguments on the ground of those difficulties are arguments for proper legislation and cannot justify a Court interpreting Section 14 to mean that award can be filed by a party also. We may in this connection refer to Panchanan Dey v. Union of India, AIR 1959 Cal 84, which has suggested a solution for a difficulty by enabling the Court to get the award filed under Section 151 of the Civil P. C. in such contingencies. Whether such a solution is permissible or not, on a proper consideration of the scheme and the various provisions of the Act and the examination of the case-law, we feel inclined to come to the conclusion that the proper procedure for the enforcement of the award is to commence appropriate proceedings for causing the award filed in Court and then to take further steps and that a mere application for the enforcement of the award without getting it filed is not maintainable.
Some case-law was cited at the Bar as to the effect of an award which is not made rule of the Court on account of its bearing on the point before us but we do not consider it necessary to notice them as the necessary, conclusion on the point before us could properly be and was actually arrived on the consideration of the relevant provisions of the Act and case law on the point itself.
22. In this view of the law, the respondent's application merely for judgment and decree without getting the award filed under Section 14 was clearly unmaintainable and was liable to be dismissed. The appellant's appeal must succeed on this point alone and it is wholly unnecessaryto consider the alternative contention canvassed by Mr, Jindal.
23. In the result, we accept the appeal and dismissthe respondent's application for the enforcement of theaward. In the circumstances of the case, we would leavethe parties to bear their own costs.