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T.C. Purushothaman and anr. Vs. D.V. Krishnan and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtChennai High Court
Decided On
Reported in(1974)2MLJ246
AppellantT.C. Purushothaman and anr.
RespondentD.V. Krishnan and ors.
Excerpt:
- - , the petitioners and the respondents, was ordered to be returnable on 28th february, 1966..well within time, the petitioners filed i. i am unable to agree with the learned counsel for the petitioners that the ground in regard to which the respondents have used expression like 'invalidity of the award' in attacking the award, is not relatable to its 'existence' but to its 'invalidity, within the meaning of section 30 (c) of the act......by the arbitrators. the president of the board of arbitrators, after having thus completed the award, filed it into court after giving notice of the said award to the parties. the said proceedings were numbered as o. p. no. 22 of 1966. the petitioners herein thereafter filed i.a. no. 66 of 1966 in the main o.p. no. 22 of 1966 filed as above by the president of the arbitrator and sought for a decree in terms of the award.2. the respondents herein took notice of the award and also the proceedings in court and the stand of the petitioners to pass a decree in terms of the award. they took such notice on 16th february, 1966. the first hearing of the proceedings was on 28th february, 1966. even then the respondents did not file any independent application or any counter to i. a. no. 66 of.....
Judgment:
ORDER

T. Ramaprasada Rao, J.

1. The petitioners and the respondents were partners in a business which was run under the name and style of 'Uma Trading Company.' Misunderstanding arose between them and their disputes were referred, under a specific arbitration agreement dated 20th October, 1965, to five individuals viz., Subramaniam Chettiar, Venugopal Chettiar, Mahalinga Mudaliar, Shanmughasundaram and Meenakshisundaram Chettiar. According to one of the Arbitrators, Venugopal Chettiar, who claimed to be the President of the Board of arbitrators the board entered upon the reference after accepting the arbitration agreement and the reference, and after several sittings in October, 1965 the final award was recorded on stamp paper.. It is not in dispute before me that the same was registered on 27th October, 1965, and was also minuted in the book kept by the arbitrators. The President of the board of arbitrators, after having thus completed the award, filed it into Court after giving notice of the said award to the parties. The said proceedings were numbered as O. P. No. 22 of 1966. The petitioners herein thereafter filed I.A. No. 66 of 1966 in the main O.P. No. 22 of 1966 filed as above by the President of the arbitrator and sought for a decree in terms of the award.

2. The respondents herein took notice of the award and also the proceedings in Court and the stand of the petitioners to pass a decree in terms of the award. They took such notice on 16th February, 1966. The first hearing of the proceedings was on 28th February, 1966. Even then the respondents did not file any independent application or any counter to I. A. No. 66 of 1966 filed by the petitioners wherein they sought for a decree in terms of the award produced by the President of the board of arbitrators into Court in the main original petition. But, on 28th March, 1966, the respondents filed a counter stating that the arbitration agreement was purely onesided, that the award passed on 28th October, 1965 by the arbitrators was ab initio void inasmuch as the mandatory provisions of Section 14 (1) of the Arbitration Act have not been complied with and that the arbitration award has been signed only by the President and not by all. Lastly, the respondents took up the position that even if an award has since been passed by the arbitrators in the regular course, the award produced into Court is a forged one; according to the respondents, from the original award some papers have been removed and some other papers have been introduced, and, while in the original award they had signed along with others, that was not to be found in the award now produced into Court, on the basis of which a decree is sought for by the petitioners.

To this a rejoinder was made by the petitioners. The main contention of the petitioners in the rejoinder was that it was not open to the respondents to challenge the award, as no application had been made within thirty days from the date of the filing of the award into Court or from the date when they had knowledge of the same, and that the respondents cannot challenge the award in any manner.

3. The lower Court, however, considered the last objection of the respondents that the award now in Court was not the award which was passed by the arbitrators and in that sense the award on which a decree as sought, is a non-exister award land therefore an enquiry has to be made under Section 33 of the Arbitrations Act to consider the challenge now posed by the respondents and is only after the Court comes to the conclusion one way or the other in the enquiry, to be undertaken under Section 33, the other aspects of the contentions, whether the petitioners are entitled to a decree on the basis of the award if otherwise invalid, could be considered. The lower Court accepted the contention of the respondents and directed such an. enquiry. It is as against this, the present civil revision petition has been filed.

4. Learned Counsel for the petitioners drew my attention to the relevant provisions of the Arbitration Act as also the provisions of the Limitation Act of 1963 and contended that this is not a case in which Section 33 of the Arbitration Act is applicable and that the respondents' challenge is only 'directed towards the merits and the conduct of the arbitrators in the course of the proceedings and their objections could only be understood: as one against the award or its 'improper procuration' or its 'invalidity' and not as an objection which could be understood to be relatable to the 'existence' of an award within the meaning of Section 33 of the Act.

5. On the other hand, learned Counsel for the respondents would state that the sum and substance of the objections of the respondents would cover the situation contemplated in Section 33 of the Arbitration Act and therefore the direction of the Court below, which is to the effect that an opportunity should be given to the respondents to let in evidence regarding the alleged fabrication of the award', and its finding that it is not open to the respondents to put forward the other grounds alleged by them in the counter-affidavit, are correct.

6. Under the Arbitration Act, it is open to the arbitrators, after making the award, to give notice, in writing, to the parties, of such making and signing, and inform them of the. amount of fees and charges payable in respect of the arbitration and the award. It is open to the arbitrators, under Section 14 (2) of the Arbitration Act, at the request of any party to the arbitration agreement or any person claiming under such party, or if so directed by the Court and upon (sic) of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the awards cause the award or a signed copy of it, together with any depositions and documents which are connected with the proceedings, to be filed into Court, and the Court shall thereupon give notice to the parties of the filing of the award. Sections 14 (1) said 14 (2) deal with these situations.

7. We are not concerned, in the instant case, with Sub-section (3) of Section 14. In the instant case, the President of the board of arbitrators filed O.P. No. 22 of 1966 under Section 14 of the Act, which was taken on file on 22nd January, 1966, and notice to all parties, viz., the petitioners and the respondents, was ordered to be returnable on 28th February, 1966.. Well within time, the petitioners filed I. A. No. 66 of 1966, seeking for a decree in terms of the award, But the respondents, for the first time, challenged the award in their counter-affidavit, filed on 28th March, 1966, without even filing an interlocutory application or an original petition for the purpose. In this counter-affidavit, as already stated, they alleged fraud and challenged the award produced into Court by the arbitrators as a fabricated or forged document.

8. It is no doubt true that under Section 30 of the Arbitration Act the grounds on which an award could be set aside are expressly stated. There are three grounds on which, an award could be set aside. The first one is that an arbitrator or an umpire has misconducted himself or misconducted the proceedings. The second ground is that the award has been made after the arbitrators have become functus officio or unable to proceed with the arbitration agreement due to an order of Court superseding the arbitration or by reason of the arbitration proceedings themselves having become invalid under Section 35 of the Act. The third ground on which an award could he set aside is that it has been improperly procured or is otherwise invalid.

9. The respondents, in their counter-affidavit, filed on 28th March, 1966, have no doubt asked for setting aside of the award on the ground of misconduct of the arbitrators and also on the ground that it has been improperly procured or is otherwise invalid. But, admittedly, they filed the counter-affidavit beyond a period of thirty days from the notice of the filing of the award. Under Article 119 of the Limitation Act, 1963, a special period of time is prescribed in the matter of setting aside an award or getting an award remitted for reconsideration: A period of thirty days from the date of the service of the notice of the filing of the award is provided for. Therefore, it is not open to the respondents to seek the order from the Court below to set aside the award on any of the grounds mentioned in their counter-affidavit excepting on the ground that the award, according to them, is a fabricated or a forged one. The question, now, is whether such a challenge based on the ground that the award produced into Court, and of the filing of which notice has been given to a litigant, is a forged one or a fabricated one, would come within clauses (a), (b) and (c) of Section 30 of the Arbitration Act.

10. There is a distinction between the force, effect and meaning of Section 30 and of Section 33 of the Arbitration Act. The purposes served by these two sections are distinct and separate. Whilst under Section 30 of the Act the existence of an award could not be challenged, but the process leading to the making of the award could mostly be under attack, under Section 33 the very existence of the said award could be in dispute. Again, under Section 30 (c) of the Act, the invalidity, of the award is once again referable to the modus operandi adopted by the arbitrators in the matter of the passing of the award, but would not in my view, include a complaint that the award passed by the arbitrators has been replaced or substituted. In any case, where the complaint of a party to an arbitration agreement is that there has been such a substitution of the award;, then, in substance and effect, the objection of that party is that the award produced into Court was never in existence so far as he is concerned. It is this distinction which has to be borne in mind while appreciating the objection of the party and while applying Section 30 or Section 33. It may be that while challenging the existence of an award a party may say that the award is invalid; equally a party while admitting the existence of an award, may also characterise his challenge as if the arbitration agreement should not be considered to he in existence or valid. It is not by the nomenclature of the defence of any litigant that the purpose and substance of his objection should be understood; it has always to be reckoned and adjudged with reference to the facts and circumstances of each case and the weight and nature of the challenge against the award itself. A mere objection as to the invalidity of an award may not necessarily be equivalent to saying that there is no arbitration award at all, or such a complaint is equatable to one about the non-existence of an award. Equally when the non-existence of an award is pleaded or its invalidity attacked in the forefront, it should not always be said that the party seeks relief and desires relief only under Section 33 of the Act. As I said, the distinction that has to be borne in mind while invoking the purpose behind the principles and prescriptions in the two sections, is that one goes to the very root of the existence of the award and the other relates to complaints about the process which led to the procuration of the award.

11. If this periphery of the purposes of both sections and their intendments are borne in mind, then, it is easy to comprehend that in the instant case the respondents' sole, purpose in their counter affidavit was to lay an attack on the award in Court on the only ground that it is a 'non-existent' award, in the sense that that was not the award which arbitrators passed after hearing the parties and that the one in Court is a substiuted or a forged one. In this sense the objection comes within the four corners of the real intendment and purpose of the prescription in Section 33 of the Arbitration Act.

12. The lower Court, therefore, was right in having permitted the respondents to let in evidence on that aspect alone treating their objection in the context as above as one coming within the purview of Section 33 of the Act. I am unable to agree with the learned Counsel for the petitioners that the ground in regard to which the respondents have used expression like 'invalidity of the award' in attacking the award, is not relatable to its 'existence' but to its 'invalidity, within the meaning of Section 30 (c) of the Act. The objection which could be raised under Section 33 of the Act is not covered by any prescription as to time under the provisions of the Limitation Act. Such an objection could be raised at any time, as the law stands now. The period of limitation which is invokable in circumstances where an attack is made against an award is only with reference to such objections which could squarely come within clauses (a), (b) or (c) of Section 30 of the Act. If, however, the objections could be brought within the four corners of the intendment of Section 33, then, there is no period which limits or bars an action by an aggrieved party in relation to such an award. The lower Court has come to the correct conclusion.

13. The civil revision petition is dismissed. There will be no order as to costs.


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