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Federal Republic of Germany Vs. S. Dey and Associates and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberAward Matter No. 351 of 1972
Judge
Reported inAIR1976Cal291
ActsArbitration Act, 1940 - Sections 14, 17, 18, 19 and 31
AppellantFederal Republic of Germany
RespondentS. Dey and Associates and anr.
Appellant AdvocateA.C. Bhabra, Adv.
Respondent AdvocateTapas Banerjee, Adv.
Cases ReferredKashinathsa v. Narasingsa
Excerpt:
- orderdipak kumar sen, j.1. the federal republic of germany and/or the consulate general of the federal republic of germany has made this application under sections 30 and 33 of the arbitration act, 1940 praying, inter alia, for orders that(a) a purported award made by one r.p. banerjee on the 28th august, 1972 should be set aside;(b) the respondent s. dey & associates or its servants, agents or officers be restrained permanently from taking any proceedings or further proceeding either by way of procuring judgment or otherwise on the said purported award.2. the events which have led up to these proceedings may be briefly stated as follows:3. pursuant to an invitation issued on behalf of the petitioner, a written tender submitted by s. dey and associates, the respondent no. 1, on the 26th.....
Judgment:
ORDER

Dipak Kumar Sen, J.

1. The Federal Republic of Germany and/or the Consulate General of the Federal Republic of Germany has made this application under Sections 30 and 33 of the Arbitration Act, 1940 praying, inter alia, for orders that

(a) A purported award made by one R.P. Banerjee on the 28th August, 1972 should be set aside;

(b) The respondent S. Dey & Associates or its servants, agents or officers be restrained permanently from taking any proceedings or further proceeding either by way of procuring judgment or otherwise on the said purported award.

2. The events which have led up to these proceedings may be briefly stated as follows:

3. Pursuant to an invitation issued on behalf of the petitioner, a written tender submitted by S. Dey and Associates, the respondent No. 1, on the 26th February, 1971, followed by two letters on behalf of the petitioner respectively dated the 16th March, 1971 and the 21st April, 1971 a contract was entered into by and between the petitioner and the respondent No. 1. The said contract was incorporated in a formal document in writing dated the 10th June, 1971. Under the said contract the respondent No. 1 was engaged to execute the works of specified additions, alterations and interior decoration of premises No. 1, Hastings Park Road, Alipore, Calcutta, at agreed rates and specifications under the supervision of M. M. Bilaney & Co., the Architects and Consulting Engineer (hereinafter referred to as the said Architects).

4. Subletting or assigning the contract without the written consent of the petitioner was prohibited and it was stipulated that in case of such subletting or assigning, the said Architects would be entitled to determine the contract by a notice of seven days.

5. The said contract also contained

an arbitration clause as follows-:

'All disputes and differences of any kind whatever arising out of or in connection with the contract or the interpretation of the contract, or the carrying out of the works (whether during the progress of the works or after their completion abandonment, frustration or breach of the contract) would be referred to the arbitration of and be settled by the said Architects who shall state his decision in writing. The decision of the said Architects with respect to any of the excepted matters would be final and without appeal.

'But if either the petitioner or the respondent No. 1 be dissatisfied with the decision of the said Architects on any matter, question or dispute of any kind (except any of the excepted matters) or as to the withholding by the said Architects of any certificate to which the respondent No. 1 might claim to be entitled, then and in any such case either party might within twentyone days after receiving notice of such decision give a written notice to the other party requiring that such matters in dispute to be arbitrated upon. Such written notice shall specify the matters which are in dispute and such disputes or difference of which such written notice has been given and no other shall be referred to the arbitration and final decision of a single arbitrator being an Architect and Consulting Engineers to be agreed upon and appointed by both the parties or in case of disagreement as to the appointment of a single arbitrator, to the arbitration of two arbitrators being both Consulting Engineers, one to be appointed by each party. The arbitrators shall before taking upon themselves the burden of reference, appoint an umpire.

'The arbitrator, the arbitrators or the umpire would have power to open up, review and revise any certificate, opinion, decision, requisition or notice save in regard to the excepted matters referred to in Clause 32 and to determine all matters in dispute which might be submitted to him or them and of which notice would have been given as aforesaid.

The submission would be deemed to be a submission to arbitration within the meaning of the Arbitration Act, 1940, or any statutory modification thereof. The award of the arbitrator would be binding on the parties. Such reference except as to thewithholding by the Consulting Engineers and Architects of any certificate to which the respondent No. 1 might claim to be entitled, would not be opened or entered upon until after the completion or alleged completion of the works or until after the practical cessation of the works arising from any cause, unless with the written consent of the parties. Provided always that the petitioner shall not withhold the payment of Interim Certificate to the contractor except with the consent in writing of the said Architects and no award of the arbitrator or the arbitrators or the umpire shall relieve the respondent No. 1 of his obligation to adhere strictly to the Consulting Engineers' instructions with regard to the actual carrying out of the works. The parties hereby also agree that arbitration under this clause would be a condition precedent to any right of action under the contract.'

6. It is alleged that the respondent No. 1 failed to complete the work within the stipulated time and further in violation of the terms and conditions of the contract engaged one M/s. Arct D'oriental for a part of the work and thereby sublet part of the contract. The petitioner it is alleged, terminated the contract on and from the 2nd November, 1971 with notice.

7. The respondent No. 1 submitted its bills for Rs. 20,922.57 for the works already executed by them which was certified by the said Architects, only to the extent of Rs. 1,419.70.

8. In the circumstances, disputes and differences arose between the parties and the respondent No. 1 by its letter dated the 6th May, 1972 referred the disputes set out therein to the arbitration of the said Architects. The Arbitrators informed the petitioner of the reference and directed the latter to send its reply on the various points raised in the said letter dated the 6th May, 1972 by the 15th June, 1972. On the 26th June, 1972 the petitioner was granted further time to file its reply by the 31st October, 1972. It was directed by the Arbitrators that on the receipt of such reply another date for hearing would be fixed.

9. Thereupon the respondent No. 1 by its letter dated 9th July, 1972 contended, inter alia, that the arbitrators had failed and neglected to enter on and proceed with the reference within a span of 52 days and that such inaction and/or conduct of the arbitrators amounted to neglect or refusal to act within the meaning of Sections 8 and 9 of the Arbitration Act.

10. By the said letter the respondent No. 1 purported to appoint one R.P. Banerjee, Barrister-at-Law, the respondent No. 2 to act as the sole arbitrator in place of the said Architects and called upon the petitioner to concur in such appointment.

11. By a letter in reply the petitioner objected to the appointment of the respondent No. 2 as arbitrator and contended that such appointment was illegal and in breach of the arbitration agreement.

12. It appears that the respondent No. 2 proceeded with the reference in the absence of the petitioner and purported to make an award on the 28th August, 1972. On the 15th September, 1972 the petitioner received a letter dated the 9th September, 1972 from the respondent No. 2 stating that the respondent No. 2 had made an award as aforesaid and had filed the same with the Registrar, High Court, Original Side, Calcutta.

13. The authority of the respondent No. 2 to act as an arbitrator, the proceedings held by him and the said award dated the 28th August, 1972 have been challenged in these proceedings.

14. It is contended that in this arbitration agreement the appointment of any person other than an Architect or a consulting Engineer, as the sole arbitrator was never intended.

15. Secondly it is contended that the petitioner never concurred in the appointment of the respondent No. 2 as the sole arbitrator. Next, it is contended that the respondent No. 2 not being a qualified Architect or an engineer could not be appointed as the sole arbitrator in terms of the arbitration agreement. It is also contended that the appointment of the respondent No. 2 as the sole arbitrator unilaterally by the respondent No. 1 was in violation of Section 9 of the Arbitration Act, 1940 and that the respondent No. 2 had no jurisdiction to enter into the reference as the sole arbitrator. It is alleged that in the premises the award is bad in law, void ab initio and not binding on the petitioner.

16. An affidavit of one Sisir Dey affirmed on the 13th January, 1973 was filed on behalf of the respondent No. 1 in opposition to the petition.

17. It is, inter alia, contended in this affidavit that M. M. Bilaney & Co. having refused and/or failed to enter on and proceed with the reference within one month from the date of the request of the respondent No, 1 could not further act or assume jurisdiction in the matter. It is alleged that the petitioner was duly served with the minutes of the meetings held by respondent No. 2 and also had notice of such meetings.

18. It is contended that the award has only been transmitted to the office of the Registrar, High Court, Original Side, Calcutta and that the same had not vet been filed. The said award was simply transmitted to the Registrar for assessment of necessary fees and stamps, and in the premises, this application was premature and liable to be rejected.

19. Pursuant to an order made on the 10th June, 1974 the petition was amended and the following prayers were allowed to be added in the petition viz (a) an order determining that the said purported award dated 28th August, 1972 is invalid and ineffective (b) an order declaring--

(i) that the appointment of the said R.P. Banerjee as arbitrator or as sole arbitrator was not in accordance with the arbitration agreement contained in the said contract dated June 10, 1971 was also invalid;

(ii) that the said purported reference to the said R.P. Banerjee as arbitrator or as sole arbitrator was not in accordance with the said arbitration agreement and was also invalid and that the said R.P. Banerjee had no jurisdiction to act as an arbitrator or sole arbitrator or to enter on or proceed with the said purported reference or to make any award.

20. This amendment was allowed without prejudice to the rights and contentions of the respondents as to the question of limitation. An affidavit affirmed by one Karl Dictor Beogner, the then Vice Consul of the Federal Republic of Germany in Calcutta affirmed on the 20th February, 1973 was filed by way of reply to the said affidavit of Sisir Kumar Dey.

21. It is not disputed in the instant case that the Arbitrator had in fact forwarded the Award to the Registrar, Original side of this Court. The said Award was produced in Court at the hearing. It is also apparent that the said Award has not been filed as of record as the Arbitrator did not forward along with the award any court-fees or stamp.

22. Dr. Tapas Banerjee, appearing for the respondents, submitted that inasmuch as the Award has not been filed, this application was premature. He contended that only after an Award has beenfiled in Court that the Court can assume jurisdiction under Sections 31 and 33 of the Arbitration Act and entertain the application for setting aside such Award.

23. Section 14 of the Arbitration Act, 1940, provides for filing of an award. Sub-sections (1) and (2) of the section read as follows:

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

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

24. Rules 13 and 14 of the Arbitration Rules framed by this Court lay down the procedure for filing of an award as follows:

Rule 13: The Arbitrators or umpire shall forward the award, or a signed copy thereof (duly stamped) together with any depositions and documents which may have been proved before them or him when causing the same to be filed under Section 14(2) of the Act together with necessary court-fees for filing (and in the case of awards in language other than English. Rs. 2/- for every folio of ninety words as translation fees) under a sealed cover to the Registrar with a letter requesting that the Award be filed.

Rule 14: Where the provisions of the Act and of Rule 13 have been complied with the Registrar shall file the Award and issue notice thereof to the parties under Section 14(2) of the Act intimating to them that the Court will proceed to pronounce judgment thereon on a date to be fixed in the notice.....

25. Mr. Banerjee contended that the arbitrator not having stamped the Award nor having forwarded the necessary court-fees has not complied with the Rules and as such has not taken lawful steps necessary to cause the award to be filed. The award, in the circumstances, remains unfiled. The fact that it hasreached the Registrar of this Court in a sealed cover is of no consequence if the Rules have otherwise not been complied with.

26. Mr. Banerjee relied upon one Bombay and several Calcutta decisions in support of the proposition that Court had no jurisdiction to set aside an award which was not filed in Court. The first decision cited by Mr. Banerjee was in the case of Ratanji Virpal & Co. v. Dhirajlal Monilal, reported in AIR 1942 Bom 101. In that case an application was made to set aside an award which was admittedly unfiled. The petitioners relied on Section 31 of the Arbitration Act and contended that under that section Court had jurisdiction to set aside an award which might be filed in that Court.

27. Section 31 of the Arbitration Act reads as follows:

(1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates.

(2) Notwithstanding anything contained in any other law for the time being in force and save as otherwise provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court.

(3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the Award has been, or may be filed, and to no other Court... ... ... ...

28. In the Bombay decision, Chagla, J. construed the above section and held that Sub-section (3) thereof must be read in conjunction with Sub-section (2) under which the phrase 'the Court in which the arbitration agreement may be filed' has reference only to proceedings in connection with the arbitration agreement. He held further, that if the question was with regard to the award itself then the matter is to be decided by the Court in which the award has been filed. No one could be prejudiced by an unfiled award and one could call upon the arbitrator to file an award or could ask the Court to direct the arbitrator to file the award after which proceedings for setting aside the award could be initiated.

29. Chagla, J. also construed Article 158 in Schedule I of the Indian Limitation Act, 1908 which provided a period of 30 days from the date of the service of the notice of filing of an award for an application under the Arbitration Act, 1940 to set aside the award. He held that by this Article the Legislature contemplated that an application to set aside the award could be made only after the notice of filing of the award was served.

30. Mr. Banerjee next cited the decision in the case of Bengal Jute Mills v. Jew Raj Heeralal reported in AIR 1944 Cat 304 where McNair, J. followed the above Bombay decision. In this case the award was made on the 19th May, 1942 and an application was made to set aside the same on the 1st August, 1942 when admittedly the award was not filed. It was contended that under Section 31 of Arbitration Act, 1940 the Court had power to set aside the award even though the same had not been filed in Court.

31. McNair, J. construed Section 31 of the Act and came to the conclusion that it was not an enabling section but was merely a section which defined the jurisdiction of the Court. He took into account the marginal note to the said section which specifically stated 'jurisdiction'. He construed the scheme of the Act and held that the Act contemplated consideration of an award by the Court only when it was filed and not before. Section 14 of the Act, according to him, enabled the Court to give notice to the parties after the award was filed and only when the award was filed the Court could take seisin of the award.

32. Mr. Banerjee next relied on the decision of a Division Bench of this Court in the case of Bengal Silk Mills Co. Ltd. v. Ayesha Ariff reported in AIR 1947 Cal 106. This case was decided on an appeal from a judgment of S.R. Das. J. reported in AIR 1949 Cal 350.

33. The facts of this case were that Amir Ali, J. made an award in a case pending before him on the 3rd September, 1944. This award was challenged and sought to be set aside. The notice of motion in the application for setting aside the award was dated the 22nd November, 1944, a requisition was given for filing the award. On the same day an interim order was passed in the application restraining the parties to the award from enforcing or acting upon the same. On the 25th November, 1944 the award was filed as on record.

34. It was contended before the trial Court that the application was premature as the award had not been filed in Court on the date of the application, Das, J. held that the application which was made for an interim order on the 23rd November, 1944 was an application limited in scope, being only for an interim order in aid of the main application for setting aside the award. When the application for setting aside the award came to be heard the award had already been filed. Das, J. distinguished the facts of the case from the facts in the Bombay decision.

35. He further discussed the position when the application for setting aside the award was made before the filing of the award. He held that filing of an award was no part of the cause of action for setting aside the same and that as soon as the conditions laid down in Section 30 of the Arbitration Act, 1940, were fulfilled the cause of action for setting aside the award was ^complete. He further held that the actual filing of the award in Court should not be regarded as a condition precedent for making an application for setting aside the same as in the case of leave under Clause 12 of the Letters Patent. Actual filing of the award was more like the leave to sue a Receiver or leave under Order 2, Rule 2 or Order 2, Rule 4 of the Code of Civil Procedure which could be obtained at any time before judgment He opined that in the instant case the defect, if any, due to the non-filing of the award at the date of the application could be cured by filing the same before the disposal of the application and he was prepared to direct the award to be filed and entered 'Nunc pro tune following the principle laid down in 1908 AC 260 and Cal WN 759. He noted that in the case before him the requisition for filing wag made on the 23rd November, 1944 but the actual filing was on the 25th November. He observed that delay in the Department should not prejudice the applicant and the Court should be prepared to direct that the award be filed and dated as on the 23rd November, 1944.

36. On appeal it was also held that on the 19th November, 1944 when the application to set aside the award was made the award had already been filed and therefore the application conformed with all the requirements of law. The separate application for the interim injunction was held not to be the application for setting aside the award. On this finding the appeal was decided.

37. But the Division Bench went on to consider the other point which was also argued, namely, whether an application for setting aside an award was maintainable or could be made before the award was filed in Court. It was conceded at the trial that the Court could not pronounce judgment upon award under Section 17 of the Act, unless and until the award was filed but it was contended that the Court could correct or remit the award for further disposal of the Arbitrator or set aside the same without the award having been filed. Gentle, J. rejected this contention and held that the filing of the award in Court was necessary for the Court to take cognizance of the award and appraise itself of its contents. The Court could not act upon the contents of the award and rely only on copies thereof supplied by the applicant or any other party. He construed Section 31, Sub-section (2) of the Act and held that the sub-section provided for determination of all questions relating to the validity, effect or existence both of an award and an arbitration agreement. In uncertain circumstances where the existence of an award has been challenged, the award may never be filed in Court, but nevertheless the question whether the award was in existence or not would have to be determined. It was held that the words 'may be' in the said Sub-section (2) had the same meaning which they had in Sub-section (1) of the section and in no way provided for futurity. He concluded that under the scheme of the Arbitration Act, the Court would have jurisdiction to set aside an award only after the same was filed in Court and an application to set aside an award could not be made in the absence of such filing. The reasoning in the Bombay judgment was however, not accepted by him and he held that Articles of the Limitation Act could not be of any assistance in the matter.

38. A separate judgment was delivered by Ormond, J. who agreed generally with the propositions laid down by Gentle, J.

39. Ormond. J. however, noted that there was no express provision in the Act of 19-40 which laid down that the application to set aside an award could not be made until the award was filed. He held on general principles that in an arbitration since the seisin of the matter was removed from the Court during the pendency of the arbitration the proper event and point of time to be taken into account was that on which the Court regained seisin of the matter, i. e. the filing of the award. He. however, observed as follows:

'For so far as the grammar of subsection (2) of Section 31 goes, it is evident that the double alternative 'has been' or 'may be' is equally applicable to an 'award' and to the question referred to in the section regarding the 'validity, effect or existence of an award' as it is to an 'arbitration agreement'. The language of the section can be read as being equally correct if the legal position is, that an application to set aside an award can be made before its filing, as if it is, that it cannot. This therefore has to be decided on other reasons unconnected with the wordings of this section. For myself I would also prefer to take the cautious course of leaving it open (for decision in a case for the disposal of which such a decision is necessary) whether the words 'may be' in Sub-section (1) and the words 'may be' in Sub-section (2) are restricted to a meaning appertaining to jurisdiction, or whether the words 'may be' in either or in both of the sub-sections may not also have the colour of futurity'.

40. Dr. Banerjee also relied upon two decisions of the Nagpur High Court reported in AIR 1951 Nag 198 and AIR 1954 Nag 236. These decisions support the Bombay view and do not advance the matter any further.

41. Mr. A.C. Bhabra, appearing on behalf of the petitioners, contended that so far as this Court was concerned, the question whether an application for setting aside an award can be made before the award is filed in Court has been left open. He submitted that the judgment of Das. J. has specifically laid down that award can be filed in Court even after the application for setting aside the award, in certain circumstances. So far as the judgment of the Appeal Court was concerned. Ormond. J. had left the point open whether under Section 31 of the Arbitration Act. 1940 an application could be made to set aside the award in a Court where the award may be filed in future.

42. He submitted that further light on this question has been thrown by a subsequent decision of the Supreme Court in Case of Kumbha Mawji v. Dominion of India, reported in : [1953]4SCR878 . The facts of the case before the Supreme Court were that the Umpire made two awards on or about the 20th July, 1949. Each of the two awards in original was made over to each of the parties. On the 10th August, 1949 the respondentsfiled an application under Section 14(2) of the Arbitration Act praying for directions on the Umpire to file both the awards in the Court of the Subordinate Judge at Gauhati. On this application, a notice was issued to the Umpire to file the Awards in that Court. On the 18th August, 1949 the Umpire addressed a letter to the Subordinate Judge enclosing signed copies of the Awards. On the 24th August, 1949, the Subordinate Judge recorded an order as follows:

'Notice on the Umpire served. Seen his report forwarding copies of the award on which the originals are said to have been made over to the parties. Applicant to file his copy on the 3rd September, 1949.'

43. On the basis of this order the original awards were filed by the respondent i. e. the applicant before the Gauhati Court on the 3rd September, 1949.

44. In the meantime on the 17th August, 1949, the appellant's solicitor sent the original Awards duly stamped to the Registrar, Original Side, High Court. Calcutta, for filing the same and for issue of notice. On the 29th August, 1949 the Deputy Registrar informed the Appellant's Solicitor that the Awards had been filed and asked him to take out the Statutory Notices from the Court and serve them on the parties. Such notices were issued on the same date and it was recorded that the Awards had been filed on the 29th August, 1949.

45. On the facts as above the question mooted before the Supreme Court was whether in view of Section 31(3) of the Arbitration Act. 1940 it could be said that the Awards were filed in the Calcutta High Court earlier than in the Gauhati Court.

46. Supreme Court held that on the 18th August, 1949, the Umpire in response to notice from the Gauhati Court had forwarded the signed copies of the award and the same were in Gauhati Court on or before 24th August, 1949. The Supreme Court held this was sufficient compliance with Section 14(2) of the Arbitration Act, 1940 and that the Umpire had caused the awards to be filed in the Gauhati Court. The Supreme Court concluded that the filing was on the 24th August, 1949 in the Court of Subordinate Judge. Gauhati and such filing was earlier than the filing of the same Awards in the Calcutta High Court which took place on the 29th August, 1949.

47. It is to be noted that in the Case before the Supreme Court all thattook place in Gauhati on the 24th August, 1949 was that the Subordinate Judge perused the report of the Umpire forwarding copies of the awards. The Subordinate Judge did not direct on that date that the awards should be filed. On the contrary, he directed the applicant before him to file his copies of the awards on the 3rd September, 1949.

48. Section 14 of the Arbitration Act, 1940 does not contemplate the filing of both the original as well as a signed copy of the award. Therefore, it is to be assumed that the Subordinate Judge did not consider the forwarding of the signed copies of the awards by the Umpire as sufficient filing within the meaning of that section inasmuch as he directed the applicant before him to file his copies of the award. It docs not appear whether the Umpire sent along with the signed copies of the Awards the necessary Court fees and stamps in order that the same may be filed in the regular manner. In spite of the aforesaid and in spite of the fact that on the 29th August, 1949 the originals of the same Awards were duly filed with the necessary stamps and fees in the Calcutta High Court, the Supreme Court held that the award had been duly filed in the Gauhati High Court on the 24th August, 1949, within the meaning of Section 14 of the Act.

49. Mr. Dhabra argued that the facts before the Supreme Court were similar to the facts in the instant case. The Arbitrator in the instant case has forwarded his Award to this Court and the Award is physically in Court and there was no bar to the present applicant to have it set aside.

50. It is settled law that filing of an award by the Arbitrator in Court is a ministerial act and not a judicial or a quasi-judicial act. In the case of Anandilal v. Keshavdeo reported in AIR 1949 Cal 549, an award dated the 24th December, 1939 had been made and signed by two named arbitrators. Subsequently one of the arbitrators died. The surviving arbitrator filed the award on the 13th January, 1949. It was contended that the Rules of this Court required both the Arbitrators to perform the act and action by one of such arbitrators was not sufficient compliance with the Rules and the award therefore was not properly filed. This Court held that the relevant Rules did not require that the arbitrator would file the award but all that was required that the Arbitrator must cause the award to be filed. In causing an award to befiled the arbitrator does not perform a judicial act but a ministerial act. This ministerial act can be performed by any one of the arbitrators. The failure or omission or inability of one of the several arbitrators to participate in this ministerial act is not an irregularity which vitiated the proceedings or the award in the absence of fraud. This decision has been followed in the subsequent case of Ebrahim Kassam v. Northern India Oil Industry reported in : AIR1951Cal230 .

51. In the instant case it appears that the arbitrator has initiated such ministerial act by forwarding the award to this Court. What remains to be done now in furtherance of such ministerial act is to tender the necessary court-fees and Stamps so that the Award can be filed as record.

52. It appears to me that so far as this Court is concerned the question whether an application for setting aside an award be validly made before the award is filed is still open. The reasoning of Mc Nair, J. has been expressly dissented from in the subsequent judgments of S.R. Das, J., Gentle, J. and Ormond, J. Ormond, J. in the Division Bench made it clear that the question may be agitated in an appropriate case in future. From the judgment of the Supreme Court noted above it also appears that the Supreme Court has laid down that under Section 14(2) of the Arbitration Act, 1940 all that the Arbitrator has to do is to cause the award to be filed and not actually file the same. Making the award available to the Court was held by the Supreme Court to be sufficient causing of the award to be filed within the meaning of that section.

53. The views expressed by S.R. Das, J. Gentle, J. and Ormond, J. in their respective Judgments appear to be in the nature of obiter inasmuch as the matter before them was really decided on the fact that the application to set aside the award in that case had in fact been made after the award had been filed. The observations of the Division Bench on the other aspect was based on the reason that till an award was filed in Court the Court could not take cognizance of the matter. Putting it in another way, it was reasoned that as long as the arbitration proceedings continued outside the Court, the Court did not have seisin over the matter and only after the award was filed the Court regained such seisin. Looking at the scheme of the Arbitration Act, 1940 and the Schedules thereunder, it is observed with respect that it is possible to reach a different conclusion.

54. The Arbitration Act, 1940 contemplates arbitrations without the intervention of the Court. The relevant sections dealing with this type of arbitration are contained in Chapter II of the Act read along with the first Schedule thereof. Under Section 5, in this Chapter, authority of an appointed Arbitrator or Umpire can be revoked by the parties after taking leave of the Court in certain circumstances. Under Section 8, also in this Chapter, where there is difference between the parties regarding the appointment of Arbitrator by consent or where an appointed Arbitrator or Umpire neglects or refuses to act or becomes incapable of acting or dies and the vacancy is not supplied then on application of the parties the Court has power to appoint an Arbitrator or an Umpire. Similarly under Section 9 under specified circumstances when one party to an arbitration agreement authorizes his own appointed Arbitrator the Court has power to set aside such appointment.

55. During the pendency of an arbitration the Court may, on application of any party, remove an Arbitrator or Umpire who fails to use all reasonable despatch in entering on and proceeding with the reference and making an award under Section 11. The Court can also remove an Arbitrator or Umpire who misconducts himself of the proceedings under the same section. Under Section 12 of the Act, the Court cannot only remove the Arbitrator or the Umpire but appoint anybody to act as an Arbitrator in place of the person removed. The Court has also power to order that the Arbitration agreement will cease to have any effect

56. Sections 14(3), 18 and 19 of the Act, also give specific powers to the Court regarding arbitrations which are conducted without intervention of the Court, Under the First Schedule to the Act the Court has power to extend the time for the Arbitrators to make their award when the same expires.

57. Therefore, it appears that under the Act the Court at all stages retains jurisdiction over arbitrations without the interventions of Court if the subject-matter thereof is within its jurisdiction. The Court assumes seisin over the proceedings on the application of the parties as provided in the Act and this seisin, it appears, does not necessarily depend whether the award or the Arbitration agreement is filed in the Court.

58. In passing judgments in terms of Awards, no doubt it is necessary for the Court to have the Award formally on record so that the judgment may be passed in exact terms of the Award. This has been noted by Gentle, J. But it appears to me, that an Award can be set aside without considering or construing the exact language of an Award on grounds which may be established without any reference to the Award at all. Chapter II contains Section 17 which empowers the Court to pass a judgment in terms of the Award. But provisions relating to setting aside of an Award are contained in Sections 30, 31 and 33 in Chapter V, the general Chapter, which applies to all arbitrations.

59. However, the matter before me may be decided according to law laid down by the Supreme Court in its judgment discussed above. I hold that in the instant case the Arbitrator has sufficiently complied with Section 14 of the Arbitration Act, 1940 in forwarding the Award to this Court and further ministerial action necessary to have the said Award filed in Court in a regular manner, may be done on behalf of the Arbitrator by the petitioner with the leave of Court. Respectfully following the observations of S.R. Das, J. I direct the applicant to forward to the Registrar, Original Side of this Court the necessary court-fees and stamps so that the Award can be filed as on record nunc pro tune as on the day when the Arbitrator forwarded the same to the Registrar. This will be in consonance with justice.

60. In the other view of the matter a situation may result where an Award can never be challenged at all because of limitation which prevents a party from taking steps for filing the Award after a certain time. The Arbitrator concerned may be unwilling or unable or may not be in existence at all and in such a situation an Award can never be challenged. An unfiled Award may not confer any enforceable right upon the person in whose favour it is made but it cannot be said that such an Award is & nullity or non est vide Kashinathsa v. Narasingsa, : [1961]3SCR792 .

61. Dr. Banerjee did not seriously press the defence of his clients on merits. I have considered the arbitration clause and the proceedings held thereunder in this case. The respondents were not entitled to assume that the original Arbitrator had ceased to have jurisdiction or to appoint the second Arbitrator as the soleArbitrator. In any event, the authority of the named Arbitrator in the agreement could not be taken away by the respondent as was sought to be done. The second Arbitrator, whose appointment was never agreed to by the petitioner was otherwise incompetent to enter into the reference as it was contemplated by the parties that only an engineer or an architect or a person having technical knowledge of the subject-matter could only be appointed as an Arbitrator.

62. Therefore, I order that the purported Award dated August 28, 1972 be set aside, subject to the petitioner's complying with the directions given above and taking necessary steps to have the Award filed as of record.

63. As I have made no order in terms of the amended prayers the question whether the same are barred by limitation or not need not be considered.

64. In the facts and circumstances of this case, I make no order as to costs.


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