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Ganpatrai and Sons Vs. Ramgopal Nanda Kishore - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberAward No. 317 of 1953
Judge
Reported inAIR1955Cal302,59CWN807
ActsArbitration Act, 1940 - Sections 16, 16(2), 16(3), 28, 28(1) and 30
AppellantGanpatrai and Sons
RespondentRamgopal Nanda Kishore
Appellant AdvocateS.C. Sen, Adv.
Respondent AdvocateA.C. Bhabra, Adv.
DispositionApplication dismissed
Cases ReferredHar Narain Singh v. Bhagwant Kuar
Excerpt:
- .....on the failure of the arbitrator or' umpire to, reconsider it and submit his decision within the time fixed. 28(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.'section 16 requires the court to fix a time within which a remitted award has to be reconsidered and within which the reconsidered award has to be submitted and empowers the court to extend the time so fixed. in my opinion section 16 in itself contains an exhaustive and complete provision with regard to such time. the court can enlarge this time in exercise of its- powers under section 16 and not by recourse to section 28. section 28 enables the court to enlarge the time fixed for.....
Judgment:

Bachawat, J.

1. This is an application for extension of the time of, the arbitrators to reconsider their award.

2. On 29,12-1952, the petitioner referred its claim for damages to the arbitration of the Bengal Chamber of Commerce and Industries under the arbitration clause contained in the contract dated 15-12-1952. On 27-6-1953, the Bengal Chamber of Commerce made its award No. 680 of 1953 in favour of the petitioner.

3. By consent order dated 15-4-1954 this Courtremitted the award to the Bengal Chamber forreconsideration in accordance with the rules of itsTribunal of Arbitration and the Chamber was directed to submit its decision within 3 months from15-4-1954. Subsequently correspondence passedbetween the Registrar of the Chamber and theattomies of the parties with regard to the questionwhether the reconsideration of the award should beby the arbitral court which made the award or bya new arbitral court to be appointed by the Registrar of the Chamber. By letter dated 23-6-1954the Chamber fixed 1-7-1954 for the reconsideration of the matter. But no meeting was held on1-7-1954 or thereafter. On 12-7-1954 the Registrarof the Chamber wrote to the attornies for the petitioner stating that it would not be possible for theChamber to make the award within 14-7-1954 andrequesting the' parties to apply to the Court for twomonths extension of the time to reconsider theaward. On or about 15-7-1954 the time to reconsider the award and to submit the fresh decision expired. On 19-8-1954, this summons wastaken out.

4. Mr. Bhabra appearing 'on behalf 'of the respondent contends that after the expiry of 15-7-1954, the Court has no power to extend the time and also that assuming that the Court has such power the Court ought not to grant the extension in the circumstances of this case.

5. Section 16(1), Indian Arbitration Act, 1940, gives power to the Court from time to time to remit an award or any matter referred to arbitration to the arbitrators or umpire for reconsideration upon such term as the Court thinks fit in certain circumstances mentioned in the sub-section, The provisions of Sections 16(2) and (3) and 28(1), Indian Arbitration Act, 1940 are as follows:

16(2). 'Where an award is remitted under Sub-section (1) the Court shall fix the time within which the arbitrator or umpire shall submit his decision to the Court; Provided that any time so fixed may be extended by subsequent order of the Court.

16(3). An award remitted under Sub-section (1) shall become void on the failure of the arbitrator or' umpire to, reconsider it and submit his decision within the time fixed.

28(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.'

Section 16 requires the Court to fix a time within which a remitted award has to be reconsidered and within which the reconsidered award has to be submitted and empowers the Court to extend the time so fixed. In my opinion Section 16 in itself contains an exhaustive and complete provision with regard to such time. The Court can enlarge this time in exercise of its- powers under Section 16 and not by recourse to Section 28. Section 28 enables the Court to enlarge the time fixed for the making of the award and not the time fixed for filing a new award on reconsideration of an award which has already been made,

6. The provisions of Section 16(2) and (3) require careful consideration. Under the proviso to Section 16(2) the Court may extend the time fixed by the order of remission by a subsequent order. The proviso does not require that the subsequent order must be made before the expiry of the tune so fixed. The discretion of the Court is unfettered and may be exercised both before and after the expiry of the time according to the necessities of the case.

7. Mr. Bhabra contends that Court cannot now extend the time because the award has become void under Section 16(3) on the expiry of the time fixed and there cannot be reconsideration of a void award. This argument though attractive is unsound and ought not to be accepted.

8. The expression 'time fixed' in Section 16(3) clearly refers to the time fixed under Section 16(2) whether by order of the remission or by a subsequent order for extension and the award does hot become void before the expiry of the extended time Section 19 shows that even when this time has expired and the award has become void in the absence of any further order the arbitration agreement subsists and the reference is not superseded. Though the time has expired the reference is still pending and the Court has the power to extend the time.

9. The effect of the subsequent order of extension is as if the extended time was originally inserted in the order of remission. The extended time should be read as having been originally inserted in the order of remission in the same manner as the time of making the award extended under the Common Law Procedure Act, 1854 was read into the submission in -- 'Lord v. Lee', (1868) 3 QB 404 (A). When an award is remitted under Section 16(1) the award is rejected and the second award is the only effective award. See -- 'Mohun Kishen v. Bhoobun Shyam', 7 Suth WR 406 (B) and -- 'Johnson v. Latham', (1851) 20 LJ QB 236 (C). The order of remission is worked out by final cancellation of the award either by the making and filing of the reconsidered award within the time fixed or by the failure of the arbitrators 'to make and file the new award within that time. Ex-hypothesi the power of enlargement of time given by the proviso to Section 16(2) must be exercised at a time when the original award has ceased to be an operative and effective award. The exercise of the power after the expiration of the time fixed only suspends retrospectively the mode of its final cancellation.

10. In my opinion Section 16(3) does hot put a fetter (upon the power of enlargement of tune conferred by Section 16(2). A review of the previous legislation, will support this conclusion.

11. The power of setting aside is defined and circumscribed by Section 30, Indian Arbitration Act, 1940, corresponding to the analogous provision of para. 15, Schedule 2, Civil P. C., 1908, Section 521, Civil P. C., 1882 and Section 324, Civil P. C., 1859.

12. The power to remit the award or any matter referred to the arbitration is given by Section 16(1), Indian Arbitration Act, 1940 corresponding to para. 14, Schedule 2, Civil P. C., 1908; Section 520, Civil P. C., 1882 and Section 323 of the Code of 1859.

13. All the 3 previous statutes required the Court to fix the time for the making of the award, and empowered the Court to enlarge the time so fixed. None of them provided for the fixing and enlargement of the time to reconsider the remitted award. The Indian Arbitration Act, 1940, Section 16(2) for the first time requires the Court to fix the time within which the award has to be reconsidered and the new award has to be submitted and empowers the Court to extend the time so fixed.

14. The Civil Procedure Code of 1859 did not provide for die legal consequences of the refusal to reconsider the award remitted under Section 323. It was held in 7 Suth WR 406 (B) that on such refusal the award became null and void without proof of misconduct or corruption under Section 324. The effect of this decision is codified by providing that the award remitted to the arbitrator or umpire for reconsideration becomes void on their refusal to reconsider it. Such provision was embodied in Section 121, Civil P. C., 1882 & para. 15, Schedule 2, Civil P. C., 1908, both of which also dealt with the question of setting aside the award.

In the Indian Arbitration Act, 1940 this provision was embodied under Section 16(3) with suitable modifications having regard to the new provision of Section 16(2) instead of incorporating it in Section 30 which now deals with the question of setting aside the award. Clearly the object of Section 16(3) is to provide that on failure to reconsider the award remitted for reconsideration the award becomes automatically void and need not be set aside under Section 30.

15. Section 16(3) has a long legislative ancestrywhereas Section 16(2) is a new provision of law havingno counterpart in the previous legislation. Section 16(3) is intended to embody and restate therule in 7 Suth WR 406 (B). It is certainlynot enacted with the object of circumscribing thepower of enlargement which is now conferred bySection 16(2). . '

16. The Indian Arbitration Act, 1899 by Sections 12 and 13 empowered the Court to extend the time for the making of the award and to remit an award for reconsideration and also required the arbitrator to make a fresh award within 3 months of the order' of remission unless otherwise .directed by the Court. The provisions of Sections 12 and 13 of this Act are materially different from Section 16, Indian Arbitration Act, 1940 and I do not think that any assistance on the question in issue can be derived from the decisions in -- 'G. Martirozi v. Subramanian Chettier', AIR 1928 Mad 69 (FB) (D) and -- 'Tejpal Jamunadas v. B. Nathmull & Co.', AIR 1920 Gal. 115 (E) which decided that under Sections 12 and 13, Indian Arbitration Act, 1899, the time to make fresh award on reconsideration of the remitted award may be extended after the time has expired. (17) The case of -- 'Badri Narain v. Sheo Koer'.

17 Cal 512 (PC) (F) deals with the construction of Section 549, Civil P. C., 1882, and the power of the Court to extend the time for furnishing security of the costs of appeal and has no direct bearing on the decision in this case.

18. In -- 'Har Narain Singh v. Bhagwant Kuar', 18 Ind App 55 (PC) (G), it was held on a construction of Sections 508 and 520, Civil P. C., 1882 that the power of enlargement of the time to make the award could not be exercised after the time has expired. The provisions of law and the subject-matter under consideration in that case were different and I do not feel compelled by that decision to accept the construction put by Mr. Bhabra.

19. I hold that the power of enlargement of time given by the proviso to Section 16(2) may be exercised after the expiry of the time fixed.

20. If the opposite construction is accepted not only the application but the order for enlaregment must be made before the expiry of the time fixed and as soon as the time has expired the. Court is powerless to enlarge the time irrespective of the justice and the merits of the case. The evils of such construction are obvious.

21. Although I hold that I have the power to enlarge the time on the facts of this case I am not satisfied that the time ought to be enlarged. It is clear that the time had expired , before the summons was taken out. When the Court made the order dated 15-4-1954, the time factor was considered important because the Chamber was given liberty to act upon a signed copy of the minutes, The delay, however, is not serious and by itself does not merit dismissal of this application. There are other circumstances in this case which induce me to hold that I ought not to enlarge the time. The Chamber formally fixed 1-7-1954 to be the date when the arbitrators would hold a meeting. Neither party asked for any adjournment. Yet no meeting was held on 1-7-1954.

The reason for not holding the meeting has not been explained and has not been communicated to the parties by the Chamber. The Chamber has not officially informed the parties whether the meeting was being adjourned and if so to what date and for what reason. Even in the letter dated 12-7-1954, the Chamber does not state why no meeting was held on 1-7-1954 and why it was not possible to make the award before 15-7-1954. The Chamber acted arbitrarily and whimsically in not holding the meeting on 1st July, and in not communicating to the parties the reason why the meeting was not being held on that date.

The affidavits and the arguments of learned counsel leave the impression that the parties and the arbitrators are not certain as to the legal effect of the order of remission dated 15-4-1954 and as to the proper construction of the arbitral court which ought to reconsider the award. The parties have not asked for any directions from the court to clear the uncertainty. In these circumstances enlargement of time will lead to endless complications. I do not think that the arbitrators really want to reconsider the award as the matter stands now. In these circumstances I am not satisfied that I ought to extend the time fixed by the Order dated 15-4-1954.

22. The application is dismissed. Each party will pay and bear his own costs of this application.

Cost of this application resulting in the order dated April 1954 was reserved for being dealt with when the matter would come up after the arbitrators have reconsidered the award. It is no longer possible for the arbitrators to reconsider the award. In these circumstances I must deal with the costs of that application.

I direct that each party will pay and bear his own costs of the application resulting in the order dated 15-4-1954.

Certified for counsel.


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