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G. Martirosi v. A.k.c.t. Subramaniam Chettiar

G. Martirosi
v.
A.k.c.t. Subramaniam Chettiar

(High Court Of Judicature At Madras)

Original Side Appeal No. 120 Of 1925 | 21-02-1927


The Officiating Chief Justice. This is an appeal against an order of Srinivasa Aiyangar, J., refusing to enlarge the time for the submission of an award remitted to the umpire. The application was made under Sect. 13 of the Arbitration Act. The facts that led up to the application are shortly these. The appellant and the respondent entered into partnership under a partnership deed which provided that in case of disputes between them the matter should be referred to arbitrators. Disputes arose shortly after the partnership and the matter was referred to two arbitrators one nominated by each party, and as the arbitrators could not agree, Mr. Vaz a Barrister-at-law of this Court, was appointed umpire. He passed an award which was ex parte and the award was filed in this Court. It was remitted to the umpire with directions to him to give an opportunity to the other side to adduce evidence and to pass an award on taking all the evidence. The order of Court remitting the award is dated the 17th of September 192

4. Both parties appeared before the umpire and the hearing was closed on or about the 26th of April, 1925 shortly before the closing of the High Court for the midsummer recess. Mr. Vaz delivered his award on 2nd of August, 1925. An application was made by the respondent to set aside the award on various grounds, one of them being that, as no time was fixed in the order remitting the matter for the reconsideration of the umpire, he had to submit his award in three months as required by Sect. 13 of the Arbitration Act and that he not having done so the award is invalid. To get over this difficulty the appellant made an application to the Court that the time for the delivery of the award remitted may be enlarged and extended up to the 3rd of August, 1925. The learned Judge dismissed the application for enlarging the time on the ground that no case was made, out for enlarging the time and that even if any such case was made out, he had no power to do so.

A preliminary objection has been taken that no appeal lies against the order on the ground that the order of refusal to extend the time does not amount to a judgment within the meaning of Cl. 15 of the Letters Patent. The definition of the word judgment within the meaning of Cl. 15 of the Letters Patent has, I think, been settled by the decision of a Full Bench of this Court in Tuljaram Row v. Alagappa Chettiar (I.L.R., 35 Mad., 1 (F.B)), where all the previous decisions of this and other Courts have been reviewed. Sir Arnold White, C. J., observes as follows:The test seems to me to be not what is the form of the adjudication but what is its effect in the suit or proceeding in which it is made. If its effect, whatever its form may be and whatever may be the nature of the application on which it is made, is to put an end to the suit or proceeding so far as the Court before which the suit or proceeding is pending is concerned, or if its effect, if it is not complied with, is to put an end to the suit or proceeding, I think the adjudication is a judgment within the meaning of the clause. An adjudication on an application which is nothing more than a step towards obtaining a final adjudication in the sui t is not, in my opinion, a judgment within the meaning of the Letters Patent. This view has been followed in all the later cases and I need only refer to the decision of Sir Murray Coutts Trotter, C. J., and Ramesam, J., in The Official Assignee of Madras v. Ramalingappa (I.L.R., 49 Mad., 539 [LQ/MadHC/1925/553] = 23 L.W., 592) where the learned Chief Justice after referring to the observations of Sir Arnold White, C. J., in Tuljaram Row v. Alagappa Chettiar (I.L.R., 35 Mad., 1 (F.B.)) observes as follows: Applying that and endeavouring as best as I can to see what is its true application, I think it is this, that a determination, call it what you will, which has the effect, whether on a technical ground or on the merits, of putting an end to the proceedings as regards the particular people or in to , is a judgment and is appealable; but if the pronouncement leaves the suit free to go on, then it is not a judgment within the meaning of the clause. Ramesam, J., observes: Having regard to the fact that in the case before us no substantial right of the defendants has been adversely affected by the order under appeal, I would say that it does not fall on the judgment side of the line.

In the present case the position is that unless the time is extended, the award would be invalid and of no legal effect. It could not be enforced by the appellant in whose favour it has been made. An application was made by the respondent to set aside the award on this ground and if nothing more was done the Court was bound to set it aside under Sect. 13 of the Act. To validate the award it was necessary in law to get an order and the refusal order to extend the time would without more put an end to the validity of the award and to any proceedings which the appellant was entitled to take under the Arbitration Act to enforce it. Under these circumstances it is difficult to see how it can be said that the order of refusal is not a judgment. It is not as the respondents vakil contends merely a step towards obtaining a final adjudication on the award but is a condition precedent to the Court entertaining the award at the instance of the appellant and making any adjudication, on it. Reference has been made by Mr. Venkataramana Rao to Gobinda Lal Das v. Shiba Das Chatterjee (I.L.R., 33 Cal., 1323 (F.B.)), where it was held that the refusal of an application to excuse the delay in the presentation of a second appeal under the Limitation Act is not appealable under Cl.15 of the Letters Patent as such an order does not amount to a judgment. I may state that this decision affirms and proceeds on the view taken by Sir Richard Couch in The Justices of the Peace for Calcutta v. The Oriental Gas Company (8 Beng. L. R., 433) where the learned Judge observes: We think that judgment in Cl.15 means a decision which affects, the merits of the question between the parties by determining some, right or liability. Sir Arnold White, C. J., and the learned Judges who formed the Full Bench in Tuljaram Row v. Alagappa Chettiar (I.L.R., 35 Mad., 1 (F.B.)), considered this definition too narrow. Sir Arnold White, C. J., observes:I am not prepared to say as was held in The Justices of the Peace for Calcutta v. The Oriental Gas Company (8 Beng. L. R., 433), and in Sonbai v. Ahmedbhai Habibhai (9 B. H.C. R., 398), it must be a decision which affects the merits by determining some right or liability. I think the decision may be a judgment for the purposes of the section, though it does not affect the merits of the suit or proceeding and does not determine any question of right raised in the suit or proceeding. There is on the other hand a decision of the Bombay High Court in Ramchandra Gangadhar v. Mahadev Moreshvar (I.L.R., 42 Bom., 260) where it has been held that such an order would amount to a judgment. Heaton, J., observes as follows. It is argued that the order of a single Judge refusing to excuse the delay is not a judgment within the meaning of Cl. 15 of the charter of this High Court and that therefore no further appeal lay. But seeing, as I have said, that the order had the very drastic effect of dismissing or rejecting the appeal, it seems to me it must be taken to fall within the meaning of the word judgment as used in Cl. 15, and I think therefore that there is no objection to our disposing of this appeal on its merits, I am of opinion that if we take into consideration the substance and not merely the form of the application the effect of the order of refusal appealed against would be to put an end to all further proceedings in the matter and that such an order would be a judgment within the meaning of Cl. 15 of the Letters Patent. I overrule the preliminary objection.

The next question for consideration is whether the learned Judge was right in refusing to extend the time, even assuming he had power to do so, as the decision on this point if against the appellant would render it unnecessary to consider whether the learned Judge had power. It is not disputed that both parties appeared and went on before the umpire without taking any objection as to the expiry of the time limited under Sect. 13 of the Arbitration Act. What appears to be probable is that the parties as well as the umpire overlooked the fact that the order remitting the matter for the consideration of the umpire did not specify any time within which the award was to be returned and that under Sect. 13 the law imposes a limit of 3 months. It is not possible to explain their conduct on any other assumption but that, having overlooked this provision, they all thought that no time limit was necessary. Otherwise, the petitioner or the umpire would easily have got an order for extension of time. There being no default on the part of the petitioner in asking for an extension of time, it is difficult to see on what ground we can refuse to exercise the discretion in enlarging the time. The learned Judge observes: I do not know whether the impression produced on the mind of a Judge on a cursory perusal of the award could be made a reason for either granting or refusing an extension of time. But I am free to confess that in this case, having perused the award itself, I am not satisfied with the award in such a manner as to make me feel that it will be the duty of the Court to extend the time to render it legal, valid and binding between the parties. I do not think that in an application to extend time, the question as to the propriety of the award should be an element to be taken into consideration as no argument is addressed to the Court on the merits during the stage of an application to ex tend the time, the only question before the Court being whether reasonable ground has been made out for extension. The proper time to object to the award on the ground that it is not a proper one is at a later stage when the award comes on before the Court under the Arbitration Act for steps to be taken to enforce it. I may also point out that in the present case the proceedings before the arbitrators and the umpire had been going on for nearly three years and it will be a great hardship should the petitioner through no fault of his own be compelled to take proceedings in Court especially as the respondent took no objection to the expiry of the time at any time during the pendency of the proceedings before the umpire. I think that if the Court had power to extend the time, it ought to have been extended.

The next question is as to whether the Court has power, Sects. 12 and 13 are the relevant sections. Sect. 12 says: The time for making an award may, from time to time, be enlarged by order of the Court, whether the time for making the award has expired or not. Sect. 13 (1). The Court may, from time to time remit the award to the reconsideration of the arbitrators or umpire, (2) Where an award is remitted under Sub-Sect. (1), the arbitrators or umpire shall, unless the Court otherwise directs, make a fresh award within three months after the date of the order remitting the award. These sections are taken from the English Arbitration Act. Sect. 9 of the English Arbitration Act corresponds to Sect. 12, almost word for word, the only difference being that whilst in Sect. 12 we find may from time to time be enlarged by order of the Court, Sect. 9 of the English Acts says may from time to time be enlarged by order of the Court or a Judge. Sect. 10 (2) runs as follows: Where an award is remitted, the arbitrators or umpire shall, unless the order otherwise directs, make their award within three months after the date of the order. So far as the decisions of the English Courts go the Court has power to extend the time when an award is remitted even though the application is made after three months had expired. The law is thus stated in Halsburys Laws of England, Vol. I, page 464, article 975: In every case the Court can enlarge the time for making an award. This power can be exercised not only after the time for making the award has already expired but even after the award has been made and thus an award which was at the time that it was made bad on the ground that the authority of the arbitrator had expired can be made valid and enforceable. Reference has been made to Lord v. Lee ((1868) L.R., 3 Q.B., 404). That was a case under the Common Law Procedure Act of 1854 and there is not much difference between the provisions of that Act and the English Arbitration Act so far as the question we are considering is concerned. It was held in that case that the Judge had power to enlarge the time after the award had been made and that the effect of the enlargement was the same as if it had been made by consent of parties, viz. , to ratify what had been previously done by the arbitrator without authority. In Knowles v. Bolton Corporation ((1900) 2 Q.B., 263) the same question arose under the Arbitration Act and it was held that Sect. 9 of the Arbitration Act of 1889 gave the Court power to extend the time for making the award even though the time for making the award had expired. This award was under the provisions of the Public Healths Act of 1875 and under Sect. 180 of the Act it was stated that the time for making the award by an arbitrator under the Act shall not in any case be extended beyond a period of two months from the date of the submission and that the time for making the award by an umpire shall not in any case be extended beyond a period of two months from the date of the reference of the matter to him. The question arose whether the Court had power to extend the time after the award was made. Lord v. Lee ((1868) L.R., 3 Q.B., 404) was referred to and approved.

Turning to the cases of the Indian Courts it was held by Sir Walter Schwabe, C. J. and Wallace, J., in Louis Dreyfus & Co. v. Rajagopala Aiyar, & Bros. (70 I.C., 353 = 16 L.W., 657) that under Sect. 12 of the Arbitration Act there was power in the Court to extend the time even though the award had been completed. There is no reference made to any decision either of the Indian or English Courts. Sir Walter Schwabe on this point simply observes: As regards the first point, there is no power in arbitrators to extend their own time after their time has expired; but there is undoubtedly power in the Court under Sect. 12 of the Indian Arbitration Act to extend the time even though the award has been completed. In Tejpal Jamunadas v. Nahmull & Co. (I.L.R., 45 Cal., 1059), Sanderson, C. J., and Woodroffe, J., took a similar view. In Shib Krishna Dawn & Co. v. Satish Chunder Dutt , (I.L.R., 38 Cal., 522) [LQ/CalHC/1911/123] Harrington, J., held that the Court had no power to extend the time so as to validate an award which had been made after the time allowed by the Court had expired. This case, however, was not under the provisions of the Arbitration Act but under the provisions of the Civil Procedure Code.

It seems to me that if the Court could extend the time under Sect. 12 even after the delivery of the award, there is no reason why it should not have power to do so under Sect. 13. I do not think that the absence of the words whether the time for making the award has expired or not in Sect. 12 necessarily shows that the legislature intended to limit the Courts power when an award is remitted. There is no reason why the power should be limited. On the contrary it seems to me that once the award is in Court and is remitted the Court being seized of the matter ought to have full power to act in the matter of extensions of time. It seems to me that unless we can hold that the moment an award is delivered either under Sect. 12 or Sect. 13 the Courts power to extend the time ceases it is difficult to distinguish the powers under one section from those under the other. The authorities on this point are not uniform. In Shib Krishna Dawn & Co. v. Satish Chunder Dutt (I.L.R., 38 Cal., 522) [LQ/CalHC/1911/123] it was held by Harrington, J., that Sect. 148 would not apply if the award had been delivered. The learned Judge observes: On behalf of the petitioner it is argued that Sect. 148 alters the law laid down in that case [ Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (I.L.R., 13 All., 300 (P.C.))] because it enables the Court to enlarge the time for the doing of any act prescribed or allowed by the Code, notwithstanding that the period originally fixed has expired. I agree with the view that if the time had expired, and no award had been made, that section does give the Court power to extend the time for the making of the award notwithstanding that it had expired at the time of the application; but it appears to me that section does not enable the Court to extend the time for the doing of a particular act when in truth and in fact the act has already been done. In Co-operative Hindusthan Bank, Ltd. v. Bhola Nath Borooah (19 C.W.N., 165) Chitty, J., was of opinion that where a Court by its order empowers an arbitrator to enlarge the time beyond three months which was fixed in the order the arbitrator could not do so after the three months originally fixed for making the award had expired as he became functus officio and he has no further jurisdiction in the matter as the time had expired, and the award was set aside. This case was under the Civil Procedure Code of 1908 and R. 3, 8 and 15 of the second schedule were considered. Chitty, J., observed: It is however clear that the arbitrator would only have such power as was conferred by the order, and he would therefore be bound to enlarge the time before the time originally fixed for making the award had expired. If he did not do so, he was by reason of effluxion o f time functus officio and had no further jurisdiction in the matter. It is a matter of great regret that when this difficulty was first noticed, and there was a discussion with regard to it before the arbitrator, an application was not made then and there to the Court under Sch. II, paragraph 8 of the Code of Civil Procedure, in which case the Court could have enlarged the time, even though the time fixed for making the award had expired. This was not done presumably because the parties were willing to go on with the reference. I think that on the above ground the award is invalid and must be set aside. It will thus appear that the distinction which Mr. Grant sought to draw between the old and the new Code has not been accepted by the learned Judges of the Calcutta High Court. In Ramji Ram v. Salig Ram (14 C.L.J., 183) it was held that when an arbitrator had made, or made and published, his award as a completed instrument, his power is wholly at an end. Mookerjee, J., in an elaborate judgment has reviewed all the authorities, English and Indian. In Sri Lal v. Arjun Das (18 C.W.N., 135) Chitty, J., doubted whether, having regard to the change in the law made by the wording of Sect. 148 and Sch. II, Cls. 8 and 15 of the Code of 1908, the decision in Shib Krishna Dawn & Co. v. Satish Chunder Dutt (I.L.R., 33 Cal., 522) and the decision of their Lordships of the Privy Council in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (I.L.R., 13 All., 300 (P.C.)) would be binding authorities. The learned Judge observed. The plaintiff relies upon the case of Shib Krishna Dawn & Co. v. Satish Chunder Dutt (I.L.R., 33 Cal., 522) in which Mr. Justice Harrington held that the Court had no power to extend the time for filing an award, which had already been made before the application was presented. The learned Judge relied upon the case of Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (I.L.R., 13 All., 300 (P.C.)) but that was a case decided under the Civil Procedure Code of 188

2. Their Lordships of the Privy Council held that an award made out of time was invalid and that the arbitrators by such effluxion of time were functi officio. In so doing they followed the express words of Sect 521 which ran that no award shall be valid unless made within the period allowed by the Court. With all respect to the learned Judge who decided the case in Shib Krishna Dawn & Co. v. Satish Chunder Dutt (I.L.R., 38 Cal., 522) [LQ/CalHC/1911/123] it appears to me that he did not give sufficient weight to the change which was made in the wording of Sect. 521 of the Code of Civil Procedure 1882 in enacting paragraph 15 of the second schedule to the Code of Civil Procedure, 1903. As paragraph 15 runs, it appears to me to leave a discretion to the Court in deciding whether an award shall be set aside on the ground of its having been made after the expiration of the period allowed by the Court. I feel some doubt, therefore, whether the decision in Shib Krishna Dawn & Co. , v. Satish Chunder Dutt (I.L.R., 38 Cal., 522) [LQ/CalHC/1911/123] , is correct in law. Sect. 148 of the present Code is in no way restricted, nor indeed is paragraph 8 of the second schedule. It might, therefore, be argued not without reason that they ought not to be restricted, in the manner there held. The learned Judge however went on to say that it was unnecessary to decide that point. In Haridas v. Ootoomal (16 I.C., 861) it was held that the Court has power to extend the time for making the award, under Sect. 12 of the Arbitration Act, even after the award is delivered, and the learned Judges distinguish Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (I.L.R., 13 All., 300 (P.C.)) on the ground that case proceeded on the wording of Sects. 514 and 521 of the Code of 188

2. So far as Sect. 148 is concerned it is doubtful whether it would apply. That section gives power to the Court to enlarge the time where the Act is prescribed or allowed by the Code, and not where the time is fixed by any other enactment. But if Sect. 148 can be applied there is little reason for limiting it to cases where the award has not been delivered by the arbitrator.

Srinivasa Aiyangar J., dissents from the decisions which empower the Court to enlarge time under Sect. 12 referred to by me and the main ground on which he thinks himself justified in doing so is that their Lordships of the Privy Council have, in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (I.L.R., 13 All., 300 (P.C.)) held that an arbitrator on the delivery of his award became functus officio and that the Court had no power to extend the time so as to validate the award. The learned Judge observes: Indeed with regard to the terms of Sect. 13, it seems to me that the observations of their Lordships of the Judicial Committee in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (I.L.R., 13 All., 300 (P.C.)) are very relevant because the similarity between the terms used in Sect. 13 of the Arbitration Act and Sect. 514 of the old Civil Procedure Code which their Lordships were considering is remarkable. In Digambari Bewa v. Joy Narain (16 C.L.J., 573) the decision of their Lordships of the Privy Council in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (I.L.R., 13 All., 300 (P.C.)) was referred to as authority for holding that an award made on a reference by the Court acting under the provisions of the Civil Procedure Code of 1908 was invalid and could not be validated by any extension of time if it was not submitted within the period required by the Court when it made the original order. There can be litle doubt from the observations of their Lordships of the Privy Council in Raja Har Narain Singh v. Chauthrain Bhagwant Kuar ((I.L.R., 13 All., 300 (P.C.)) that their Lordships proceeded on the view that after the expiry of the time limited by the Court for the submission of an award the arbitrator becomes functus officio and that the Court had no jurisdiction to extend the time so as to validate the award. There is, however, considerable force in the argument that the arbitrator is functus officio after the delivery of the award and if the decision in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (I.L.R., 13 All., 300 (P.C.)) is good law in spite of the amendment in the Civil Procedure Code and the enactment of the Arbitration Act the Court will have no power to extend the time fixed when the award has been delivered.

The question raised is of considerable importance especially to the commercial community and as it is desirable that the matter in controversy should be settled by the decision of a Full Bench, I would refer the following point to a Full Bench: Whether in cases where an award is remitted for the decision of the arbitrators or umpire without fixing any time for the return of the award the Court has power to extend the time fixed by Sect. 13 of the Arbitration Act after the arbitrators or umpire have, after the remission, given their award.

Curgenven, J. I agree with my Lord, whose order I have had the advantage of reading, that the preliminary objectionthat no appeal liesmust be overruled. Applying the test proposed by Sir Arnold White, C. J., in Tuljaram Row v. Alagappa Chettiar (I.L.R., 35 Mad., 1 (F.B.)) the learned Judges order refusing to enlarge the time for the making of the award must be found to be in substance a final order, although it may be that either of the parties might still go through the empty formality of applying to have the award recorded. In the same way an appellant who has presented his appeal out of time, and who has failed to get the delay excused under Sect. 5 of the Limitation Act, may still present his appeal and have it dismissed as time-barred. But it seems reasonable to hold, with the Bombay High Court in Ramchandra Gangadhar v. Mahadev Moreshvar (I.L.R., 42 Bom., 260), that the order which really had the effect of rejecting the appeal was that which refused to excuse the delay, and accordingly that it amounted to a judgment within the meaning of Cl. 15 of the Letters Patent. The criterion laid down in Tuljaram Row v. Alagappa Chettiar (I.L.R., 35 Mad., 1 (F.B.)) is one of substantial effect rather than of form.

Turning to the merits of the learned Judges decision, the case appears to me to be eminently one in which an extension, if open to the Court to grant, should be granted. It was the umpire, and not the parties, who was responsible for the delay. The parties acquiesced in the making of the award out of time. There can be little doubt that, if an extension of time had been applied for before the expiry of the time already allowed, it would have been given. In these circumstances I can see no valid reason for refusing to extend the time, if it be held that it is within the Courts competence to make such an order.

The learned Judge has disclaimed jurisdiction to make an order after the delivery of the award upon a consideration of the terms of Sects. 12 and 13 of the Indian Arbitration Act and because he holds that the judgment of the Privy Council in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (I.L.R., 13 All., 300 (P.C.)) is binding upon him. Taking the first ground, there appears to me to be no difficulty in holding, with Sanderson, C. J., in Tejpal Jamunadas v. Nathmull & Co. (I.L.R., 46 Cal., 1059) [LQ/CalHC/1919/222] that if under Sect. 12 time may be extended after the award has been made, it may equally be extended under Sect. 13. The occurrence in the former section only of the words whether the time for making the award has expired or not does not afford a safe guide to a conclusion, because they do not necessarily authorize an extension of time after delivery of the award, Under Sect. 13 the fresh award has to be made within three months unless the Court otherwise directs. I do not think that it would entail placing an undue strain upon that phrase to hold that the Courts direction may be given not only after the expiry of the time already allowed but also, by way of retrospective validation, after the award has been passed. No reason has been suggested why the power of the Court in this respect should be more limited under Sect. 13 than under Sect. 12.

Assuming then that the power exists under both sections or under neither section, there is high authority for the position that, under Sect. 9 of the English Arbitration Act, which is substantially identical with Sect. 12 of the Indian Act, the Court has jurisdiction to extend the time for making the award, although the award has in fact been made. If this were all, the way would, I think, be clear to hold accordingly under the Indian Act. But it is impossible to adopt that course without first deciding whether or not the judgment of the Judicial Committee in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (I.L.R., 13 All., 300 (P.C.)) which was passed under the Civil Procedure Code of 1882, has application to awards governed by the Indian Arbitration Act. The judgment opens with the observation that the case has to be decided entirely upon the construction of the Civil Procedure Code, Sects. 508, 514 and 521, and it does not appear that the construction of those sections can be very much aided by analogies drawn from sections of the English Common Law Procedure Act, under which time could be retrospectively extended. It is to be borne in mind that, before the enactment of that Act, the arbitrator, once his award was given became functus officio [See Mordue v. Palmer ((1870) 6 Ch. App., 22) Re Stringer and Riley ((1901) 1 K. B., 105) Sutherland & Co. v. Hannevig Brothers, Ltd. , ((1921) 1 K. B., 336)] and neither he, nor, I conclude, the Court could make any order to bring the award within time. The Privy Council, in the case cited above, appear to hold that under the Civil Procedure Code of 1882 the same principle held good, for they say: When once the award was made and delivered the power of the Court under Sect. 514 was spent, and although the Court had the fullest power to enlarge the time under that section as long as the award was not completed, it no longer possessed any such power once that time was passed. Whether or not that observation holds good under the present Code, I am inclined to think that it has no application to an award under the Arbitration Act, but the matter is not free from doubt, and I agree to the proposed reference.

[This appeal came on for final hearing on 18th November, 1926 before a Full Bench constituted as above]

Opinion:

Kumaraswami Sastri, J.

[1] I have in my order of reference dealt with the cases, both English and Indian, dealing with the question referred. Sections 12 and 13 of the Indian Arbitration Act are taken almost verbatim from Sections 9 and 10 of the English Arbitration Act. So far as the English Act is concerned, the authorities are clear that the Court has power to extend the time in the case of remitted awards even though the award has been delivered. I need only refer to Lord v. Lee (1868) LR 3 QB 404 and to the decision of the Court of Appeal in Knowles & Sons, Ltd. v. Bolton Corporation (1900) LR 2 QB 253.

[2] Louis Dreyfus & Co. v. Rajagopal Aiyar (1922) 16 LW 657 and Tejpal lamunadas v. Nathmull & Co. (1919) ILR 46 C 1059 also follow the view taken by the English Courts. So far as the cases under the Civil Procedure Code are concerned, there has been a diversity of opinion. To the cases I have already referred to in the order of reference I might add Gopalji Kallianji v. Chhaganlal Vitthalji (1920) ILR 45 B 1071 where Sir Norman MacLeod, C. J., and Shah, J., were of opinion that the decision of their Lordships of the Privy Council in Raja Har Narain Singh v. Chaudarain Bhagwant Knar (1891) LR 18 IA 55 : ILR 13 A 300 (P C) prevented Courts from extending the time after the delivery of the award even in cases under the Code of 1908. But this decision was not under the Arbitration Act, as a reference was made in a pending suit. I think there are not sufficient grounds for dissenting from the decisions I have already referred to, both English and Indian, which gave the Court power to extend the time even after the award has been delivered so as to cure any defect in the award owing to its having been delivered after the time fixed had elapsed. There seems to be no reason to limit the power under Section 13 of the Arbitration Act which admittedly gives power to extend the time beyond the period of three months before the award is delivered. I am unable to accept the extreme contention put forward by Mr. Venkataramana Rao that an extension beyond three months should be in the order remitting the award itself and that where three months have been fixed by the order the Court has no power to extend the time. Such a construction would lead to obvious injustice as it may be that after the order has been made fixing 3 months the arbitrators find that owing to a number of witnesses to be examined or other circumstances which prevent the finishing of the enquiry in 3 months further time is to be granted. There is, in my opinion, power to extend the time subsequent to the order which fixed three months as the period ; and if there is this power there is no reason why such time should not be extended after the award is delivered. If under Section 12 the Court can extend the time for the delivery of the award even though the time has expired it should have the power to extend the time when it remits an award unless there are very strong reasons to come to a contrary conclusion.

[3] The Civil Procedure Code of 1908 deals with awards in the second schedule and Rule 14 deals with the remission of awards to arbitrators. Rule 15 says that an award remitted shall not be set aside except on the grounds mentioned in that rule and one of the grounds is that the award was made after the expiration of the period allowed by the Court. Rule 8 deals with extension of time for making award. It is argued by Mr. Venkataramana Rao that there is no difference between the Civil Procedure Code and the Indian Arbitration Act on the question of extension of time and that if the giving of the award after the expiry of time allowed by the Court entitles a party to have it set aside so far as arbitrations under the Code are concerned, the same rule should be applied to arbitrations out of Court. It is further argued that the decision of their Lordships of the Privy Council in Raja Har Narain Singh v. Chaudarain Bhagwant Kuar (1891) LR 18 I A 55 : ILR 13 A 300 (P C) though passed under the Code of 1882 is equally applicable to the present Code. Section 521 of the Code of 1882 with which their Lordships of the Privy Council were dealing enacts that no award shall be valid unless made within the period allowed by the Court. This clause is omitted in Rule 15 which I have already referred to and all that Rule 15 says is that the Court shall not set aside an award except on one of the grounds mentioned therein. I think this omission is not merely accidental and the question is how far under the new Code the omission of such a clause in Rule 15 of the second schedule which corresponds to Section 521 of the old Code without the last clause gives the Court discretion to extend the time even where the time for passing the award has expired. Chitty, J., in Sri Lal v. Arjun Das (1914) 18 CWN 1325 was of opinion that the amendment introduced by the Code of 1908 gave the Court discretion even under the C.P. Code. I may point out that so far as the Arbitration Act is concerned, there is no section corresponding to the last clause of Section 521 preventing the Court from extending the time fixed in a remitted award. 1 think the proper way of construing Sections 12 and 13 of the Arbitration Act is to read them together. Where an award is set aside under Section 13, either in whole or in part, and remitted to arbitrators, the effect of it is to re-open the proceedings under the Arbitration Act, the necessity for fixing three months or some time to deliver the award arising out of the fact that the time fixed in the original award might have expired before the remission or might have been considerably reduced. Once an award is set aside and remitted to arbitrators, I find it difficult to see why Section 12 should not apply to proceedings after remission as the matter then is really a matter in a pending arbitration without the original award having been set aside and why the provisions of Section 12 as to extension of time should not apply. The Court has, according to all the decisions 1 have referred to, both English and Indian, power to extend the time under Section 12 of the Indian Arbitration Act, which corresponds to Section 9 of the English Arbitration Act, even after the award has been delivered. There seems to me to be no reason why, when an award is remitted, a similar power should not exist unless there is something in the wording of the Act which compels me to come to a contrary conclusion.

[4] I am of opinion that the decision of their Lordships of the Privy Council in Raja liar Narain Singh v. Chaudarain Bhagwant Kuar (1891) LR 18 IA 55 : ILR 13 A 300 (P C), which was passed under the Civil Procedure Code of 1882 does not constrain us in dealing with Sections 12 and 13 of the Arbitration Act to put a restriction on the power of the Court under Section 13 and to hold that although under Section 13 the Court might extend the time beyond three months if it did so in the. order of remission, it has no power to do so once the award has been I would answer the reference in the affirmative and hold that the Court has power to extend the time.

Murray Coutts Trotter, Kt., C.J.



6. I agree.

Reilly, J.



7. I agree. I may point out that a period of three months for making an original award, unless otherwise agreed, is fixed by Schedule 1 of the Arbitration Act. The effect of Section 13 (2) of the Act appears to me to be to fix a similar period, unless the Court otherwise directs, for an award to be made after remission ; it does not affect the power given to the Court by Section 12, which I understand to apply both to original awards and to awards made after remission. The Court can therefore extend the time for making an award on remission even after the time fixed either by Section 13 (2) or by the Court has expired. I agree that we need not apply the decision of the Privy Council in Raja Har Narain Singh v. Chaudarain Bhagwant Kuar (1891) LR 18 I A 55 : ILR 13 A 300 (P C) which related to the provisions of the Code of Civil Procedure of 1882 to the present case. And under the present Code an award is not invalid merely because it is made after the time allowed. Here it is not the Code but the Arbitration Act which we have to interpret and I see nothing to prevent the Court from retrospectively extending under Section 12 of the Act the time fixed for making an award on remission so as to cover such an award already made after the expiry of the time previously fixed by Section 13 (2) or by the Court.

Advocates List

For the Appellant Nugent Grant Instructed by C. Rajamanikkam, Advocates. For the Respondent P. Venkataramana Rao, Advocate.

For Petitioner
  • Shekhar Naphade
  • Mahesh Agrawal
  • Tarun Dua
For Respondent
  • S. Vani
  • B. Sunita Rao
  • Sushil Kumar Pathak

Bench List

HON'BLE CHIEF JUSTICE MR. MURRAY COUTTS TROTTER

HON'BLE MR. JUSTICE C.V. KUMARASWAMI SASTRI, KT.

HON'BLE MR. JUSTICE REILLY

Eq Citation

(1928) 54 MLJ 49

(1928) ILR 51 MAD 103

122 IND. CAS. 516

109 IND. CAS. 70

1928 MWN 107

AIR 1928 MAD 69

LQ/MadHC/1927/90

HeadNote

Arbitration Act, 1940 — Award — Remitted award — Extension of time — Arbitrator delivered the award after expiry of period specified in the order of remission — Application for extension of time for submission of award after its delivery was dismissed — Held, Court had jurisdiction to extend the time within which the remitted award had to be submitted, even after the award was delivered. (Paras 3, 4, 7, 8 and 9)