B. Subbarama Naidu Vs. B. Siddamma
Naidu & Ors [1961] INSC 138 (5 April 1961)
MUDHOLKAR, J.R.
SUBBARAO, K.
DAYAL, RAGHUBAR
CITATION: 1962 AIR 671 1962 SCR Supl. (1) 784
ACT:
Arbitration-Order of reference-If must
specify date within which the award is to be made--Award-Validity-When can be
set aside--Arbitration Act, 1940 (10 of 1940), SS. 23(1), 30.
HEADNOTE:
The questions for determination in the appeal
were whether the award in question was invalid, (1) by reason of the court
failing to comply with the mandatory requirement of S. 23(l) Of the Arbitration
Act, 1940, that the time within which the award is to be made, must be
specified in the order, and (2) whether the arbitrator was in error in
allotting to the appellant less than half share in the properties.
Held, that under S. 23(l) Of the Arbitration
Act, 1940, it is imperative that the time for making the award must be fixed;
but that does not mean that where the court omits to specify the time in the
order of reference and does so elsewhere in the proceedings, the reference is
invalid.
Consequently, in a case where the order sheet
of the court read with the order of reference made it clear that the arbitrator
was to file his award by the date to which the suit was adjourned, it could not
be said that the section had not been complied with. Raja Har Narain Singh v.
Chaudbrain Bhagwant Kuar (1891) L.R. 18 I.A. 55, referred to.
Held, further, that the award could not be
said to be bad on the face of it and "otherwise invalid" merely
because the appellant had received less than his due share. The court cannot
interfere with the findings of an arbitrator based on the best of his judgment
unless it is shown that he has acted dishonestly.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 12 of 1958.
Appeal by special leave from the judgment and
order dated April 6,1953, of the Madras High Court in Appeal against order No.
54 of 1949.
S. T. Desai and K. R. Choudhri, for the
appellant.
K. N. Rajagopala Sastri and T. V. B.
Tatachari, for respondents Nos. I to 5.
1961. April 5. The Judgment of the Court was
delivered by MUDHOLKAR, J.-In this appeal by special leave from the decision of
the High Court of Madras the appellant challenges the validity of an award made
by an arbitrator appointed by the Court in a suit for partition and recovery of
possession filed by the appellant of his half share in certain properties upon
three grounds. The first ground is that the reference to arbitration was itself
invalid because the Court failed to comply with the mandatory requirements of
s. 23, sub-s. (1) of the Arbitration Act, 1940 (10 of 1940) in the matter of
specifying the time within which the award was to be made. The second ground is
that the award was filed in Court by the arbitrator after the expiry of the
time subsequently granted by the court for filing the award.
The third ground is that the arbitrator erred
in allotting to the appellant less than half the share in the properties in
suit. In our opinion there is no substance in any of these grounds.
It is undoubtedly true that sub-s. (1) of a.
23 requires that an order there under referring a dispute to an arbitrator must
specify the time within which the award is to be made. What is imperative is
the fixation of the time for making the award. But it does not follow that
where the Court omits to specify the time in the order of reference but does so
elsewhere in the proceedings, the reference is bad. In Raja Har Narain Singh v.
Chaadhrain Bhagawant Kuar and another (1) which was a case under the Code of
Civil (1) (1981) L.R. 18 I.A. 55.
786 Procedure, 1882, the Privy Council had to
consider the provisions of s. 508 which correspond to those of s. 23(l) of the Arbitration
Act. While pointing out that the provisions of s. 508 are mandatory and
imperative they held that though the failure of the Court, to specify the time
for making the award in the order of reference was not a strict compliance of
the terms of the section still the fact that the Court fixed a date for hearing
of the case "might be sufficient." There also, as here, subsequent to
the making of the reference the Court repeatedly made orders enlarging the time
and in those orders Axed the time within which the award was to be made. Thus
the emphasis laid by the Privy Council was on the fixation of time in some manner
and not on the necessity of expressly specifying the time in the order of
reference itself. Here the B Form Diary of the court shows that the dispute was
referred to arbitration on January 22, 1948. The entry in the diary of that
date reads thus: "Subject matter of suit is referred to Arbitration on
joint petition. Call on...... 24-2-1948".The words "call on"
must be interpreted to mean that the arbitrator was required to file his award
by the date for which the suit stood adjourned, that is, February 24, 1948. In
our opinion this entry should be read along with the order of reference.
Reading them together it would follow that
time was in fact fixed for filing the award by February 24, 1948. The mere
omission to mention this date in the order of reference itself did not vitiate
the reference.
As regards the failure of the arbitrator to
file the award within the time fixed the argument of learned counsel is that
though on March 25, 1948, time was fixed for filing the award by June 23, 1948,
the award was not actually filed till July 6, 1948. A reference to the B Form
Diary discloses that on February 24, 1948, the case was adjourned to March 25,
1948. The Diary contains the remark "call on" and this remark
precedes the mention of the adjourned date.
The High Court has interpreted this to mean
that the time was extended by the Court on February 24, 1948, to March 25,
1948. The entry dated March 25, 1948, contains the following:
787 "Further time wanted. File Award
23-6-1948".
Three further entries are relevant and they
are as follows:
"23-6-1948 Call on .... 28-6-1948
28-6-1948 Call on... 6-7-1948 6-7-1948 Award filed.Objections 13-7-1948".
It is obvious from these entries that time
was extended by the Court to file the award on three occasions. The award was
actually ready on June 28, 1948, and was filed in Court on July 6, 1948.
Learned counsel for the appellant faintly urged that on July 2, 1948, that is,
before the award was actually filed, he had made an application to the Court
for superseding the arbitration and that, therefore, the award could not be
filed thereafter. A mere application of the kind could not affect the
reference. Apart from that, the award had actually been made before that date
and, therefore, the attempt to seek the supersession of the arbitration was, in
any case, belated.
As regards the last point the High Court has
come to the conclusion that though the area of the land allotted to the
appellant is less than half the total area of the land in suit there is nothing
to indicate that the value of that land is less than half that of the entire
land in suit. We agree that upon the material on record it would not be
possible to say that the appellant has in fact received less than his due share
of property. Apart from that, however, we may point out that under s. 30 of the
Act an award can be set aside only on the following three grounds:
(a)..that an arbitrator or umpire has mis-conducted
himself or the proceedings;
(b)..that an award has been made after the
Issue of an order by the Court superseding the arbitration or after arbitration
proceedings have become invalid in under section 35;
(c)..that an award has been improperly
procured or is otherwise invalid.
Plainly this objection would not fall either
under el. (a) or under cl. (b) nor under the first part of cl. (c).
788 The question is whether it could possibly
fall within the second part of cl. (c), that is, whether the award is I
otherwise invalid". In order to bring the objection within this clause
learned counsel contended that the award was bad on its face. It is difficult
for us to appreciate bow the award could be said to be bad on its face. When a
dispute is referred to arbitration, the arbitrator has to decide it to the best
of his judgment, of course acting honestly. Here, in his judgment the
arbitrator has allotted to the appellant certain lands the total area of which
is less than half that of the entire I-and in suit. The appellant's contention
is that he is entitled to half the entire land. This contention was before the
arbitrator. In spite of that he has made the award in the terms in which he has
made it. There appears to be no suggestion that the arbitrator acted
dishonestly. How can it then be said that this award is on its face bad?
Agreeing with the High Court we dismiss this appeal with costs to the
contesting respondent.
Appeal dismissed.
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