State
of West Bengal Vs. Sree Sree Ma Engineering & ANR [1987] INSC 243 (8
September 1987)
MUKHARJI,
SABYASACHI (J) MUKHARJI, SABYASACHI (J) OZA, G.L. (J)
CITATION:
1987 AIR 2229 1988 SCR (1) 69 1987 SCC (4) 452 JT 1987 (3) 553 1987 SCALE
(2)507
ACT:
Arbitration
Act, 1940:
Sections
14 to 16, 28 and 30-Unsigned award by Arbitrator-Whether can be made rule of
the Court-Whether Court can cure this formal defect by remitting award for
signature.
HEADNOTE:
There
was a dispute between the first respondent and the appellant in respect of Silt
Clearance of River Peali from Uttarbhag Canning Road Bridge up to Hobon Sluice.
The matter was referred to the Arbitrator, who made his award.
The
respondent was paid a sum of Rs.32,525.62 in terms of the award, and a true
copy of the award was forwarded to the Court.
The
first respondent filed an application under Sections 14, 15, 16 and 30 of the
Arbitration Act, 1940, for setting aside the award. A Single Judge of the High
Court dismissed the application and passsed a judgment in terms of the award.
The Division Bench having allowed the appeal of the respondent, the matter
again came up before the Single Judge, who allowed the application of the
respondent under Section 5, 11 and 12 of the Act and appointed a retire Judge
of the High Court as arbitrator and later revoked the authority of the said
arbitrator and appointed a lawyer of the High Court as arbitrator.
The
appellant filed an appeal against the said decision to the Division Bench,
which held that as there was an extension of time in making the award and the
award having been filed within the extended time, the award was not beyond
time. However, it held that an unsigned award could not be made a rule of the
Court.
Disposing
of the appeal by special leave, this Court, ^
HELD:
Under law, the mandatory rule is that the award should be signed by the
Arbitrator. No doubt an unsigned award cannot be made a rule of the Court. But
it is only a formal defect. The Court, in such circumstances, can extend time
for making the award and direct 70 curing of the formal defect in the award. So
much time and effort should not be allowed to go waste. Law must subserve
justice and endeavour to serve the purpose of law. [71 F-G] In the instant
case, the award was handed over to the parties and a letter was sent to the
parties concerned and award bore no signature of the Arbitrator. The parties
acted upon the award. In a situation of this nature, the proper order in the
interest of justice would be to remit the award, under Section 16 of the
Arbitration Act, for enabling the Arbitrator named therein for signing the
award and for that purpose if it is necessary under Section 28 of the
Arbitration Act, the Court has the power to extend the time to the Arbitrator
for making the award final.[71F. H; 72A-B] Accordingly, the time is extended by
four months and the award remitted to the Arbitrator for signature. [72B]
Civil
Appellate Jurisdiction: Civil Appeal No. 2190 of 1987.
From
the Judgment and Order dated 29th August, 1986 of the Calcutta High Court in
Appeal No. 204 of 1986.
Amal
Dutta, D.K. Sinha and J.R. Das for the Appellant.
The
Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. Special leave
granted.
This
is an appeal challenging the decision of the High Court of Calcutta upholding
the decision of the learned Single Judge of that Court whereby the award of the
arbitrator was set aside and new arbitrator was appointed.
In
order to appreciate the position it is necessary to state that in the year 1964
the Executive Engineer had invited competitive sealed tenders in respect of
"Silt Clearance of River Peali from Utterbhag Canning Road Bridge upto
Hobon Sluice". Shri D.P. Chatterjee entered upon the reference soon
thereafter and the award was made in November, 1966. It appears that thereafter
the respondent asked for the award amount in full and final settlement which
the Executive Engineer turned down. The respondent herein was paid by the
appellant a sum of Rs.32,525.62 in terms of the award and which sum was received
and acknowledged by the respondent No. 1. Then the true copy of the award was
forwarded to the Court by the Chief Executive Engineer and the application was
71 filed by the respondent No. 1 in 1981 in the High Court of Calcutta under
Sections 14, 15, 16 & 30 of the Arbitration Act, 1940 for setting aside the
award dated the 19th November, 1966. The High Court after hearing the parties
dismissed that application on 10th May, 1982. The High Court was thereafter
pleased to pass judgment in terms of the award. The respondent herein preferred
an appeal against the judgment dated 10.5.82. The Division Bench allowed the
appeal of the appellant. The appellant's advocate did not notice that the
matter appeared in the daily list dated 26th April, 1985 of the learned Single
Judge for judgment and as such he did not know the result of the judgment.
Thereafter the matter again appeared in the list of the learned Single Judge
and the respondent had made an application before the learned Single Judge for
setting aside the previous order.
The
learned Single Judge on 18th March, 1986 rejected the application of the
appellant and allowed the application of the respondent herein under Section S,
11 and 12 of the Arbitration Act and appointed a retired Judge of the High Court
as the arbitrator and thereafter revoked the authority of the said arbitrator
from acting as the arbitrator and appointed a lawyer of the High Court as the
arbitrator. The appellant preferred an appeal against the said order dated the
3rd December, 1985 before the Division Bench of the High Court of Calcutta.
Two
points were raised before the learned Single Judge, firstly that the award was
beyond time and secondly, the learned arbitrator had not signed the award. The
Division Bench found that as there was an extension of time in making the award
and the award having been filed within the extended time, expressed the view
that there was no force in the first point. The Division Bench, however, was
unable to accept unsigned award being made the rule of the Court.
It
is true that an unsigned award cannot be made the rule of the Court. But it is
only a formal defect. It appears that the award was handed over to the parties
and a letter was sent to the parties concerned and award bore no signature of
the arbitrator. The parties had acted upon the award. It is true that under the
law the mandatory rule is that the award should be signed by the arbitrator.
But law must subserve justice and end eavour to serve the purpose of law. The
Court can in such circumstances extend time for making the award and direct
curing of the formal defect in the award. So much time and effort should not be
allowed to go waste.
In
the situation of this nature the proper order in the interest of H 72 justice
would be to remit the award under Section 16 of the Arbitration Act, 1940 for
enabling the arbitrator named therein for signing the award and for that
purpose if it is necessary under Section 28 of the Arbitration Act, 1940, the
Court has the power to extend the time to the arbitrator for making the award
final. We did so. We extend the time by four months from today and direct the
award be remitted to the arbitrator for signature.
The
appeal is disposed of accordingly.
N.P.V.
Appeal disposed of.
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