Back
IN THE HIGH COURT OF BOMBAY
(Dr. S. Radhakrishnan and S. J. Vazifdar, JJ.)
MAGANLAL DALICHAND SANTOKCHAND and another - Appellants
V.
NARPATRAJ BESARMAL MEHTA and others - Respondents
Advocates appeared
For appellants: T.G. Vora instructed by M/s Bharat Joshi and Co.
For respondents: P. K. Samdhani, Senior Advocate with Chetan Kapadia instructed by Mis Basant Tilokani and Co.
Arbitration and Conciliation Act, 1996 - Section 34 Award Time Essence of Order Reference by consent To be disposed of within 4 months Reference delayed Award passed after expiry of time for decision of Reference A nullity contended Contention rejected by Arbitrator Single Judge affirmed order of Arbitrator Appeal against Under new Act of 1996, no limitation for finding Award Consent order making reference adopted it Clause 3 of agreement empowering Court to extend time of application on reference by any part or Arbitrator Award of Arbitrator in time. The single Judge upheld the above view of the learned Arbitrator inter alia on the ground that the parties relied upon the expression "entering upon reference" as defined under the Arbitration Act, 1940. Under the 1996 Act, there is no time limit prescribed. The learned Judge held that it was safe to assume that while fixing the time limit for the arbitrator to make the award, the parties deliberately used the well defined term under the 1940 Act and that therefore it would constitute an agreement to the contrary, contemplated by Section 21 of the 1996 Act.
It is important to note firstly that we are not concerned with the interpretation of a statutory provision containing the expression "date of entering upon the reference". We are concerned here with the real intention of the parties qua Clause 6 of the minutes of the order. What did the parties have in mind when they agreed to Clause 6 ? In other words, what was the date that the parties contemplated as falling within the expression "date of entering upon the reference". The reliance upon the judgment in M/s. Jolly Steel Industries, is only an indication of how the parties may have construed the term.
The appellant has not suggested anything regarding the intention of the parties. The burden was on the appellant to do so.
The appellant’s conduct militates against Mr. Vora’s submission. On 28.01.2004, the Arbitrator in the presence of the parties fixed 24.03.2004 and 25.03.2004 as the next dates for the hearing of the reference. If according to the appellants the intention of the parties was that the Arbitrator had entered upon the reference on 30.09.2003, surely they would not have agreed to the same. They, in fact, raised no objection.
It is also pertinent to note that Clause 6 required the parties to "co-operate and endeavour to dispose of the reference". Clearly, if not admittedly the appellant failed and neglected to do so. It is a moot point whether the parties intended that the one in default could urge such a contention. These are questions of fact, the burden of which was on the appellant to prove, which they failed to do.
The appellants have thus failed to establish that the arbitrator’s mandate came to an end on 30.01.2004. Secondly, even if the date of the arbitrator entering upon the reference is to be determined in accordance with Clause 3 of Schedule I of the 1940 Act, the appellant’s case is not well founded.
S.J. VAZIFDAR, J. : - This is an Appeal against the order of the learned Single Judge, dismissing the petition filed by the appellant, challenging an award dated 31 -3 -2004 made by the learned arbitrator.
2. By an order dated 30 -9 -2003, Suit No. 2335 of 1994 filed by the respondents was disposed of in terms of the minutes of the order signed by the parties and their Advocates. Clauses 1 and 6 of the minutes of the order read as under:
"1. By consent the pending disputes as mentioned in the above suit between the parties hereto are referred to the sole arbitration of Mr. Justice S. M. Jhunjunwala (Retd.) to be conducted under the provisions of Arbitration and Conciliation Act, 1996 and the Learned Arbitrator shall pass a reasoned A ward which shall be final and binding on the parties."
"6. The Arbitrator shall dispose off the reference within a period of 4 months from the date of entering upon the reference and the parties shall co -operate and endeavour to dispose of the reference."
3. The arbitration proceeding were conducted pursuant to the above terms.
The only ground urged before us was that in view of clause 6 of the minutes of the order, the arbitrators mandate came to an end on 30 -1 -2003. The appellants Advocate addressed a letter dated 11 -3 -2004 to the arbitrator contending that his mandate had come to an end and, as such, the arbitration proceedings could not continue.
4. The learned arbitrator rejected this contention by a detailed order dated 19 -3 -2004. The learned arbitrator thereafter made and published his award dated 31 -3 -2004 on merits. As stated above, the only ground urged before us was that the arbitrators mandate had come to an end on 30 -1 -2004 i.e. four months after the date of the minutes of the order dated 30 -9 -2004 and that therefore the award dated 31 -3 -2004 was passed without the arbitrator having any mandate to do so.
5. Clearly, if not admittedly, the award was made after 30 -1 -2004 entirely due to the appellants default in failing to comply with the time limits set by the Arbitrator for filing the reply and the arbitrator granting the appellants extension of time for doing so as well as on account of the Arbitrator granting adjournments on the appellants applications and to accommodate the appellants. The appellants raised this purely technical plea having taken advantage of the indulgence sought by them and granted by the learned arbitrator. The attitude of the appellant in this regard is not entirely bona -fide or honest.
6. Mr. Vora however contended that this was a question of law and, however unfair and dishonest the appellants conduct may appear to be, the arbitrators mandate having come to an end, the award is a nullity.
7. It is necessary to note a few facts before dealing with the rival contentions. The minutes of the order dated 30 -9 -2003 were forwarded to the arbitrator under cover of the respondents Advocates letter dated 15 -10 -2003. At a meeting held on 5 -11 -2003, directions were issued for filing a statement of claim, written statement and counter claim, if any. On 5 -11 -2003 the respondents, in fact, filed a statement of claim and documents relied upon by them. The appellants were required to file the written statement and counterclaim, if any, by 28 -11 -2003. By a letter dated 27 -11 -2003 the appellants requested the arbitrator for time till 5 -12 -2003 for filing the written statement. On 5 -12 -2003 the appellants again requested further time till 12 -12 -2003 to file the written statement. By a letter dated 12 -12 -2003 the appellants Advocates informed the arbitrator that the written statement would be filed on 13 -12 -2003 and sought extension accordingly. Along with the letter dated 13 -12 -2003, the appellants filed the written statement and requested that the same be taken on record. All the aforesaid requests were granted and the written statement was taken on record.
8. By a letter date
SupremeToday
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
