PATNA HIGH COURT
Sinha and K.Dayal JJ.
Lakhmir Singh
Versus
Union Of India
Appeal From Original Order No. 279 of 1952 ;
Decided On : MAY 08, 1957
ARBITRATION - APPOINTMENT OF ARBITRATOR - JURISDICTION - AWARD - DELAY IN MAKING - EXTENSION OF TIME - LIMITATION - ESTOPPEL.
Fact of the Case:
The plaintiff entered into a contract with the Government of India for strengthening taxitracks and approaches at job No. 170, Bihta Aerodrome. The estimated cost of the work was nearly Rs. 6,64,765. The entire work could not be done and the plaintiff submitted a claim, amounting to Rs. 90,508 on 20th April, 1945. The claim was not accepted and the matter was therefore referred to arbitration. Mr. Sethi, Superintending Engineer of Delhi Aviation Circle was the sole arbitrator. The plaintiff alleged that the award given by the arbitrator had not been filed in Court nor had it been made a rule of the Court. The plaintiff, therefore, applied under Sec.33 of the Arbitration Act before the Subordinate Judge First Court, Patna, and prayed for the following reliefs: "* * * . (a) The award dated 27-6-1947 be set aside. (b) The arbitrator be removed. (c) That a new and independent arbitrator should be appointed to decide the difference between the parties. (d) Costs of this petition be awarded to the petitioner."
Finding of the Court:
The court found that the arbitrator, Mr. Sethi, did not have jurisdiction to arbitrate the dispute as he was not the Superintending Engineer of the circle for the time being as required by the contract. The court also found that the award was made beyond four months of the arbitrator entering on the reference and was, therefore, hit by paragraph 3 of Schedule 1 to the Arbitration Act. The court further found that the amendment of the claim on 9th May 1947 did not amount to a fresh reference and that the plaintiff was not estopped from challenging the award on the ground of delay. The court also found that the extension of time granted by the court below was not justified as there was no proper exercise of judicial discretion.
Issues: 1. Whether the arbitrator, Mr. Sethi, had jurisdiction to arbitrate the dispute. 2. Whether the award was made beyond four months of the arbitrator entering on the reference. 3. Whether the amendment of the claim on 9th May 1947 amounted to a fresh reference. 4. Whether the plaintiff was estopped from challenging the award on the ground of delay. 5. Whether the extension of time granted by the court below was justified.
Ratio Decidendi: 1. The court held that the arbitrator, Mr. Sethi, did not have jurisdiction to arbitrate the dispute as he was not the Superintending Engineer of the circle for the time being as required by the contract. 2. The court held that the award was made beyond four months of the arbitrator entering on the reference and was, therefore, hit by paragraph 3 of Schedule 1 to the Arbitration Act. 3. The court held that the amendment of the claim on 9th May 1947 did not amount to a fresh reference and that the plaintiff was not estopped from challenging the award on the ground of delay. 4. The court held that the extension of time granted by the court below was not justified as there was no proper exercise of judicial discretion.
Final Decision: The appeal was allowed with costs, the order of the Court below was reversed and the award was set aside, and the suit decreed with costs.
Dayal, J.
1. This appeal is under Sec.39, Arbitration Act, 1940 , by the plaintiff.
2. The facts and circumstances giving rise to this appeal are these: The plaintiff entered into a contract (vide Ext. 6) with the Government of India for strengthening taxitracks and approaches at job No. 170, Bihta Aerodrome. The estimated cost of the work was nearly Rs. 6,64,765. The entire work could not be done and the plaintiff submitted a claim, amounting to Rs. 90,508 on 20th April, 1945 (Ext. 5).
The claim was not accepted and the matter was therefore referred to arbitration. Mr. Sethi, Superintending Engineer of Delhi Aviation Circle was the sole arbitrator. The plaintiff alleged that the award given by the arbitrator had not been filed in Court nor had it been made a rule of the Court. The plaintiff, therefore, applied under Sec.33 of the Arbitration Act before the Subordinate Judge First Court, Patna, and prayed for the following reliefs: "* * * .
(a) The award dated 27-6-1947 be set aside.
(b) The arbitrator be removed.
(c) That a new and independent arbitrator should be appointed to decide the difference between the parties.
(d) Costs of this petition be awarded to the petitioner."
The contention of the plaintiff, amongst others, was that the award was bad in law and was liable to be set aside because it was made more than four months after the arbitrator entered on the reference. Another ground on which the award was challenged to be inoperative was that the appointment of Mr. Sethi as arbitrator was illegal as he was not the Superintending Engineer to whom the matter should have been referred for arbitration under Clause 25 of the agreement (vide Ext. 6).
3. The present respondents filed a rejoinder to the claim and contended that the award was in order. It was given by a competent authority and was binding on the plaintiff. It was further contended that the plaintiff having agreed to Mr. Sethi being appointed as arbitrator and having preferred fresh claim before him during the pendency of the matter, he was estopped from contending that Mr. Sethi was not the competent authority to be appointed arbitrator or that the award was given more than four months after the arbitrator entered on the reference. The action was resisted also on the grounds of limitation, jurisdiction, maintainability and want of notice under Section 80, Code of Civil Procedure.
4. This matter was registered as Title Suit No. 30/12 of 1950/51 and the parties went to trial on the following issues;
"1. Is the suit maintainable?
2. Has the Court jurisdiction, to entertain and try the suit?
3. Is the suit bad for non-compliance of Section 80 of the Code of Civil Procedure? Is that section applicable to the suit.
4. Is the suit barred by limitation?
5. Is the award in question liable to be set aside on any of the grounds as alleged?
6. Is the plaintiff estopped from raising the question of limitation?"
5. Issues Nos. 1 to 4 have been decided in favour of the appellant. But the plaintiff has been non-suited by virtue of the decision of the Court below on issues Nos. 5 and 6.
6. Being thus aggrieved, the present appeal has been filed by the plaintiff-appellant. Mr. Lal narayan Sinha learned Government Advocate, appearing for the appellant in support of the appeal, has raised the following points:
1. The reference was invalid, as Mr. Sethi, the arbitrator, had no jurisdiction under the contract (Ext. 6) to arbitrate; the contract in this regard, was ambiguous and vague.
2. The award was hit by paragraph (3) of Schedule T to the Arbitration Act being beyond four months and was therefore, unenforceable;
3. There was no estoppel against the statute and the amendment to the claim dated 9th May, 1947 was not in the nature of a fresh reference: and
4. In the circumstances, the court below was not justified in extending the time under Sec.28 of the Act.
7. Mr. Sinha also referred to Exts. 5, 5 (a) and P as illustrations of the losses suffered by the plaintiff for no
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