PATNA HIGH COURT
Choudhary and K.Dayal JJ.
Soneylal Thakur
Versus
Lachhminarain Thakur
Civil Revision No. 1071 of 1954 ;
Decided On : APRIL 15, 1957
ARBITRATION - AWARD - TIME LIMIT - INTERPRETATION OF EXPRESSION "ENTERING ON THE REFERENCE" - ARBITRATOR ACCEPTS REFERENCE BUT DOES NOTHING IN FURTHERANCE THEREOF - HE DOES NOT ENTER ON REFERENCE - AWARD MADE WITHIN FOUR MONTHS FROM DATE OF ENTERING ON REFERENCE IS VALID.
Fact of the Case:
Dispute between petitioner and opposite party No. 1 regarding survey plot No. 3926. Petitioner gave plot to Sribans in exchange for another plot, which Sribans exchanged with opposite party No. 1. Opposite party No. 1 built a house on the plot and dispossessed Sribans. Sribans dispossessed petitioner from the land given to him in exchange. Several criminal cases between parties. Dispute amicably settled and four sale deeds executed on 16-11-1951. Money claims remained unsettled and parties agreed to have their differences decided by opposite party No. 2 as arbitrator. Petitioner learnt that arbitrator was being influenced by his father-in-law and requested arbitrator not to arbitrate. Arbitrator accepted request and promised not to proceed with arbitration. Petitioner got assured that arbitration had fallen through and demanded dues from opposite party No. 1. Opposite party No. 1, in collusion with arbitrator, got an award fabricated behind petitioner's back and without hearing him. Petitioner applied to court to call upon arbitrator to file award in court. Arbitrator filed award on 15-13-1952; court directed parties to file objections to award. Petitioner filed application on 12-3-1953, for setting aside award on various grounds. Trial court set aside award, but lower appellate court reversed trial court's finding and passed an order for a decree to follow in accordance with the award.
Finding of the Court:
Arbitrator enters on reference when, after having accepted it, he proceeds to do something in furtherance of and towards the execution of the work of arbitration. Award made within four months from date of entering on reference is valid.
Issues: 1. Whether the award is void as having been made beyond the time-prescribed by Rule 3 of Sch. I, Arbitration, Act. 2. Whether the agreement of reference is vague and did not mention correctly the dispute that had to be decided by the arbitrator. 3. Whether the arbitrator misconducted himself as he gave the award without giving notice to the petitioner and without hearing him.
Ratio Decidendi: 1. The expression "entering on the reference" in Rule 3 of Schedule I of the Arbitration Act, 1940, means that the arbitrator has already accepted the reference and has proceeded to do something in furtherance of and towards the execution of the work of arbitration. 2. An arbitrator does not enter upon a reference the moment he accepts to work as an arbitrator, nor can it be said that he enters upon a reference only when he actually hears the reference. 3. The exact date as to when an arbitrator enters on a reference in a particular case, however, will have to be determined on the facts and circumstances of that case.
Final Decision: Application allowed; judgment and order of court of appeal below set aside; case sent back for fresh decision in accordance with law.
Choudhary, J.
1. This application in -revision arises out of an arbitration proceeding without the intervention of the Court. The facts leading to the institution of the proceeding, put shortly, are these. There was a dispute between the petitioner and opposite party No. 1 with regard to survey plot No. 3926 which, admittedly, belonged to the petitioner. He, however, gave this plot in exchange to one Sribans who, in his own turn, exchanged the same with opposite party No. 1, Thereafter, opposite party No. 1 built, a house on the said plot, and, subsequently, dispossessed Sribans from the land which he had given to him in exchange for the above plot. Consequently, Sribans dispossessed the petitioner from the land which he had given to him in ex-change of that plot. As a result of this, there were several criminal cases between the parties. During the pendency of these cases, it appears the dispute between the parties with regard to land was amicably settled and in consequence of the settlement four sale deeds were executed on 16-11-1951, one by the petitioner in favour of Sribans with respect to the said plot No. 3926, the other by Sribans to opposite party No. 1 with regard to the same plot, the third by opposite party no, 1 to Sribans with regard to the land that the former had given to the latter in exchange and the fourth by Sribans to the petitioner with regard to the land which had been given to the petitioner in exchange by him, The dispute between the parties with regard to certain money claims remained unsettled and for that purpose they on the same date agreed to have their differences decided by opposite party No. 2 as an arbitrator. Accordingly, a registered agreement to refer the above dispute to the arbitration of opposite party No. 2 as executed on that date.
Subsequently,, the petitioner, as is alleged by him, learnt that the father-in-law of the said arbitrator was influencing him and, as such, the petitioner requested the arbitrator not to arbitrate. It is said that the said arbitrator accepted the request and promised not to proceed with the arbitration. Accordingly, the petitioner got assured that the arbitration had fallen through and he began to demand his dues from opposite party No. 1. The case of the petitioner is that, opposite party No. 1 was thus annoyed with him and he, therefore, in collusion with the arbitrator, opposite party No. 2, got an award fabricated behind the back of the petitioner and without hearing him. No notice of this award was given to the petitioner, but when he learnt about it, he made an application in court on 13-11-1952, to call upon the arbitrator to file the award in court, As a result of this application, the arbitrator filed the award in court on 15-13-1952; and on 5-3-1953, the Court directed the parties to file objection to the award. Thereafter, the petitioner filed an application on 12-3-1953, for setting aside the award on various grounds. It was contended on his behalf that the agreement of reference is vague and did not mention correctly the dispute that had to be decided by the arbitrator. The ground for this contention was that the petitioner was claiming from opposite party No. 1 mesne profits for the exchanged land for the period during which he was kept out Of possession and for costs incurred by him in the criminal cases. But the deed of reference used the words "Len Den" as being the matter of dispute between the parties. The next contention was that, opposite party No. 2 having promised not to proceed with the arbitration, the reference was terminated. The third contention was that the arbitrator misconducted himself as he gave "the award without giving notice to the petitioner and without hearing him. The fourth point that was raised was that the award was made beyond the time prescribed by Rule 3 of Schedule I, Arbitration Act, 1940 and, as such, it was void. The Courts-below overruled the first three contentions. The Court of first instance, howev
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