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1967 Supreme(Pat) 18

PATNA HIGH COURT
R.L.Narasimham, R.K.Choudhary and U.N.Sinha JJ.
Makeshwar Misra
Versus
Laliteshwar Prasad Singh
Appeal From Appellate Decree No. 815 of 1960 ;
Decided On : FEBRUARY 17, 1967

An order dismissing an application to file an award, where the court has considered objections to the award and effectively set it aside, is an appealable order under Section 39(1)(vi) of the Arbitration Act, 1940.

Headnote:

ARBITRATION ACT, 1940 - SECTION 33, 39 - APPEAL - MAINTAINABILITY - AWARD - SETTING ASIDE - INTERPRETATION - COURT ANALYSIS AND CONCLUSION - EFFECT OF ORDER - APPEALABILITY.

Fact of the Case:

Plaintiff filed an application under Section 14(2) of the Arbitration Act, 1940, seeking to enforce an award made by arbitrators in a dispute with Defendant No. 1. Defendant No. 1 challenged the existence and validity of the arbitration agreement and the award, alleging fraud and misconduct by the arbitrators. The trial court dismissed the plaintiff's application, holding that the award was not genuine and setting it aside.

Finding of the Court:

The appellate court reversed the trial court's decision, accepting the plaintiff's case and holding that the arbitration agreement and award were genuine and valid. The court found that the arbitrators had acted properly and that the award was binding on Defendant No. 1.

Issues: 1. Whether an appeal lay in the court of appeal below against the judgment and order passed by the trial court. 2. Whether the trial court's order dismissing the plaintiff's application amounted to setting aside the award, making it appealable under Section 39(1)(vi) of the Arbitration Act.

Ratio Decidendi: 1. The court held that an appeal did lie in the court of appeal below because the trial court's order, in effect, set aside the award filed by the plaintiff. 2. The court interpreted Section 33 of the Arbitration Act, which deals with challenges to the existence or validity of an arbitration agreement or award, and Section 39, which specifies the appealable orders under the Act. 3. The court found that the objections raised by Defendant No. 1 fell within the purview of Section 33, and that the trial court's order, by accepting these objections and dismissing the plaintiff's application, amounted to setting aside the award. 4. The court relied on previous decisions of the Patna High Court and the Allahabad High Court, which held that an order dismissing an application to file an award, where the court has considered objections to the award and effectively set it aside, is an appealable order under Section 39(1)(vi) of the Arbitration Act.

Final Decision: The court dismissed the appeal, holding that the appeal in this case did lie in the court of appeal below and that the trial court's order was in the nature of an order setting aside the award.

Judgment

U.N.Sinha, J.

1. This appeal has been referred to this Full Bench for hearing, in pursuance of an order passed by a Division Bench of this Court on the 3rd January, 1966 to the effect that in view of certain conflicting decisions of this Court, it is desirable that the question involved in the case should be finally resolved by a larger Bench.

2. The appeal has been filed by Makeshwar Misra, who was opposite party No. 1 to an application filed by Sureshwar Prasad Singh under Sec.14(2) of the Arbitration Act, 1940 (10 of 1940). Originally Sureshwar Prasad Singh was respondent No. 1 to this appeal, and, after his death, he is being represented by Ms heirs and legal representatives, who have been substituted in his place. From the records of the case, it appears that Sureshwar Prasad Singh has been described as the plaintiff and Makeshwar Misra as defendant first party, and, therefore, I shall refer to Sureshwar Prasad Singh as the plaintiff and Makeshwar Misra as defendant No. 1.

3. The facts of the case, in short, are as follows. The plaintiff alleged that, in the circumstances mentioned by him, a sum of Rs. 3,500 had been deposited with defendant No. 1 in four instalments, and the plaintiff was entitled to receive this money from him. After defendant No 1 had refused to return this money to the plaintiff, they had agreed to refer their dispute to certain arbitrators for their decision. A deed of reference to five arbitrators was executed by both the parties on the 15th November, 1956. These five arbitrators were opposite party Nos. 2 to 6 of the application filed under Sec.14(2) of the Arbitration Act, and they are the other respondents to this appeal It was alleged that, in due course, the arbitrators took up the arbitration, appointing one of them rum ed Ramanandan Singh at the umpire. Both the parties had tiled their written statements before the arbitrators, and both the parties had appeared before them. After the plaintiff had adduced evidence before the arbitrators, defendant No. 1 did not take any further steps in the case, and an award was signed by the arbitrators in the 13th March, 1957. Thereafter, the award was prepared on stamp paper, and was duly executed by the arbitrators on the 30th March 1957. The award was registered on the 30th April, 1957, by the umpire. According to the award, defendant No. 1 was asked to pay the plaintiff Rs. 3,500, and it was alleged by the plaintiff that he had not done so. On these allegations, the plaintiff filed the application under Sec.14(2) of the Arbitration Act, stating that the award was being filed on the direction of the arbitrators. The plaintiff prayed that a decree might be passed in terms of the award in favour of the plaintiff against defendant No. 1.

4. A written statement was filed by defendant No. 1, denying all the allegations of facts made by the plaintiff regarding the deposit of Rs. 8,600 with him. He denied having executed any deed of reference to arbitration, contending that, if any such document is produced, it must be a forged and fabricated document. He denied all knowledge of the arbitration proceeding. The award relied upon the plaintiff was described as a collusive document. On those allegations, the parties went to trial before the Munsif, 1st Court, Samastipur.

5. The learned Munsif decided all the points in favour of defendant No. 1. With respect to the plaintiffs allegation of the deposits amounting to Rs. 3,500 it was held that no such deposits had been made with defendant No. 1. The plaintiffs case about the execution of the deed of reference by defendant No. 1 was not accepted. The alleged arbitration proceedings were not accepted as true. It was held that all the arbitrators had perjured themselves in supporting the plaintiffs case. A question of limitation had also been agitated; but it was decided against the plaintiff on the ground that, as the award was not a genuine document, the defendants objection was not barred by limitation under






































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