SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

1968 Supreme(Pat) 121

PATNA HIGH COURT
Anwar Ahmad and Shambhu Prasad Singh JJ.
Bahadur Singh
Versus
Fuleshwar Singh
Appeal From Original Order No. 110 of 1965 ;
Decided On : JULY 12, 1968

The meaning of an agreement for reference to arbitration is not required to be certain at the time of entering into the agreement, but it is sufficient if it is capable of being made certain from the surrounding circumstances.

Headnote:

ARBITRATION - AWARD - FILING - LIMITATION - NOTICE OF FILING - SERVICE - CONSTRUCTION - INDIAN LIMITATION ACT, 1908 (ACT IX OF 1908), ART. 158 - ARBITRATION ACT, 1940 (ACT X OF 1940), SEC. 30 - INDIAN CONTRACT ACT, 1872 (ACT IX OF 1872), SEC. 29.

Fact of the Case:

Plaintiff and defendant entered into a partnership business and referred a dispute to arbitration. The arbitrators pronounced the award on 3rd April 1962, re-wrote it on stamped paper on 4th April 1962, and registered it on 5th April 1962. A notice of the award was served on the plaintiff on 7th April 1962. Defendant filed an application to make the award a rule of the Court on 5th May 1962. Defendant filed an objection to the award on 11th January 1964, alleging various misconducts by the arbitrators and vagueness in the reference. The Court below set aside the award and refused to pass a decree in terms thereof.

Finding of the Court:

The Court held that the objection filed by the defendant was beyond thirty days from the date of service of the notice of filing of the award and was, therefore, barred by limitation. The Court further held that the agreement for reference was not vague and that the award was not invalid on the ground of vagueness. The Court also held that the award was not invalid because it was re-written after it was pronounced.

Issues: 1. Whether the objection filed by the defendant was barred by limitation? 2. Whether the agreement for reference was vague? 3. Whether the award was invalid on the ground of vagueness? 4. Whether the award was invalid because it was re-written after it was pronounced?

Ratio Decidendi: 1. The Court held that the starting point of limitation for filing an objection to the award by the defendant would be the date on which he came to know of the filing of the award, which in this case was 12th June 1963. The Court relied on the observations of the Supreme Court in Nilkantha Sidramappa V/s. Kashinath Somanna, AIR 1962 SC 666, that the expression "date of service of notice" in Article 158 of the Limitation Act includes constructive or informal notice. 2. The Court held that the agreement for reference was not vague as it clearly stated that the dispute which was referred for arbitration was a dispute relating to the Variety House, a shop owned by the partnership. The Court relied on the decision in Radha Kishan V/s. Sapattar Singh, AIR 1957 All 406, which held that arbitration agreements are generally not specific about the actual points of dispute and that the parties formulate their disputes before the arbitrators when necessary. 3. The Court held that the award was not invalid on the ground of vagueness as the meaning of the agreement for reference was certain or, at least, capable of being made certain. The Court relied on Section 29 of the Contract Act, which states that agreements, the meaning of which is not certain, or capable of being made certain, are void. The Court held that, in the present case, the meaning of the agreement for reference was capable of being made certain from the surrounding circumstances. 4. The Court held that the award was not invalid because it was re-written after it was pronounced as there was no question of any variation, addition, or alteration in the award.

Final Decision: The Court allowed the appeal, set aside the order of the Court below, and directed that a decree be prepared in terms of the award.

Judgment

Shambhu Prasad Singh, J.

1. This appeal by the plaintiff arises out of an application dated the 5th May 1962 for making an award on a reference made outside the Court a rule of the Court, which was registered as a title suit.

2. According to the plaintiffs case, he and defendant No. 1 entered into a partnership business in which the plaintiff was to supply the capital and to have eleven annas share and defendant No. 1 was to have five annas share. In August 1959, they started a shop of stationery goods in the town of Saharsa. In November 1961, there was a dispute between them and, on the 5th December 1961, they entered into an agreement to refer the matter for arbitration by four arbitrators who were made defendants 2 to 5 to the suit. One of them, Manzar Alam, according to the plaintiff, was to act as the umpire. They executed two documents. Exhibits 1 and 1(a), separately showing that they agreed to refer the case for arbitration. It appears that on the 3rd April 1962, the arbitrators pronounced the award and signed it. It was re-written on stamped paper on the 4th April, 1962 and was registered on the 5th April, 1962. A notice of the award was served on the plaintiff on the 7th April, 1962. Two more persons were made parties to the suit as defendants 6 and 7 who, according to the plaintiff, were merely his benamidars and had nothing to do with the business.

3. After the notice was served upon him, defendant No. 1 appeared in court on the 16th June 1962. The award was actually filed in Court on the 11th May 1963. On the 12th June 1963. defendant No. 1 filed an application before the Court below that the award had been filed and kept in safe custody and that he wanted to inspect it. On the 11th January 1964, he filed his objection, alleging inter alia, that there was no valid reference inasmuch as he was made to sign the agreement for reference under undue influence and coercion, that the award was invalid for the arbitrators had misconducted themselves, that defendants 6 and 7 had interest in the partnership and were not mere benamidars of the plaintiff and, as they were no party to the reference, the award could not be enforced, that the reference was void as it was vague, that the reference was also bad because it was in respect only of a part of the partnership business and not in respect of the canteen business owned by the partners in Sour Bazar in Saharsa and that the arbitration was bad because no umpire was, in fact, appointed lie alleged various misconducts on the part of the arbitrators which need not be referred to except three items, namely, that the arbitrators did not take into account the damaged articles of the shop and did not assess any value with respect to them, that they fixed the valuation of the other articles with the help of outsiders and that they re-wrote the award on the 4th April, 1962 after they had pronounced and signed it a day earlier.

4. The Court below has found in favour of the plaintiff on all points except on the questions of vagueness of the reference and three misconducts stated above. It has held that the reference was vague and the arbitrators did commit the aforesaid three misconducts and, accordingly, set aside the award and refused to pass a decree in terms thereof.

5. Mr. R.S. Chatterji, appearing for the appellant, has argued that, as the objection of defendant No. 1 (respondent No. 1 before this Court and to be referred to as the respondent hereafter) was filed beyond thirty days of the filing of the award it was time barred and that this fact should have been taken into consideration by the Court below and it should have passed a decree in terms of the award. There can be no doubt that the respondent came to know of the filing of the award on the 12th June 1963 when he filed an application for its inspection and his objection was obviously beyond thirty days from that date. Article 158 of the Indian Limitation Act (Act IX of 1908) lays down that an application under th



















Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

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

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top