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1970 Supreme(Pat) 15

PATNA HIGH COURT
R.J.Bahadur and Anwar Ahmad JJ.
State Of Bihar
Versus
S.K.Sahay
Appeal From Original Order No. 373 of 1967 ; 374 of 1967 ;
Decided On : JANUARY 21, 1970

An award given after the expiry of four months from the date of reference is null and void.

Headnote:

ARBITRATION - AWARD - VALIDITY - AWARD GIVEN AFTER EXPIRY OF FOUR MONTHS FROM DATE OF REFERENCE - WHETHER NULL AND VOID - ESTOPPEL - WAIVER - ACQUIESCENCE - PARTY TAKING PART IN PROCEEDING BEFORE ARBITRATOR AFTER EXPIRY OF FOUR MONTHS WITHOUT OBJECTION - WHETHER ESTOPPED FROM CHALLENGING VALIDITY OF AWARD - ARBITRATION ACT, 1940, S. 28(1)(c).

Fact of the Case:

Respondent was given a contract for the construction of a cattle farm building. The agreement was terminated in May 1960. In March 1964, the respondent filed an application for the enforcement of Clause 23 of the agreement, which provided for arbitration in case of disputes. The Superintending Engineer was appointed as the arbitrator. The respondent filed an application before the Court below for the removal of the arbitrator on the ground that he was apprehensive of not getting justice. The arbitrator gave the award on 2nd February 1966, after the expiry of four months from the date of reference. The respondent filed another application to set aside the award as null and void.

Finding of the Court:

The Court held that the award was null and void as it was given after the expiry of four months from the date of reference. The Court also held that the respondent was not estopped from challenging the award on the ground of his taking part in the proceeding after the expiry of four months or that he acquiesced in it.

Issues: Whether the award was null and void as it was given after the expiry of four months from the date of reference.

Ratio Decidendi: The Court held that the award was null and void as it was given after the expiry of four months from the date of reference. The Court also held that the respondent was not estopped from challenging the award on the ground of his taking part in the proceeding after the expiry of four months or that he acquiesced in it.

Final Decision: Miscellaneous Appeal No. 373 of 1967 was dismissed and Miscellaneous Appeal No. 374 of 1967 succeeded on the technical ground that the application filed in Miscellaneous Case No. 84 of 1965 had become infructuous.

Judgment

Anwar Ahmad, J.

1. These two appeals by the State of Bihar arise out of Miscellaneous Cases 84 of 1965 and 19 of 1966 of the Court of the Subordinate Judge, Hazaribagh, and are directed against the same order of the learned Subordinate Judge. They have been heard together and will be governed by this common judgment.

2. The facts of the two cases are common and are as follows. Respondent S. K. Sahay was given a contract for the construction of the cattle farm building at Gauriakarma in the district of Hazaribagh. An agreement to this effect was entered into by the Executive Engineer representing the appellant with the respondent namely, agreement No. 2F2 form of 59-60 (Ex. 3). In pursuance of this agreement, the respondent received the work order on the 20th August 1959.

In the month of January, 1960, when the work had only been completed in part, the respondent was directed to stop further construction. On the 4th May, 1960, the respondent was further informed by the Executive Engineer that the agreement was terminated. On the 19th March 1964, the respondent filed an application for the enforcement of Clause 23 of the agreement which provided that, in case any dispute or difference arose between the parties, the same would be referred to the Superintending Engineer of the circle and his decision would be final and binding upon the parties. On the 9th November, 1964, the Chief Engineer directed the Superintending Engineer of the circle to arbitrate in the matter.

It appears from the order-sheet of the arbitrator that he entered upon the reference some time prior to the 14th July, 1965. On this date, evidently in response to the notice issued to the parties, they appeared before the arbitrator. The respondent again appeared before him on the 5th July, and the 2nd September, 1965 and the case was heard in part. On the 1st November, 1965, the respondent filed an application before the Court below for the removal of the arbitrator on the ground that he was apprehensive that he would not get justice and fairplay at the hands of the arbitrator, namely, the Superintending Engineer of the circle. This application gave rise to Miscellaneous Case No. 84 of 1965 of the Court below out of which Miscellaneous Appeal No. 374 of 1967 of this Court arises.

3. It appears from the order sheet of the arbitrator dated the 12th November, 1965 that the respondent attended his office on the 2nd November, 1965. It is also stated therein that nobody appeared before him on that date to represent the appellant. The case was adjourned to the 10th December, 1965. The respondent did not present himself before the arbitrator on this date. The award of the arbitrator is dated the 2nd February, 1966. On the 1st March, 1966, another application was filed by the respondent praying to set aside the award as the same was null and void and was given beyond the period of four months of the arbitrator entering upon the reference. This application was numbered as Miscellaneous Case 19 of 1966 of the Court below out of which Miscellaneous Appeal No. 373 of this Court arises.

4. The only point raised before the learned Subordinate Judge was whether the award dated the 2nd February, 1966 was null and void. The learned Subordinate Judge, relying on the decision of their Lordships of the Supreme Court in Hari Shankar Lal V/s. Shambhu Nath, AIR 1962 SC 78 has come to the conclusion that, as the award was given after the expiry of four months from the date on which the arbitrator entered upon the reference, it must be held to be null and void and without jurisdiction.

5. Mr. Sarwar Ali (Government Pleader No. 1) on behalf of the appellant has submitted that, in the instant case, the respondent had been taking part in the proceeding before the arbitrator and, as such, he is estopped from challenging the award as being illegal on the ground that it was given after the period of four months from the date on which the arbitrator entered upon the reference. Learned Couns









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