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1956 Supreme(Cal) 62

HIGH COURT OF CALCUTTA
P. B. Mukharji
BANWARILAL GARODIA - Appellant
Versus
JOYLAL HARGULAL - Respondent
Award 48  Of  1955
Decided On : MARCH 28, 1956

Advocates Appeared:
A.C.BHABRA, E.R.Meyer

The validity of an arbitration award can be challenged on various grounds, but the court will uphold the award unless the challenge is based on a material error of law or fact.

Headnote:

ARBITRATION - Award - Validity - Challenge - Grounds - Illegality of contract - Error in date - Ex parte proceedings - Interest on damages - Notice of legal proceedings - Effect on arbitration proceedings - Interpretation of Section 35, Arbitration Act.

Fact of the Case:

The petitioner, Banwarilal Garodia, a registered firm under the Indian Partnership Act, filed an application to declare Award No. 484 of 1954 dated 31-3-1954 of the Bengal Chamber of Commerce illegal and invalid and to set aside such award. The petitioner raised various grounds to challenge the validity of the award, including the illegality of the contract, error in the date of the award, ex parte proceedings, interest on damages, and the effect of notice of legal proceedings on arbitration proceedings.

Finding of the Court:

The court found that the contract was not illegal, the error in the date of the award was not material, the ex parte proceedings were justified, the award of interest on damages was valid, and the notice of legal proceedings did not render the arbitration proceedings invalid.

Issues: 1. Whether the contract was illegal under the West Bengal Jute Goods Act 5 of 1950? 2. Whether there was an error in the date of the award? 3. Whether the arbitrators should have held the meeting on 30-3-1954 and proceeded ex parte on that date? 4. Whether the arbitrators had awarded interest on damages? 5. Whether the award was made after notice under Section 35, Arbitration Act had been given to the arbitrators?

Ratio Decidendi: 1. The court held that the contract was not illegal as the question of whether a person is a habitual dealer or not is a question of fact within the competence of the arbitrators to decide. 2. The court held that the error in the date of the award was not material as the award may have been made by the arbitrators on the date mentioned in the award and the fact that the award was typed on the following day does not discredit the date of the award. 3. The court held that the arbitrators were justified in holding the meeting on 30-3-1954 and proceeding ex parte as the applicant had been given clear notice that if they failed to attend, the arbitrators would proceed ex parte. 4. The court held that the award of interest on damages was valid as the word 'damages' was not mentioned by the arbitrators in any part of their award and the respondents had given written notice that they would charge and claim interest. 5. The court held that the award was not invalid under Section 35, Arbitration Act as the legal proceeding commenced by the applicant did not relate to the 'whole subject-matter of the reference' and the notice of such legal proceeding was not given to the arbitrators until after the award had been made.

Final Decision: The court dismissed the application with costs.

P. B. MUKHARJI, J.

( 1 ) THIS is an application by the petitioner Banwarilal Garodia, a registered firm under the Indian Partnership Act to declare Award No. 484 of 1954 dated 31-3-1954 of the Bengal Chamber of Commerce illegal and invalid and to set aside such award. There is an alternative prayer to modify the award by deleting 'payme:it of interest' mentioned in para 20 (u) of the petition. The Notice of Motion was taken out as early as 3-5-1955, but has managed to remain undisposed so long.

( 2 ) MR. Bhabra appearing for the applicant did not urge all the grounds mentioned in para 20 of the petition. He selected the grounds stated in sub-paras (a), (c), (f), (g), (h), (q), (r), (s), (u) and (v) of para 20 of the petition and abandoned all others. In fact, he urged before me five points to set aside the award and to declare it in-valid.

( 3 ) HIS first point of objection was that the contract itself was illegal under the West Bengal tration Goods Act 5 of 1950, and, therefore, the arbitration clause was illegal and the arbitrators had no jurisdiction. He did not press this point. The ground on which that point is based is the disputed fact, whether the respondent was or was not in fact a habitual dealer in the sale or purchase of jute goods. As I am of the view that this is a question of fact which in the present arbitration clause is within the competence of the Arbitrators to decide, I do not think that the contract by itself and on the face of it can be said to be illegal. The Arbitrators are competent, in my opinion, to decide whether a person is in fact a habitual dealer or not. A contract is not hit by this Statute unless this particular fact is proved to come within the mischief of the Act. I, therefore, overrule the first objection.

( 4 ) THE second objection of the applicant is that there is error in the award so far as its date is concerned. The award is dated 31-3-1954. It is shown from the stamp paper on which the award is written that it could not have been given on. 31-3-1954 but on 1-4-1954. The stamp vendor's endorsement on the back: of the stamp paper on which the award is written shows that the stamp paper was sold on 1-4-1954. The body of the award begins with the date 31-3-1954. I do not consider this objection to have any merit at all. There are many reasons for saying so. The first is that the award may have in fact been made by the Arbitrators on 31-3-1954 in the sense that the Arbitrators had on that date decided what they would award. The fact that the Award was subsequently typed on the stamped paper on the next day 1-4-1954 does not discredit the date 31-3-1954. Secondly, the stamp vendor's endorsement is not necessarily unimpeachable or infallible and it might very well be that his date was wrong and the Arbitrators' date was right. The stamp vendor himself might have made an error in giving the date. It is also quite possible that the Arbitrators may have dictated the award on the 31st March to a Stenographer, and the Stenographer finally transcribed it on the stamp paper on the following day, 1-4-1954. The Arbitration Act does not insist that a date. should be given on every award or that an award must always bear a date. Nor do I think that it is such an error as can at all make the award bad and illegal. Mr. Bhabra wanted to argue that the Arbitrators awarded interest up to the date of the award and, therefore, it was essential that the date should be correct. Indeed so. But the interest of 4 1/2 per cent on the amount of the award which was Rs. 18,381-8-0 for one day would be a trifle. According to the well-known maxim of law, a Court or the law does not concern itself about trifles. De Minimis Non Curat lex. I, therefore, overrule the second point of objection.

( 5 ) THE third point of objection urged on behalf of the applicant is that the Arbitrators should not have held the meeting on 30-3-1954 and in any event should not have proceeded ex parte on that date. It is essential to state









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