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1976 Supreme(Del) 17

High Court Of Delhi
UNION OF INDIA - Appellant
Versus
K.L.BHALLA - Respondent
First Appeal Order 183D of 1964
Decided On : 02/04/1976

Advocates Appeared:
MADAN BHATIA, R.L.TANDON

The court does not have the power to remit an award to the arbitrator under section 16 of the Arbitration Act, 1940, after the first award has been made, if the only ground found by the court for setting aside the award is the misconduct of the arbitrator, which is covered under section 30 of the Act.

Headnote:

ARBITRATION - AWARD - REMISSION - JURISDICTION - EXTENSION OF TIME - ESTOPPEL - ACQUIESCENCE - APPEALABILITY OF ORDER - SETTING ASIDE OF AWARD - GROUNDS.

Fact of the Case:

In an arbitration proceeding, the arbitrator made an award in favor of the appellant. The respondent objected to the award, and the court remitted the matter back to the arbitrator for reconsideration. The arbitrator made a fresh award, which was again challenged by the respondent. The court set aside the award on the ground that the court had no power to extend the time for making the award after the first award had been made.

Finding of the Court:

The court held that the order of the court remitting the award to the arbitrator was without jurisdiction and void, as the court did not have the power to remit the award under section 16 of the Arbitration Act, 1940, since the only ground found by the court for setting aside the award was the misconduct of the arbitrator, which is covered under section 30 of the Act. The court also held that the respondent was not estopped from challenging the order of the court remitting the award to the arbitrator, as the order was not appealable and the respondent had raised the objection in an application for revocation of the authority of the arbitrator.

Issues: 1. Whether the court had the power to remit the award to the arbitrator under section 16 of the Arbitration Act, 1940, after the first award had been made? 2. Whether the respondent was estopped from challenging the order of the court remitting the award to the arbitrator?

Ratio Decidendi: 1. The court did not have the power to remit the award to the arbitrator under section 16 of the Arbitration Act, 1940, after the first award had been made, as the only ground found by the court for setting aside the award was the misconduct of the arbitrator, which is covered under section 30 of the Act. 2. The respondent was not estopped from challenging the order of the court remitting the award to the arbitrator, as the order was not appealable and the respondent had raised the objection in an application for revocation of the authority of the arbitrator.

Final Decision: The appeal was dismissed and the final order of the court below was confirmed.

B. C. MISRA

( 1 ) THIS first appeal from order has been filed under Sec. 39 (l) (b) of the Indian Arbitration Act, 10 of 1940 (hereinafter referred to as the Act) against the order of Mr. D. R. Khanna, then Sub-Judge, I Class, dated 29th May, 1964, by which he set aside the award of the Arbitrator dated 26th May, 1962. mainly on the ground that it had been made beyond the time allowed by the court under section 16 of the Act and was, therefore, void.

( 2 ) THE appeal came up for hearing before my learned brother Ansari. J. , who by order dated 23rd August, 1972 was pleased to allow the appeal and purporting to follow the decision of the High Court of Calcutta in Ganpatrai and Sons v. Ramgopal Nanda Kishore, AIR 1955 Calcutta 302, (1) held that the court had power under the proviso to sub-sec. (2) of Section 16 of the Act to extend the time to make the award even after the award had been made. Having recorded that finding the learned Judge allowed the appeal. Thereafter, K. L. Bhalla, respondent in the appeal, filed an application for review of ths order. In the application, it was contended that the learned Judge had failed to notice the decision of the Judicial Committee reported as Raja Har Narain Vs. Chandhrain I. L. R. 13 Allahabad 300 (2 ). on the point that time under the provisions of the Code of Civil Procedure corresponding to Section 16 (2) of the Act could not be extended and that the same had been cited before the learned Judge. The other ground submitted was that the arguments were confined by the appellant to the question which had been decided against the appellant by the court of first instance but that the arguments of the respondent on the merits of the case and the other grounds of objection to the award which had been raised before the trial court and repelled by it had not been heard and the counsel wanted to address arguments further,

( 3 ) THIS review application came up for disposal before my learned brother, Ansari J, who by order dated 8th December, 1972 held that so far as the first contention was concerned, it was true that the aforesaid decision of the Privy Council had been cited before him at the time of arguments as was also admitted by the counsel for the opposite side. But the mere emission to refer to or discuss the judgments cited by the counsel would not be a valid ground for review of the judgment and so the first ground for review was rejected. The second ground of review prevailed with the court and his lordship allowed the review application, but the review was limited to the extent of the second contention,viz. addressing arguments on the grounds which had been decided against the respondent by the court of first instance. The appeal was directed to be heard in the first week of January, 1973. Thereafter, the appeal came up for hearing before my Lord Ansari J. on a number of dates, but it could not be disposed of for one reason or the other and finally on 16th January, 1976 his Lordship was pleased to adjourn it to 23rd January, 1976. His Lordship is no longer a Judge of this court and has been appointed Chief Justice of the High Court of Jammu and Kashmir and this appeal has hence been placed for hearing before me.

( 4 ) THE material facts of the case are these : There was a contract between the parties (No. CWE/d-17 of 1955-56 ). The Union of India, appellant, claimed damages from the respondent for breach of contract. The respondent also claimed some amount from the appellant. In this way, disputes arose between the parties, which were referred to the arbitration of Lt. Col. R. N. Kapur in terms of the arbitration clause. He made an award dated 23rd October, 1958 by which he directed the contractor to make some payments to the appellant. The appellant thereupon moved the court for an order for filing the award and making it a rule of the court. Objections against the award were raised by the present respondent. On the pleadings of the partics, a number of issues were framed, including
































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