High Court Of Delhi
HARISH CHANDRA SAXENA - Appellant
Versus
UNION OF INDIA - Respondent
First Appeal Order 66D of 1957
Decided On : 01/11/1965
ARBITRATION - AWARD - LIMITATION - ARBITRATOR ENTERING UPON REFERENCE - MEANING OF - AWARD MADE BEYOND PRESCRIBED PERIOD OF FOUR MONTHS - VALIDITY OF.
Fact of the Case:
The appellant, Harish Chandra Saksena, submitted a tender for executing certain repair works for the Union of India. However, he realized a mistake in the tender and sent a letter of revocation. Despite this, the tender was accepted by the Union of India. A dispute arose, and the matter was referred to arbitration. The arbitrator made an award in favor of the Union of India. The appellant objected to the award, arguing that it was a nullity as it was made beyond the prescribed period of four months from the date the arbitrator entered upon the reference.
Finding of the Court:
The court held that the award was a nullity as it was made beyond the prescribed period of four months from the date the arbitrator entered upon the reference. The court found that the arbitrator entered upon the reference on the date he sent letters to the parties informing them of his acceptance of the appointment and requesting them to submit their pleadings. The court rejected the appellant's argument that the arbitrator entered upon the reference only when the parties appeared before him or when he issued a formal notice to them to appear before him.
Issues: 1. Whether the award was a nullity as it was made beyond the prescribed period of four months from the date the arbitrator entered upon the reference? 2. When did the arbitrator enter upon the reference?
Ratio Decidendi: The court relied on the decision of the Calcutta High Court in Messrs Bajrangal Laduram v. Ganesh Commercial Co., which held that arbitrators enter upon a reference when they accept their appointment and communicate with each other about the reference. The court also noted that the English courts had changed their view on the meaning of the term "entering upon a reference" and were now more inclined to uphold the jurisdiction of arbitrators.
Final Decision: The court allowed the appeal, set aside the award, and dismissed the application for filing the award.
( 1 ) THIS first appeal is directed against the order of Shri Jagmohan Lal Tandon, Subordinate Judge, dated 11th April 1957 whereby he rejected the objections preferred under sections 30 and 33 of the Indian Arbitration Act, by the appellant Harish Chandra Saksena and making the award of the arbitrator dated 14th July 1955 rule of the Court directing that a decree be preapred in accordance with it
( 2 ) TENDERS had been invited by the Union of India for executing certain repair works. On the 11th December 1951 the appellant Harish Chandra Saksena submitted his tender in which he quoted rate as 149 percent above those given in the Schedule A of the tender. This tender was accepted by the C. W. E. Delhi Area, Lieut: Col: Ghumman, on the 17th December 1951. It appears that in the meantime on 16th December 1951 the appellant realised that there had been , a mistake in the filling up the tender inasmuch as in quoting rates he had wrongly put down 149 instead. of 249 per cent above the rates given in the Schedule A. Accordingly, on the 16th December 1951 the appellant sent a letter of revocation. Exhibit P. 2 to authorities under the certificate of posting Exhibit P. 3 This letter, according to the records of the respondent, however, -reached. the autliorities concerned on the 24th December 1951, but, as has. been noticed earlier, prior to the 17th December 1951 the appellants tender had been accepted by Lieut: Col. G. S. Ghumman. A dispute having thus arisen between the parties, on 9th February 1955 the Union of India referred it for adjudication to Lt. Col. G. S. Ghumman as sole arbitrator in accordance with the terms and conditions of the contract in dispute.
( 3 ) ON the 15th February 1955 the arbitrator sent letters to the parties wherein, after stating that he had accepted his nomination to act as arbitrator/he called upon them to submit their respective pleadings to him. The claimant was directed to put in a detailed statement erf claim alongwith a copy of the pleadings by the 2nd March 1955. The opposite party was asked to furnish a written statement arid pleadings by the 14th March 1955. After the parties had complied with these directions on the 2nd June 1955 the arbitrator issued a formal notice to the parties to appear before him on the 15th June 1955 warning them that if any of the parties absented himself he shall be proceeded ex-parte if so requested by the other party to the reference. On the 15th June 1955 the appellant absented himself and after taking the necessary proceedings ex-parte, on the 14th July 1955 the arbitrator gave his award under which the appellant Harish Chandra Saksena was directed to pay Rs. 7. 176. 00 to the Union of India- On the 7th November 1955 an application under section 17 of the Arbitration Act for filing the award was made by the Union of India. Thereafter, on the 17th February 1956 the appellant Harish Chandra Saksena filed an objection petition under sections 30 and 33 of the Indian Arbitration. Act assailing the validity of arbitration proceedings and the award. Besides pleading that there was no valid contract between the parties nor any agreement to refer the matter to arbitration, a number of objections were raised to the validity of the award and the conduct of the proceedings by the arbitrator, one of which was that the award, having not been made by the arbitrator within four months of the day he entered upon the reference, was. null and void. Being of the opinion, that there was no defect in the award, the learned Subordinate Judge dismissed the appellants objections and directed that a decree in accordance with the award shall issue,
( 4 ) IN assailing the order of the Subordinate Judge the appellants learneded, counsel has contended :
(1) That the award is a nullity having been made beyond the prescribed period of four months from the date on which the arbitrator entered on the reference. (2) That the reference being unilateral and not with the consent of the a
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