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1995 Supreme(Guj) 357

Gujarat High Court
Judgename :R.A.MEHTA, S.K.Keshote
State of Gujarat - Appellant
Versus
Aarcee Construction Co. - Respondent
First Appeal 2616 of 1995
Decided On : 08/04/1995

Advocates Appeared: A.J.DESAI, K.G.SUKHVANI

Headnote:Arbitration Act, 1940 - Sec. 39 - Award - Given after expiry of time - Extension of time not granted - Alleged consent of Executive Engineer is no consent in the eye of law - Held, decree in pursuant to impugned award quashed.Only a day previous to such consent, the Executive Engineer had under his own signature filed strong objection to the arbitrator taking up any further proceedings and had stated that the time had already expired and the arbitrator was committing misconduct by holding and conducting further arbitration proceedings after having become functus officio and had in fact prayed for stay of further proceedings before the arbitrator. In these circumstances, the sudden change of stand by the Executive Engineer before the arbitrator in the absence of the Government Pleader and in absence of any instructions from the Government is very perplexing and it would be difficult to hold that this consent was the consent of the Government and of the parties to the arbitration dispute. The sudden change of stand by the Executive Engineer himself without any instructions from the Government and in the absence of the Government Pleader cannot be said to be consent by the Government and cannot be said to be a bonafide consent at all. It is clear that the award made by the arbitrator is beyond the time fixed and extended by the Court. The so called consent given by the Executive Engineer for extension of time by the arbitrator is no consent of the Government in the eye of law and on such consent, the time would not stand extended and we refuse to exercise judicial discretion in favour of extension of time. Hence, the award of the arbitrator is without jurisdiction and no order in terms of award could have been passed and the objection raised by the Government is sustained.

       [Paras 7, 8, 11 & 14]

MEHTA, J.

( 1 ) IN these appeals, the common question arise. Hence they are heard and decided together. The trial Court has passed a decree in terms of the award and allowed interest on the amounts of award at 11% from 1-7-1987 to 12-5-1990 and at the rate of 18% from 15-8-1991 till realisation. The particulars regarding different awards passed in different civil suits are as follows:- F. A. No.

Civil Suit No.

Amount awarded (Rs.)


2616 of 1995

251 of 1987

6,77,060/-


2615 of 1995

249 of 1987

3,95,000/-


2614 of 1995

250 of 1987

4,74,762/-


2524 of 1994

252 of 1987

1,56,935/-



( 2 ) THE learned Assistant Government Pleader submits that the award has been made admittedly beyond the time limit to make the award which expired on 31-3-199l and the award came to be passed on 15-7-199l.

( 3 ) BY a Court order dated 11-8-1989, a retired Chief Engineer was appointed the arbitrator to decide the dispute and was further directed to submit his award within four months or within such time as may be extended by the Court. It appears that by a letter of 12-3-1991, the Court had informed the arbitrator that the matter was old and the award was required to be made and the arbitrator was directed to make the award on or before 1-4-1991. It appears that the arbitrator had written a letter in reply to the Court letter that the time be extended by a further period of one month from 1-4-1991. However, on that application, no order was passed.

( 4 ) CONTENDING that the arbitrator had become functus officio and had no jurisdiction to hold the hearing on 18-6-1991, the Government through the Executive Engineer made an application Ex. 30 on 17-6-1991 and prayed for stay of further proceedings pending before the arbitrator on the ground that the time for making the award had already expired and the Arbitrator had no jurisdiction to hold and continue the arbitration proceedings and to pass any award and submitted that the insistence of the arbitrator to hold the proceedings was a misconduct of the arbitrator.

( 5 ) ON that application, the Court had passed an order of serving the copy to the arbitrator and fixing hearing on 31-7-1991. On the next day i. e. 18-7-1991, the proceeding was held before the arbitrator. The Government advocate did not remain present, but it appears that the Executive Engineer who had remained present had on his own agreed to the extension of period for submission of the award of the arbitrator up to 31-7-1991 and the Arbitrator made the final award on 15-7-199l. The question is whether the State Government is said to have consented to the extension of time by the arbitrator. The application Ex. 30 and the objections raised by the State Government were yet to be heard and decided by the trial Court. In Para. 2 of the judgment, the trial Court has narrated the objections and it is seen that the arbitrator was appointed by the Court and the time was extended to file the award up to 31-3-1991 and arbitrator wrote a letter on 23-3-1991 and prayed for extension of time by one month i. e. up to 1-4-1991. The Court had recorded that report and in spite of this knowledge, the arbitrator held the meeting at Ahmedabad on 17-6-1991. It is also submitted that prior thereto, he had wrote a letter to the party on 10-2-1991 to get the time extended and also wanted consent of the parties for passing interim award to which the Government had raised its objections. It is further stated that the arbitrator had become functus officio and he had filed the award after the expiry of the time and it was a misconduct on the part of the arbitrator.

( 6 ) THIS contention is dealt with by the learned trial Judge in para. 15 of the judgment by referring to the judgment of the Andhra Pradesh High Court in the case of Superintending Engineer Somasila Project v. R. Ramana Reddy, (1990) 2 Arbi LR 183 : (AIR 1990 AP 283 ). It is observed that it is with the consent of both the learned Counsel that the arbitrator had extended the time for filing the award.

( 7 ) IN t










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