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1977 Supreme(Ker) 28

Kerala High Court
V.P.GOPALAN NAMBIYAR,T.KOCHU THOMMEN
M.George - Appellant
Versus
Raju M.Mathew - Respondent
Decided On : 02/02/1977

Advocates:
C.S. Thomas, T.L. Anandasivan, P.K. Jose and K. Prabhakaran, for Petitioners; T.L. Viswanatha Iyer, for Respondent.

The main legal point established in the judgment is the interpretation of the Arbitration Act, particularly regarding the jurisdiction of the court to appoint a Receiver and the circumstances under which arbitrators become functus officio.

Headnote:

Arbitration - Appointment of Arbitrator - Arbitration Act - S. 8, S. 41(b) - IInd Schedule - The court held that it had jurisdiction to appoint a Receiver under S. 41(b) read with the IInd Schedule of the Arbitration Act. The court also considered the question of whether the arbitrators had become functus officio or not. The court found that the arbitrators had not entered upon the reference and had not become functus officio.

Fact of the Case:

The case involved a dispute between partners of a firm regarding the appointment of an arbitrator and the progress of arbitration proceedings. The court was petitioned to appoint a Receiver and review a previous order on the grounds of error and fraud.

Finding of the Court:

The court found that the arbitrators had not entered upon the reference and had not become functus officio. It dismissed the revision petition.

Issues: The issues included the progress of arbitration proceedings, the appointment of a Receiver, and the jurisdiction of the court under the Arbitration Act.

Ratio Decidendi: The court's decision was based on the interpretation of the Arbitration Act, specifically S. 41(b) and the IInd Schedule. The court also relied on the legal principles established by previous judicial decisions, including the meaning of 'entering upon the reference' and the circumstances under which arbitrators become functus officio.

Final Decision: The court dismissed the revision petition, finding that the arbitrators had not entered upon the reference and had not become functus officio.

ORDER :-

This revision petition is against the order of the Sub-Court, Pathanamthitta in Arbitration O. P. No. 1 of 1970. The petitioner and the cr. petitioner were partners of a firm called M. George and Brothers, Bankers, Kozhencherry. There was a notice of dissolution of the firm issued by the one to the other; in response to which the arbitration clause in the agreement was invoked and one of the partners appointed an arbitrator Mr. K V. Joseph. As the other partner did not appoint his arbitrators, a petition under S. 8 of the Arbitration Act, was filed to compel appointment of an arbitrator by the other partner or to have arbitration proceedings conducted by Mr. K. V. Joseph as the sole arbitrator. That resulted in the appointment of an arbitrator on behalf of the other partner also. As arbitration proceedings did not progress any further. I. A. No. 941 of 1971 was filed for appointment of a Receiver. The same was dismissed by order dated 18-7-1973. On 16-8-1973 I. A. No. 456 of 1973 was filed for reviewing the said order on the ground that it was vitiated by error apparent on the face of the record and that there was fraud on the part of the counter-petitioner. To substantiate the contentions taken in support of the review, I. A. 473 of 1973 was filed for permission to take out summons to the Income-tax Officer for production of certain records. The counter-petitioner resisted the application contending that it was not maintainable as the court had become functus officio with the passing of the final order on the O. P. and that for the same reason it had no jurisdiction either to appoint a Receiver or to summon documents. By its order dated 5-6-1974, the court held that the reference was pending before the Arbitrators and the court had jurisdiction under S. 41 (b) read with the IInd Schedule of the Arbitration Act, to appoint a Receiver. I. A. No. 473 of 1973 was allowed subject to the relevancy of the documents being considered and decided at the time of hearing (the statement in para 3 of the order under revision, where it is stated that I. A. 456 of 1973 was allowed seems to be a mistake for I. A. 473 of 1973). Against the said order, C. R. P. 662 of 1974 was filed in this Court. This Court concurred with the court below on the question of jurisdiction and remitted the matter back to the court to consider the question whether the arbitrators had become functus officio or not. That question was considered by the court below in the order against which this revision has been preferred.

2. Two arguments were advanced before the court below, which have been repeated before us also in this revision petition. The arguments were : (1) that the Arbitrators had actually entered upon the reference and done nothing further thereafter for a period of four months, and therefore the proceedings had come to an end; and (2) even if they had not entered upon the reference, they had become functus officio as notice had been issued to them on 15-10-1973 and 29-10-1973 by the petitioner and the counterpetitioner, calling upon the Arbitrators to appoint an Umpire and more than four months had expired thereafter. The court below held both these points against the petitioner in this revision petition. It held that the Arbirators had not entered upon the reference. It held also that the Arbitrators had not become functus officio.

3. In support of the argument that the Arbitrators had actually entered upon the reference Counsel for the revision-petitioners relied on Ex. A1 notice dated 23-12-1974. That notice is issued by Mr. K. V. Joseph one of the arbitrators to the petitioner in the O.P. (respondent herein) The notice is as follows:

"Sub : Arbitration O. P. I/1970 in the Sub-Court, Pathanamthitta.

You will be aware that no steps have been taken to enter upon the reference or to act in accordance with the appointment from the Honourable Court.

On 14-11 -1973 I have sent a letter to Sri. O. Thomas, the Co-Arbitrator asking his convenience to take























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