High Court Of Rajasthan
Judgename : S.K.SHARMA
BRIMCO BRICKS - Appellant
Versus
SITARAM AGARWAL - Respondent
S. B. C. REVISION 370 Of 1995
Decided On : 05/20/1997
ARBITRATION - ABATEMENT OF PROCEEDINGS - APPLICABILITY OF ORDER 22, RULE 3, C. P. C. - PROVISIONS OF ORDER 22, RULE 3, C. P. C. ARE NOT APPLICABLE TO ARBITRATION PROCEEDINGS. - SECTION 41 OF THE ARBITRATION ACT, 1940 MAKES THE PROVISIONS OF THE CODE OF CIVIL PROCEDURE, 1908 APPLICABLE TO ARBITRATION PROCEEDINGS, SUBJECT TO THE PROVISIONS OF THE ACT AND RULES MADE THEREUNDER. - RULE 7 OF SCHEDULE I OF THE ACT PROVIDES THAT THE AWARD SHALL BE FINAL AND BINDING ON THE PARTIES AND PERSONS CLAIMING UNDER THEM RESPECTIVELY. - THEREFORE, THE PROVISIONS CONTAINED IN ORDER 22, C. P. C. HAVE BEEN IMPLIEDLY EXCLUDED. - THE AWARD SHALL BE FINAL AND BINDING IRRESPECTIVE OF THE DEATH OF ANY OF THE PARTY, ON THE PERSONS CLAIMING UNDER HIM EVEN IF THEY WERE NOT BROUGHT ON RECORD.
Fact of the Case:
During the pendency of a petition under Section 20 of the Arbitration Act, 1940, one of the non-applicants in the Arbitration proceedings died. The non-petitioner moved an application under Order 22, Rule 3, C. P. C. stating that the Arbitration proceedings abated as the legal representatives of the deceased were not brought on record. The legal representatives of the deceased filed an application requesting the Court to bring them on record and contended that the provisions of Order 22, Rule 3, C. P. C. did not apply to Arbitration proceedings. The Court below held that the Arbitration proceedings abated to the extent of the rights of the deceased.
Finding of the Court:
The Court held that the provisions of Order 22, Rule 3, C. P. C. are not applicable to Arbitration proceedings. The Court further held that even if the provisions of Order 22, Rule 3, C. P. C. were applicable, the legal representatives of the deceased should have been allowed to be impleaded as parties to the Arbitration proceedings.
Issues: 1. Whether the provisions of Order 22, Rule 3, C. P. C. are applicable to Arbitration proceedings? 2. If the provisions of Order 22, Rule 3, C. P. C. are applicable, under what circumstances do the Arbitration proceedings abate?
Ratio Decidendi: 1. The provisions of Order 22, Rule 3, C. P. C. are not applicable to Arbitration proceedings because: a. Section 41 of the Arbitration Act, 1940 makes the provisions of the Code of Civil Procedure, 1908 applicable to Arbitration proceedings, subject to the provisions of the Act and Rules made thereunder. b. Rule 7 of Schedule I of the Act provides that the award shall be final and binding on the parties and persons claiming under them respectively. c. Therefore, the provisions contained in Order 22, C. P. C. have been impliedly excluded. 2. Even if the provisions of Order 22, Rule 3, C. P. C. were applicable, the Arbitration proceedings would not have abated in the instant case because: a. The legal representatives of the deceased were not informed about the death of the deceased under Rule 10a of the Arbitration Rules. b. The legal representatives of the deceased filed an application to be impleaded as parties to the Arbitration proceedings within a reasonable time.
Final Decision: The Court allowed the revision petition and set aside the order of the Court below. The Court held that the Arbitration proceedings did not abate and the legal representatives of the deceased were allowed to be impleaded as parties to the Arbitration proceedings.
S. K. SHARMA, J.
( 1 ) LAWS of procedure are designed to facilitate justice and not to trip people up, they are devised for advanced justice and not impeding the same. The framers of the Code of Civil Procedure enacted the provisions for abatement of suit of appeal for expeditious disposal of cases in the interest of proper administration of justice and not to penalise the litigant.
( 2 ) THE questions that fall for consideration in the instant case are (i) as to whether the provisions for abatement of suit are also applicable in the Arbitration proceedings? (ii) If provisions are applicable then under what circumstances, the Arbitration proceedings abate?
( 3 ) THESE questions emerge in the following circumstances. (a) During the pendency of petition under Section 20 of the Arbitration Act, 1940 (for short the Act 1940) non-petitioner Sita Ram on April 30, 1994 moved an application before the learned Court below under Order 22, Rule 3, C. P. C. stating therein that Smt. Chanda Devi, one of the non-applicant in the Arbitration proceedings, died on Aug. 14, 1993. As per legal representatives were not brought o record by the applicants M/s. Brimco Bricks and others, therefore petition under Section 20 of the Act 1940 abated. (b) On May 20, 1994, the legal representation of Late Smt. Chanda Devi alongwith Partner of the firm Damodar Das, submitted another application requesting the learned Court below for bringing the legal representative of Smt. Chanda Devi on record. It was also averred in the application that provisions of Order 22, Rule 3, C. P. C. did not apply to Arbitration proceedings. (c) The learned Court below vide order dated January 12, 1995 disposed of both the applications observing that right to sue did survive in the firm and the other partners of the firm therefore in not bringing the legal representatives of Late Smt. Chanda Devi, the entire Arbitration proceedings did not abate but abated to the extent of the rights of Smt. Chanda Devi. (d) Against this order of the Court below that the action for filing the revision has been resorted to by the petitioners.
( 4 ) THE first question for consideration is whether having regard to the provisions of the Act 1940 and Rules made thereunder, Order 22, C. P. C. can at all be applied to arbitration proceedings.
( 5 ) AN agreement between the parties is the foundation of "arbitration proceedings". From the beginning until the award as passed the proceedings take place before a Tribunal chosen by the parties subject to the control which has been vested in the Court under the Arbitration Act in certain circumstances. The arbitrator or arbitrators or even the umpire, as the case may be, ultimately embodies the decision in a document which is described as the award. The arbitrator or umpire becomes functus officio as soon as the award is made. Once the award is made, the duty of the arbitrator is to file the award. Once the award is duly filed the arbitrator disappears from the scene and the Court becomes active.
( 6 ) IT is necessary at this juncture to refer R. 7 of Schedule 1 of the Arbitration Act which provides that the award shall be final and binding on the parties and persons claiming under them respectively.
( 7 ) SECTION 41 of the Arbitration Act, makes the provision of the Code of Civil Procedure, applicable to arbitration proceedings. Relevant provision Section 41 reads as under :-"subject to the provisions of this Act, and of rules made thereunder - (a) the provisions of the Code of Civil Procedure, 1908 shall apply to all proceedings before the Court, and to all appeals under this Act. "
( 8 ) CLAUSE (a) of Section 41 makes the provisions of C. P. C. applicable to all proceedings before the Court and to all appeals except where such application is expressly excluded by the Act or by any Rules framed by the High Court under Section 44. The words "subject to the provisions of this Act " therein means that the Code is applicable only subject to the pr
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