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HIGH COURT OF RAJASTHAN
MODI, J., JJ.
Ismail
Versus
Hansraj
Civil Revn. No.32 of 1954
Decided On : 26-11-1954
ARBITRATION - LIMITATION - SETTING ASIDE AWARD - APPLICATION UNDER S.30 OR S.33, ARBITRATION ACT - LIMITATION ACT, ART.158 - APPLICABILITY - VALIDITY OF AWARD - COURT'S POWER TO REFUSE RECOGNITION - GROUNDS.
Fact of the Case:
The defendant challenged an arbitration award on various grounds, including that it was invalid and should be set aside. The courts below dismissed the defendant's objections as barred by limitation under Art.158 of the Limitation Act, which prescribes a 30-day period for filing such objections. The defendant argued that Art.158 did not apply and that his objections fell within the scope of S.33 of the Arbitration Act, which provides a three-year limitation period under the residuary Art.181 of the Limitation Act.
Finding of the Court:
The court held that the defendant's objections fell within the scope of S.30 of the Arbitration Act, which deals with the setting aside of an award, and that Art.158 of the Limitation Act applied, barring the objections as they were filed beyond the 30-day period. The court also held that the award was not illegal on its face and that the courts below were justified in passing a decree in accordance with the award.
Issues: 1. Whether the defendant's objections to the arbitration award were barred by limitation under Art.158 of the Limitation Act? 2. Whether the award was invalid and should be set aside on the grounds raised by the defendant?
Ratio Decidendi: 1. The court interpreted S.30 of the Arbitration Act broadly to include any objection giving rise to the invalidity of an award, regardless of whether it was based on the grounds specified in the section or not. The court held that the defendant's objections, which sought to have the award set aside, fell within the ambit of S.30 and were, therefore, subject to the 30-day limitation period prescribed by Art.158 of the Limitation Act. 2. The court examined the various grounds raised by the defendant to challenge the validity of the award and found them to be without merit. The court held that the arbitrators had jurisdiction to give the award, that they had considered the defendant's counterclaim and dismissed it for lack of evidence, that the defendant had been informed of the meeting at which the award was given but chose not to attend, and that the award was given within the time allowed by the court.
Final Decision: The court dismissed the defendant's revision petition, upholding the lower courts' decision to dismiss the defendant's objections to the arbitration award as barred by limitation and to pass a decree in accordance with the award.
2. The opposite parties Hansraj and another filed a suit in the Court of the Judicial Superintendent, Sojat, against the defendant for recovery of a sum of Rs.1100/- as damages for breach of a contract relating to the construction of a house for the plaintiffs. The defendant repudiated the plaintiffs cLalm and put in a counter-claim for Rs.750/-.
The case was fixed for the plaintiffs evidence on 20-1-1950, when the parties referred the dispute between them to the arbitration of three persons, namely, Shri Manakraj Singhvi, Shri Abheynandanmal Kochar and Shri Manaklal Mathur (vide reference bearing the same date i.e., 20-1-1950). It was agreed to between the parties that two arbitrators out of the above will have the right to give the award so long as Shri Manakraj Singhvi was one of them, who was also authorized to conduct the arbitration proceedings.
It was further provided that in case all the three arbitrators participated in the award and if there was a difference of opinion between them, the decision of the majority will be binding on the parties. The trial Court referred the dispute to the arbitrators accordingly and fixed 25-2-1950, for filing their award. The case was thereafter transferred to the Court of the Munsiff Sojat under the new scheme of the re-organization of Courts, and the time appears to have been extended up to 26-9-1950, by the order of the Munsiff dated 18-7-1950.
Meanwhile as the arbitrators had not given their award, on 16-8-1950, the defendant petitioner moved an application in Court for revoking the reference on certain allegations the effect of which was that he had no confidence in the arbitrators. This application was ordered by the Court to be put up with the file on that very day but no order appears to have been passed.
It further appears that the defendant also served a notice on the arbitrators that he did not want the matter to be decided by them. On 23-8-1950, the arbitrators asked for the Court record to be sent to them. On 25-8-1950, the office reported that an application for recalling the reference had been made by the defendant and was pending. The trial Judge on the same date passed an order that Shri Manakraj be informed that he should take the file from the office whereupon the latter acted accordingly. On 26-8-1950, the plaintiff Hansraj also filed an application in the Court of the Munsiff wherein he stated that he had come to know that the defendant had filed an application for revocation of the reference but that no orders had been passed on that application. Hansraj further stated that the Surpunch, that is, Shri Manakraj was to come from Sumerpur on 28-8-1950, and that it was very necessary to decide the defendants application urgently.
The Munsiff asked for a report on this application but no order cancelling the reference was made. The arbitrators Messrs. Manakraj Singhvi and Abheynandanmal met on 28-8-1950, and gave an award by which they decreed the plaintiffs claim for a sum of Rs.777,8/- with costs and interest from the date of the award to the date of realization at 6 per cent per annum, and they also dismissed the defendants counter-claim with costs.
The arbitrators filed the award in Court on 26-9-1950, in the presence of counsel for the parties and the defendant himself. On that very day, the Court passed an order that if the parties had any objections to be filed against the award, they be put up, and 24-10-1950, was the next date fixed for the case to come up before the Court.
On 24-10-1950, the plaintiffs said that they had no objections to put in but a request was made on behalf of the defendant for further time within which to raise his objections. The plaintiffs objected but their objection was overruled. On 8-12-1950, the defendant put in his objections, and eventually the objections of the defendant were dismissed as barred by time, and a decree wa
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