HIGH COURT OF ORISSA
Narasimham, J.
NARSING DAS HIRALAL LTD. - Appellant
Versus
BISANDAYAL SATYANARAIN FIRM - Respondent
Civil Revn. 248 Of 1951
Decided On : OCTOBER 14, 1952
ARBITRATION - AWARD - DELAY IN MAKING - EXTENSION OF TIME - POWER OF COURT - SUB-SECTION (1) OF SECTION 28, ARBITRATION ACT, 1940 - COURT CAN EXTEND TIME EVEN AFTER AWARD IS MADE - DISCRETION OF COURT - PROPER EXERCISE.
Fact of the Case:
The petitioners and the defendant executed separate arbitration agreements referring their dispute to three arbitrators. No time limit was fixed for the giving of the award, and the award was given after the expiry of the statutory period of four months. The trial court, finding that the delay was mainly due to the defendant's action in taking time on successive occasions from the arbitrators, extended the time limit under Sub-section (1) of Section 28, Arbitration Act, 1940. The lower appellate court set aside the award, holding that the statutory time limit could be extended only if there was an agreement in writing by both parties for extension of the time limit.
Finding of the Court:
The High Court held that the trial court had jurisdiction to enlarge the time for making the award in exercise of the powers conferred by Sub-section (1) of Section 28, and that the court exercised its discretionary power properly in the facts and circumstances of the case.
Issues: 1. Whether the trial court had jurisdiction to enlarge the time for making the award in exercise of the powers conferred by Sub-section (1) of Section 28, Arbitration Act, 1940? 2. Whether the court exercised its discretionary power properly in the facts and circumstances of the case?
Ratio Decidendi: 1. Sub-section (1) of Section 28, Arbitration Act, 1940 confers full discretion on the court to enlarge the time limit for making the award at any time, even though the time for making the award has expired and also even after the award has been made. 2. The court exercised its discretion properly in extending the time limit, considering that the delay was mainly due to the defendant's action in taking time on successive occasions from the arbitrators, and that the petitioners had waived the objection by their conduct.
Final Decision: The order of the lower appellate court was set aside and the order of the trial court was restored.
NARASIMHAM, J.
( 1 ) THIS revision petition is against the appellate judgment of the Additional District judge of Cuttack reversing the judgment of the First Additional Sub-Judge of cuttack and setting aside an award given by the arbitrators and the judgment and decree following the award.
( 2 ) THE opposite party was the defendant in Suit No. 57/8 of 1949-48 in the Court of the 1st Additional Sub-Judge, Cuttack. That suit was brought under Sections 14 and 17, Indian Arbitration Act, 1940 by the petitioners-plaintiffs for a judgment in terms of an award said tr have been given by the arbitrators appointed by the parties, on 13-12-47. The plaintiffs and the defendant executed separate arbitration agreements (ekrarnamas) dated 13-3-47 and 11-3-47 respectively referring their dispute to three respectable merchants of Cuttack, namely, rangalal Modi, Narsingdas Bhowsinka and Joharimal. In the arbitration agreements executed by the parties no time limit was fixed for the giving of the award and consequently the provisions of para 3 of the First Schedule to the arbitration Act would apply and the award should be made within four months after the arbitrators have entered on the reference. As already stated, the award was given only on 13-12-47 in which it was stated that a sum of Rs. 3898/8/- was due from the defendant to the plaintiffs.
( 3 ) SEVERAL objections were taken up both in the trial Court and in the lower appellate Court against the award. But the only point that need be considered now is whether the delay of more than four months in the making of the award was sufficient for the Court to set it aside. The trial Court held that the delay was mainly due to the defendant himself and that he had asked the arbitrators for adjournments on 26-3-47, 13-4-47 and 28-4-47 for the purpose of adducing his evidence. That Court also believed the oral evidence of one of the arbitrators to the effect that on several other dates also the defendant orally asked for adjournments. As late as 20-7-47 the defendant filed certain documents. The trial court came to a finding that the delay in giving the award was due mainly to the defendant's action in taking time on successive occasions from the arbitrators. One of the main grievances of the defendant against the award was that the arbitrators did not afford sufficient opportunities to him to present his case (vide para 11 of his written statement ). The trial Court, therefore, thought that in the interests of equity it should extend the period of four months prescribed in para 3 of the First schedule to the Arbitration Act. The Court, however, omitted to state clearly under what provision of the Indian arbitration Act it exercised the power of extending the statutory time limit for the making of the award. But it is obvious that this power was exercised under Subsection (1) of Section 28, Arbitration Act.
( 4 ) THE lower appellate Court, however, thought that the statutory time limit fixed in para 3 of the First sch. to the Arbitration Act can be extended only if there was an agreement in writing by both parties for extension of the time limit and that in the absence of such an agreement the Court had no jurisdiction to extend the time. It, therefore, came to the conclusion that the arbitrators were guilty of legal misconduct inasmuch as the award was not made within the prescribed statutory period and therefore set aside the award.
( 5 ) THE lower appellate Court has clearly misdirected itself. Its assumption that the trial Court acted under the provisions of Sub-section (2) of Section 28, Arbitration act is not warranted. There is no doubt that under the provisions of that subsection the time for making an award cannot be enlarged except with the consent of all the parties to the agreement and the arbitrators cannot on their own motion extend the time limit. But any discussion about the scope of Sub-section (2) of section 28 is academic in the present case inasmuch as the trial Court purp
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