1984 Supreme(P&H) 135

PUNJAB & HARYANA HIGH COURT
J.V.Gupta, J.
S.Sarabjit Singh
Versus
State Of Punjab
First Appeal Order No. 4 of 1976,
Decided On : FEBRUARY 15, 1984

An award given by the Arbitrator is an instrument executed by or on behalf of the Government and hence exempted under the second proviso to Section 3 of the Stamp Act. The authority of the Arbitrator appointed by the Court cannot be revoked except with the leave of the Court, but in the present case, the Arbitrator was appointed with the consent of both the parties and hence no order of the Court was required. The Arbitrator did not give the award beyond the scope of the reference and the interest was rightly allowed by the Arbitrator in the award. The court cannot sit in appeal over the conclusion of the Arbitrator by re-examining and reappraising the evidence considered by the Arbitrator.

Headnote:

ARBITRATION - AWARD - STAMP DUTY - EXEMPTION - AWARD GIVEN BY ARBITRATOR IS AN INSTRUMENT EXECUTED BY OR ON BEHALF OF GOVERNMENT AND HENCE EXEMPTED UNDER SECOND PROVISO TO SECTION 3 OF STAMP ACT - ARBITRATION ACT, 1940 - SECTION 5 - AUTHORITY OF ARBITRATOR APPOINTED BY COURT CANNOT BE REVOKED EXCEPT WITH LEAVE OF COURT - ARBITRATOR APPOINTED WITH CONSENT OF PARTIES - NO ORDER OF COURT REQUIRED - ARBITRATION ACT, 1940 - SECTION 28 - ARBITRATOR GIVING AWARD BEYOND SCOPE OF REFERENCE - NO OBJECTION TAKEN BEFORE ARBITRATOR - INTEREST RIGHTLY ALLOWED IN AWARD - ARBITRATION ACT, 1940 - SECTION 30 - COURT CANNOT SIT IN APPEAL OVER CONCLUSION OF ARBITRATOR BY RE-EXAMINING AND REAPPRAISING EVIDENCE CONSIDERED BY ARBITRATOR.

Fact of the Case:

An agreement was executed between the Governor of Punjab and Sarabjit Singh on the stipulation that the Government would furnish requisite guarantee to the Bank on behalf of Sarabjit Singh and Sarbjit was to complete a usual full length picture in Hindi and English versions for commercial exploitation and its script etc. were mortgaged with the Government. Disputes and differences arose between the parties and by an order of the Court, on an application under Section 20 of the Arbitration Act, the matter was referred to the Chief Parliamentary Secretary, Punjab. However, it was found that at the relevant time there was no Parliamentary Secretary and as such a fresh agreement was executed between the parties on 24th March, 1971 by which in supersession of clause 10 of the agreement dated 12-5-1964, it was agreed that all the disputes and differences arising out of or in any way touching the agreement dated 12-5-1964 were referable to the sole arbitration of the Finance Minister, Punjab. The other terms and conditions of the earlier agreement remained unchanged. In pursuance of the new agreement, the matter was referred to the then Finance Minister, Punjab (Shri Balwant Singh) but before he could make his award, the Ministry of which he was a member, quitted office. The new Ministry of which Shri Hans Raj Sharma was the Finance Minister, took office in 1972 and the parties agreed to refer the matter for arbitration to the said Shri Hans Raj Sharma. Ultimately, he gave his award on 3-11/1973 by which he directed that Rs. 4,07,813.67 shall be paid by Sarbjit Singh appellant to the Government and upon the said payment, relevant material of the picture shall be returned to him.

Finding of the Court:

The court held that the award given by the Arbitrator was an instrument executed by or on behalf of the Government and hence exempted under the second proviso to Section 3 of the Stamp Act. The court also held that the authority of the Arbitrator appointed by the Court cannot be revoked except with the leave of the Court, but in the present case, the Arbitrator was appointed with the consent of both the parties and hence no order of the Court was required. The court further held that the Arbitrator did not give the award beyond the scope of the reference and that the interest was rightly allowed by the Arbitrator in the award. Lastly, the court held that it cannot sit in appeal over the conclusion of the Arbitrator by re-examining and reappraising the evidence considered by the Arbitrator.

Issues: 1. Whether the award given by the Arbitrator was an instrument executed by or on behalf of the Government and hence exempted under the second proviso to Section 3 of the Stamp Act? 2. Whether the authority of the Arbitrator appointed by the Court can be revoked except with the leave of the Court? 3. Whether the Arbitrator gave the award beyond the scope of the reference? 4. Whether the interest was rightly allowed by the Arbitrator in the award? 5. Whether the court can sit in appeal over the conclusion of the Arbitrator by re-examining and reappraising the evidence considered by the Arbitrator?

Ratio Decidendi: 1. An award given by the Arbitrator is an instrument as defined in section 2(14) of the Stamp Act. Second Proviso to Section 3 of the said Act provides that no duty shall be chargeable in respect of any instrument executed by or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument. 2. Section 5 of the Arbitration Act relates only to an Arbitrator who is appointed by the Court and any revocation subsequently will be with the leave of the Court and not otherwise. In the present case, the Arbitrator was appointed with the consent of both the parties and hence no order of the Court was required. 3. No objection was taken before the Arbitrator that the award was beyond the scope of the reference and hence the interest was rightly allowed by the Arbitrator in the award. 4. The court cannot sit in appeal over the conclusion of the Arbitrator by re-examining and reappraising the evidence considered by the Arbitrator.

Final Decision: The appeal was dismissed with costs.