PUNJAB & HARYANA HIGH COURT
Rajendra Nath Mittal, J.
S.D.Ghai And Co.
Versus
Punjabi University, Patiala
First Appeal First Order No. 59 of 1970,
Civil MISCELLANEOUS No. 6751 of 1970,
Decided On : MAY 10, 1972
ARBITRATION - AWARD - LIMITATION - EXTENSION OF TIME - POWER OF COURT - SECTION 28 OF THE ARBITRATION ACT, 1940 - ORAL REQUEST FOR EXTENSION OF TIME - VALIDITY - COURT'S DISCRETION TO ENLARGE TIME - CIRCUMSTANCES TO BE CONSIDERED.
Fact of the Case:
The appellant, a contractor, entered into an agreement with the respondent university for the construction of a Physics Block on the university campus. The agreement contained an arbitration clause providing for the reference of disputes to the Superintending Engineer, P.W. D. (Buildings and Roads) Patiala (the Arbitrator). After the completion of the work, a dispute arose between the parties, and the appellant referred the dispute to the Arbitrator. The Arbitrator made an award in favor of the appellant, but the university filed objections to the award under Section 30 read with Section 33 of the Arbitration Act, 1940 (the Act). The Trial Court set aside the award on the ground that it was not made within a period of four months as required by Rule 3 of Schedule 1 of the Act.
Finding of the Court:
The High Court upheld the order of the Trial Court and dismissed the appeal. The Court held that the Arbitrator entered on the reference on the date he issued a notice to the university to file a statement in reply to the appellant's claim, and that the award was made beyond four months from that date. The Court also held that the appellant could have made an oral request to the Court to enlarge the time for making the award under Section 28 of the Act, but that no such request was made in this case. The Court further held that the Court has discretion to enlarge the time under Section 28 of the Act, but that this discretion should be exercised judiciously and only in appropriate circumstances.
Issues: 1. Whether the Arbitrator entered on the reference on the date he issued a notice to the university to file a statement in reply to the appellant's claim? 2. Whether the award was made beyond four months from the date the Arbitrator entered on the reference? 3. Whether the appellant could have made an oral request to the Court to enlarge the time for making the award under Section 28 of the Act? 4. Whether such a request was made in this case? 5. Whether the Court has discretion to enlarge the time under Section 28 of the Act? 6. In what circumstances should the Court exercise its discretion to enlarge the time?
Ratio Decidendi: 1. The Arbitrator enters on the reference when he takes upon himself the office of the arbitrator and exercises some functions as arbitrator. Issuing mandatory directions for pleadings or for particulars or for interrogatories or fixing peremptory dates for hearing can only be done by the arbitrator when he has begun his work as such and taken upon himself the functions of an arbitrator. 2. The period of four months prescribed for giving the award starts from the date when the Arbitrator enters on the reference. 3. An oral request can be made to the Court to enlarge the time for making the award under Section 28 of the Act. 4. No such request was made in this case. 5. The Court has discretion to enlarge the time under Section 28 of the Act. 6. The Court should exercise its discretion judiciously and only in appropriate circumstances.
Final Decision: The High Court dismissed the appeal and upheld the order of the Trial Court setting aside the award.
1. This judgment of mine will dispose of F. A. O. No. 59 of 1970 and Civil Miscellaneous Application No. 6751 of 1970.
2. The Punjabi University, Patiala, (hereinafter referred to as the University) invited tenders for construction of Physics Block in the Campus of the University. The appellant submitted a tender in reply to the invitation which was accepted by the University and a formal agreement was executed on November 5, 1965, between the appellant and the University in accordance with which he started construction work. There was clause 25-A in the agreement by which the disputes between the parties were to be referred to the Superintending Engineer, P.W. D. (Buildings and Roads) Patiala (hereinafter referred to as the Arbitrator). After the completion of work, some dispute arose between the parties and the appellant made a reference of the dispute to the Arbitrator. The appellant sent his claim along with a letter to the Arbitrator on August 1, 1968, and also sent a copy thereof to the University. The Arbitrator on August 9, 1968, wrote a letter to the appellant that this claim had been entered at Serial No. 187 and on the same day wrote a letter to the University that the appellant had referred a claim (copy enclosed) for arbitration in respect of the work cited as subject stated to have been executed by him. The University was also requested to submit its statement in duplicate on the date of hearing of the case which was to be fixed after one month from the date of issue of this reference. The Arbitrator on April 29, 1969, wrote to the parties that May 6, 1969, had been fixed by him as date of hearing. They should appear on that date and if they failed to do so, ex parte proceedings would be taken against them. After the adjournment of the case on some of the hearing the Arbitrator gave his award on August 20, 1969. The appellant filed an application in the Court that the Arbitrator be ordered to file an award in the Court and the same May be made the rule of Court. The Arbitrator sent the award to the Court of Senior Subordinate Judge, Patiala, vide his letter dated August 28, 1969. The Senior Subordinate Judge, Patiala, sent notices to both the parties. The University in response to the notice filed objections under Section 30 read with Section 33 of the Arbitration Act 1940 (hereinafter referred to as the Act) against the award. One of the objections was that the award was not made within a period of four months. The University also made allegations regarding the conduct of the Arbitrator and raised an objection that he had misconducted himself and the proceedings. The appellant controverted the pleas of the University and the following issues were framed:-
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"1. Whether the award is null and void as it was not within time?
2. Whether the arbitrator has misconducted himself or the proceedings as alleged.
3. Relief."
3. The Trial Court held that the award had been made after a period of four months after entering on the reference and, as such, it was unenforceable. It decided issue No. 2 against the University. The objection petition was, however, allowed on the decision of issue No. 1 and the award was ordered to be set aside. The Contractor having felt aggrieved against the said order has come up in appeal to this Court.
4. The first contention of the learned counsel for the appellant is that the Arbitrator cannot be said to have entered on reference on August 9, 1968, as he had not applied his mind on that date and no proceedings were taken by him. He has drawn my attention to the letter dated August 9, 1968, which was written by the Arbitrator to the appellant in which he had stated that his claim had been registered. He has further submitted that registration of claim would not tantamount to entering on the reference. The learned counsel for the appellant submits that the Arbitrator entered on the reference on April 29, 1969, when he fixed May 6, 1969, as the date of hearing of the case. He has also ur
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