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1979 Supreme(All) 713

IN THE HIGH COURT OF ALLAHABAD
N. N. Mithal, J.
SATYA PAL - Appellant
Versus
VED PRAKASH - Respondents
Second Appeal 819 Of 1972
Decided On : 12/21/1979

Advocates Appeared:
A.N.Verma, M.B.Dayal, S.N.Verma, V.Sahai

An oral award cannot be made under the Arbitration Act, 1940, and an award which has not been made rule of the court cannot be enforced.

Headnote:

ARBITRATION ACT, 1940 - SECTION 14 - ORAL AWARD - NOT CONTEMPLATED - WRITTEN AWARD - ESSENTIAL - ENFORCEMENT OF AWARD - AWARD NOT MADE RULE OF COURT - NOT ENFORCEABLE.

Fact of the Case:

Plaintiff and defendant were brothers carrying on business as M/s. Kanhaiya Lal Ved Prakash. A dispute arose between them and was referred to arbitration. The arbitrators gave an award on 4th May 1966, which was accepted by the parties. The defendant paid part of the amount awarded, but refused to pay the balance. The plaintiff filed a suit for recovery of the balance and for an injunction restraining the defendant from carrying on business in the name of M/s. Kanhaiya Lal Ved Prakash. The trial court decreed the suit, but the lower appellate court dismissed the suit for injunction.

Finding of the Court:

The lower appellate court found that there was an oral award on 20th April 1966, which was acted upon by the parties. The court also found that the written award dated 4th May 1966 was not made rule of the court and, therefore, could not be enforced.

Issues: 1. Whether an oral award can be made under the Arbitration Act, 1940? 2. Whether an award which has not been made rule of the court can be enforced?

Ratio Decidendi: 1. An oral award cannot be made under the Arbitration Act, 1940, as Section 14 of the Act requires an award to be signed and announced to the parties. 2. An award which has not been made rule of the court cannot be enforced.

Final Decision: The appeal was dismissed.

N. N. MITHAL, J.

( 1 ) THIS second appeal arises out of a suit for recovery of certain amount which was due to the plaintiff from the defendant under an award said to have been given by the Arbitrators in a dispute of accounts between the parties.

( 2 ) THE suit of the plaintiff in brief was that the plaintiff and the defendant, who are brothers, were carrying on business in the name of M/s. Kanhaiya Lal Ved Prakash at Kanpur which was a registered firm. A dispute arose between the parties and, therefore, the matter was referred to the arbitration of Lalla Raliya Ram and Banarsi Das for deciding the matter through arbitration. The arbitrators went through the accounts of the firm and heard the parties and gave their award on 4th May 1966. The award was accepted by the parties and in token of their acceptance they had put their signatures on the award. It is said that the award given by the arbitrators was in the nature of an agreement between the parties. According to the award, a sum of Rs. 24,278. 15 became payable to the plaintiff by the defendant which was payable in instalments out of which rs. 16,300/- was paid to the plaintiff on various dates, leaving a balance of Rs. 7,978. 15 and Rs. 544. 65 as interest for late payment of the instalments, totalling a sum of Rs. 8,532. 80. It was further alleged in the plaint that according to the award the defendant was not entitled to carry on any business of the dissolved partnership in the name of M/s. Kanhaiya Lal Ved Prakash. Since the defendant did not comply with that term of the award and was still carrying on business in that name, the plaintiff filed a suit for permanent injunction restraining the defendant from carrying on any business in the name and style of M/s. Kanhaiya Lal Ved Prakash and also for the recovery of Rs. 8,532. 80.

( 3 ) THE defendant contested the suit and according to him the suit was not maintainable and that there was no award by the arbitrators on 4-5-1966, According to the case of the defendant the arbitrators had given their award on 20th April 1966 orally and in terms of the award the parties had started acting upon. It was under the oral instruction of the arbitrators that the defendant paid the amount to the plaintiff but not under the alleged award dated 4-5-1966. It was contended that the plaintiff was not entitled to enforce the award dated 4-5-1966 as the same had not been made rule of the court and could not be enforced through a decree of the court. It was also contended that the award dated 4-5-1966 was never given and the defendants signatures had been obtained on blank stamp papers, that he was, not pre- sent at Amritsar where the award was given on that date and that the written award dated 4-5-1966 was not the same as was orally told to the parties on 20-4-1966.

( 4 ) FROM the above narration of facts, it would be seen that the main contention between the parties was as to whether the award was made in writing on 4-5-1966 or there had been a prior oral award at Amritsar on 20-4-1966.

( 5 ) THE argument of the learned counsel for the plaintiff-appellant was that an oral award cannot be made and in view of Section. 14 of the Arbitration Act an oral award is not contemplated under the Arbitration Act. The only written award was made on 4-5-1966 and since the defendant did not take any proceedings to have it set aside, that can be deemed to be a final award enforceable between the parties.

( 6 ) THE trial court decreed the suit for the recovery of Rs. 8,532. 80 and also for the injunction. The defendant did not file any appeal against the money part of the decree but only filed appeal challenging the decisions so far as the trial court had granted an injunction against the defendant. The decision of the trial court, therefore, on the money part of the decree became final between the parties. In appeal, the lower appellate court disagreed with the trial court and dismissed the suit of the plaintiff for the relief of injunction. It is agai







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