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1954 Supreme(All) 8

HIGH COURT OF ALLAHBAD
MALIK, C.J., SAPRU, J.
Shambhu Nath
Versus
Hari Shankar Lal
F.A.F.O. No. 353 of 1951
Decided On : 05-01-1954

Advocates:
Surendra Narain Singh, for Appellant; Rajeshwari Prasad, for Respondents.

Judgement

MALIK, CJ. :- This is a defendants appeal against an order passed by the lower court directing that a decree be passed in terms of an award. The parties are brothers. On 17-8-1948, they entered into an agreement along with their mother Rajwanti and the dispute was referred to two arbitrators, Girdharilal and Madho Prasad. Within 10 or 12 days of the reference the two arbitrators started the work, gave notice to the parties and started recording the evidence. On 25-7-1949 Rajwanti died. On 31-8-1950 one of the brothers, Hari Shanker Lal, gave a notice to the arbitrators that they should proceed with the reference and give an award by an early date. On 1-10-1950, the award was given, Thereafter Hari Shanker Lal applied that the award be filed and made a rule of the court. The application was registered as a suit and notice was issued to Shambhu Nath and Kedar Nath, Shambhu Nath filed the following objections :

(i) That the arbitrators had not complied with the provisions of Rule 2, Sch. 1, Arbitration; Act and the award was void on that ground.

(ii) That the award was given beyond time,

(iii) That after Rajwantis death the reference had elapsed and there was no fresh agreement of reference.

(iv) That the arbitrators were personally interested in Hari Shanker Lal and the award was therefore vitiated as it was to benefit one of the arbitrators and the arbitrators were therefore guilty of misconduct.

2. Learned counsel has agreed that there is no substance in the third objection. It is not necessary for us to go into the fourth. The second objection of limitation must be decided in favour of the appellant. Section 3 of the Arbitration Act (Act No. 10 of 1940) provides that :

"3. An arbitration agreement, unless a different intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule in so far as they are applicable to the reference."

Paragraph 3 of the First Schedule is as follows :

"3. The arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow."

The lower court has held that the arbitrators have a right to make their award either within, four months after entering on the reference or after having been called upon to act by notice in writing, and as the notice to act was given on 31-8-1950, the award was within time. We do not think that this view is sound. If the arbitrators have entered on the reference then the award must be made within four months from such date. If they have not entered on the reference the arbitrators may be called upon by notice in writing to act and in that case the four months period is to be counted from the date of the notice.

Here the arbitrators had entered on the reference 10 or 12 days after the reference. That will be 28th or 30th August 1948. The four months expired on the 28th or 30th December 1948. Seven months after the period fixed had expired Rajwanti died and almost after a further period of one year from that date a notice was given long after the expiry of the period of four months. In the circumstances, the award had clearly been given after the expiry of the period of limitation. This view is supported by a decision of this Court in - Sardar Mal, Hardat Rai v. Sheo Bukhsh Rai, Sri Narain, AIR 1922 All 106 (A).

3. As regards the first point, that the arbitrators had not appointed an umpire, reference is made to para. 2 of the First Schedule of the Act which is as follows :

"2. If the reference is to an even number of arbitrators, the arbitrators shall appoint an umpire not later than one month from the latest date of their respective appointments." If the arbitrators do not nominate an umpire then under S. 8(1)(c) a party has to serve the arbitrators with a notice in writing and if within 15 days they do not make the appointment then under S. 8(2) the court has






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