Patna High Court
Bhopal Singh And Ors. vs Nagendra Narain Singh And Ors. on 4 April, 2001
Equivalent citations: 2001(2)BLJR1095
Author: S.K. Katriar
Bench: S.K. Katriar
JUDGMENT S.K. Katriar, J.
1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'), has been preferred by the plaintiffs, and is directed against part of the order dated 6-9-2000, passed by learned Subordinate Judge, llnd Court, Muzaffarpur, in Partition Suit No. 94 of 1981, (Bhupal Singh and Ors. v. Nagendra Narain Singh and Ors.), whereby the plaintiffs' application purported to be under Section 34 of the Act has been rejected.
2. The plaintiffs-appellants instituted the aforesaid suit for partition of family properties. The parties agreed to have the issues adjudicated through arbitration outside the Court through Panchnama and referred the dispute for decision by arbitration and award. Accordingly, the Arbitrator gave the award dated 21-5-99, which was filed in the Court on 24-5-99. The Court gave copies of the award to the parties on 4-6-99. The plaintiffs filed an application before the Court in the Partition Suit, purported to be under Section 34 of the Act with the following prayer:
It is, therefore, prayed that the Court be pleased to correct the award in respect of R.S.P. Nos. 2226 and 927 of Schedules. I & II of the award or send the award back to the arbitrators for the aforesaid correction, as also for giving additional award in respect of omitted R.S.P. No. 534 and 2660 and to confirm the award. And for this the petitioner shall ever pray.
3. The defendants, who are the respondents herein, filed objections to the same and submitted that the plaintiffs' application be rejected. After hearing the parties, the plaintiffs' application dated 30-8-99, has been rejected by one part of the order dated 6-9-2000, and impugned herein.
4. While assailing the validity of the impugned order, learned Counsel for the appellants has submitted that the trial Court erred in holding that the Court of Subordinate Judge is not the principal Civil Court within the meaning of Section 2(1)(e) of the Act. He relies on two judgments of this Court, both by learned Single Judges, reported in 2000(4) PLJR 815 (Mohd. Sadiq v. State of Bihar), and 2000(4) PUR 843 (Thakur Prasad Singh v. State of Bihar), He has next submitted that the learned trial Court has erred in holding that the Court has not referred the dispute to the Arbitrator and, therefore, the Court's intervention is not permissible. Learned Counsel has also maintained that the plaintiffe' application dated 30-8-99 was one under Section 34 of the Act.
5. Learned Counsel for the defendants-respondents has submitted in opposition that the learned trial Court may have assigned wrong reasons in support of the impugned order, but the conclusion is correct. It is clear from a perusal of the application dated 30-8-99 that it was in substance under Section 33 of the Act which is not maintainable before the Court. The Court could have interfered only if it were an application under Section 34 of the Act. He has lastly submitted that the present appeal is misconceived and is beyond the scope of Section 37 of the Act.
6. Having considered the rival submissions, I am of the view that this appeal ought to be dismissed. Section 2(1)(e) of the Act defines "Court" and reads as follows:
Court means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes.
The provision fell for consideration of this Court on two occasions and it has been held in the cases of Mohd. Sadiq v. State of Bihar (supra), and Thakur Prasad Singh v. State of Bihar (supra), that the Subordinate Judge of a district is the principal Civil Court of original jurisdiction for entertaining a suit and not the District Judge. In that view of the matter, the trial Court has erred in observing in the impugned order that his Court is not the principal Civil Court within the meaning of Section 2(1)(e) of the Act.
7. The trial Court seems to have further erred in holding that it is not empowered to interfere with the award if the reference was not made by the Court, but was due to the volition of parties outside the Court. The trial Court seems to be labouring under the conception under the old Act. The Supreme Court has held in its judgment (Sundaram Finance Limited v. NEPC India Ltd.), that the present Act is very different from the Arbitration Act, 1940. The provisions of this Act have, therefore, to be interpreted and construed independently, and in fact reference to, 1940 Act may actually lead to misconstruction. In other words, the scheme of the present Act is quite different and, therefore, its provisions have to be interpreted being uninfluenced by the principles underlying the 1940 Act. The Supreme Court also had the occasion to dwell on the provisions of this Act dealing with settlement of disputes by volition of parties outside the Court, or the Court's power to make reference to the Arbitrator. The Supreme Court has held that while the former is absolutely unbridled, the award need not be made a rule of the Court, and has the force of a decree which could be executed by the parties straightway. It has further been held that in view of the provisions of Section 8 of the new Act, it is only in an already pending action before the Court that a party can apply that the matter is the subject of an arbitration agreement and thus, the Court gets the jurisdiction to refer the parties to arbitration. Section 8 of this Act does not contemplate, unlike Section 20 of the 1940 Act, that a party can apply to a Court for Arbitration when no matter is pending before a Court. Furthermore, the appointment of Arbitrator(s) under this Act is made as per the provisions of Section 11 of the Act which does not require the Court to pass a judicial order appointing the Arbitrator. Therefore, the matter, the parties in the present case were fully justified in appointing arbitrator(s) outside the Court, without the Court's intervention, to dissolve the dispute. In that view of the matter, the trial Court has erred in holding that the Court's intervention in the present case is not possible because reference to the Arbitrators was not at the instance of the Court.
8. It is thus manifest that both the reasons assigned by the learned trial Court in rejecting the plaintiffs' application are erroneous in law. I am yet constrained to hold that conclusion of the impugned order rejecting the plaintiffs application dated 30-8-99, is correct and is hereby upheld. Relevant portions of Sections 33 and 34 of the Act are set out hereinbelow for the facility of quick reference:
33. Correction and interpretation of award; additional award.-(1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties-
(a) a party, with notice to the other party, may request the Arbitral Tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award;
...
(b) if so agreed by the parties, a party, with notice to the other party, may request the Arbitral Tribunal to give an interpretation of a specific point or part of the award.
34. Application for setting aside arbitral award.-(1)Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with Sub-section (2) and subsection (3).
(2) An arbitral award may be set aside by the Court only if-(a) the party making the application furnishes proof that-(i) a party was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not failing within the terms of the submission to arbitration, or it contains decisions or matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside;...
...
(4) On receipt of an application under Sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting the arbitral award.
9. It is thus manifest from a plain reading of Section 33 that it permits correction of the kind of errors mentioned in clause (a) of Sub-section (1) of Section 33 of the Act, and a party may request the arbitral tribunal within thirty days from receipt of the arbitral award unless another period of time has been agreed upon by the parties. The provision is in the nature of a review proceeding. The scope is, therefore, very limited. There are two conditions for the exercise of power under Section 33 of the Act, namely the period of limitation, and, secondly, the forum, i.e. the arbitrator(s) themselves. On the other hand, an application under Section 34 of the Act can be maintained before the Court for setting aside such an award on the grounds enumerated in Sub-section (2) of Section 34 of the Act. It is manifest from a plain reading of the two Sections that while powers have been conferred on the Arbitrators under Section 33 of the Act to make corrections in the award of the nature mentioned therein while maintaining the award. The provisions of Section 34 of the Act empowers the Court to set aside the whole or a part of the award. It is-rnanifest from a plain reading of the plaintiff's application dated 30-8-99 that it is meant to maintain the award with correction, and not to set aside the award, and is, therefore, beyond the scope of Section 34 of the Act. It is clear from a plain reading of the application, particularly paragraph 7, that corrections sought for is within the scope of Section 33 (1)(a) of the Act and, therefore, could have been maintained only before the arbitral tribunal. Paragraph 7 of the application is set out hereinbelow for the facility of quick reference:
7. That from the abovesaid facts, it is obviously clear that omission and errors in the award is simply incidental and clerical in nature and, therefore, if is within the competence of the arbitrators to make the necessary correction in the award.
Such an application, therefore, could not have been maintained before the Court.
10. I must also deal with the appellants' contention that the plaintiffs' application is covered by the terms of Section 34(4) of the Act. He has also relied on the following portion occurring in the commentary entitled Justice Bachawat's Law of Arbitration and Conciliation, 3rd Edition (Reprint 2000),
13. Paragraph (4) envisages a procedure which is similar to the "remission" known in most common law jurisdiction, through in various forms. Although the procedure is not known in all legal systems, it should prove useful in that it enables the arbitral tribunal to cure a certain defect and, thereby, save the award from being set aside by the Court.
Learned Counsel, therefore, submits that it is in the scheme of the Act to make every effort to save the arbitral award by correction. I am unable to accede to the contention for the reason that the Court's power to remit the matter to the arbitral tribunal in terms of Sub-section (4) of Section 34 of the Act is only with respect to applications filed under Sub-section (1) read with Sub-sections (2) and (3) of Section 34 of the Act. I have held hereinabove that the application in question was one under Section 33 of the Act. Therefore, the provisions of Sub-section (4) of Section 34 of the Act are not attracted in the present case. The aforesaid passage quoted from the text book is confined to the scope and content of Sub-section (4) of Section 34 of the Act. In other words, the Court may make every effort to save the award by correction if it were possible in the facts and circumstances of particular case, say, for example, in terms of Section 34(2)(iii) of the Act.
11. I therefore, reach the conclusion that the Court below has rightly rejected the plaintiff's application date 30-8-99, though on erroneous grounds. The Court ought to have rested its order on the grounds indicated hereinabove.
12. I would also like to deal with the contention advanced on behalf of the defendants-respondents that the present appeal is not maintainable in view of the terms of Section 37 of the Act. The same is set out hereinbelow for the facility of quick reference:
37. Appealable orders.-An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:
(a) granting or refusing to grant any measure under Section 9.
(b) setting aside or refusing to set aside an arbitral award under Section 34.
(2) An appeal shall also lie to a Court from an order of the arbitral tribunal-
(a) accepting the plea referred to in Sub-section (2) or Sub-section (3) of Section 16; or
(b) granting or refusing to grant an interim measure under Section 17.
(3) No second appeal shall like from an order passed in appeal under this Section, but nothing in this Section shall affect or take away any right to appeal to the Supreme Court."
Clause (a) of Sub-section (1) of Section 37 permits an appeal with respect to orders under Section 9 of the Act which relates to grant of interim measure etc. by Court, and is not the case here. Clause (b) of Sub-section (1) of Section 37 permits an appeal with respect to an order under Section 34 of the Act which relates to setting aside an award by the Court, and is not the case here. An appeal under Clause (a) of Section 37 is maintainable against orders passed under Sub-section (2) or Sub-section (3) of Section 16 of the Act, which is not the case here Sub-section (2) of Section 16 deals with the plea that the arbitral tribunal does not have the jurisdiction, and Sub-section (3) of Section 16 deals with the plea that the arbitral tribunal is exceeding the scope of its authority. An appeal under clause (b) of Sub-section (2) of Section 37 shall be maintainable if it relates to grant or refusal of an interim measure by the arbitral tribunal under Section 17 of the Act which is not the case here. It is thus manifest that the subject-matter of the impugned order is not covered by any one of the clauses enumerated under Section 37 of the Act, In that view of the matter, this appeal is not maintainable.
13. In the result, the appeal is dismissed.