Patna High Court
Prasad Gope vs Makhan Gope And Anr. on 18 July, 1968
Equivalent citations: AIR1969PAT307, AIR 1969 PATNA 307
JUDGMENT H. Mahapatra, J.
1. Plaintiff is the appellant. He initiated a proceeding under Section 14 (2) of the Arbitration Act, 1940, on the 14th March, 1959. In pursuance of an order passed by the Court, the award was filed on the 22nd April, 1959. The defendants-respondents appeared and filed a written statement on the 8th June, 1959, in which they had made several allegations against the plaintiff and the award. One of the contentions raised there was that there was no reference to arbitration and the two documents showing arbitration agreement had been fabricated by the plaintiff. Ultimately the court passed judgment on the 28th February, 1962 against the appellant holding that there had been no reference to arbitration and the two documents (Exs. 5 and 5/a) had not been executed for that purpose by the defendants.
There was an appeal against that by the present appellant in title appeal no. 63/15 of 1962/63 in which the judgment of the court below was set aside and the case was remanded for fresh disposal. This time the learned Munsif passed a judgment in favour of the appellant and drew up a decree in accordance with the award on the 26th February, 1966, Against that the defendants' took an appeal in which they succeeded. That is why the present second appeal has been filed by the plaintiff.
2. Learned counsel appearing for the appellant first raised a point that the defendants' appeal in the court below was not competent, inasmuch as, decree having been passed in accordance with the award, no appeal could be preferred against that as provided under Section 17 of the Arbitration Act. Section 17 states:
"Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration, or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow and no appeal shall lie from such decree except on the ground that it is in excess of, or nut otherwise in accordance with, the award."
Clearly enough, the defendants' appeal directed against the decree passed under Section 17 of the Act was not maintainable as the decree followed the judgment which was according to the award and as there was no allegation by the defendants in the court below that the decree was in excess of, or not otherwise in accordance with, the award. But in the present case that will not end the controversy.
3. Section 14 of the Act provides that "the arbitrators or umpire shall, at the request of any party to the arbitration agreement ..... or if so directed by the Court ..... cause the award or a signed copy of it together with any depositions and documents ..... to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award." In the present case on an application made by the appellant the court directed the arbitrators to file the award and when, the award was filed notice was issued to the defendants. At that stage it was open to the defendants to apply to the court challenging the existence or validity of the arbitration agreement or the award and to have the effect of either or both of them to be determined by the court. Section 33 of the Act provides for that. In Section 17 we find that the court before whom a proceeding under Section 14 is brought has to allow time for making an application to set aside the award after it decides not to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award suo motu. This indicates that a party who wants to challenge the award can have an opportunity to come before the same court to do so in a proceeding under Section 14, and if any such objection is filed, that will have to be disposed of by the court before proceeding to pronounce judgment according to the award and the decree following such judgment. The objection against the award if filed, will have to be rejected before such judgment and decree can be passed. That appears to be the sequence of Section 17.
In the present case, objections against the award were raised in the written statement that was filed by the defendants-respondents and in that they had virtually asked for setting aside the award. They had given several grounds, one of them being that there was no reference to arbitration by them. The trial court, considered those objections in the final judgment that was passed in the first instance on the 28th February, 1962 and in the second instance after remand, on the 26th February, 1966. Strictly speaking, the court should have passed an order refusing to set aside the award as asked for by the defendants and thereafter should have proceeded to deliver the judgment according to the award and then the decree was to follow the same. In this case, a composite order in the shape of a judgment was delivered by the court containing therein the refusal to set aside the award and direction to make a decree in accordance to the award. In such circumstances, the defendants cannot reasonably be precluded from having the opportunity, of appealing against the order refusing to| set aside the award.
The question that arises in this connection for consideration is whether the defendants had made an application to set aside the award, and if they did not make such an application, then they were not entitled to an order refusing to set aside the award and the court was only to wait for 30 days after service of the notice on the defendants before pronouncing the judgment accepting the award and making that the basis of the decree of the court.
4. Admittedly there was no application as such by the defendants to set aside the award. Under Section 33, two courses were open to them. They could have applied to the court if they desired to challenge the existence of the arbitration agreement or/and the award. As far as the challenge in regard to the existence or validity of the arbitration agreement, that itself was a ground for setting aside the award. In written statement, as I have already pointed out, that stand was taken by the defendants. In the Arbitration Act no form has been prescribed for making an application as contemplated under Section 33 or under Section 17 challenging the award. In that context, if necessary materials and allegations were disclosed in the written statement itself, that may be taken as an application for setting aside the award. Article 158 of the Limitation Act (Old) provides 30 days time for making such an application from the date of service of notice of filing an award in court Admittedly the written statement filed by the defendants in this case was within that period. In such circumstances, the written statement was to be treated as an application for setting aside the award. (See the case of Madan Lal v. Sundar Lal. AIR 1967 SC 1233).
5. Learned counsel for the appellant, however, disputed this position and drew my attention to the case of Minalal Mundhra v. Smt. Anchi Devi, (AIR 1965 Pat 66). There the question that arose for decision was whether a second appeal would lie out of an appeal which was permissible under Section 17 of the Arbitration Act, What would be considered to be an application, under Section 33 was not the point at issue in that case and observations made in that judgment are to be taken in the context of the facts of that case. If the judgment passed by the court on the 26th February, 1966, is to be taken as one including an order refusing to set aside the award, the defendants would be entitled to make an appeal against that under Section 39, Clause (i), Sub-clause (vi) of the Arbitration Act No doubt, Section 39 speaks of appeal from orders passed under the Act, but that will equally apply to a judgment which is taken to contain an order setting aside or refusing to set aside an award.
6. Learned counsel pointed out from the memorandum of appeal filed by the defendants in the court below that it was directed against the decree passed under Section 17 also. The usual practice is to state in the memorandum of appeal that that is directed against both judgment and decree. Mention of decree in that way will not change the legal character of the appeal. That was also directed against the judgment which contained the order refusing to set aside the award.
7. Another argument raised by learned counsel was that when the court passed an order for filing of the award under Section 14 of the Act and the arbitrators did file it, the defendants could and should have come in appeal against that order within the provisions under Section 39(1)(iv). They having failed to do so should not, learned counsel continued, be allowed by this Court the discretion of treating the written statement as an application under Section 33 of the Act If statute provides the facility for an appeal not only against filing of the award but also against the order refusing to set aside an award, a party cannot be deprived of that for the mere reason that he did not avail of an earlier opportunity of contesting an earlier order about filing of the award. The preliminary objection against the appellate judgment thus fails.
8. Learned counsel next contended that the trial court had given very cogent and elaborate reasons for discarding the defendants' case and grounds of objection and upholding the award. The lower appellate court has not considered those reasons, more particularly the most important point which the trial court had pointed against the defendants. In the written statement the defendants stated that the two documents (Exts. 5 and 5/a) contained their thumb impressions but the thumb Impressions were given on two blank sheets of paper which were given to arbitrators in another dispute between the defendants themselves. In Para 15 of the written statement they alleged that they had put their thumb impressions on two separate sheets of blank papers at the instance of a person to whom they wanted to refer for arbitration of their dispute. The name of that person was left blank in para 15 of the written statement which was filed on the 8th June, 1959. As late as the 23rd of August, 1965, that blank was filled up by way of amendment and the name of Rohan Gope was inserted at that blank space. This was obviously after Rohan Gope was examined in court as a witness on the side of the defendants. The court of first instance referred to this serious lacuna and drew an inference against the truth of the defendants version as to how Exts. 5 and 5/a came into existence. The lower appellate court has nowhere given its attention to this aspect. To me it appears this is not an insignificant thing omission of consideration of which is not likely to affect the assessment of evidence on the defendants side of the final conclusion on the merits of the case. No doubt, it was open to the appellate court to take a different view of the witnesses and their testimony, but that would only be justified if all important aspects that had gone to influence the trial court decision were considered adequately. In a case of reversal that is very much needed. I would, therefore, set aside the judgment and remand the case to the court of appeal below for hearing the parties fresh and disposing of the appeal according to law. Costs will abide the result.