Punjab-Haryana High Court
Sikander Singh And Others vs Messers Paragon Utility Financiers (P) ... on 1 May, 2013
Author: K. Kannan
Bench: K. Kannan
CR No. 526 of 1995 1
IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH
CR No. 526 of 1995
Date of decision: May 1, 2013
Sikander Singh and others
....... Petitioner
Versus
Messers Paragon Utility Financiers (P) Ltd.
........ Respondents
CORAM: HON'BLE MR. JUSTICE K. KANNAN
Present:- Mr. G. S. Punia, Advocate
for the petitioner.
Mr. Sarwan Singh, Advocate
for the respondent.
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1. Whether reporters of local papers may be allowed to see the judgment ?
2. To be referred to the reporters or not?
3. Whether the judgment should be reported in the digest?
K. Kannan, J (oral).
1. The revision is against the order of Appellate Court dismissing the appeal against the order of the Court of first instance refusing to set aside an arbitral award. The arbitration was on a dispute relating to a hire purchase agreement where the borrower had been purported to have failed to pay hire charges and consequently in terms of the clause contained in the hire purchase agreement for resolution of dispute through arbitral process, under the Arbitration Act, 1940 the financier had applied for appointment of an Arbitrator. The appointment had been made through an CR No. 526 of 1995 2 intervention of Court on 21.5.1982 by the order of Sub Judge First Class, Jalandhar and the Arbitrator had entered reference on 19.8.1986. On the award being filed by the Arbitrator before the Court, notices had been sent to parties and the financier was represented through a representative and the respondent did not file any reply in spite of several adjournments. He was proceeded ex- parte on 31.7.1987. The Arbitrator proceeded to draw up the award on 16.5.1988 allowing for a claim of the financier for `6,26,646.80 with 18% being the contractual rate of interest w.e.f. 1.12.1987 till date of realization.
2. This award was placed in Court for issue of judgment in terms of the award and it appears that notices had been again sent and publication effected whereupon the petitioner before this Court had filed his objection stating that the award is not valid in law and that the Arbitrator misconducted himself in undertaking a reference and proceeded to pass an award beyond the period of limitation as prescribed under the Arbitration Act. His contention was that the Arbitrator had become functuous officio and the objections filed by him were to be treated as objections under Section 30 and 33 of the Arbitration Act of 1940. The Court of first instance rejected the objections and held that the plea that the Arbitrator did not have a competence to pass the award was erroneous. In so doing the Court of first instance recorded the fact that after he entered reference on 19.8.1996 the petitioner before this Court had himself availed of 5 opportunities to file reply and the case was adjourned from time to time till 31.7.1987, when the petitioner remained absent he was CR No. 526 of 1995 3 proceeded ex-parte and the latter proceeded to pass the award. When the award was filed in the Court, the arbitrator sought for extension of time and this was granted by the Court. as such and he had sought an extension of time and this was granted by the Court. In the manner of grant of extension before judgment was passed no notice had been given to either of the parties but the Court proceeded to act on a plea by the Arbitrator himself that during the proceedings before him the case was adjourned from time to time by consent of parties till the petitioner was set ex-parte. Subsequently when the award was passed and placed before the Court, the Court of first instance had itself extended the time for passing the award. The Court of first instance has observed in the judgments that the Arbitrator had moved an application for extension of time and that extension was considered and it was allowed to be given up to the period 18.5.1998 and therefore the award cannot become vitiated. While dealing with this issue at the Appellate Court the District Judge also found that the power to grant extension was with the Court and if such an extension was given, post the period when the award was filed in Court, that would validate the award.
3. Learned counsel appearing in revision before this Court urges that he had not been given any notice of the application by the Arbitrator before the Court nor did the Court give any reasons for grant of such extension. As far as the proceedings before the Arbitrator is concerned the appearance of party before the Court and seeking for time for preferring reply themselves constituted a consent for extension. After he remained ex-parte and when an CR No. 526 of 1995 4 award had been drawn up on 16.5.1988 it was essentially a matter between the Arbitrator and the Court and if the Court found a justification for extension, a party cannot complain that the award is vitiated unless any clear prejudice was shown.
4. Learned counsel has a new argument to urge before this Court which was never before the Court of first instance or when the appeal was dismissed. The contention is that the award does not spell out as to how it is within the period of limitation it is rather a strange argument to make for all the records that will have a bearing for the award being passed and the nature of agreement between the parties and when the default took place are not before the Court. The award of the Arbitrator itself is a skeletal as it is perfectly tenable to be all that it states is the detail regarding the date of entering in to reference and the fact that hire purchase agreement had been executed on 31.5.1975. The award also registers the fact that the revision petitioner had undertaken to repay the loan availed for purchase of truck bearing No. PN-859 but had defaulted for the same and consequently as per the statement filed before the Arbitrator it was found that the amount payable up to 31.11.1987 was `6,26,646.80. The hire purchase agreement is not before the Court nor are the books of account available for this Court for perusal. I cannot allow for an objection regarding how the award came to be passed was within the period of limitation. Unless there was an issue of limitation which was brought up earlier as regards the enforcement of the hire purchase agreement, it is too late in the date for the person to plead that even a claim for enforcement of hire purchase CR No. 526 of 1995 5 agreement was barred by limitation. As I have observed an objection which was not taken before the two Courts below as regards the enforceability of the hire purchase agreement cannot survive for consideration before this Court.
5. Learned counsel also has an argument to make that this is bound to be stated so and the award passed without stating that it was within time is vitiated. He makes a reference to Section 20 of the Arbitration Act, 1940 to urge for such a contention. Reliance on Section 20 is wholly misplaced. Section 20 arises only for a party who seeks assistance of the Court to have an arbitration agreement filed in Court but has nothing to do with the duty of an Arbitrator to state that the award which he passed was an enforceable award. The enforceability of the award arises by the fact entering on reference and passing an award that becomes a judgment unless any of the factors which are delineated under Section 30 of the Act are brought out to set aside the award. There is no necessity for a specific mention in that award that it is not barred by time. Learned counsel refers to a judgment of this Court in Shri Des Raj Vs. Food Corporation of India AIR 1984 (P&H) 761, as bringing support to his argument. In that case the Bench was considering the right to apply for an Arbitrator for referring the dispute to arbitration. The Court held that the reference to arbitration must be made within a period of three years as per the residuary Article 137 of the Limitaiton Act. This instant case that is the subject of revision has nothing to do about whether the arbitration was invoked within the limitation or not. There is certain confusion for the CR No. 526 of 1995 6 petitioner to formulate what he seeks to argue. If the contention is that the reference to arbitration was not made within the period of three years from the time when the dispute arose, then there must be something brought on record to show that the dispute arose much far beyond a period of three years when the party resorted to action for appointment of an Arbitrator. Even the order appointing the Arbitrator by the Court of first instance is not available on record for perusal.
6. Learned counsel also refers to me a decision of Orissa High Court in Secretary to Government of Orissa, Vs. Raghunath Mohapatra AIR 1985 Orissa 182 which also addresses the issue of limitation. The Court was holding that it is for Arbitrator and not for the Court to deal with the question whether the claim of a party to the arbitration agreement was barred by law of limitation. The question of whether the claim before the arbitrator was within time is a matter that could be dealt with by the Arbitrator. As I have observed, before the Arbitrator there was no issue of reference of limitation at all, nor indeed was any argument made or addressed before the Court of first instance regarding the enforceability of arbitration. It was contended that the Arbitrator had become functuous officio and has not passed the award within a period of four months. The said issue was totally different from an argument which is urged for the first time before this Court. The plea is literally a desperate last clutch at the straw, for the person who has simply no legal tenability to contend.
7. The learned counsel refers to me also the CR No. 526 of 1995 7 decision in State of Punjab Vs. Hardyal AIR 1985 SC 920. The Supreme Court was holding that the Arbitrator himself cannot extend and Court alone can do it. In this case I have already observed that the Arbitrator had not extended himself the period of limitation and the application for extension of period was filed into the Court with the prayer for extension and the Court had granted the extension as it is recorded by the Court of first instance and also adverted to in the judgment of the Appellate Court. The decision of the Supreme Court also therefore cannot avail to the appellant.
8. Learned counsel would have yet another argument to make that the claim was only loan with reference to hire purchase agreement which contained an undertaking to pay `2175/- with 29 instalments and the claim although originally it was `61338/-, the award had been passed for `6,26,646.80. The contention is that the petitioner does not know how the amount was arrived at. It is not possible for me to examine nor is it necessary. The area of intervention that is possible under the Arbitration Act does not extend to examine the reasoning. The whole argument is built as though this Court is a Court of appeal on facts. The area of interference in revision to arbitral award that has stood confirmed by the Court of first instance and rejected by the second Court cannot traverse beyond the scope which is already available under Section 30 of the Arbitration Act. The appeal is untenable and without merit.
9. Counsel for the appellant argues that interest awarded for 18% shall be reduced to 6%. On a loan of the year 1975 which has gone unpaid for all these years, the only benefit which the CR No. 526 of 1995 8 revision petitioner can obtain by the exercise of discretion is reduction of interest. The rate of interest is reduced to 9% from 18% simple interest from the date of award of the Arbitrator till date of payment.
10. The revision petition is disposed of with the only modification relating to interest subsequent to the date of the award.
(K. KANNAN) JUDGE May 1, 2013 archana