Patna High Court
Jayant R. Taunk vs Mrs. Hemani H. Patel And Ors. on 31 July, 1992
Equivalent citations: 1993(1)BLJR122
JUDGMENT S.K. Chattopadhyaya, J.
1. This appeal is directed against an order dated 30th April, 1983 passed by the Subordinate Judge, Jamshedpur in Misc. Case No. 14 of 1981 by reason of which the learned court below has rejected the petition filed by the appellant under Section 33 of the Arbitration Act (hereinafter referred to as the Act).
2. Before narrating the event of facts, it is necessary to mention some salient feature of the present case.
After the arbitrators submitted their award in the court on 24-6-1981, an application was filed by the respondent No. 4 to make the awatd as Rule of the Court. This application was filed on 29-6-1981. Title Suit No. 39 of 1981 was registered and notices were directed to be issued under registered cover to the parties.
3. It appears from record that on 24-7-1981 appellant received the notice but till 23-8-1981 no objection petition was filed by th appellant either under Section 30 or under Section 33 of the Act. On 12-11-1981 appellant filed a petition praying therein to grant one month's time to file objection and the prayer was allowed but no reason/cause whatsoever was given in the said petition for not filing objection petition under Section 30 of the Act in time. Ultimately, on 25-11-1981 a petition under Section 30 of the Act was filed by the appellant and that too without any verification.
Respondent Nos. 3 and 4 filed their rejoinders stating therein that the objection petition under Section 30 of the Act was time barred and was defective and as such cannot be entertained. It further appears that no steps were taken by the appellant to verify the said objection petition filed under Section 30 of the Act even after rejoinder was filed.
4. The appellant instead of curing the defect in the said petition filed a petition under Section 33 of the Act on 14-12-1981 and Misc. Case No. 24 of 1981 was registered. On 5-11-1981, the respondent No. 4 filed a petition drawing attention of the court that notice of filing of the award in court was personally served on the appellant on 24-6-1981. An affidavit was filed. Subsequently by the appellant stating therein the reasons for not verifying the petition under Section 30 of the Act.
5. A petition was filed on behalf of the appellant for amalgamation of the aforesaid two cases, namely, Title Suit No. 39 of 1981 and Misc. Case No. 24 of 1981 and by an order dated 5-1-1982, the prayer was allowed and as such both the cases were amalgamated and heard together.
6. After hearing the parties by reason of the impugned order dated 30-4-1983 the court below allowed the Title Suit No. 39 of 1981 making the award as Rule of the Court but dismissed Misc. Case No. 24 of 1981 rejecting petition filed under Section 33 of the said Act.
7. The appellant moved this Court in Civil Revision No. 210 of 1983 (R) impugning the order dated 30-4-1983 passed in Title Suit No. 39 of 1981 by which the court below made the award dated 2-6-1981 as Rule of the court.
Maintainability of the aforesaid civil revision application was raised and by order dated 12-1-1984 this Court dismissed the aforesaid civil application as not maintainable in view of specific provisions of Section 39 (1) (vii) of the Arbitration Act.
8. In the instant appeal, the appellant has impugned that part of the order dated 30-4-1983 by which Misc. Case No. 24 of 1981 has been dismissed after overruling the objection petition filed under Section 33 of the Act.
9. From the facts narrated above, it is clear that instead of filing appeal against the impugned order by which Title Suit No. 39 of 1981 was allowed overruling the objection petition filed under Section 30 of the Act, the appellant moved this Court in Civil Revision which was held to be not maintainable.
On the other hand, the appellant filed the instant appeal impugning the order dated 30-4-1983 by which his objection petition under Section 33 of the Act has been dismissed resulting in dismissal of the aforesaid Misc. Case.
10. It is a settled principles of law that if there is a composite order by which both the applications under Sections 30 and 33 of the Act are disposed of by registering one case, an appeal will lie against such composite order. But, in this case two separate cases were registered by filing two separate petitions one after another and not at the same time.
It is a fact that on the prayer made by the appellant both the cases were heard together and a common judgment has been passe but by no stretch of imagination it can be said that the impugned order is a composite one.
11. That being the position in facts in my opinion, the instant appeal is not maintainable inasmuch as the appellant in his petition under Section 33 of the Act challenged the existence or validity of the arbitration agreement, the reference made to arbitrators and the award made and published by the said arbitrators.
My this view is supported by a Division Bench decision of this Court in the case of Abdul Karim and Ors. v. Mst. Maniram and Ors. AIR 1954 Pat, p. 6. In the aforesaid case, the Division Bench relied on a decision of Lahore High Court reported in AIR 1943 Lahore 295, where a question arose as to whether an application to challenge the validity of an arbitration agreement or to have the effect of that agreement determined falls under Section 39(4) of the Arbitration Act as an appealable order. In that case, an application in revision had been filed against such an order and it was contended that, as an appeal lay under Section 39 (4) of the Act, the application in revision should not be entertained. It was, however, held that an order passed under Section 33 of the Arbitration Act does not fall under Section 39(4) and is not an appealable order, hence, an application in revision against such an order was entertainable.
12. Now coming to the facts of the case it can be stated in short as under:
By terms of an indenture of partnership dated 10th April, 1979 the appellant and respondent Nos. 1 to 4 entered into partnership under name and style of Natraj Cinema for carrying on the business of exhibition of Cinema show. There were two groups of partner originally. One being called Patel set of partners consisting o f respondent Nos. 1 and 2 and other group called Taunk group of partners consisting of respondent Nos. 3 and 4 and the appellant. There was a partnership deed and the said deed inter alia contained the Arbitration clause being Clause No. 19 of the partnership deed wherein, it was stipulated that dispute on all the questions arising during the continuance of the partnership in regard to the condition and any of the terms contained in the partnership or any other matter concerning the formation of the partnership deed shall be referred to the decision of the two arbitrators one to be appointed by Rati Lal R. Taunk, father of the respondent Nos. 3 and 4 and other to be appointed by Homi H. Patel, husband of respondent No. 1 and father of respondent No, 2. It is not in dispute that none of the aforesaid persons, namely, Rati Lal R. Taunk and Homi H. Patel were the partners of the said firm.
13. Subsequently, there arose some dispute amongst the partners and as such said Rati Lal R. Taunk and Homi H. Patel were requested to appoint arbitrators forthwith to decide and give their award on the questions referred in the said letter The appellant addressed a registered letter to the respondent Nos. 5 and 6 requesting them not to enter into any reference without any express consent in writing.
14. Ultimately as stated aforesaid, an award dated 2nd June, 1981 was filed in the court by the said arbitrators on 24-6-1981.
15. The learned court below, from the records of the case has found that the postal information received from the Post Master, Jamshedpur reveals that a registered notice was delivered to the appellant on 24-7-1981 but appellant did not file any objection under Section 30 of the Act within the prescribed period of 30 days which expired on 23-8-1981:
It appears that an affidavit was filed by the appellant in the court below stating therein the reason for not verifying the objection petition filed by him under Section 30 of the Act. While in his objection petition under Section 30 of the Act, the appellant challenged the jurisdiction of the arbitrators on (sic) grounds and submitted that the award was bad in law as without jurisdiction and tainted with fraud and undue influence, in the petition under Section 33 of the Act the appellant challenged the legality and validity of the arbitration agreement and also alleged that no dispute has arisen amongst the partners within the four corners of the partnership deed and as such reference to arbitrators was illegal.
16. From reading of both the petitions referred to above, it appears that the contention raised in both the applications are more or less the same.
17. The learned court below after discussing in extenso the case of the parties has come to a conclusion that the admitted facts are that there was a partnership business carried out by the partners in the name and style of Natraj Cinema and the said partnership deed was duly signed by all the partners and partnership deed was registered under the Partnership Act.
The court below has further come to the conclusion on the basis of the records of the case that the appellant admitted in his rejoinder dated 12-5-1982 that at the time of inception of the partnership, he was aged about 24 years and he signed the consent letter dated 2-6-1981 but alleged that he signed the above letter under misrepresentation, The appellant has also admitted his appearance before the arbitrators with his father-in-law and also admitted that he had signed the consent letter dated 2-6-1981 on the basis of which the arbitrators made an award, which was subsequently filed in the court. Further, there is no denial of the fact that the appellant accepted and encashed a sum of Rs. 1,50,000 one lac and fifty thousand) as agreed towards full and final satisfaction of his share in the assets capital, profits and goodwill of the firm. The appellant granted a receipt dated 2-6-1981 which reveals that he received the aforesaid sum from M/s. Natraj Cinema by Cheque No. NIR 054229 dated 2-6-1981 drawn in favour of the appellant on the Union Bank of India, Bistupur, Jamshedpur in full and final satisfation in respect of his share of capital assets, profit, goodwill upto day of the said firm from which he has resigned in consideration of the said amount, thus there was an agreement to that effect.
18. While rejecting the submissions made on behalf of the appellant on various grounds for attacking the award as well as the arbitration agreement itself, the learned court below after perusing various documents, particularly the minutes of the meeting of the arbitrators has come to a conclusion that the appellant placed before the arbitrators a letter dated 2-6-1981 signed by him and address to the parties and another signed by Shivanand Jha constituted attorney on behalf of Mrs. Homi H. Patel and Mrs. Tehmi H. Patel also by Deepak R. Taunk for self and as constituted attorney on behalf of Shri Atul R. Taunk. The minutes of the said meeting further shows that arbitrators looked into and considered the said letter, The court below has come to a finding that the award shows that that parties present consented before the arbitrators to an award being made in terms of the said letter of the appellant and the appellant admitted before the arbitrators about the receipt of Rs. 1,50,000.
19. The Court below has come to a conclusion that the award was a valid award and moreover the said award was acted upon by the appellant and by other partners. The court below has considered the fact that the appellant received the said amount and the letters written to the Manager, Union Bank of India, Bistupur, Jamshedpur, the State Bank of India, Manager, Bank of Baroda, Jamshedpur intimating therein that the appellant has consequently severed his business relationship with M/s, Natraj Cinema, Jamshedpur as having resigned from his partnership and filling the Form No. V before the Registrar for change of situation.
20. After scrutinising the evidence on record the court below has come to a finding that the appellant enjoyed the benefit of the award and acted upon the same.
From the findings of the learned court below enumerated hereinabove, it is clear that the appellant was not a minor at the very inception of the arbitration agreement, the appellant did participate in the "meeting before the arbitrators and gave his consent after receiving a cheque of Rs. 1,50,000 and thereby acted upon the said award.
21. The learned Counsel appearing on behalf of the appellants has raised number of points in support of his arguments but has miserably failed to satisfy me as to how even after receiving the said amount of Rs. 1,50,000 as a consideration of severing business relationship from M/s. Natraj Cinema and thereby acted upon the said award, could challenge the award or the arbitration agreement itself.
22. It is a settled principles of law that party accepting payment under award is estopped from challenging the award.
This principle is to be found in Russel on Arbitration, 14th Edition, page 191; and what the learned author says is that it will be good answer to a motion to set aside an award if the opposing party can show that the party moving has acquiesced in the award by knowingly accepting a benefit under it. The emphasis on 'knowingly' is in order to point out that the acceptance of the benefit under the award should be in ignorance of the fact that the award has been made. If the party accepting the benefit wishes to challenge the award, as in this case there cannot be the slightest doubt that the benefit was accepted knowingly by the party.
The next authority which will support my view is 1940 AC 412--Lissenden v. C. A. V. Bosch Ltd. In that case, an award was made by a County court under the Workmen's Compensation Act for payment of certain weekly amount to a worker. There was a right to appeal against the said award given by the rules framed under the Act. The worker after accepting some weekly payments, filed an appeal challenging the award and it was contended that the appeal was barred on the principle of "approbate and reprobate".
The House of Lords in that case stated as follows:
In arbitration in the ordinary sense the award is the fruit of a consensual agreeernent under which the parties have agreed to accept the arbitrator's award, which thus governs them by their agreement. There is no appeal in the proper sense of the term, The Court has certain powers over arbitrators, which the parties may invoke. Thus a party may claim that the award was made without jurisdiction or that the arbitrator was guilty of misconduct and that for those or other like reasons should be set aside. A party who has treated the award as valid, for instance, by accepting payment of what it awarded him, would generally be barred from adopting the inconsistent attitude of claiming to set it aside. It might then be said that he could not affirm and disaffirm of perhaps even that he could not approbate or reprobate.
23. Mr. N. K. Prasad, the learned Counsel appearing on behalf of the appellant also argued that the court below has come to a wrong finding in holding that the objection petition under Section 30 of the Act was time barred.
In my opinion, the argument of Mr. Prasad is only to be noticed and to be rejected. Firstly, on the ground that in the instant appeal, the impugned order passed in Title Suit No. 39 of 1981 has not been challenged and the said order has met its finality when the Civil Revision application was held to be not maintainable by this Court as aforesaid.
Secondly, even on facts, there is no scope for argument on behalf of the appellant that the ojection petition under Section 30 of the Act was not time barred.
24. As stated earlier, award was filed in the court on 24-6-1981, notice was received by the appellant on 24-7-1981 and objection petition under Section 30 was made on 25-11-1981 i.e. much beyond the period of limitation.
Moreover, petition filed by respondent No. 4 on 25-11-1981 before the court below drawing its attention that notice of filing of award in court was personally served on the appellant on 24-7-1981 and there being nothing on record to show that this statement had ever been controverted by the appellant, I am of the view that the appellant received the notice on 24-7-1981 and as such in view of the decision of the Supreme Court in the case of Indian Rayon Corpn. Ltd. v. Raunak and Company Pvt. Ltd. , the petition under Section 30 was time barred. The Apex Court has observed as follows:
The aforesaid question was again examined from a slightly diffierent angle later in Dewan Singh v. Champat Singh, where this Court while dealing with Article 158 of the Limitation Act, 1908 which was the previous Article corresponding to Clause (b) of Article 119 of the Limitation Act, 1963 held that the said Article gave 30 days time for applying to set aside the award, from the date of the service of the notice of (he filing of the award. As mentioned hereinbefore the notice of the service award may be communicating in of any form. It need not necessarily be in writing.
25. Taking into consideration the facts and law involved on this points (sic) of the view that the objection petitioner under Section 30 of the Act was hopelessly time.
26. Mr. N. K. Prasad has tried to wriggle out of this position by submitting that there is no token of proof that the notice issued by the court was served on the appellant on 24-7-1981. This argument, in my opinion, is not supported by the records of the case barred.
It has been earlier noticed that with reference to the court's letter No. 456 dated 13-8-1981, the Post Master of Jamshedpur had informed the court that the registered letter under reference was delivered to the addressee on 24-7-1981. Secondly, the appellant has nowhere controverted the assertions made by the respondent No. 4 that notice of filing the award in court was personally served on the appellant on 24-7-1981.
Last but not the least, the appellant nowhere in his objection petition has stated that he did not receive the notice on 24-7-1981. Even in his petition dated 12-11-1981, the appellant has not made any grievance for not receiving the notice on 24-7-1981.
27. Taking into consideration this factual aspect, I am constrained to hold that the application under Section 30 of the Act was barred by limitation.
28. I have already discussed about the non-maintainability of the instant appeal which is against an order passed on the petition filed under Section 33 of the Act. Even on merit, I find that the appellant has no case inasmuch as having accepted the amount and acted upon the award, he is estopped from challenging the existence of arbitration agreement and/or existence of any dispute for reference to the arbitrators.
29. In my opinion, the court below has rightly come to a conclusion that the appellant having found that his objection under Section 30 of the Act was time barred, just to circumvent the said bar, filed the petition under Section 33 of the Act.
30. I, therefore, find and hold that there is no merit in this appeal and as such the appeal is dismissed with costs, which is assessed at Rs. 500 (five hundred) only.