Kerala High Court
State Of Kerala And Ors. vs T.A. Thomas on 4 June, 1973
Equivalent citations: AIR 1973 KERALA 262, ILR (1973) 2 KER 102 1973 KER LJ 545, 1973 KER LJ 545
JUDGMENT George Vadakkel, J.
1. This is an appeal by the State and two of its officers who were counter-petitioners Nos. ] to 3 In the lower Court in proceedings under the Arbitration Act, 1940. Certain disputes between the respondent herein, a contractor and the 2nd appellant - the Superintending Engineer, Irrigation Central Circle, Trichur -in respect of the construction of a sea wall were referred to the decision of one Seshadri-natha Tyer, a Superintending Engineer in Kerala Slate Public Works Department, as arbitrator. He made and signed an award on 31-12-1970, and gave notice of the same in writing to the parties to the arbitration agreement the same day. Ext. A-l is the notice received by the respondent, the contractor. Under the award the respondent is entitled to get Rs. 91,962/- from the appellants. A period of three months was fixed for the award to come into effect. The respondent requested the arbitrator to cause the award to be filed in Court and the arbitrator as per Ext. A-2 dated 29-10-1971 permitted the respondent to file a copy of the award. He filed the copy of the award in Court on 16-11-1971 along with a statement, and attaching Ext. A-2 to it. In the statement the respondent stated that the arbitrator had directed him to file a copy of the award, and that the award was being filed by him on behalf of the arbitrator. The proceedings were registered as O. P. No. 37 of 1971 and the Court issued notice of the filing of the award as prescribed in Section 14 (2) of the Act. The 3rd appellant. Executive Engineer, on 5-1-1972 filed I. A. No. 93 of 1972 supported by an affidavit praying that the award may be set aside. The contractor, (respon-
dent herein) filed a counter-affidavit, and also a petition, I. A. No. 515 of 1972, praying "to pass a judgment in terms of the award, and a decree to follow the same". The Executive Engineer on 11-2-1972 filed a reply affidavit traversing the averments contained in the counter-affidavit filed by the contractor.
2. The main points raised in the affidavits dated 5-1-1972 and 11-2-1972 sworn to by the Executive Engineer are that O. P. No. 37 of 1971 is barred by limitation, that a court-fee of Rs. 250/- is payable on it, that the award has been improperly procured and that the arbitrator has misconducted himself. In his affidavit dated 23-1-1972 the contractor contended that the proceedings are not barred by limitation, that no court-fee is payable by him, that the award has been properly passed and that there was no misconduct on the part of the arbitrator. He also raised a contention that court-fee is payable on I. A. No. 93 of 1972.
3. The lower Court overruled the points raised by the appellants and pronounced judgment according to the award which was followed up by the decree under appeal. The lower Court also held that court-fee was payable on I. A. No. 93 of 1972. The learned Government Pleader has raised before us all the contentions that were raised in the lower Court.
4. At the outset itself, it has been brought to our notice that the appeal is against the order in O. P. No. 37 of 1971 and is one challenging the decree, not on the ground that it is in excess of or not otherwise in accordance with the award, but on the grounds raised in I. A. No. 93 of 1972. Under Section 17 of the Arbitration Act an appeal against the decree is maintainable only on the ground that it is in excess of or not otherwise in accordance with the award. However, it may be noted that the lower Court has not passed any separate order on I. A. No. 93 of 1972. The judgment in the case deals with that application as well, and has therefore to be treated as an order refusing to set aside an award which is appealable under Section 39 (1) (vi) of the Act. The learned Government Pleader is therefore entitled to agitate all the grounds raised by him. We are supported in this view by the decision of this Court in Mathulla Mathulla v. Thomas George, AIR 1962 Ker 320.
5. The first question that arises for consideration in this case is as to whether court-fee is payable on O. P. No. 37 of 1971, I. A. No. 93 of 1972 or on T. A. No. 515 of 1972. The decision on this question depends upon the nature of each of those proceedings which has to be determined with reference to the scheme of the provisions contained in the Arbitration Act, 1940. In dealing with this aspect we will also advert to the question of limitation, since the decision thereon also largely rests on the determination of the nature of the proceedings.
6. Section 14 (1) of the Arbitration Act, provides that on making the award the arbitrator shall sign it and shall give notice thereof to the parties. This notice is to be served in the manner provided for in Section 42 of the Act. The Act contemplates two kinds of notices, those to be served through Court and those which are to be served direct. Section 42 provides for the manner of service of the latter kind of notices. After giving notice as provided in Section 14 (1) the arbitrator can file the award in Court himself or can cause it to be filed. Filing of the award is only a ministerial act, and need not be accompanied by any application. If the arbitrator does not file the award himself, but causes it to be filed by another, the latter must file the award under the authority of the arbitrator. See Kumbha Mwaji v. Dominion of Tndia, AIR 1953 SC 313. If the arbitrator fails to file the award or cause it to be filed, any party to the arbitration agreement may request the arbitrator to file it or cause it to be filed, or may apply to Court for directions in that behalf. An application for such direction is to be filed, under Art. 119 (a) of the Limitation Act, 1963 within 30 days of the service of notice of making and signing the award. On request of a party or on being directed by Court, and upon fulfilment of the requirements regarding payment of fees, charges and costs mentioned in Section 14 (2), the arbitrator is bound to file the award or cause it to be filed. On filing of the award the Court shrill give notice to parties of such filing. Under Section 15 a party to the award can seek modification or correction of the award, and under Section 16 he can apply to remit back the award for reconsideration in the circumstances mentioned in those sections. The next provision to be noticed is Section 30 which enumerates the grounds for setting aside the award. The period of limitation for filing an application to remit the award for reconsideration or for setting aside the award is under Article 119 (b) of the Limitation Act, 1963, 30 days from the date of service of the notice sent by Court informing the parties of filing of the award. If the award is not remitted for reconsideration or set aside the Court must make the award a rule of the Court by pronouncing judgment according to the award and upon such judgment a decree is to follow. This in short is the scheme of the Arbitration Act from the stage of makine and signing the award to the stage when a decree is drawn UD in terms thereof.
7. Article 119 is the only Article in the Limitation Act, 1963 that deals with proceedings under the Arbitration Act, 1940. Sub-article (a) of Art. 119, as already stated deals with an application under Section 14 (2) of Arbitration Act for directions to the arbitrator to file the award or cause it to be filed; and sub-article (b) deals with an applica-'tion under Section 30 of the Arbitration Act for setting aside the award. The statement filed by the respondent which was registered as O. P. No. 37 of 1971 and 1. A. No. 515 of 1972 wherein the respondent prayed for a decree in terms of the award are not applications under Section 14 (2) or Section 30 of the Arbitration Act. Article 119 is not therefore attracted to these proceedings. In fact, no statement need accompany when an award is filed, in Court, and no application is required to get a decree in terms of the award which has been filed in Court.
8. The learned Government Pleader relying on the decision in Rambilas v. D. B. Prasad Singh, AIR 1965 Pat 239 argued that the view taken by us that there is no period of limitation prescribed for filing an award or causing it to be filed by the arbitrator will lead to an anomaly. The argument is that in the view we have taken, though a party to the award has to apply for directions to file the award within the time prescribed in Article 119 (a) of the Limitation Act, 1963 (which corresponds to Art. 178 of the earlier Act), he can safely ignore that provision, and, persuading the arbitrator to file the award long after the expiry of the prescribed period obtain a judgment and decree in accordance with the award. Therefore, it was submitted, that Article 119 (a) must be held to apply to the act of filing the award by the arbitrator also. No doubt, the decision relied on supports him. It was observed therein in para 28 at p. 249:
"It seems to me, therefore, that the act of filing the award in Court after the expiry of the period of limitation, though ostensibly the act of the arbitrators or the umpire, is in reality the act of one the other or both parties to the arbitration agreement or any person claiming under such party, that is to say, that the award has been filed on behalf of one or both parties. Therefore the award cannot remain effective or binding upon the parties if no steps are taken to file it in Court within the time allowed for the purpose by the law and the rights of the parties cannot be affected by an award which has not been filed by the arbitrators in Court for several years after it has been made and notice has been given by the arbitrators to the parties of making and signing thereof. If this view were not accepted, the arbitrators would be competent to file even after an indefinitely long lapse of time since the pronouncement of the award."
9. With respect we are unable to agree. According to the ordinary plain meaning of the words--the article is not in any way ambiguous and therefore what is called for is a grammatical construction of the terms of the article--the period of limitation prescribed by the article is only for making of an application for filing the award, and not for filing the award. The position of law in this regard has been settled by the decision of the Supreme Court in Champalal v. Mst. Samrath Bai, AIR 1960 SC 629 wherein Kapur J., delivering the judgment of the Court said:
"Article 178 of the Limitation Act which Was relied upon by the appellants applies to applications made by the parties and not to the filing of the award by the arbitrators."
10. It appears that this decision was not brought to the notice of the learned Judges who decided AIR 1965 Pat 239. We may also here note that the Patna High Court in a later decision, Mohommad Hus-san v. Mohomad Anwar, AIR 1968 Pat 82, wherein the question directly arose, relying on several decisions including the decision in Champalal's case, AIR 1960 SC 629 has held that the filing of the award is not governed by Article 119 (a) of Limitation Act, 1963.
11. The provisions of the Kerala Court Fees and Suits Valuation Act, 1959 that deal with applications under the Arbitration Act are those contained in Schedule II, Article 11 (m) and (n). Sub-art, (m) provides for Court-fee payable on an application to set aside the award, and sub-article (n) for that payable on applications -under Sections 14 and 20 of the Arbitration Act, 1940, viz., applications for a direction for filing an award, and for an order for filing an arbitration agreement, as well as on an application for enforcing foreign awards. The appellants have not specifically stated in the affidavit as to under which provision Court-fee is payable, but the amount has been specified as Rs. 250/-. Obviously therefore they have in mind Article 11 (m) (ii) (3) of Schedule IT of the Kerala Court Fees and Suits Valuation Act, 1959. Sub-article (m) as already stated deals with applications to set aside an award. The respondent has not by any application sought to have the award set aside, and as such he is not liable to pay any Court-fee. But by I. A. No. 93 of 1972 the appellants applied to have the award set aside, and therefore a Court-fee of Rs. 250/- is to be levied thereon under Article 11 (m) (ii) (3).
12. The conclusions of the lower Court on points (i) and (ii) raised by it relating to questions of limitation and Court-fees are therefore correct, and we confirm the same.
13. I. A. No. 93 of 1972, wherein the appellants sought to set aside the award, Was held by the lower Court (and rightly so) to be liable to be rejected for non-payment of Court-fees. Under Section 17 of the Arbitration Act, 1940 on refusal of an application for setting aside the award or in the event of no such application being filed, the Court has to proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow. However, the lower Court has discussed and considered the grounds raised for setting aside the award on merits also, and found against the appellants. We will also consider those grounds on merits.
14. The grounds urged for setting aside the award are that the arbitrator has misconducted himself in making the award, that the award has been improperly procured, that the award is against the terms of the agreement and outside the scope of the reference, and that it is vitiated by apparent errors and mistakes. It is also complained that the arbitrator has failed to give any data, or basis or reasoning for fixing the extra quantity of materials, and for raising the rate over the agreed rate.
15. From the award filed it is seen that the disputes centred round four matters, and that the arbitrator admitted one of the four claims of the contractor, viz., the claim for enhanced rate for supply of rubble. It is also seen that appellants Nos. 2 and 3, the Superintending Engineer and Executive Engineer as well as the respondent (the contractor) and his advocate were present and were heard. Therefore it is evident that every opportunity was given to the parties to place their case before the arbitrator, and to adduce evidence, if any. It is well settled that the arbitrator is complete master over questions of fact coming up before him. If his decision is in accordance with ordinary rules of fair play misconduct will not be inferred on his part. Further the burden of establishing misconduct, which is a question of fact to be decided on evidence, is on the party alleging it. Principles of fairplay and justice require that the facts which constitute the misconduct must be specifically stated, and that the arbitrator mast be given an opportunity to explain. This is particularly so, because law docs not enjoin that the arbitrator is to give reasons for his decision. The appellants have not adduced any evidence to establish the misconduct alleged. There is also no evidence regarding the allegation that the award has been improperly procured. Likewise there is no evidence to come to the conclusion that the award is beyond the terms of the agreement and reference, or that it is vitiated by apparent errors. We therefore confirm the findings of the lower Court on points (iii) and (iv) also and hold that the award is not liable to be set aside on any of the grounds raised by the appellants.
16. No other point was raised before US. We confirm the judgment and decree of the lower Court, and dismiss this appeal with costs.