Haryana State Electricity Board Vs. M/s Universal Fasteners Pvt. Ltd. & Anr.
Email(Arising out of Special Leave Petition (C) No. 14657/2000)
(Arising out of Special Leave Petition (C) No. 14657/2000)
Arbitration Act, 1940
Section 28 – Arbitration – Time limit for making an award – Arbitrator making the award after the expiry of the period prescribed by the statute for making an award – Parties (respondent and appellant) had agreed for the extension of time for making the award and participated in the proceedings – Respondent, subsequently challenging the validity of the award on the ground of the award having been made after expiry of the prescribed time – Trial court making the award, decree of the court on the ground that the parties having participated in proceedings, the time for making the award should be deemed to have been extended – First appellate court, however, setting aside the order of trial court – High Court also confirming the order of the appellate court. Held, power of court to interfere with the arbitration award being limited, the appellate court and High Court erred in dealing with the matter as if it was an appeal over the award made by the arbitrator. Trial court justified in exercising its power under section 28 and decreeing the award. Trial court’s order accordingly restored.
Bearing this aspect in mind and looking to the conduct of the parties and the circumstances arising in the same, the court could certainly exercise this power and extend the time in making the award. That power ought to have been exercised by the trial court. However, the first appellate court and the High Court, without due application of mind to this aspect of the matter decided this question. (Para 6)
The award made by the arbitrator is a non-speaking award. In such matter the power of this Court to interfere with the award made by the arbitrator is very much limited. In this case the appellate court and the High Court have virtually dealt with the matter as if in appeal over the award made by the arbitrator and such course is not open at all. (Para 7)
1. Leave granted.
2. An award made on 19.6.1990 at Faridabad which reads as follows:
“The case as referred to the undersigned by the CE/Arb. vide his memo no. CE/ARB/125/1689 dated 11.5.1988 for adjudication of dispute between the parties related to the charges levied on the claimant-company by the respondent-HSEB on account of defaulting amount of another connection bearing account no. 2SP-441, which existed in the same premises.
After going through the proceedings that took place, documents/record produced and evidence/arguments adduced by the parties, I have come to the conclusion that the claimant-company is liable to pay the case of the above defaulting/disconnected connection and respondent is rightly entitled to recover the outstanding dues from the claimant company.
3. When this award was sought to be made rule of the court, inter alia, an objection was raised that the said award has been passed after expiry of the time within which it ought to have been made. The appellant took the stand that the parties themselves had not only throughout agreed for the extension of the time but acquiesced in the proceedings and, therefore, it is not open to the respondents to contend now that the award is passed belatedly. The trial court took the view that inasmuch as the parties had agreed for extension of time to make the award and also participated in the proceedings of arbitration, time must be deemed to have been extended and it was no longer open to them to contend to the contrary now. On that basis, the trial court made the award decree of the court.
4. When the matter was carried in appeal, the appellate court accepted the contention put forth on behalf of the respondents and allowed the appeal setting aside the order made by the learned trial judge. Thereafter, that order was carried in revision to the High Court. The High Court affirmed the order made by the first appellate court and interfered with the award on two grounds: firstly that the award had been made on 19.6.1990 and in doing so the arbitrator had mis-conducted himself inasmuch as he passed the award beyond the time allowed in the law and secondly examined the matter on merits and decided the matter.
5. So far as the first question is concerned, section 28 of the Arbitration Act regulates the enlargement of time which provides that the court, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarged from time to time, the time for making the award.
6. Bearing this aspect in mind and looking to the conduct of the parties and the circumstances arising in the same, the court could certainly exercise this power and extend the time in making the award. That power ought to have been exercised by the trial court. However, the first appellate court and the High Court without due application of mind to this aspect of the matter decided this question.
7. Further we may notice that the award made by the arbitrator is a non-speaking award. In such matter the power of this Court to interfere with the award made by the arbitrator is very much limited. In this case the appellate court and the High Court have virtually dealt with the matter as if in appeal over the award made by the arbitrator and such course is not open at all, at this stage. Learned counsel for the respondents points out that in view of the communication sent on 9.2.1998 nothing is due from him. Whether it is so or not, cannot be examined now and it would be appropriate to raise this point in appropriate proceedings.
8. Hence, the order made by the High Court affirming the order made by the appellate court is set aside and the order made by the trial court is restored. The appeal is allowed accordingly.
