Edakkavil Karimbuvalappil Abdulkhader Haji vs Thalakkal Kunhammad and Others

Narendran, J.—Questions of considerable importance in the law of Arbitration arise for consideration in this case. The questions are : (1)

Whether the dismissal by court of an original petition by the Arbitrator u/s 28 of the Arbitration Act, 1940 to enlarge the time for making the

Award, will amount to ''superseding an arbitration'' and whether an appeal will lie u/s 39 of the Act from the order of dismissal; (2) whether the

Arbitrator can file an appeal from an order of the Court refusing to enlarge the time for making the Award; and (3) when the Arbitrator dies

pending the appeal can any of the parties to the Arbitration agreement get himself transposed as the appellant. A question whether an Award

passed in violation of an injunction restraining the Arbitrator from passing an Award has to be ignored also arises in the case.

This appeal was filed by the Arbitrator against the order of the Court below dismissing his original petition for enlargement of time for making the

Award u/s 28 of the Arb. Act, 1940. By the same order the Court also dismissed the interim application by which the appellant Arbitrator filed in

court the Award he made pending the Original Petition for time to make the Award.

As per an Arbitration agreement dt. 24-6-1973 the respondents appointed the appellant as the, sole Arbitrator for deciding certain disputes and

for partition of the properties scheduled to the Original Petition. The Original Petition for extension of time was filed in the court below on 28-2-

1974. On 14-8-1974 the court granted time up to 23-12-1974. On 18-11-1974 the 6th respondent who was ex parte filed an interim application

for setting aside the ex parte order alleging that the Arbitrator and the first respondent colluded and obtained an extension of time for making the

Award. On 18-11-1974 itself the 6th respondent filed an application for injunction restraining the Arbitrator from making the Award. Though the

interim order of injunction issued by the court on 18-11-1974 was attempted to be served on the Arbitrator on 19-11-1974 he refused to accept

the same. The Arbitrator then passed the Award and the same is purported to have been signed by him on 22-11-1974. On 17-1-1975 the ex

parte order against the 6th respondent was set aside. Though the Arbitrator challenged the above order in a civil revision before this Court the

same was dismissed by this Court on 26-5-1975. On 17-11975 the interim order of injunction also ceased to be in force. On 31-2-1975 the

Arbitrator gave notice to the parties except the 6th respondent, of the making of the Award. On 19-2-1975 the Award was filed in court along

with I.A. 208 of 1975. On 8-4-1975 the 6th respondent, filed a counter challenging the making and filing of the Award in Court.

The Court below dismissed the Original Petition for extension of time for making the Award and I.A. 208 of 1975 filing the Award in court

holding :

In the case on hand, the arbitrator has not given notice of filing the award. However, the court issued notice on 15-3-1975 and the 6th respondent

filed a counter challenging the award on 8-4-1975. Hence the objection is filed within time. That apart, the award was made at a time when interim

injunction was in force. Moreover, when the award was made the period had expired and the application for extension of time was not allowed by

the Court. Hence the award sought to be canvassed in I.A. No. 208 of 1975 is a nullity. Since the award is made even before the extension of

time, O.P. No. 7/1974 becomes infructuous.

As already mentioned the Arbitrator , filed this Miscellaneous First Appeal against the above order of the Court below. Pending the appeal the

Arbitrator left this world on 9-10-1984. On 11-11-1984 the legal representatives of the Arbitrator filed C.M.P. No. 30226 of 1984 to implead

them as supplemental appellants in the appeal. The 3rd respondent in the appeal opposed the impleading by contending that when the Arbitrator

died no cause of action survived to his wife and children as the right is purely personal and hence the wife and children have no locus standi to

come in. The contentions of the 3rd respondent were upheld and the application for impleading was dismissed, holding that the arbitrator when

appointed is an officer and the right is a personal one and in an appeal filed by him against an order in an Original Petition for extension of time for

making an Award the right to prosecute the appeal will not survive to his legal heirs.

Then respondents 1 and 2 in the appeal filed C.M.P. 32366 of 1984 to transpose them as appellants in the appeal and allow them to continue

the appeal. Respondents 3, 4 and 9 to 15 in the appeal opposed the C.M.P. A counter-affidavit was filed by the 3rd respondent contending that

the appeal by the Arbitrator was incompetent and the right to sue at any rate will not survive after the death of the Arbitrator.

The first question to be considered is whether an appeal lies u/s 39 of the Arb. Act, 1940 from an order of the Court refusing to enlarge time for

making the award. Section 39 of the Arb. Act enumerates the orders from which the appeal lies under the section and one of those orders is an

order superseding an arbitration. So, if the order refusing to enlarge time for making the award is in effect an order superseding an ""arbitration, an

appeal will lie u/s 39 of the Act, The effect of an order refusing to enlarge time for making the award is that the arbitration as per the agreement of

the parties appointing the arbitrator comes to a grinding halt. If the order becomes final, it goes without saying that there can be no arbitration as

per the agreement of the parties appointing the arbitrator. Though the order does not say in so many words that the arbitration is superseded, there

cannot be any arbitration as per the agreement after the Court refuses to enlarge time for making the award. So, it has to be taken for granted that

by refusing to enlarge the time for making the award the Court really supersedes an arbitration and an order u/s 28 of the Arb. Act refusing to

enlarge time for making the award is really an order superseding an arbitration. Hence it goes without saying that there is an appeal from such an

order passed by the Court u/s 28 of the Arb. Act. Counsel on both sides relied on a number of authorities in support of their contentions. In

Martirozi v. Subramaniam Chettiar AIR 1928 Mad 69 it has been held :

An order refusing to enlarge the time for the submission of an award remitted to the umpire on an application u/s 13, Arb. Act is a judgment and is

appealable."" :

It has to be pointed out that in the above decision what the High Court of Madras has held is that an appeal will lie under the Letters Patent

(Madras) Rules and not an appeal under the provisions of the Arb. Act. In AIR 1944 152 (Nagpur) it has been held :

The order allowing leave to revoke the authority of the appointed arbitrator is not an order superseding the arbitration such as can be appealed

against.

In Satya Narayan Agarwall Vs. Baidyanath Mandal and Others, it has been held :

Mr. Chatterjee then contested the impugned order. He drew out attention to Section 39 of the Act which gives a list of the orders against which

appeal may lie. That section provides that an appeal shall lie from those orders as given therein and from no others. The first in the list of orders is

an order superseding an arbitration. In my view, the impugned order amounts to supersession of an arbitration. Therefore, the appeal was

maintainable."" (Para 13)

In Chandra Narain Chaudhary and Another Vs. Mt. Godavari Choudharain and Others, it has been held :

Under the Act the phrase ''superseding an arbitration'' in Clause (i) of Sub-section (1) of Section 39 has got to be assigned a meaning with

reference to the power of the Court to supersede an arbitration u/s 19 of the Act...............In my opinion, therefore, the order recalling the

reference is not appelable u/s 39 of the Act. I am of the opinion in the first instance that when the Court has got power to make a reference u/s 23

of the Act, it must be assumed that the Court has got power to recall the reference...........But here, an order making a reference u/s 23 of the Act

is, undoubtedly, not appealable and, therefore, an order recalling a reference also is not appealable."" (Para 2)

In the above case, the reference was u/s 23 of the Arb. Act at the instance of the Court and it was not an arbitration in pursuance of an agreement

for arbitration. In R.N. Rice Mills Vs. State of Orissa, it has been held :

I am of the opinion that refusal to extend time by the court on the application of the arbitrators or the party does not amount to an order

superseding the arbitration so as to be appealable under Clause (1) of Section 39 of the Arb. Act of 1940."" (Para 5)

In Shiv Omkar Maheshwari Vs. Bansidhar Jagannath, it has been held :

It is true that the application made by the respondent for extending time was consolidated with the appellant''s application for setting aside the

award. But this consolidation cannot give the appellant a right to challenge an order which, under the law, is not appealable. Therefore, in our

opinion, it is unnecessary for us to consider whether the learned Judge was right or not in extending time for making the award.

By no stretch of imagination the above order will amount to an order superseding an arbitration. In M.H. Tejani Vs. Kulsumbai M. Jetha, it has

been held (Paras 5, 6) :

From this scheme it is clear that although the language employed in Sections 19 and 25 is not identical with the language employed in Section

12(2) in substance the power contained in the two sections is identical, namely the power to order that there will be no arbitration with respect to

the difference referred and that the arbitration agreement shall cease to have effect. In other words, when the court orders that the arbitration

agreement shall cease to have effect, in effect it sets aside the arbitration agreement with respect to the difference referred. When the court orders

that the arbitration agreement is superseded, the court in terms makes an order that the arbitration agreement shall cease to have effect. Therefore,

an order by the court that the arbitration agreement shall cease to have effect with respect to the difference referred is in law an order superseding

the arbitration and is, therefore, appealable u/s 39(1)(i) of the Act.

The next question to be considered is whether an arbitrator can file an appeal against an order by which the Court refuses to enlarge the time for

making the award. It was contended that the arbitrator cannot be a person aggrieved by the order passed by the Court refusing to enlarge time and

hence the appeal filed by him is incompetent. The learned counsel for the petitioners in the petition for transposing, contended that the arbitrator is

the representative of all the parties to the agreement for arbitration and hence he is competent to file an appeal from the order in question. In Adi

Pherozshah Gandhi Vs. H.M. Seervai, Advocate General of Maharashtra, Bombay, ) the Supreme Court had occasion to consider the scope and

ambit of the words ''person aggrieved''. The Supreme Court held :

it is apparent that any person who feels disappointed with the result of the case is not a ''person aggrieved''. He must be disappointed of a benefit

which he would have received if the order had gone the other way. The order must cause him a legal grievance by wrongfully depriving him of

something. It is no doubt a legal grievance and not a grievance about material matters but his legal grievance must be a tendency to injure him. That

the order is wrong or that it acquits someone who he thinks ought to be convicted does not by itself give rise to a legal grievance.

In Corpus Juris Secundum, Vol. IV page 356 Ist Edition it has been stated :

Broadly speaking, a party or person is aggrieved by a decision when, only when it operates directly and injuriously upon his personal, pecuniary

and proprietary rights.

In Re Riviere''s Trade Mark (1884) 26 Ch. D. 48 it has been held :

..........it must be a legal grievance, it must not be a stet pro ratione voluntas; the applicant must not come merely saying ''I do not like this thing to

be done'', it must be shown that it tends to his injury, or to his damage, in the legal sense of the word.

In State of U.P. Vs. Smt. Ram Sri and Another, it has been held :

In other words, the right to file an appeal against a judgment or decree exists only in the person who is aggrieved or prejudiced thereby. A party,

therefore, who would benefit from the change in the judgment has an appealable interest. This interest of course, should not be contingent,

speculative or futuritive. It must be substantial, immediate and pecuniary. Such an interest must have invaded legal rights of the person filing an

appeal. It is, therefore, clear that an aggrieved party is one who is injuriously affected by the judgment or whose rights are directly affected by the

operation of the same.

The important thing which may be noted in this definition is that the person filing an appeal must have ''legal grievance'' against the decision which

''wrongfully deprives him of something'' or ''affects his title to something''..........

..........it is clear that the mere fact that a judgment is wrong, does not entitle a person to file an appeal against the same. It is necessary that such a

person must be deprived of the results of the litigation which he. was expecting in his favour in case the judgment went against him."" (Paras 8, 9 &

10)

In the above decision the court relied on the following passage from Re Sidebotham : Ex. P. Sidebotham 1880) 14 Ch D. 458 :

..........not really a person who is disappointed of a benefit which he might have received if some order had been made. A ''person aggrieved''

must be a man who had suffered a legal grievance, a man against whom a decision has been pronounced which had wrongfully deprived him of

something, or wrongfully refused him something or wrongfully affected his title of something.

In A. P. Agricultural University v. Dan Reddy (1974) 1 A LT 332 Chinnappa Reddy J. (as he then was) speaking for the Court, has held that a

person cannot be said to be directly affected by the judgment of a Court unless some right or liability of his is declared by the Court. An arbitrator

is a Judge of the parties own choosing. He is a disinterested person for whose decision the matters in dispute are referred to by the parties. Even

though he has been chosen by the parties he cannot identify himself with any of the parties. The moment he does this he will cease to be entitled to

continue as arbitrator. So, It goes without saying that an arbitrator cannot respresent any of the parties or cannot be a representative of the parties

to the arbitration. u/s 28 of the Arb. Act, 1940 the arbitrator or any of the parties to the arbitration agreement can move the Court for enlarging the

time to make the award. If the Court declines to enlarge the time the parties to the arbitration can challenge that order in appropriate proceedings

but the arbitrator has nothing more to do. As per the agreement for arbitration the arbitrator is to conduct the arbitration within a specified time and

make the award. If he was not able to do that and the Court refuses to enlarge the tune he will have to leave it there. It is not the arbitrator''s job to

fight out the matter and get an extension of time. Whether the parties to the arbitration will suffer if the time for making the award is not enlarged

this cannot be the concern of the arbitrator. He can rest content that the parties will take care of themselves. By no stretch of imagination the

arbitrator who is a person disinterested in the dispute, can be aggrieved by the order of the Court refusing to enlarge time for making the award. In

this view, the arbitrator cannot be a person aggrieved by the order of the Court refusing to enlarge time. As it goes without saying that an appeal

can be filed only by a person aggrieved by the order appealed against this Miscellaneous First Appeal filed by the arbitrator is not maintainable.

Respondents 1 and 2 in the appeal filed by the arbitrator have applied for transposing them as appellants in the place of the arbitrator who

passed away pending the appeal. So, the question is whether this can be allowed and whether they can be permitted to prosecute the appeal. If the

appeal abated by the death of the arbitrator, no question of transposing arises. Even if the appeal did not abate if no purpose will be served by

transposing, then also transposing need not be done. No question of transposing also arises in an incompetent appeal. In Aiyappan v. Kesavaru

AIR 1953 TC 545 it has been held :

Abatement is a legal consequence flowing from the omission to take the necessary steps within the time limited by law to implead the legal

representative of the deceased plaintiff and a formal order of the court is not necessary for such a consequence to happen. That must be the reason

why the framers of the Code chose to use the expression that the suit shall abate so far as the deceased plaintiff is concerned in Order 22 Rule

3(2) instead of the expression that the ''court may pass an order that the suit shall abate'' as contained in Section 366 of the old Code.

..............The effect of these provisions is only that the abatement takes place by operation of law and it does not depend on any order of the

court."" (Page 548)

In P.V. Sarma v. S.C. Riy. Employees Co-op. Cr. Socy. AIR 1977 A P 319 it has been held :

In order to decide whether a particular right of action survives to the legal representatives or not the correct approach is to consider what the right

claimed in the proceeding is. If the right is purely a personal one then the right to sue cannot survive. The mere fact that there is a possibility of the

petitioner obtaining further reliefs in case he succeeds in establishing the right which he claims in the particular proceeding cannot be taken into

account in determining whether the right to sue survives or not."" (para 9)

In Girja Nandini Devi and Others Vs. Bijendra Narain Choudhury, it has been held :

A claim for rendition of account is not a personal claim. It is not extinguished because the party who claims an account or the party who is called

upon to account dies. The maxim ''actio personalis moritur cum persona'' a personal action dies with the person, has a limited application. It

operates in a limited class of actions ex delicto such as actions for damages for defamation, assault or other personal injuries not causing the death

of the-party, and in other actions where after the death of the party the relief granted could not be enjoyed or granting it would be nugatory."" (para

14)

In Thelapurath Kalyanikutty Amma Vs. M.K. Ravunni Nair and Others, it has been held that there will be no abatement of a representative suit by

the death of the plaintiff. The same view has been taken by the Supreme Court in Charan Singh and Another Vs. Darshan Singh and Others, ). In

Saila Bala Dassi Vs. Sm. Nirmala Sundari Dassi and Another, it has been held that a transferee pendente lite can continue an appeal filed by the

transferor. In Santuram Hari Vs. Trust of India Assurance Co., it has been held :

Although the original plaintiff might not be entitled to maintain, the suit, it is competent to the Court exercising its discretion under Order 1, Rule 10

to transpose a party defendant to the place of the plaintiff, such a parly being entitled to maintain the suit, and pass the decree in favour of the

newly added plaintiff though in most cases the Court would not exercise its discretion in transposing defendants as party plaintiffs where a valuable

right acquired by one of the defendants is likely to be taken away or defeated.

In Ramnibas Jhunjhunwalla Vs. Benarashi L. Jhunjhunwalla, it has been held that in the case of the death of parties to an award filed in Court

before judgment the Court has inherent power to bring on record the legal representatives. In Goutami Devi Sitamony Vs. Madhavan Sivarajan, it

has been held :

The provision in Rule 10 of Order XXII indicates that the right of the assignee to seek to continue the suit is not absolute as it is for the court to

consider whether leave is to be granted. In appropriate cases the court may grant leave to continue the suit. Such an assignee is bound by the

previous proceedings in the suit and his right is only one of further prosecution of the suit. It seems to be plain from the scheme of Order XXII that

an assignee can make an application for leave to continue the suit so long as there is a suit, so far as it concerns the assignee, on the file of the

court. In a suit which is not subsisting there is no scope for seeking continuance. It is only logical that in a case where the suit has abated the

assignee cannot thereafter seek to be added as a party to the action. If the assignee seeks to be impleaded in the proceedings before the suit

abates and the legal representatives also seek to be impleaded whether the court would allow the assignee to come on record is a different

question. That will depend upon consideration of many matters. But the assignee cannot claim to come on record as a matter of right since leave is

not to be granted as a matter of course. Rule 10 begins with the words in other cases''. The reference is to cases other than those mentioned in Rr.

2, 3, 4, 7 and 8 of Order XXII of the C.P.C. The provision enables only continuance and that by leave of the court. There would be no scope for

continuance where by reason of the operation of Rule 3 or Rule 4 as the case may be, there is abatement and consequently termination of the

proceedings. In such a situation there is no scope for the assignee to make application under Order XXII Rule 10, C.P.C. In other words it means

that no motion will succeed under Rule 10 when once there is abatement of the suit as against the party as whose assignee motion is made under

Order XXII, Rule 10."" (Headnote)

In this case, by the death of the arbitrator appellant, the appeal has abated because the appeal arose from an order of the Court refusing to enlarge

the time for making the award. The award is something which the appellant alone can make and he cannot make it once he has left this world. So,

in this case, the personal action died with the person and the right to sue cannot survive. Not only that, no purpose will be served by transposing

the respondents petitioners as appellants. Even if the appeal is allowed and the time for making the award is enlarged, they cannot step into the

shoes of the arbitrator and make the award. There is another reason also. Only in a pending appeal a respondent can be transposed as an

appellant. Here, the appeal abated on the death of the appellant. Over and above all these, the appeal itself being an incompetent appeal in the

sense that it was filed by a person who cannot be an aggrieved person, no question of transposing arises in such an appeal.

The only question that remains to be considered is whether the passing of the award by the Arbitrator after the time for making the same had

expired and when there was an injunction from Court restraining him from making the award in force, can in any way help the respondents

petitioners in getting themselves transposed as the appellants in the place of the deceased appellant-arbitrator. In Hari Shankar Lal Vs.

Shambhunath Prasad and Others, it has been held :

The legal position may be formulated thus :

(a) A notice to act may be given before or after the arbitrators entered upon the reference. (b) If notice to act is given before they entered upon the

reference, the four months would be computed from the date they entered upon the reference. (c) If a party gives notice to act within 4 months

after the arbitrators entered upon the reference, the arbitrators can make an award within 4 months from the date of such notice. And (d) in that

event, after the expiry of the said 4 months the arbitrators become functus officio, unless the period is extended by court u/s 28 of the Act; such

period may also be extended by the court, though the award has been factually made."" (para 11)

In Union of India Vs. K.L. Bhalla, it has been held :

I have, therefore, to hold that the learned Subordinate Judge had the power to consider the question of extending the time for filing the decision of

the arbitrator notwithstanding the fact that the decision had been filed after the expiry of the time previously fixed by the court.

In this case, admittedly, the award was not made within the time allowed for making the same. But the award was, as a matter of fact, later made

and filed in Court. But before making the award something very relevant happened. The appellant-arbitrator moved the Court for enlarging the

time for making the award and got an order enlarging the time colluding with some of the respondents. So, the order of the Court enlarging the time

was later set aside by the Court at the instance of the 6th respondent who was earlier declared ex parte. The 6th respondent along with the petition

to set aside ex parte, moved an application for injunction and obtained an injunction restraining the arbitrator from making the award. The

injunction order when taken to the arbitrator was refused by him. The arbitrator then made the award. So, the award made by the arbitrator was

one made when he was, as a matter of fact, restrained by the Court by an injunction from making the award In the case of such an award, the

question is whether the Court will be justified in passing a subsequent order for enlarging the time for making the award. As it goes without saying

that the award is one made in violation of an injunction issued by the Court, no Court will pass an order enlarging the time for making the award

and legalise the award made in flagrant violation of a Court order. For the above reason, even if the respondents-petitioners get themselves

impleaded as appellants in the place of the deceased arbitrator, it will only be a futile exercise as the award passed by the arbitrator cannot be

treated as an award in the eye of law.

In the result, C.M.P. 32366 of 1984 the petition for transposing respondents 1 and 2 as appellants in the appeal is dismissed. The

Miscellaneous First Appeal which has abated, is dismissed. No costs.