Shiv Ram vs Ram Rakha Mal

Teja Singh, C.J.—This is an appeal from an order of District Judge of the erstwhile Faridkot State, made on an application u/s 20, Arbitration Act, 1940, that an agreement to refer a dispute to arbitration be filed.

The Petitioner before the District Judge was Captain Ram Rakha Mal Bhandari and the Respondent was Mahant Shiv Ram Gir Chela Mahant Basheshar Gir. The Petitioner alleged that be owned certain residential land at Kot Kapura in connection with which a dispute came into existence between him and the other side. On 10-8-2002 the parties executed an agreement by virtue of which they referred the matter in dispute to the arbitration of Durga Das Chopra, adopted son of Narain Mal Khatri of Kot Kapura and agreed to abide by his award. Since the arbitrator had not given any award, the Petitioner prayed that the agreement be filed and the arbitrator be directed to enter upon arbitration proceedings and to give his award. Ha further prayed that after the award has been filed, a decree in terms thereof be passed. Mahant Shiv Ram Gir resisted the petition and joined issue with the Petitioner on several points. His principal pleas were that he had not entered upon any agreement, and that his signatures on a document had been obtained under coercion and on misrepresentation etc. He also pleaded that the application was barred by time, and that since the arbitrator had not commenced any proceedings within four months of the date of the agreement, the same had become infructuous.

The following five issues were framed by the District Judge:

Did the parties get the agreement dated 10th Maghat 2002 executed? Onus on Plaintiff.

Should issue 1 be decided in favour of the Plaintiffs, was this agreement executed under coercion, misrepresentation and misinterpretation of the Plaintiff? Onus on Defendant.

What is the effect of no arbitration proceedings commencing within four months of the execution of the agreement? Onus on Defendant.

Is the application within time? Onus on Plaintiff.

Relief.

All the issues were found for the Plaintiff and the agreement as mentioned above was ordered to be filed. Mahant Shiv Ram Gir is now the Appellant before me.

Before dealing with the appeal on merits, it is necessary to dispose of a preliminary objection raised by the counsel for the Respondent, that the appeal is not competent. He contends that after the order of the trial Court, the arbitrator commenced his arbitration proceedings and gave his award. Later on the award was submitted to the Court who passed a decree in the terms thereof. The argument of the Respondent''s counsel is that since the Appellant did not take any steps to have the proceedings before the arbitrator stayed, he is estopped from going on with the appeal. He has, however, not been able to support his contention with any authority and I am inclined to think that there is no force in it. It is not denied that the order of the Court filing the agreement is appealable and by the time the appeal was instituted, nothing practical had been done by the arbitrator and no award had been given. Under the circumstances I cannot understand how what happened subsequent to the order of the Court filing the award can affect the Appellant''s right to appeal from that order. The objection is therefore overruled.

As regards the merits, the first point urged by the Appellant''s counsel was that his client was not a free agent when he signed the agreement but his signatures had been obtained under coercion. He further argued that the Respondent had made certain misrepresentations to the Appellant and it was because of this that he became a party to the agreement. No effort was made to explain what the misrepresentation consisted of and how and in what manner it affected the Appellant''s free will. The Appellant''s own statement on this point was that the Petitioner went on dictating the document to the petition-writer but he could not understand what it was about. He further stated that when he hesitated to sign, the Respondent said that he was going to sign first and after he had affixed his signature, he also followed suit. Surely this did not amount to misrepresentation. The evidence that the Respondent examined and which has been referred to by District Judge, leaves no doubt that the Appellant signed the document of his own accord. I, therefore, hold that issues 1 and 2 were rightly decided by the Court below.

The other point urged before me was that since the arbitrator had not given his award within four months of the date of the reference, which he was bound to do according to the implied terms of the agreement, which must be read into it by virtue of Section 3 of the Act, the agreement could not be ordered to be filed. It is no doubt true that Section 3 of the Act lays down that unless a different intention is expressed in an arbitration agreement, it should be deemed to include the provisions set out in Schedule I in so far as they are applicable to the reference, and one of such provisions, as contained in para. 3 of Schedule I, is that the arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow. But the Appellant''s counsel has not been able to convince me that either this condition was violated in the present case or if it was, it prevented the agreement from being filed. There is no evidence to show that the arbitrator entered upon the reference or that any of the parties gave him a notice to act. The Appellant''s counsel argued that the arbitrator was present at the time the agreement was executed and from this it should be presumed that he entered upon the reference there and then. Assuming for the sake of argument that this contention is correct, the question is what is the effect of the arbitrator''s failure to make his award within four months. Counsel argued that it automatically resulted in the cancellation of the agreement, but I do not find it possible to agree with him. Sections of the Act lays down that the authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court, unless a contrary intention is expressed in the arbitration agreement. No question of such an intention can arise in the present case, because the agreement did not even provide that the award should be given within four months and the term has been read into it by virtue of Section 3 and the provisions of Schedule I. be the arbitrator still remained the arbitrator and the agreement continued to be binding upon the parties in spite of the arbitrator''s failure to give the award within four months. It was, of course, open to the Appellant to apply to the Court to revoke the arbitrator''s authority, but he did nothing of the kind. The other important fact to note in this connection is that Section 28 of the Act gives the Court a power to extend the time for making the award and this power the Court can exercise even after the time for making the award has expired. The inference that I draw from the section is that mere lapse of time fixed for making the award does not affect the agreement, and if later on the time is extended by the Court, it will have the same effect as if the extended time had been fixed originally. Accordingly, this objection is also overruled.

The result is that the appeal fails and is dismissed with costs.