Union of India (UOI) vs Ram Sarup Prem Singh

D.B. Lal, J.—The Union of India has filed this appeal against the judgment of the Senior Subordinate Judge, Sirmur, wherein he has rejected the objections filed by the Appellant to an award made by the Revenue Assistant, Mahasu, in a dispute which arose from a forest contract said to be entered into between the Forest Department (H.P.) and Messrs Ram Sarup Prem Singh, Forest Contractors. The case was, that the Respondents who are Messrs Ram Sarup Prem Singh purchased in auction certain number of trees from the Forest Department and the agreement that was executed contained a clause for arbitration in case a dispute arose between the parties. Accordingly a dispute arose and a sum of Rs. 13,266/2/4 was claimed by the Appellant against the Respondents. The dispute was referred to the Deputy Commissioner, Mahasu, who further appointed the Revenue Assistant to arbitrate in the matter. On March 16, 1964, the Arbitrator made the award and also signed it. However, the arbitration fee was not paid and, therefore, notices were sent to both the parties. The matter somehow dragged on for a considerable time. On 27-7-1967, as the order sheet indicates, the arbitration fee was paid and in the presence of the counsel of respective parties the award was announced. That was in fact a notice to the parties, of the making and signing of the award with in the meaning of Clause (1) of Section 14 of the Arbitration Act, 1940. The claim of the Appellant was dismissed by the Arbitrator.

Subsequently the award was submitted to the Court of the Senior Subordinate Judge, Sirmur, for making it a rule of the Court. The usual notices were sent and the Appellant objected that the Arbitrator had misconducted in the proceeding and that the award was illegal and void on the grounds alleged by the Appellant. However, no evidence was adduced by the parties. The issue regarding misconduct was not pressed and as the judgment of the learned Senior Subordinate Judge indicates the only point urged under issue No. 2 was that the award was made and signed on 16-3-1964 but was announced on 27-7-1967 and that was the illegality. The objection did not find favour with the Court and the same was dismissed. The award was made a Rule of the Court. The Union of India felt aggrieved of the decision and preferred the present appeal.

It was urged by the learned Counsel representing the Union of India, that the Arbitrator became functus officio no sooner the award was made and signed. Thereafter the notice in writing should have been issued forthwith or at any rate the same could not be delayed for about three years as was done in the present case. Under Clause (1) of Section 14 in fact there are two stages under which the award has to pass; first when it is made and signed by the Arbitrator and that has nothing to do with the second stage when a notice in writing is given to the parties of the making and signing thereof. The second stage is in fact to enable the parties to apply to the Court for the filing of the award in order to make it a Rule of the Court. The making and signing of the award cannot be considered illegal if either a notice in writing is not given of the making and signing thereof or the said notice is delayed for some reason or the other and is not given forthwith. In Janardhanprasad v. Chandra Shekhar and Ors. AIR 1951 Nag198 a Division Bench was considering the question as to whether an award becomes a nullity because notice in writing to the parties of the making and signing thereof is either not given or delayed for any reason. The learned Judges held that the provision for giving notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and the award, is for the purpose of limitation under Article 178, Limitation Act, entitling either party to apply to the Court for the filing in Court of the award. No time is fixed for the giving of such notice by the Arbitrator. A notice may be given to one party and may not be given to another party for a much longer, period. It cannot be said that an award becomes final so far as the first party is concerned and not as against the other entitling the arbitrator to scrap the award and make a fresh one. There is thus a fundamental difference between the making, signing and delivery of a judgment and making, signing and giving notice of an award. In the former case all three must be simultaneous acts and parts of the same transaction. In the latter case the first two may be simultaneous and the notice of the award can be postponed. The award does not become invalid because notice of the making of it has not been given. The same view was taken in Ram Bharosey Vs. Pearey Lal and Another, It was held that the validity of the award does not depend upon the notice of the same being given to the parties. In that case the notice as to making and signing of the award was not given at all. Subsequently the. Court gave notice under paragraph (2) of Section 14 and that was considered sufficient. Therefore, the mere fact that the notice of the making, and signing of the award was given to the parties on 27-7-1967 and not forthwith will not make any difference. The award was a valid one.

The Arbitrator did not become functus officio because according to the facts proved extension of time was taken on 28-3-1967 for four months and the award could be pronounced up to 28-7-1967. In the instant case it was pronounced on 27-7-1967 and since both the parties were present notice was given to them of the making and signing of the award.

It was then contended that the Deputy Commissioner could not delegate his power to the Revenue Assistant. This in fact he could do as is evident from his order dated 10-2-1960. The Revenue Assistant, ex-ojficio, was appointed Arbitrator. Thus it was immaterial if the award was signed by Shri Bishan Das and was pronounced by Shri Jit Ram as both were Revenue Assistants. Order 20 Rules 1 and 2 of the CPC of which assistance was taken by the Appellant, will not support his contention. As evident the judgment is signed and pronounced on one and the same date while u/s 14(1) of the Arbitration Act, 1940, although the award is made and signed on one date, the same is pronounced by a notice in writing to the parties of the making and signing thereof. Thus the two stages are different and the stage is not one and the same as in the case of a judgment of Civil Court within the meaning of Order 20, Rule 1 of the Code of Civil Procedure. Under Rule 2 of Order 20 a judgment written by one Judge can be pronounced by his successor. This provision will be of no assistance to the Appellant.

In this view of the matter the award pronounced was a valid one. The same could not be questioned on any of the grounds and was rightly made a Rule of the Court. The appeal has no force and the same is dismissed without making any order as to costs.