Find a Lawyer

Suit No. 498 of 1985, decided on 27th March, 1986.

‑‑‑S. 30‑‑Limitation Act ( IX of 1908) , Art. 178‑‑Objections for setting aside award‑‑Limitation‑‑Filing of award in Court by Arbitrator‑‑None of parties applying to Court for a direction to Arbitrator for filing award‑‑Arbitrator on his own filing award in Court with a covering letter‑‑Such action of Arbitrator, held, was a ministerial act to which Art. 178, Limitation Act, 1908 would not apply.

‑‑‑5. 30‑‑Award‑‑Objections for setting aside award‑‑Court while committing matter to sole Arbitrator prescribing time limit of 4 months for giving fresh award‑‑Such time, held, to be calculated from date when Arbitrator received file from High Court and entered on reference and not from date fixed by Court for appearance of parties before Arbitrator.

‑‑‑Ss. 30 & 5‑‑Award‑‑Objections for setting aside award‑‑Arbitrator giving award on 15‑3‑1985 within time prescribed by Court‑‑Defendant moving application on 14‑3‑1985 under S. 5 before Arbitrator for staying proceedings‑‑Arbitrator who had to complete his work within prescribed time, held, could not without an order from Court, keep whole case pending after having heard parties and after having completed his work.

Siraj Ahmed for Plaintiff. A. Wajid for Defendant.

These are objections under section 30 of the Arbitration Act for setting aside an award which has been given in a dispute between the plaintiff and the defendants in connection with a building contract.

2. Fact of the case briefly stated are that the plaintiff Haji Abdullah (now deceased), under a contract dated 4‑10‑1978, engaged the defendant for constructing a first Class Restaurant for a lump sum of Rs.3 lacs. The constructions was to be carried out according to the plan and was to be completed within a specified time. Hereafter I will call the plaintiff as 'Owner' and the defendant as 'Contractor'.

3. The admitted position is that the contractor completed the work according to the plans. Some additional work was also awarded by the owner to the contractor.

4. This agreement between the parties contained an arbitration clause whereby disputes and differences were to be referred to arbitration of a named Arbitrator, namely, one Mr. Muhammad Anwar, who was to act as a Sole‑Arbitrator.

4. Disputes and differences are between the parties and they were referred to the Sole‑Arbitrator for adjudication. The Arbitrator gave his award on 18‑3‑1985. This award was filed in Court for being made a rule of the Court. Objections were filed and were heard by my brother Mr. K.A. Ghani, J. The learned Judge after hearing both the parties set aside the award and remitted the matter back to the same Sole‑Arbitrator for a fresh decision by order dated 15‑10‑1984. In this very order date of appearance before the Arbitrator was also fixed as10th November, 1984. On 10‑11‑1984 parties appeared but the papers had not yet reached the Arbitrator, therefore, the case was adjourned. The order of the Court alongwith the file reached the Arbitrator on 22‑12‑1984. The Arbitrator issued notices to the parties for appearance on 29‑12‑1984. Thereafter, the case proceeded on different dates which were fixed by the Arbitrator keeping in view the time limit of four months which was prescribed in the order for giving his award. The Arbitrator directed the parties to file their statement of claim which was done. Having received statement of claim from both the parties,' the Arbitrator directed them to file affidavit‑in‑evidence. The plaintiff filed affidavit‑in‑evidence on 5‑2‑1985. The contractor was allowed to cross‑examine the owner on this affidavit‑in‑evidence. The cross examination was done on 9‑2‑1985 and the case was put off for further cross‑examination. The cross‑examination was resumed and concluded on 21‑2‑1985 and the case was adjourned to 26‑2‑1985. On 26‑2‑1985 the Advocate for the Contractor moved an application for the appointment of an Architect, for report on the work. This application was granted and the Sole‑Arbitrator appointed a licensed Architect. On 26‑2‑1985 the case, however, did not proceed as the son of the Arbitrator had expired. The contractor failed to file any affidavit‑in‑evidence till the date of hearing which was 3‑3‑1985. On 3‑3‑1985 the Advocate of the owner appeared but the Advocate of the contractor remained absent and the case was adjourned to 5‑3‑1985. On 5‑3‑1985 the owner remained present but none appeared for the contractor and the case was adjourned to 9‑3‑1985 for filing the affidavit‑in‑evidence by the contractor. Before 9‑3‑1985 the Advocate of the contractor sought further adjournment and the arbitrator acceded to his request and adjourned the case to 14‑3‑1985. On 14‑3‑1985 an application was moved before the Arbitrator by the Advocate of the contractor informing him that the contractor was dissatisfied with the proceedings and had moved an application under section 5 of the Arbitration Act in the High Court praying for revoking the reference. On this attitude the Sole‑Arbitrator was convinced that the contractor was adopting delaying tactics and the adjournment sought by the Advocate of the party were merely motivated to prolong the proceedings. He, therefore, proceeded to examine the case on merits. In the mean time the architect who was appointed at the request of the contractor, had submitted his report and recommendations to the arbitrator. The arbitrator after examining the merits of the case and report and recommendations of the architect gave an award on 18‑3‑1985. He has filed this award alongwith his application dated 4‑8‑1985. Notices were issued of this award to the parties and the contractor has filed these objections for setting aside the award. The award is a detailed award spread on 10 pages. In this award the learned arbitrator was examined the contentions raised before him by the two parties and has also thoroughly examined the report of the architect and Engineer dated 16‑3‑1985 marked Exh. P/2. He has disagreed with this report on certain points and using his own discretion and independent judgment awarded a sum of Rs.69,000 to the owner to be payable by the defendant /contractor. He has struck this figure after taking into consideration the over payments made to the contractor by the owner/plaintiff to the extent of Rs.2,12,000 and readjustment of the amount of the additional work done by the contractor.

5. The learned counsel for the defendant /contractor has argued the following objections and has urged that the award should be set aside.

These contentions are as follows:‑

(1) That the award has not been filed within the time prescribed under Article 178 of the Limitation Act.

(2) That the award has been given after a period of four months. As such it is invalid.

(3) That the defendant had moved an application under section 5 of the Arbitration Act on 14‑3‑1985 and informed the arbitrator of this development by a telegram and the arbitrator ought to have stayed the proceedings.

(4) That the Engineer/ Architect had inspected the site and taken measurements of the construction without notice to the defendants /contractor.

6. I now proceed to dispose of these objections. The award was signed on 18‑3‑1985 and it has been filed on 6‑8‑1985. It would appear that the award has been filed by the arbitrator after four months and 22 days. The learned counsel has argued that the time rescribed under Article 178 of the Limitation Act is 90 days from the notice making of the award. But this contention is not well‑founded because the period of 90 days would be applicable only in such cases where a party to the Arbitration Agreement moves the Court for the filing of the award. This article will have no application if the arbitrator himself files the award in Court. Such is the case in hand. None of the parties has applied to the Court for a direction to the arbitrator for filing the award in Court. The arbitrator has on his own filed the award with a covering letter dated 4‑8‑1985. This action of the ,arbitrator has been held to be a ministerial act to which Article 178 of the Limitation Act has no application. This objection, therefore, fails.

7. The next objection raised by the learned counsel is that they award ought to have been given within four months from the reference. In this case the order was communicated to the arbitrator,on 20‑12‑1984 and the award was announced on 18‑3‑1985. The learned counsel has argued that period of 4 months should be calculated from 10‑11‑1984 which was the date fixed by the Court for appearance of parties before the arbitrator. If the time is calculated from 10‑11‑1984, the award given on 18‑3‑1985 would be late by about 8 days. I could allow extension of 8 days under section 28 of the Arbitration Act read with section 148, C.P.C. But in my opinion it is not necessary, because time must be calculated from 20‑12‑1984 when the arbitrator received the file from the High Court and by issuing notices to the parties entered on the reference. Any other approach would be simply unrealistic; suppose the file was further delayed and had reached the arbitrator some time after expiry of 4 months. Could it be argued that the award should have been given before the order and papers were delivered to the arbitrator. Moreover the order‑sheet would show that delay in the award is attributable to the defendant himself and he should be the last person to turn round and object to this delay. This objection also fails.

8. The third objection argued by the learned counsel is that he had moved an application under section 5 of the Arbitration Act on IL 14‑3‑1985 as Judicial Miscellaneous No. 16 of 1985 and informed the arbitrator to stay the proceedings, but still the arbitrator has given his award on 15‑3‑1985. There seems to be no merit in this contention as well, because the arbitrator had to complete his work within four months and without an order from the Court he could not keep the whole case pending after having heard the parties and after having completed his work. Even now I have asked the learned counsel to show on what grounds he wanted the revocation, but the learned counsel has failed to make out any case of partiality against the arbitrator. His only grievance is that he was not allowed proper accommodation to file his affidavit‑in‑evidence. But this allegation is belied by the facts of the case. It appears that the arbitrator had adjourned the case on a number of occasions only to a accommodate the Advocate for the defendant /contractor and at the risk of running out of limitation for giving the award. I agree with the arbitrator when in his award he answers this contention in the following words:‑

"From the contents of the remarks of the Advocate for the 2nd party on notice, dated 5‑3‑1985 and also the conversation on telephone by the said Advocate I was convinced that the party No.2, was determined to frustrate the proceedings before me, by making false allegations and by use of dilatory tactics. Much prior to 14‑3‑1985 the Advocate for the party No.2 stopped attending the proceedings and simply talked on telephone. I have not seen Syed lqbal Naseem, party No.2 during the whole proceedings except on a single occasion on 10‑11‑1984. The Advocate for the party No.2 spoke to me on telephone that he and his party would not participate in the proceedings."

9. The last contention of the learned counsel for the defendant is that the Architect did not give him notice of inspection of the premises. This contention is also flimsy and not maintainable, for the reasons that if the defendant had any objection on the report or recommendations of the Architect, he could raise those objections before the arbitrator and those objections could be examined. The very fact that the defendant chose to keep away from the proceedings and after cross‑examining the plaintiff at length, did not care to appear before the arbitrator, shows that there was not much to be said on their behalf. Neither he filed any statement or affidavit in evidence nor offered himself for cross‑examination, nor indeed he came to question or criticise the report submitted by the Architect, which shows that his only endeavour was to prolong the matter and gain time. The award is a speaking award. The learned Sole‑Arbitrator has exercised his best judgment on the points he has disagreed with the opinion of the Architect and allowed the defendant additional amounts which were not recommended by the Architect.

All this shows that the objections raised to this award are merely to justify the withholding of the excess payments which have been pocketed by the defendant and which he does not now want to return. No other point was argued by the learned counsel for the defendant. I would, therefore, reject these objections. The award should be made a rule of the Court and a decree be passed in terms of the award.

S‑ Q. Objections rejected

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.