D. Khosla & Co. vs Y.N. Rao And Another
1993 Latest Caselaw 234 Del

JUDGMENT

R.C. Lahoti, J.

1. The Chief Enginee, Delhi Zone, Delhi Cantt. on behalf of Union of India, the defendant-respondent in the proceedings under the Arbitration Act, 1940 has filed these two applications IA No. 7243/93 under Section 5 of the Limitation Act and IA No. 7244/93 under Order 9 Rule 13 of the CPC. seeking condensation of delay in moving the court and setting aside of the judgment and decree dated 29.3.1993 passed by a learned Single Judge of this court making an award dated 23.12.1989 the rule of the court. Insofar as the application under Order 9 Rule 13 CPC is concerned, it has been prayed in the alternative that this court be pleased also to treat the application as one seeking review of the judgment and decree inasmuch as they suffers from an error apparant on the face of the record. The relevant facts are all stated in the application. The learned counsel have been heard on this alternate prayer.

2. The Arbitrator published the award on 23.12.1989 and gave notice to the parties. The award was filed in the court. The parties were noticed. The Chief Engineer, respondent No. 2, filed objection under Sections 30 and 33 of the Arbitration Act submitting that the award was invalid, illegal, none set and liable to be set asid. The principal ground on which the validity of the award was attacked was that the award was made by the Arbitrator after the expiry of time limited for making the award. It was submitted that the Arbitrator had entered the reference on 27.5.1988, while the award was made on 23.12.1989, i.e., beyond the period of one year from the date of entering upon the reference. The other principal contention was that the Arbitrator was required to record his findings on the items of dispute and then to make award which having not been done, the award was vitiated.

3. The record of the proceedings shows that Chief Engineer, the defendant-respondent was represented by a counsel. However, the counsel had stopped appearing in the court. On 27.1.1993, the arguments were heard ex parte. On 29.2.1993, the court passed a judgment rejecting the objections and making the award rule of the court.

4. The applications under consideration state that the counsel appointed defendant-respondent had stopped appearing without any intimation. On 14.6.1993, the respondent came to know of ex parte the judgment and decree from a letter sent on behalf of the petitioner On 17.6.1993, the counsel was contacted for securing certified copy of the judgment along with his opinion. The Court was closed for summer vacation. As there was no response from the counsel, a letter was written by the defendant-respondent to the Law Ministry on 7.7.1993. On 21.7.1993, again a letter was written to the counsel. On 21.7.1993, the Dy. Legal Advisor advised the defendant-respondent of appointing the present counsel and collecting papers from the previous counsel. The previous counsel did not oblige by returning the papers. The present counsel inspected the record and having apprised himself of all the facts of the case drafted the applications along with affidavits and filed the same in the court on 13.8.1993. It is submitted that the defendant-respondent was not to blame at all for abstention from the proceedings. Grave injustice which has taken place with the defendant-respondent deserved indulgence of the court by setting aside the ex parte judgment and decree.

5. Though the contents of the applications have been controverter, yet this court is of the opinion that there is no reason to disbelieve the correctness of the facts stated in the applications. It appears from the facts narrated that the defendant-respondent had done all that was within his power to defend himself. A counsel was appointed and duly instructed. Objections were preferred. Looking to the nature of the objections raised to the validity of the award, it was not necessary for the defendant-respondent, to have remained personally present before the Court on all the dates of hearing. He could have depended on the counsel. As there was communication gap and default in appearance on the part of the counsel, the case proceeded ex parte.

6. The learned counsel has rightly read with emphasis the following part from the judgment dated 29.3.93 passed by the learned Single Judge of this Court. To quote :

"The Arbitrator entered upon the reference on 27th May, 1988 when he called upon the parties to submit their claims along with the documents in support thereof. The parties submitted their claims before the Arbitrator and also made their case known to him and the Arbitrator after hearing the parties and going through the record, made and published his Award on 23rd December, 1989. This Award is within the period of one year from he entered upon the reference."

The error is apparent. Between 27.5.1988 and 23.12.1989, a period of more than 18 months had elapsed. The learned Single Judge has erroneously counted the period as 'within one year'.

7. The following part of the arbitration clause, not in dispute, deserves to be extracted and reproduced for the purpose of ready reference :

"The Arbitrator may from time to time with the consent of the parties, enlarge, the time up to but not exceeding one year from the date of his entering on the reference, for making and publishing the award.

The Arbitrator shall give his award within a period of six months from the date of his entering on the reference or within the extended time as the case may be on all matters referred to him and shall indicate his findings, along with sums awarded, separately on each individual item of the dispute."

8. The learned counsel for the defendant-respondent has submitted that under Schedule 1 Para 3 of the Arbitration Act, the Arbitrator has to make the award within four months after entering on the reference or within such extended time as the court may allow. Section 28 of the Act reads as under :

"Power to Court only to enlarge time for making award -

(1) The Court may, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarge from time to time, the time for making the award.

(2) Any provision in an arbitration agreement whereby the arbitrators or umpire may, except with the consent of all the parties to the agreement, enlarge the time for making the award, shall be void and of no effect."

The power to extend the time is vested in the court. The Arbitrator cannot extend time even if is empowered to do so by the agreement. The parties may, of course, with consent enlarge the time. In the case at hand, the arbitration clause takes away the power of even the parties to enlarge the time beyond a period of one year.

9. The question of enlargement of time and the effect of delay on validity of the award, if given beyond time limit, has been subject matter of consideration by their Lordships of the Supreme Court on several occasions, State of Punjab v. Hardyal , Hindustan Steel Works Construction Ltd. v. C. Rajasekhar Rao , and Hari Krishna Wattal v. Vaikunth Nath Panday , are some of the authorities relevant.

10. The Arbitrator to indicate his findings, along with sums awarded, as prescribed by the arbitration clause. A perusal of the arbitration award shows prima facie the absence of any findings on items of dispute though the sum awarded is mentioned against each of the items of dispute. It is a non-speaking award. Reasons might not have been given but the findings were a must.

11. On both the points above said, the judgment of the Learned Single Judge appears to be vitiated by error apparent.

12. Not only the defendant-respondent has made out a sufficient cause for setting aside the ex parte judgment and decree, he has also made out a case for review of the judgment within the meaning of Order 47 Rule 1 CPC. Material error manifest on the face of the order resulting in miscarriage of justice and circumstances of a substantial and compelling degree within the meaning of law laid down by their Lordships in Col. Avtar Singh Sekhon v. Union of India and other , and M/s. Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi , have been shown to appear warranting exercise of the power of review.

13. Insofar as the delay in moving the applications is concerned, on the facts stated and found worthy of credence, a sufficient cause for condoning the delay is made out. The delay in moving the application under Order 9 Rule 13 CPC is condoned.

14. Whatever might have been the view taken by the Learned Single Judge on the substantial contentions raised on behalf of the defendant-respondent, the fact remains that the contentions ought to have been disposed of with correct appreciation of facts and that has not been done.

15. For the following reasons, the applications are allowed. The delay in filing the application is condoned under Section 5 of the Limitation Act. The judgment and decree dated 29.3.93 are set aside. It is directed that the principal prayer for making the award a rule of the court shall be listed for hearing on merits on the next date of hearing.