1. We are invited in this rule to set aside a decree based on an award made by a majority of arbitrators appointed in a pending suit. The legality of the award has been questioned on two grounds.
2. It has been contended in the first place that the arbitrators, with whose award we are now concerned, were appointed although the matter had been previously referred to another arbitrator who had not been formally discharged. In support of this objection reliance has been placed upon Sch. 2, para. 5, Cl. (b), sub-Cl, (ii), Code of Civil Procedure, in which it is provided that where an arbitrator refuses or neglects to act or becomes incapable of acting, any party may serve the other party with a written notice to appoint an arbitrator. In the case before us, it appears that the time within which the arbitrator first appointed was directed to submit his award had expired before the appointment of the second set of arbitrators.
3. Consequently his authority to submit an award had lapsed and it may under these circumstances well be held that he had refused or neglected to act. The validity of the award cannot consequently be questioned on the ground that the arbitrators were appointed without jurisdiction.
4. In the second place it has been contended that the reference to arbitration was void, because the Court had failed to comply with the provisions of para. 4, Sch 54, Code of Civil Procedure. Sub-Cl. (i) of that paragraph provides that “where the reference is to two or more arbitrators, provision shall be made in the order for a difference of opinion amongst the arbitrators: (a) by the appointment of an umpire; or (b) by declaring that, if the majority of the arbitrators agree, the decision of the majority shall prevail, or (c) by empowering the arbitrators to appoint an umpire; or (d) otherwise as may be agreed between the parties, or if they cannot agree, as the Court may determine.” Here the matter was referred to three arbitrators, and there was no provision made in the order of reference for a difference of opinion amongst them. The case consequently falls apparently within the scope of para, (4). But it has been pointed out that although the order of reference did not provide for any difference of opinion amongst the arbitrators, the parties in their submission had explicity agreed that in the event of a difference of opinion amongst the arbitrators, the opinion of the majority was to prevail. The question consequently arises whether where, as here, the parties have agreed to be bound by the opinion of the majority of arbitrators, the omission of the Court to record the fact in the order of reference invalidates the reference to arbitration.
5. The question must clearly be answered in the negative. It has not been contended and, in our opinion upon a plain reading of para. 4, it cannot be reasonably contended, that it is open to the Court to make an order in this behalf different from what has been agreed upon between the parties in their submission. Para. (4) clearly implies that Cl. (d) is to be read along with the three preceding clauses. If it is so read, the four clauses taken together obviously mean that the Court shall provide in the order for a difference of opinion by the appointment of an umpire or by declaring that the decision of the majority shall prevail or by empowering the arbitrators to appoint an umpire or in such other manner as may be agreed upon between the parties. It is only when the parties cannot agree or have not come to an agreement that the Court is at liberty to determine what direction should be given. In the present instance as already explained, the parties had agreed that the decision of the majority should prevail. All that remained for the Court to do was merely to embody in the order of reference a direction that the decision of the majority would in the case of a difference of opinion prevail. The omission to embody that direction in the order, which it was obligatory upon the Court to do, cannot affect the validity of the order. Reliance was placed upon the cases of Futteh Singh v. Gango . [1865] 1 W.R 4.; Thakoor Dass Chuckerbutty v. Ramjeebun Chuckerburty . [1870] 14 W.R 150.; Muhammad Abid v. Muhammad Asghur . [1886] 8 All. 64 and Gurupathappa v. Narasingappa . [1884] 7 Mad. 174., in support of the proposition that where the order of reference does not embody a direction as to the mode in which decision is to be given when there is a difference of opinion amongst the arbitrators, the whole proceeding is thereby invalidated. These cases however are clearly distinguishable, because in each of these cases there was not only an omission by the Court to provide for a difference of opinion in its order of reference, but there was also no agreement between the parties as to what would happen in the event of a difference of opinion. In the case before us, there was an agreement between the parties on this point. In our opinion therefore there is no force in the contention of the petitioner.
6. The result is that the order of the Court below is affirmed and this rule is discharged with costs. We assess the hearing-fee at three gold mohurs.
V.B/R.K
7. Rule discharged.