Narayan Bhawu v. Dewajibhawu

1. This is an application for revision against an order passed by the Additional District Judge, Bhandara, in Miscellaneous Judicial Case No. 5 of 1942 holding that an application filed by arbitrators to have the award filed was not tenable. The applicants and non-applicant 1 are real brothers. They referred their dispute regarding partition of moveables to the arbitration of non-applicants 2 to 6 in December 1940. The arbitrators gave an award on 16th February 1941 and served notices on the applicants and non-applicant 1 stating that the award had been made and signed and that Rs. 600 remuneration should be paid to them. This notice was served on the parties to the reference on 5th July 1941. Thereafter the arbitrators filed an application in Court for filing the award under Section 14 of the Arbitration Act, 1940. They also prayed that their remuneration, which had been fixed and of which notice had been given to the parties, be also ordered to be paid to them. Notices were issued to the parties, and the Court came to the conclusion that the application filed by the arbitrators did not comply with the provisions of Section 14 of the Arbitration Act, 1940 and therefore was not tenable. Section 14 runs as under:

“(1) When the arbitrators or umpire have made their award, they shall sign it and shall give 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 award.

(2) The arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award…”

2. This award was filed in Court, not by any parties to the arbitration but by some of the arbitrators themselves, and it was contended on behalf of the opposing party that the application did not mention that the award was being filed at the request of any of the parties to the arbitration, and that therefore the application was not tenable.

3. The present applicants before me, however, stated in the proceedings that it was at their request that the arbitrators had produced the award in Court. The arbitrators accepted this statement as correct and filed an affidavit in support of it. The Judge himself in his order stated that the arbitrators had in fact no interest in the filing of the award and that they wanted to file it for the benefit of non-applicants 2 and 3 (the applicants before me). The fact that the arbitrators were filing the award in the interests of the present applicants clearly indicates that the award was intended to be filed by the arbitrators at their request and at their instance. The mere circumstance that the arbitrators had not mentioned in their application that the applicants had requested them to file the award does not therefore appear to me to be a matter of great consequence. There is nothing in S. 14 which precludes the arbitrators from filing the award, and I do not see any point in the argument that only the parties to the arbitration should make an application in Court for filing an award or causing an award to be filed.

4. The second objection taken to the application was that the costs of arbitration were admittedly not paid, and that when they were not paid the arbitrators were not competent to produce the award in Court. The arbitrators have been given the power to decline to produce the award in Court if their remuneration is not paid; but if the arbitrators choose to produce it even though their charges have not been paid and leave the matter of the enforcement of their charges to be dealt with by the Court under Section 38(3) of the Arbitration Act, there is nothing in S. 14 which prohibits such a thing being done. Section 38 provides for all cases where remuneration payable to an arbitrator has not been paid by the parties to the arbitration. When such payment has been made the arbitrators can be directed by the Court to produce the award. I do not regard the non-payment of the fees and charges due in respect of the arbitration and award as non-compliance with the provisions of S. 14 when the arbitrators are prepared to file the award and have, as a matter of fact, produced it in Court. The ruling in 5 Rang. 1711 referred to by the Court below does not apply to the facts of the present case. There the question was whether the Registrar could be said to have properly filed the award so as to give that filing the effect of a decree, and it was in connexion with that contention that it was held that the filing which was done without compliance with the provisions of the Act and the requirements of the rules of the Court was not proper. It is true that the application is not artistically worded. The Arbitration Act of 1940 had just come into force when this application was made. The High Court had not even made rules under S. 44 of the Act then. Rules have since been made in the year 1943, and one of the rules (Rule 7) distinctly provides that:

“the arbitrator or umpire or any of the parties to the arbitration may cause the award or a signed copy thereof to be filed in Court in the manner prescribed in rule 1.”

5. This rule clearly indicates that the High Court did not regard an arbitrator as being precluded from filing an award in Court under S. 14 of the Act. The inartistic nature of the application was therefore a matter that could not be made much of, and the application for amendment filed by the applicants should have been allowed. The arbitrators who were the applicants in the Court below, as soon as they realized their position under Section 14 of the Arbitration Act, bona fide applied to the Court requesting it to permit them to state that the application was made at the request of some of the parties to the arbitration. They also stated that the question regarding costs may be allowed to be left over to a separate suit. This application was dismissed by the Court below on the ground that it was not bona fide. As already held by me the original application is at the most inartistic. It is quite clear that the application was made by the arbitrators at the request of some of the parties to the arbitration. Mere failure to state that fact in the original application was therefore merely inadvertent, and if an application was made later on to have the mistake corrected the party should have been allowed to rectify the mistake. As for costs, it is a matter which the Court may take into consideration under Section 38(3) of the Arbitration Act, or, as desired by the arbitrators may be left to a separate suit. In any case, I see no reason why the application that had been filed in time should have been dismissed on these technical grounds. It was a substantive application under Section 14 of the Arbitration Act, to have a particular award filed in Court whereupon judgment and decree have to follow. If there were certain mistakes in that application due to the law not having been properly understood by the parties there was every reason for permitting those mistakes to be rectified by amendment. The Court below had jurisdiction to proceed with the application and decide whether the award could be filed or not. It has failed to exercise that jurisdiction by dismissing the application on the ground that the application itself was not tenable.

6. I therefore set aside the order of the Court below and direct that the application be inquired into and permission to amend be granted as desired by the parties. In cases of this nature where arbitrators make an application for filing an award and it is made clear that the application has been made at the request of one of the parties to the arbitration the proper procedure is to allow the parties to the arbitration to take up the litigation in their hands and relieve the arbitrators. Inasmuch as this application was made by the arbitrators in the Court below at the request of the present applicants, it is they who have filed the application before me as they felt aggrieved by the decision that the application was not tenable. The arbitrators have also been joined as parties to this application for revision and all parties are thus before me. I do not think the fact that the persons who originally filed the application in the trial Court, viz., the arbitrators, have not filed the present application should disentitle the persons aggrieved from continuing the application before me and have a decision in the matter. The revision application is allowed. Counsel's fee Rs. 25.

7. Revision allowed.