P L D 1966 Dacca 262 (PLP)

HASAN, J.‑This appeal arises out of an order passed by the learned Subordinate Judge, Second Court, Dacca, decreeing the suit in terms of an award. Messrs Badri Narayan Agarwalla, according to the plaintiff's case entered into a contract with the respondent Messrs Pak. Jute` Balers on 31st May 1957, to purchase 1000 bales of N. C. Cuttings at Rs. 95 per bale of 400 lbs. net free on board Khulna. It was agreed that the bales would be lifted within July 1957. The buyer failed to lift the goods within the stipulated period whereupon the seller demanded the market difference of the goods amounting to Rs. 16,

000. The buyer did not pay the same. As a result the seller made a reference to the Registrar of Tribunal of Arbitration. A Court of Arbitration was constituted and passed Award No. 22 allowing Rs. 16,000 to the seller together with Rs. 320 as the cost of Arbitration. The defendant resisted the suit contending that the defendant did not enter into any contract for the purchase of 1,000 bales of N. C. Cuttings at Rs. 95 per bale; hat he did not sign the agreement, that the said agreement was forged; that he did not also agree to any Arbitration Clause and autho rise any person to make any contract on his behalf; that there was a contract between the plaintiff and him as, per, contract No. IVYJA/64, dated 29th December 1956, for purchase of 1000 bales of N. C. Cuttings at Rs. 112 per bale 400 lbs; that the defendant did not take delivery of goods of the above contract as Export Registration Number was refused before the present alleged contract ‑No. IVY/A/107, dated 31st May 1957; that notice of the Arbitration was not served upon him; that he did not also carry on with any business in the name of Badd Narayan Agarwalla and that he came to know of the award from the summons of the present suit on 19th July )958, and accordingly it was prayed that the suit be dismissed against him with compensatory cost under section 35‑A of the Code of Civil Procedure. The following issues were framed on the contentions of the parties: (1) Is the award maintainable in law? (2) Was the reference legal and valid? (3) Have the Arbitrators mis-conducted themselves?. (4) To what relief, if any, the plaintiff is entitled? In support of the respective claims the defendant examined himself and the parties exhibited some documents. The learned Subordinate Judge on a consideration of the evidence and materials on record was of the view that the defendant could not challenge the existence of the contract in view of the provision of sections 32 and 33 of the Arbitration Act; that the Arbitrators were not guilty of misconduct that notices of Arbitration were duly served upon the defendant and accordingly decreed the suit in terms of the award with costs. It appears from the subsequent portion of the judgment that before the judgment was delivered by the learned Subordinate Judge, the defendant‑appellant raised a new point and challenged the award contending that the same was not made within four months from entering upon the reference. The learned Subordinate Judge on the arguments advanced by the learned Advocate for the defendant was of the view that the Arbitration Board did not enter upon the reference within four months as provided. by clause 3, Schedule 1 of the Arbitra tion Act but as the objection was not taken at the earliest opportunity he was of opinion that no effect could be given to such a belted contention. As against that the defendant preferred the present appeal before us, and the plaintiff filed the cross‑objection for the full cost on the decretal amount. Mr. Asrarul Hossain, the learned Advocate for the appellant, has pressed only three points before us. The first point is that no contract was entered into between the plaintiff and the defendant for supply of the jute cutting. The learned Sub ordinate Judge was of the view that in view of the provision of sections 32 and 33 of the Arbitration Act the defendant could not challenge the existence of the contract as the remedy was byway of a suit. Mr. Hossain referring to section 33 of the Arbitration Act has contended that that section authorises the parties to the Arbitration proceeding to challenge the existence of contract. He has in support, relied on the following words "any party to an Arbitration agreement or any person claiming under him desiring to challenge the existence" of section 33 of the Act and on the case of Chaturbhuj Mahanlal v. Bhicam Chand Chororia & Sons (53CWN410). We do not find any such observation in the Judgment. Sinha, J. observed: "The Act was intended to consolidate and amend the law in India relating to arbitration proceedings. The scheme of the Act is to prevent the parties to an Arbitration agreement from agitating questions relating to the Arbitration in any manner other than that provided by the Act." Moreover section 33 only permits any party to an arbitration agreement or any person claiming under him to challenge the existence or validity of an arbitration agreement or an award but not to challenge the existence of a contract. See the case of Shiwa Jute Balling Ltd. v. Hindley & Company Ltd. (A I R 1959 S C 1357). This disposes of the first contention. The next contention raised by the learned Advocate is that the learned Subordinate Judge was wrong in holding that the question of limitation could be only raised at the first instance. In support he has relied on the case of Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar and another (I L R 13 All. 300 (P C)), and also on the case of Hashmatali Jamaddar and others v. Asmatali Jamaddar (6 D L R 478), and contended that according to the above decisions though the question of limitation might, not have been raised at the first instance the same could be taken at any stage of the proceeding. Section 30 of the Arbitration Act provides for ground for setting aside an award and article 158 of the limitation Act provides that application to set aside an award or to get an award remitted for reconsideration under the Arbitration Act, 1940 must be filed within 30 days from the date of the service of notice of the filing of the award. The relevant observation of their Lordships of the Privy Council in the case of Raja Har Narain Singh v. Chaudarain Bhagwant Kuar and another, is:‑

"This objection to the award was apparently nor brought to the notice either of the Subordinate Judge or of the High Court. But the statute is there, and the Judges were bound to take judicial notice of it." On the following facts the aforesaid observation was made:‑

"When once the award was made and delivered the power of the Court under section 514 was spent, and although the Court had the fullest power to enlarge the time under that section as long as the award was not completed, it no longer possessed any such power when once the time was passed. The Court did, however, receive the award delivered on the 24th of March 1885, and a decree was made upon it by the Sub ordinate Judge, which was confirmed by the High Court. The objection now put forward for the appellant is that this award is not valid. That contention has to support it, the express statutory enactment that no award shall be valid unless made within the period allowed by the Court. The utmost period allowed by the Court was until the 20th of March, 1885, and therefore the award delivered on the 20th of March 1885, was so delivered by arbitrators who no longer had any lawful authority to make it. Again as a matter of fact, there was not enlargement of the time made by the Court after the 20th March 1885." The question of limitation was also considered by a Division Bench of this Court in the case of Hashmatali Jamaddar and others v. Asmatali Jamaddar. The following observation is pertinent. "Therefore, where an award is illegal and void ab initio and the illegality is apparent on the face of it, the Court should take judicial notice of it, and it is not neces sary that the parties should file objections to the award under section 30 within the time prescribed under Article 158 of the Limitation Act. In support of the view reference may be made to the Privy Council decision in Raja Harnarain Singh v. Chaudhrani Bltagwant Kuar, I L R 13 All.

300. In that case the award was filed beyond the period limited by the Court. The party effected thereby objected to it. Their objection did not include the objection that it was filed beyond time and therefore invalid under section 521 of the Code of Civil Pro cedure of 1898 which declares that no award shall be valid unless made within the period allowed by the Court. That objection was taken for the first time before their Lordships of the Privy Council." From the aforesaid two decisions it is clear that when an award is not void Article 158 of the Limitation Act cannot be avoided but when the award is void ab initio there could not be any question of running of limitation under Article 158 of the Act. So if it is found in the present case that the award in question is void ab initio, then the objector is entitled to put forward objection to the award even beyond the period of limitation as provided by Article 158 and not otherwise. Whether this award is void or not we will discuss the matter later on at the relevant place. Next ground urged by the learned Advocate is that no notice was served on the appellant by the Arbitration Board. On con sideration of the evidence, the learned Subordinate Judge was of the view that notice was served. From the evidence of the defen dant who has deposed as a witness in the case we find the following statement in his deposition:‑ "No notice of arbitration was served upon me. There was another contract with this plaintiff but we could not carry out the term of this contract for want of registration certificate. 1 would have filed objection if I was served with notice of the arbitration. I did not sign these acknowledgment bonds. My Khulna address is at. West Macord Road Khulna. Khulna is a big town. This letter was not tendered." In cross‑examination he has deposed that it is not a fact that the buyer demanded the difference of price from him; that he was not asked to file written‑statement and to appear before the Arbitration Board. The learned Subordinate Judge took into consideration the signatures of the defendant in postal receipt and acknowledgment and comparing the same with those .in other documents he was of the opinion that the defendant received the notice issued by the Arbitration Board. After going through the evidence we are satisfied that the defendant was served with notice by the Arbitration Board and as such the arbitrators were not guilty of misconduct. It appears that the claim and contentions were contained in an accompanying copy of a letter of 5‑10‑

57. That notice as appears from Exh. B(2) was addressed to Messrs Badri Narayan Agarwalla and was received on 16th October 1957 and signed by B. Narayan. It has been sufficiently proved that Badri Narayan Agarwalla and B. Narayan was none but no defendant himself. Again on the 25th October 1957, another reminder was given vide Exh. 1 (b) dated 25th October 1957, to Badri Narayan Agarwalla, Khulna (East Pakistan) and the same was received on the 1st October 1957, vide Exh. B (1). The defendant also received the summons of the present suit. Last ground which is most important is that the award was made beyond time. In order to appreciate this point it is necessary to refer to certain dates of the proceedings in this case. Reference was made on 5th October 1957. The Court of Arbitration was constituted on 11th December 1957, and the award was made on the 10th April 1958, but before the Court was constituted on I 1 th December 1957, the Registrar issued notice to the parties on 12th October 1957, informing them that Messrs Pak. Jute Balers Ltd., Narayanganj had applied for arbitration in dispute with regard to non‑acceptance of Jute as per special contract under contract No. IVY/A/107 of 31st May 1957. In the aforesaid facts it has been contended that the Board of Arbitration entered on the reference on 12th October 1957, and the award was made on 10th April 1958, and that having not been within four months from that date the award passed in this case is a nullity, as entering upon reference means when the parties are invited to submit their statements. In sup port of this contention reliance has been made on the case of Messrs M. M. Ispahani Ltd. v. Messrs Pakistan Trading Company (P L D Dacca 54). In that case I myself sitting singly held:‑ "The words `entering on the reference' in clause (3) of Schedule I of the Arbitration Act do not mean when the arbit rators have the parties before them and begin to hear the parties. They mean that when a reference has been made and thd arbitrators accept the reference," and further observed that the arbitrator entered on the reference not on 17th May but on the 25th October 1955, when the notice was issued asking the opposite‑party to file statement. Relying on the last observation it has been contended by Mr. Hossain that as notice calling for filing statement was issued by the Registrar on 12th October 1957, and was received on 16‑10‑57 the arbitrators entered on reference on that date. In that case there was no dispute that the Court was con stituted before the date of issue of notice asking for statements from the parties; but in the present case the Board was consti tuted and papers were handed over to the arbitrators on 11th December 1957, after the notice was issued by the Board and as such the notice given by the Registrar before the constitution of the Court directing the parties to file statement cannot be said that the Arbitrators entered upon reference on that date inasmuch as the Court was not in existence at that time. The rules framed by the Dacca‑Narayanganj Chamber of Commerce for the Tribunal of Arbitration provide that the Secretary will act as Registrar of the Tribunal. It has also been provided that when there has been a dispute or difference between the parties to an agreement the matter shall be referred for decision to the Chamber of the Tribunal and an application for arbitration may be addressed by either party to the Registrar and on receipt of such application the Registrar shall con stitute a Court for adjudication of the dispute and under the heading "Contract of Arbitration" we find it is the Court which is to direct the submission of the statements by the parties and according to .the rules it should be submitted to the Registrar in duplicate. But in the present case the Registrar issued the notice not as directed by the Court after its con stitution but before the Court was constituted and as such we are of opinion that the Court did not and could not enter upon reference on the 12th October 1957, but only could have entered upon reference at the earliest on 11th December 1957 the date it was constituted. Mr. Asrarul Hossain being faced with this position has contended that as the Registrar had no authority before the Court was constituted to issue any notice the notice issued by the Registrar was a nullity; and accordingly the award passed was without any notice and in the absence of it the award is nothing but a nullity. Mr. Sharif, the learned Advocate for the respondent relying on the case of Messrs M. P. Ali Mia & Sons v. Messrs Green and White Ltd (P L D 1964 Dacca 54) a decision of a Division Bench of this Court has argued that merely because the Registrar issued a notice before the Court was constituted that will not make an award a nullity inasmuch as that is nothing but a mere irregularity. It was observed in that case:‑

"The act of calling for the statement of the case or other papers from the parties is a ministerial act and if that has been performed by the Registrar in violation of the rules, that was at best an irregularity and not an illegality affecting the award. If it is a ministerial act, that cannot affect the award or render it invalid." . We find no reason to differ from that decision. We accordingly hold that merely because notice was issued by the Registrar before the Court was constituted the award in the present case is not a nullity. We further hold that the award was passed within four months from entering upon the reference and it accordingly was not made beyond time and it is a valid award. Further it may be pointed that there is nothing to show that authority of the defendant's agent was taken away by the defendant. We accordingly find no substance in this contention. Mr. Hossain in this connection has argued another point. It has been pointed out that the award that is passed is not the award of the Tribunal but that of the Chamber of Commerce and accordingly the limitation will run from the time when reference is made to the Chamber of Commerce. In support of his contention that the award made is an award of the Chamber itself, he has relied on the case of Katihar Jute Mills Ltd. v. Shri Machminarayan Jute Manufacturing Co. Ltd. (A I R 1958 Cal. 501). In our opinion this contention is misconceived. The following observation in that case will go to show the hollowness of the argument. "It is true that in the case of an arbitration by the Bengal Chamber of Commerce and Industry, the award made is an award of the Chamber itself and not of the arbitral Court, but as S. R. Das Gupta, J. has pointed out, the Chamber, being a corporated body, can function only in accordance with its rules and therefore when the Court constituted is one which cannot to constituted under the rules, the award made by the Chamber through such a Court is an award made without jurisdiction and as such a nullity." The above quotation clearly indicates that the award is not made by the Chamber of Commerce though it is of the Chamber but through a Court constituted in accordance with the rules and as such the Arbitration Board cannot enter upon the reference before the constitution of the Court in accordance with the rules. We accordingly find no substance in this appeal and the same is dismissed with costs. There is a cross‑objection. From the Judgment of the learned Subordinate Judge, it appears that cost was awarded to the respondent at some stage but at the later stage the order decreeing the suit does not convey whether any cost was given. In our opinion the respondent is entitled to cost of the suit to be assessed by the Court below and that is accord ingly decreed and the cross‑objection is allowed without any cost. TAIBUDDIN TALUKDAR, J.‑I agree. K. B. A. Appeal dismissed.