P (PLP)

The appellant Abdul Majid and the respondents Bahawal Bakhsh and Capatain Muhammad Akbar Khan, presented a petition to the Deputy Commissioner, Gujrat, to the effect that that Officer might name two arbitrators who should give their award in the dispute between the parties regarding property and they would accept their decision without objection. This petition was presented on 10th July 1943. The Deputy Commissioner named Ghulam Muhammad and Jahan Khan as the arbitrators and they started their proceedings on 9th August 1943. On 4ith February 1944. however, they decided that, as more than four months had passed since they had entered on the reference, they could not proceed further and referred the dispute for decision to an umpire, Ch. Abdullah Khan, whom they had already selected, within one month of their own appointment. The file was accordingly sent to Ch. Abdullah Khan. This gentleman took no action on the reference but declined to act finally on 13th June 1944. The file, therefore, came back to the arbitrators who appointed a new umpire, Ch. Muhammad Ashraf, on l 0th July 1945, The new umpire gave an ex parte award against Bahwal Bakhsh on 12th January 1945, and on 16, January 1945, the arbitrators issued notices to the parties intimating that the award had been delivered. It was on 12th April 1945, that the appellant applied to the lower Court for the award to be made rule of the Court. The respondent Bahawal Bakhsh filed objections, in consequence of these objections, it was held by the learned Sub-Judge that there was no justification for the umpire to proceed ex Parte against Bahawal Bakhsh and that he was guilty of misconduct. The plea taken on behalf of the appellant before the learned Sub-Judge to the effect that Bahawal Bakhsh was estopped from objecting to the award was replied. Abdul Majid has therefore, appealed. The first question argued before me is as to the validity of the order of the umpire directing ex parte proceedings to be taken against Bahawal Bakhsh. It appears from the evidence on record that on a notice issued by the umpire, Bahawal Bakhsh had been served for 25th October 1944, but on that date, the umpire did not order ex parte proceedings to be taken against him. Instead he preferred to wait and directed that Bahawal Bakhsh may be served a notice by registered post for 25th November 1944. However, on 6th November 1944, on receiving a letter from Bahawal Bakhsh respondent, the umpire gave an order that no registered notice need be sent as the letter received from the respondent Bahawal Bakhsh, indicated his clear intention not to appear before the umpire. That letter is not on the arbitrator's file which was produced in Court by the umpire. The learned Sub-Judge, therefore, thought that the very basis of the ex Parte order was non-existent. Learned counsel for the appellant tried to argue that the note given by the umpire in this connection should suffice for the finding that the letter in fact conveyed the intention of the contesting respondent to boycott the proceedings before the umpire. In my opinion, this would not be a legitimate inference under the circumstances of the case. That the missing, letter was written by the contesting respondent, is not open to doubt. Another letter from Bahawal Bakhsh Ex. P. 16 dated 5th January 1945 is on the file and it seems to have reached the umpire on 19th January 1945 after the award had been delivered. This clearly refers to a letter written by the respondent in reply to the notice for appearance on 25th October 1944, but the contents of the missing letter, so far as they can be judged from the recital in Ex. P. 16, would tend to an opposite conclusion to that reached by the umpire. The contesting respondent merely stated that he was under medical treatment at Lahore and wanted to know whether the umpire was stit9 intending to continue the proceedings in spite of the fact that the respondent, had taken legal and technical objections to has competency to act, previously. In Ex. P. 16 however, -the contesting respondent made it absolutely clear that he wag now willing to appear before the umpire to continue the proceedings. It would seem that the missing letter merely contained an enquiry as to the intention of the umpire and did not connote an irrevocable decision on the part of the respon dent to boycott the proceedings before the umpire. It may also be mentioned that in the notice for appearance on 25th October 1944 issued on' 22nd September 1944, it was recited that unless he appeared on the' due date; he would be served by means of a notice inserted in a daily, paper. Even that notice, therefore, did not intimate to the respondent that 25th October 1944, was the final date on which the respondent must necessarily appear and could only absent himself on peril of ex Parte proceedings being taken against him. The correspondence on the file merely shows that though the respondent had raised certain technical objection to the appointment of the umpire by the arbitrators, he was still undecided in his own mind whether he would appear before the umpire should the latter decide to take up the reference in spite of the objections or not. From this correspondence no intention to boycott the proceedings before the arbitrators can be spelled out. The disappearance of the material letter from the file of the arbitrator is significant. I, therefore, agree with the learned Sub-Judge that that the circumstances did not justify the umpire in proceeding ex pane against the respondent and he was guilty of misconduct. Learned counsel for the appellant strenuously argued before me that the respondent was precluded by the principle of estoppel from raising any objection to the award in view of the clauses in the original application to the Deputy Commissioner to the effect that the decision of the arbitrators would be accepted "in every way without objection". In support of this argument, learned counsel relied on Khan Singh v. Mohan Lal, a Single Bench authority, of this Court reported as A. I. R 1616 Lahore

80. In that case the agreement between the parties was that they would have no objection whatever to the award. Rattigan, J. held on the authority of Tullis v. Jacson ( (1892) 3 Ch. 441) that the appellant was debarred by his agreement from urging any objections to the award of the arbitrators. The learned judge also derived support from the well known maxim quilibet potest renuncrare i uri pro se introducto. This authority no doubt goes in favour of the appellant's position. However, I am doubtful whether in the present case the parties really intended to agree that they would raise no objections whatsoever to the award of the arbitrators. The words used in the Urdu petition are jo faisla sadar farmain ham ko har tareh bila uzr manzur hoga. It may be translated as "whatever award they might give, shall be acceptable to us in every way without objection". I wonder if it was present to the minds of the parties that this clause might be relied upon later as basis for the argument that even if the arbitrators or the umpire who could be appointed in accordance with law were to be guilty of misconduct, the party against whom the award was given would be precluded from objection to it. The clause seems to have been more or less of a formal nature implying the readiness, of the parties to abide by the decision of the arbitrators. It is doubtful if it was intended to shut out all objection on whatever ground, they may be based. Even learned counsel for appellant concedes that if the award bad been tainted with fraud, objection on the score could not be ruled out. The above ruling was noticed in the Sind judicial Com missioner's Court by' Crouch, A. J. C. in Naraindas v. Kewalram (42 I. C.' 706 (1917). In the Sind case the reference to arbitration included clause which concluded with the words "the arbitrators are authorised in all respects". The learned A. J. C. pointed out that the case of Tullis v. Jacson whose authority had been relied, upon by Rattigan, J. was a different type of case. That was a case where a builder sued his employers for an account of what was due to him in respect of a certain contract containing a clause that the certificate of the architect shall be accepted as final as to the amount due. The plaintiff sought ought to impeach the certificate of the architect on the ground of fraud. Chitty, J., held in that case that the agreement was not void as against public policy and the plaintiff was entitled to the amount certified and no more. The question was thus one of contract. In cases of the kind under discussion, however, the question is somewhat different. The award, if made rule, of the Court, has to be followed by a decree. The discretion of the Court to set aside, the award on any valid ground could not be controlled by an agreement between the parties as was pointed out by Crouch, A. J. C. in the Sind Case. The learned Judge remarked as follows : "This question is no whether a party .shall be compelled to carry out the terms of his contract, but whether the. Court would be exercising a proper discretion in conferring on the award the efficacy of one of its own decrees". The learned judge further referred to section 28 of 'the Indian Contract Act and 'observed that an' agreement which restricts a party absolutely from enforcing his rights in respect of a contract by the usual pro ceedings in the ordinary Tribunals is void .to that extent. In the commentary on the Contract Act by Pollock and Mulla (seventh edition), I find the following at page 207 :- "But a stipulation that parties to a reference shall not object at all to the validity of the sward on any ground whatsoever before any Court of law does restrict a party absolutely from enforcing his rights in the ordinary tribunals, and, as such, is void. The Courts have power; in-spite of such a stipulation to set aside an award on the ground of misconduct on the part of the arbitrator". The learned Commentators have referred in that connection to an authority of the Madras High Court reported as Burla Ranga Reddi v. Kalapalli Sithaya ( (1883) 6 Mad. 368). That was a case of an agreement to submit to arbitration filed in Court under the provisions of sections 523 of the old Code of Civil Procedure. It was stipulated therein that the decision of the arbitrator shall be accepted as final by the parties and that no appeal therefrom shall be made. It was held that the stipulation did not prevent the Court from setting aside the award on the ground of misconduct on the part of the arbitrator. The learned judges observed in that case that the very filing of the agreement in Court gives it jurisdiction to set aside the award on the ground of the arbritrator's misconduct. The learned Commentators have added that the decision ought not to be different even if the agree ment was not filed in Court, for although, in that case, the provisions of the Code would not apply, the award may be set aside in regular suit on that ground. A party undoubtedly has the right under the Arbitration Act, 1940, to have an award set aside on the ground of misconduct on the part of the arbitrator (see sections 30 and 25) I am inclined to agree with this view in preference to that expressed in Kahan Singh v. Mohan Lal. In Hurdwary Mull v. Ahmad Musaji Selaji and others (13 C. W. N. 63 = I Indian Cases 371) a Single Bench of the Calcutta High Court has also held that it is not competent for the parties by an agreement to oust the jurisdiction of the Court vested in it by section 14, Indian Arbitration Act, 1899, to set aside an award misconduct on the part of the arbitrators were shown or if it were shown than the award was improperly procured, when the parties desire that the award should be enforced unner the pro visions of the Act. The position would not be materially different under the new Arbitration Act The observations of Garth, C. J., In the Coringa Oil Company, Limited v. Koegler (I. L. R. 1 Calcutta 466 D.B.) further support this view. In English Law also the position does not appear to be materially different In Halsbury's Laws of England, Volume I, second edition, at page 628 it is stated as follows: " An agreement which purports to oust the jurisdiction of the Court is on grounds of public policy illegal and void, but an agreement that no right of action shall arise unless and until an award has been made is valid and enforceable." Further on it is stated :- " As long as an arbitration clause only requires certain conditions as precedent to a valid claim it does not oust the jurisdiction of the Court and a stipulation that if a claim for arbitration is not put forward within a limited time the claim shall be deemed to be waived, is not illegal or void, but a provision which purports to prevent a party from exercising his right to ask for a special case for the opinion of the Court on a question of law, deprives that party of the protection of the Arbitration Act, 1889, and is contrary to public policy and unenforceable". Learned counsel for the appellant cited certain other authorities which do not seem to be directly in point and which I, therefore, do nit propose to discuss. They did not involve any question of misconduct on the part of the arbitrator but mostly deal with irregularities in procedure by the arbitrator or the umpire which were deemed to have been waived by inaction on the part of the party concerned or concerned cases where parties agreed to accept as final the finding of a local commissioner, on, a question of fact. On a review of the authorities, therefore, I am inclined to hold that the respondent was not precluded by any rule of law or equity from objecting to the award on the ground of misconduct of the umpire. That the umpire was guilty of misconduct in the present case is clear from the finding that he unjustifiably pro ceeded to give an ex Parte award against the respondent. Learned counsel for the respondent tried to argue that the umpire in fact had no jurisdiction to give an award in this case as he had purported to do so beyond two months of his entering on the reference. As has been observed, the award was given on 12th January 1945. The learned Sub-Judge thought that the starting point of the reference before the umpire was the date 25th November 1949, when the proceedings were. definitely ordered to be ex carte by the umpire. Counting from that date, the award was delivered within the time allowed by law. Learned counsel for the respondent however, contended that the umpire should be deemed to have entered on the reference on 6th November 1949 when he directed that no notice of any further hearing need be sent to the respondent as he had received a letter from the respondent conveying an intention to boycott the pro ceedings. That was, however, not a date on which the umpire began enquiry into the case and till then he should not be described as a "entering on the reference". Reference in this connection may be made to Sardar Mal Hardat Rai v. Sheo Bakhsh Rai Sri Narain (A. I. R. 1922 Allahabad 106). It was held therein that an arbitrator enters on the reference when he enters upon the matter of the reference, i.e., when the parties are before him or under some peremptory order he is compelled to conclude the hearing ex parte. On 6th November 1944 the umpire merely directed that no further notice need be sent to the respondent but the actual ex parte order was given on 25th November 1944 and that seams to be the relevant date. The argument of the learned counsel for the respondent appears to be devoid of force. Learned counsel for the respondent then urged that the appointment of the umpire was not valid at all in this case. He pointed out that the second umpire had been appointed by the arbitrators one year after the dispute had been referred to the arbitrators themselves when they were functus officio. The arbitrators could have given their award within four months of entering on the reference under para. 3, schedule I, to the Arbitra tion Act, 1940. The learned counsel argued that the appoint ment of an umpire was a judicial act which could not have been performed by them after those four months had expired. In this case he also referred to paragraph 2 of this schedule and pointed out that the arbitrators could only appoint an umpire not later than one month from the latest date of their respective appoint ments. My attention has however been drawn by learned counsel for the appellant to the provision of section 8 (1) (b) which seems to indicate that the arbitrators can fill in a vacancy in the office of an umpire if he neglects or refuses to act but no limita tion of time is mentioned in this provision. The first umpire could only enter on the reference under paragraph 4 of Schedule First to the Act after the arbitrators had allowed the time to expire without making an award. Clearly if the law contemplates filling of a vacancy in the office of umpire even in these circum stances as section 8 would seem to suggest, there would be no objection to such a vacancy being filled even at a later date. I need, not however, express a final opinion on this point because I consider that the appeal must fail on the first two findings. Learned counsel for the appellant has requested that the award may be remitted to the umpire for continuing the proceed ings after allowing both parties to appear before him. I do not feel disposed to accede to this request. The umpire was not the choice of the parties and learned counsel for the respondent has contended with force that after having raised legal objections to the competency of the umpire to act, his client would legitimately apprehend that the umpire would not deal justly with him. I therefore, dismiss the appeal but in the circumstances of the case, leave the parties to bear their own costs. The decision will be communicated to the parties or their counsel. K. M. A. Appeal dismissed.