RATNAWA Vs. GURUSHIDDAPPA GURUSHANTAPPA MAGAVI

JUDGEMENT

(1.) THIS appeal arises out of proceeding under S. 14(2) of the Indian Arbitration Act to be referred to as the "Act" hereinafter. The parties to this appeal are relations. The appellant as the plaintiff instituted Special Civil Suit No. 29 of 1954 in the Court of learned Civil Judge, Senior Division, Dharwar, praying that the award made and signed by defendants 1 and 2 on 7-1-1950 or a signed copy of the same be caused to be filed in Court and judgment according to that award be pronounced. Some of the parties to the award raised various objections to the reliefs prayed for by the plaintiff. On the pleadings, the Court below raised three preliminary issues. They are :

(2.) THE material facts are undisputed. THE parties to the arbitration referred their disputes to defendants 1 and 2 as per Ex. 3/1 dated 26-10-1949. Immediately thereafter, the Arbitrators entered upon their duties. THE ward in question was made and signed on 7-1-1950. THE two Arbitrators mentioned above were unanimous in their decision. No umpire had been appointed by them. In the terms of reference, no provision for the appointment of an umpire was made. But, as per S. 3 of the "Act", an arbitration agreement, unless a different intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule in so far as they are applicable to the reference. Four our present purpose, only clause (2) of the First Schedule is relevant. That clause reads: "If the reference is to an even number of arbitrators, the arbitrators shall appoint an umpire not later than one month from the latest date of their respective appointments". THE award was made and singed long before the time fixed for the appointment of an umpire under clause (2 ) of the First Schedule. THE Court below has opined that the appointment of an umpire within the stipulated time is a mandatory requirement of the law and any failure to comply with that requirement vitiates the award made. Is this view correct ?

(3.) IN construing whether a particular rule is mandatory or directory, we have to look to the language employed therein, the purpose behind the rule, the scheme of the "Act" etc. Clause (2) of the First Schedule comes into play only in the absence of any provision in the terms of the reference as regards the appointment of an umpire. IN other words, it is open to the parties to the reference to refuse to have an umpire. It is equally open to them to devise other measures for appointing an umpire in cause of need. From this it follows that the provisions contained in clause (2) were included only as a measure of convenience and not as the crux of the matter. The reason for having that clause is obvious. There is always the possibility of evenly balanced disagreement amongst the arbitrators. Therefore, it is necessary to create a machinery to resolve that disagreement unless the parties insist on some other course. The time limit was evidently fixed in the present Act for two reasons. Firstly, it must have been thought desirable that the Arbitrators should appoint an umpire even before there was any disagreement between them; once they begin to disagree on any point, human reactions being what they are the atmosphere is likely to be surcharged with suspicion, prejudice and the like; it may be difficult for them to make an impartial selection thereafter. Secondly, provision is made in the Act for the parties to approach the Court, for the appointment of an umpire. If the Arbitrators fail to do so. Unless a time limit is fixed for the Arbitrators to make their selection, it is difficult for the parties to approach the Court.