SECURITY AND FINANCE PRIVATE LIMITED Vs. CHANDAN SINGH

JUDGEMENT

(1.) THE appellant filed an application in the Court of Sub-Judge, 1st Class, Delhi, under section 14 of of Arbitration Act, 1940 (hereinafter referred as the Act) for directing the arbitrator to file his award in Court and for making the award rule of the Court. In pursuance of this application the Court directed the arbitrator to file the award and after the same was filed issued notices to both the parties of the filing of the award. THE respondents filed their objections, one of the objections being that the award was based upon a unilateral reference to the arbitrator made by one of the parties to the dispute and that, therefore, arbitrator had no jurisdiction to enter upon the reference. This objection was upheld by the learned Sub Judge and the application filed by the appellant was dismissed. THE appellant has filed the present appeal against the said judgement of the lear ned Sub Judge.

(2.) ADMITTEDLY, the reference to the arbitraton was made only by one of the parties to the dispute, namely the appellant herein and the respondent did not join in the reference. It is well settled that such unilateral reference does not I confer any jurisdiction on the arbitrator to enter upon the reference and the proper course for the party who wants the dispute to be referred to arbitration is to file an application under section 20 of the Act. This rule, however, is subject to one exception namely, that even if the reference to the arbitrator was made in the first instance by only one of the parties and the other party had not joined in the reference, but if the other party, subsequently submitted to the jurisdiction of the arbitrator, then the arbitrator would get jurisdiction to enter upon the reference notwithstanding the fact that the reference in the first instance was unilateral reference. The question therefore for consideration in this case is whether the respondents or any of them had submitted to the jurisdiction of the arbitrator even though they did not join in the reference made to the arbitrator by the appellant. According to the proceedings of the arbitrator, which have not been challenged before me, notices were issued by the arbitrator to the appellant and the respondents to appear before him on 16.5.63. On that date, counsel for the appellant Co. was present and the | first respondent Chandan Singh was also present alongwith Advocate Shri Harish Chander. The second respondent was Jiot present nor was he repre- rented by counsel. A copy of the appellant's statement of claim was handed over to respondent no. 1 and the case was adjourned to 31.5.63 for filing the written statement of the first respondent. Neither the first respondent nor his counsel appeared before the arbitrator on 31.5.63 for filing the written state- ment of the respondent. Neither the first respondent nor his counsel appeared before the arbitrator on 31.5.63 or subsequently and the arbitrator proceeded exparte against both the respondents. The first respondent having appeared before the arbitrator on 16.5.63 did not challenge the jurisdiction of the arbitrator to enter upon the reference. He only wanted time for filing the written statement and time was given to him until 31.5.63. In my view, this amounted to the submission by the first respondent to the jurisdiction of the arbitrator. Although he did not participate in the further proceedings before the arbitrator, it cannot be said that he did not submit to the jurisdiction of the arbitrator. A person having submitted to the jurisdiction may choose to remain exparte for various reasons and once both the parties submit to the arbitrator, it Confers valid jurisdiction on the arbitrator to enter upon the reference and it is immaterial whether any of them participate in the subsequent proceedings of the arbitrator. The rule laid down by H.R. Khanna,J. (as his Lordship then was) in Dewan Amolak Singh Vs. Shri Lajpat 1966.D.L.T. 100, in my view applies to the facts of the present case. The present case it, therefore taken out of the ambit of the rule laid down by the Supreme Court in Thanwardas Pherumal Vs. Union of India AIR 1955. S.C. 468 or rule laid down by the Full Bench in P.C. Aggarwal Vs. Banwari Lal 1971. Rajdhani Law Reporter.93. The learned sub judge in my view, failed to appreciate the distinction between the facts in Thanwardas's case and the facts in the present case and he was therefore wrong in applying the rule laid down in Thanwardas's case to the present case and dismissing the application filed by the appellant.