FACT LTD Vs. INDUSTRY SIDE P LTD

JUDGEMENT

(1.) THE challenge in these revisions is against enlargement of time granted by the court below for making awards in three arbitration proceedings. In Original Petitions filed in the Sub Court for removal of arbitrators, learned Sub Judge enlarged time for making the awards by exercising power under S. 28 of the Arbitration Act, 1940 (for short 'the act' ). One of the parties to the arbitration agreements has filed these revision petitions.

(2.) THE disputes relate to three contracts entered into between Fertilisers and Chemicals Travancore Ltd, (FACT) and a Calcutta based Company (the first respondent ). As per the contracts, the first respondent was to carry out certain items of work such as fabrication and delivery of M. S. Stacks and Foot vessel. THE different types of work involved in the contracts were not completed, but disputes arose between parties thereto. THE agreements between parties provided for arbitration in the event of disputes arising between them. First respondent appointed the second respondent as arbitrator and FACT (petitioner herein) appointed the third respondent as arbitrator on their part. On 20-5-1976, the arbitrators entered on reference. Claim statements were filed by the first respondent on 21-7-1976. Counter statements were filed by the petitioner on 5-10-1977. THEreafter no progress was registered in the arbitration proceedings which remained torpid for more than six years. On 17-11-1983 the first respondent filed three Original Petitions in the lower court claiming the relief of removal of the present arbitrators and appointment of a sole arbitrator in their place. Petitioner opposed the prayer contending, inter alia, that the petitions were barred by limitation under Art. 137 of the Limitation Act, 1963. THE other contention advanced is that since the first respondent has abandoned the claim it elected not to pursue the remedy through arbitration. THE plea based on Art. 137 of the Limitation Act was found favour with the lower court first and so the Original Petitions were dismissed. This Court in revision set aside the dismissal order. This court permitted the first respondent to file applications in the lower court under S. 28 of the Act for enlargement of time to make the awards. THE Original Petitions were accordingly remitted to the lower court for disposal 'afresh in the light of certain observations made in the order. Pursuant thereto the first respondent filed interlocutory applications praying for enlargement of time for making awards. THE Original Petitions were disposed of by the learned Sub Judge by a common order granting enlargement of time by four months from the date of receipt of a copy of the said order. THEse revision petitions are in challenge of the said common order.

(3.) CERTAIN factual positions cannot be overlooked. The following observations made by this Court in the earlier revisions are relevant in this context. (Order dated 3-4-1987 in CRP. 2018/84 and connected cases): "as held by the Supreme Court in Hari Shankar Lal's case, the competency of the arbitrators to act arises out of the reference made by the parties and not dependent on the period during which they ought to make the award. The power vested in them to decide the dispute is not yet withdrawn. They continue to be competent to act on the reference in expectation that the period for making the award would be extended by the Court. The dispute is pending before them even now. In the interest of justice a decision on the merits of the case has to be rendered by the arbitrators The power of enlargement of time has to be exercised after taking all the circumstances into consideration. The court has now found that the petitioner cannot be made responsible for the delay in making the award and that the arbitrators had not become functus officio. This is a case where the parties appeared before the arbitrators even after the expiry of four months without any protest or objection. The disputes between the parties are not yet decided by any court or other authority. The power vested in the arbitrators to decide the disputes is not withdrawn so far. The lower court will take into consideration all such relevant circumstances of this case before considering the question whether time is to be extended or not". The parties in these revisions cannot now go behind the findings contained in the order passed by this Court in CRP. 2018/84 and connected cases. Learned counsel for the petitioner argued that the portion of the judgment extracted in the impugned order from Hari Shankar Lal v. Shambunath Prasad (AIR. 1962 SC. 78) is not the majority judgment, but it forms part of only the dissenting judgment which adopted a different reasoning despite the uniformity in the conclusion. There is no necessity in the present revisions to consider the question whether the reasoning adopted by Raghubar dayal, J. in the said decision is the law declared by the Supreme Court because this Court has already taken the view in this case itself that the Supreme court has made the said reasoning in Hari Shankar Lal's case. Parties in this case cannot now wriggle out of those findings.