GAUTAM SARABHAI Vs. NAVINBHAI R THAKKER

JUDGEMENT

(1.) The challenge in this appeal is to the judgment and order dated 22/2/1999 passed by the Ld. Judge, Court No. 16, City Civil Court, Ahmedabad [for short 'City Court'] in Civil Misc. Application No. 109/1998, whereby the aforesaid application preferred by the appellant herein came to be dismissed by the City Court and consequently the award dated 29/11/1997 rendered by two Ld. Arbitrators, namely Mr. MM Sheth and Mr. HK Trivedi came to be confirmed and upheld by the City Court.

(2.) The respondent no. 1 was registered broker of respondent no. 2 Ahmedabad Stock Exchange and the appellant happened to be sub-broker of the respondent no. 1. Between them, a dispute occurred regarding payment of certain dues and as per bye-law no. 248 of the Stock Exchange Ahmedabad Rules, Bye-laws and Regulations, 1957 [for short 'the said Rules and Regulations'], the dispute between a member and a non-member was required to be referred to arbitration. The Arbitrators in their award dated 29/11/1997 directed the appellant herein to pay to the respondent no. 1 Rs.3,50,193-50 ps., with running interest @ 10% p.a., till the realization of the amount by the respondent no. 1. Feeling aggrieved and dissatisfied with the award passed by the Arbitrators, the appellant herein filed Civil Misc. Application No. 109/1998 before the City Court under section 34 of the Arbitration and Conciliation Act, 1996 [for short 'the Act']. The City Court, after considering the submissions advanced on behalf of both the sides and perusing relevant material, dismissed said application and confirmed and upheld the award passed by the Arbitrators. This has given rise to this appeal.

(3.) Mr. DR Dave, Ld. Advocate for the appellant, at the outset, challenged the very appointment of the Arbitrators in the arbitral proceedings. It is submitted that the respondent no. 1 appointed Mr. MM Sheth as his Arbitrator, the appellant did not appoint any Arbitrator, but the Stock Exchange appears to have appointed Mr. HK Trivedi as Arbitrator of the appellant pursuant to certain rules and bye-laws. It is, therefore, submitted that at any rate, Mr. HK Trivedi was not appointed as his Arbitrator by the appellant. It is further submitted that as per bye-law no. 254 of the Rules and Regulations, the Arbitrators were required to pass their award within 4 months after entering on the reference or after having been called upon to act by notice in writing from any party. It is submitted that in the instant case, the said time slot of 4 months has not been adhered to by the Arbitrators and the award was delivered beyond said period of 4 months. Mr. Dave submitted that there is the provision in the Rules and Regulations of the Stock Exchange about extension of time of said 4 months and the said period can be extended with the consent of the parties. It is submitted that in the instant case, the City Court observed that certain letters written by the appellant to the Arbitrators requesting early decision in the arbitral proceedings amounts to consent on the part of the appellant for extension of said period of 4 months. It is submitted that in the instant case, mere addressing letters by one party to the Arbitrators cannot be construed as consent of the parties for extension of the period. Mr. Dave, Ld. Advocate for the appellant submitted that in the instant case the award was delivered by two Arbitrators and considering the provision contained under section 10 of the Act, there cannot be even number of Arbitrators and thus, the arbitral proceedings is hit by the provision contained in section 10 of the Act.