MODERN BUILDERS Vs. HUKMATRAI N VADIRANI

JUDGEMENT

(1.) THIS appeal arises from an order of the Bombay City Civil Court refusing to set aside an award made on a Court reference.

(2.) THE appellants before us were the original plaintiffs. They had filled a suit in the Bombay City Civil Court for the recovery of Rs. 14, 900 and odd from the defendant. When the suit reached hearing on 6th April, 1963, the matter in dispute was by consent of the parties referred to the arbitration of two arbitrators, who were the two Advocates of the parties. One of the terms in the order of reference provided that the two arbitrators "shall nominate an umpire". The arbitrators did not appoint an umpire but heard the parties and received their evidence in three meetings held on the 13th the 16th and the 17th of May,. 1963. The time for making the award was enlarged by the Court by consent of parties. The arbitrators made an award on 28th November, 1964. by which they directed that the defendant shall pay to the plaintiffs Rs. 8,500 with interest and costs. being dissatisfied with the award the plaintiffs applied to the City Civil Court for setting it aside. The main ground advanced on their behalf was that the provision contained in Clause 2 of the First Schedule of the Arbitration Act, 1940, which required the arbitrators to appoint an umpire was a mandatory provision and that the breach of that provision by the arbitrators rendered the award invalid. The learned trial Judge held that the award was not invalid, that the provision in clause 2 of the First Schedule was not mandatory and that in any case the plaintiffs had by their conduct waived the non-compliance with that provision. This decision has been challenged by the plaintiffs in this appeal.

(3.) ALTHOUGH the order of reference made by the trial Court by consent of parties contained a clause that the two arbitrators "shall nominate an umpire" the clause did not provide the time within which the nomination was to be made. Section 3 of the Arbitration Act, 1940, which relates to an arbitration without the intervention of a Court lays down that-