SONEYLAL THAKUR Vs. LACHHMINARAIN THAKUR

JUDGEMENT

(1.) THIS application in -revision arises out of an arbitration proceeding' without the intervention of the Court. The facts leading to the institution of the proceeding, put shortly, are these. There was a dispute between the petitioner and opposite party No. 1 with regard to survey plot No. 3926 which, admittedly, belonged to the petitioner. He, however, gave this plot in exchange to one Sribans who, in his own turn, exchanged the same with opposite party No. 1, Thereafter, opposite party No. 1 built, a house on the said plot, and, subsequently, dispossessed Sribans from the land which he had given to him in exchange for the above plot. Consequently, Sribans dispossessed the petitioner from the land which he had given to him in ex-change of that plot. As a result of this, there were several criminal cases between the parties. During the pendency of these cases, it appears the dispute between the parties with regard to land was amicably settled and in consequence of the settlement four sale deeds were executed on 16-11-1951, one by the petitioner in favour of Sribans with respect to the said plot No. 3926, the other by Sribans to opposite party No. 1 with regard to the same plot, the third by opposite party no, 1 to Sribans with regard to the land that the former had given to the latter in exchange and the fourth by Sribans to the petitioner with regard to the land which had been given to the petitioner in exchange by him, The dispute between the parties with regard to certain money claims remained unsettled and for that purpose they on the same date agreed to have their differences decided by opposite party No. 2 as an arbitrator. Accordingly, a registered agreement to refer the above dispute to the arbitration of opposite party No. 2 as executed on that date. Subsequently,, the petitioner, as is alleged by him, learnt that the father-in-law of the said arbitrator was influencing him and, as such, the petitioner requested the arbitrator not to arbitrate. It is said that the said arbitrator accepted the request and promised not to proceed with the arbitration. Accordingly, the petitioner got assured that the arbitration had fallen through and he began to demand his dues from opposite party No. 1. The case of the petitioner is that, opposite party No. 1 was thus annoyed with him and he, therefore, in collusion with the arbitrator, opposite party No. 2, got an award fabricated behind the back of the petitioner and without hearing him. No notice of this award was given to the petitioner, but when he learnt about it, he made an application in court on 13-11-1952, to call upon the arbitrator to file the award in court, As a result of this application, the arbitrator filed the award in court on 15-13-1952; and on 5-3-1953, the Court directed the parties to file objection to the award. Thereafter, the petitioner filed an application on 12-3-1953, for setting aside the award on various grounds. It was contended on his behalf that the agreement of reference is vague and did not mention correctly the dispute that had to be decided by the arbitrator. The ground for this contention was that the petitioner was claiming from opposite party No. 1 mesne profits for the exchanged land for the period during which he was kept out Of possession and for costs incurred by him in the criminal cases. But the deed of reference used the words "Len Den" as being the matter of dispute between the parties. The next contention was that, opposite party No. 2 having promised not to proceed with the arbitration, the reference was terminated. The third contention was that the arbitrator misconducted himself as he gave "the award without giving notice to the petitioner and without hearing him. The fourth point that was raised was that the award was made beyond the time prescribed by Rule 3 of Schedule I, Arbitration Act, 1940 and, as such, it was void. The Courts-below overruled the first three contentions. The Court of first instance, however, accepted the last contention and set aside the award. On appeal, the lower appellate Court reversed the trial Court's finding on this point and passed an order for a decree to follow in accordance with the award. Being, thus, aggrieved, the petitioner has moved this Court in revision.

(2.) MR. Kumar appearing for the petitioner has pressed before us all the four points stated, above. I will first take-up the last point, namely whether the award is void as having been made beyond the time-prescribed by Rule 3 of Sch. I, Arbitration, Act. That rule provides that the arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow. In this case, no notice in writing from any party his been given to the arbitrator calling upon him to act, nor has the time for giving the award been extended either by agreement between the parties or by Court. Therefore, the award "had to be made within four months after entering on the reference. The question, however, is as to what the expression "entering on the reference" means. The trial Court interpreted this expression to mean the execution of the deed of reference. The lower appellate Court took the view that this expression meant the appearance of the parties before the arbitrator and the hearing of the matter under reference by him. The two Courts, below have, thus, taken two extreme views both of which, in my opinion, are wrong, and counsel for the parties have not supported the two extreme views. MR. Kumar has contended that an arbitrator enters on a reference when he accepts the reference after the execution of the deed of reference. On the other hand, MR. Sinha appearing for opposite party No. 1 has contended that he enters on a reference when, after having accepted the reference, he does something relating to the execution of the work of arbitration.

(3.) ON a careful consideration of the authorities discussed above, I have no hesitation In arriving at a conclusion that an arbitrator does not enter upon a reference the moment he accepts to work as an arbitrator, nor can it be said that he enters upon a ' reference only when he actually hears the reference. In my opinion, as already observed, an arbitrator, enters upon a reference when, after having accepted the reference, he applies, his mind and does some thing in furtherance and execution of the work of arbitration. The exact date as to when an arbitrator enters on a reference in a particular case, however, will have to be determined on the facts and circumstances of that case. For example, after having accepted the office of arbitrator,, the first thing that he does is that, the parties, being already before him, he proceeds to hear them, he will be said 'to have entered on the reference when he actually began the hearing. Again, suppose, parties not being before him, the first act that he does is to give notice to them to appear in that case he enters on the reference when he gives notice. But, suppose, after having, accepted the office, he says that he will hear the parties some time after or on a date to be fixed later or at his convenience, he cannot? be said to have entered upon the reference because he does nothing in furtherance of the arbitration till then. Now, applying, these tests we have to see as to when in the present case the arbitrator entered on the reference.