UNION OF INDIA Vs. ASHOK TSHERING LAMA

JUDGEMENT

(1.) The arbitrator while making his award in respect of the several disputes between the parties referred to him for arbitration declined to award any pendente lite interest on the ground that no dispute relating to any claim for interest was referred to him for arbitration. On appeal, however, the learned District Judge, without deciding as to whether any claim for interest was at all referred to arbitration, held that "it was within the jurisdiction of the arbitrator to award interest pendente lite" and remitted the issue relating to interest to the arbitrator far reconsideration and "for giving his decision on merits". The arbitrator, on reconsideration of the matter as directed by the learned District Judge, awarded pendente lite interest, and the award thereafter having been filed in the Court of the District Judge, the appellant Union of India filed an application for setting aside the award. The learned District Judge, having found no merit in the application filed by the Union of India, rejected the same and confirmed the award. The Union of India has now preferred this appeal against the order of the District Judge refusing to set aside the award.

(2.) Mr. A. Deb. the learned Standing Counsel appearing for the appellant Union of India, has assailed the order of the District Judge mainly on two grounds. He has urged, firstly, that the learned Judge was entirely wrong in remitting the issue relating to interest to the arbitrator for reconsideration as no question relating to interest was referred to arbitration and, secondly, that irrespective of the legality or otherwise of the order of remittal, the award of pendente lite interest by the arbitrator after remittal and the confirmation thereof by the District Judge were vitiated by error apparent. Mr. Deb has pointed out that the Union of India could not under the law prefer any appeal against the order of the District. Judge remitting the issue relating to interest as no appeal, lies against an order passed under S.16 of the Arbitration Act remitting or refusing to remit an award or any matter referred to arbitration.

(3.) A bare perusal of S.39 of the Arbitration Act, providing that appeals would lie only from the orders listed in sub-sec.(1) thereof, "and from on others," would clearly show that no appeals is provided against any order remitting or refusing to remit an award or any matter referred to arbitration, though the reason behind the same is not that clear. When a Court modifies an award under S.15 (a) by striking out a part of it when such part appears to the court to be upon a matter not referred to arbitration and can be separated without affecting the other part of the award made upon matters referred to an appeal is provided under S.39. (1) (iii) against such order modifying the award and therefore, any party aggrieved by such exclusion or modification is entitled to urge in appeal and to satisfy the appellate Court that the part excluded or struck out was really on matters referred to and was therefore, wrongly excluded. But when a Court remits the award to the arbitrator under cl. (a) or (b) or (c) of S.16. or remits under first part of Cl. (a). not the award in its entirety but any matter referred to arbitration but left undetermined by the arbitrator, any party aggrieved by such remittal has been deprived of any opportunity to go in appeal and to satisfy the appellate Court that such remittal of the entire award or of any matter as "aforesaid was wrong as neither the award was indefinite nor patently illegal nor it determined extraneous matters not separable from the award without affecting the same nor left undetermined any matter referred to arbitration. The reasoning advanced in a number of decisions in justification of this denial of right of appeal is that after remittal the award would in due course have to be resubmitted in court and the party, if still aggrieved, may appeal for its setting aside on the ground that the earlier order of remittal leading to the reconsidered award was bad. This is indeed a very queer way of providing remedy in a law which was designedly framed with the avowed purpose and the proclaimed objective to provide "simple, speedy and cheap remedy": because, even if the parties or the arbitrators are fully convinced that the remittal was bad in law, they must still have to participate in the reconsideration and remaking of the awards with full knowledge that the award, when resubmitted, would, be liable to be set aside because of the illegal order of remittal and the entire post-remittal arbitration proceeding would thus become exercise in futility.