Bhikarilal vs Dibyasingh Brahma and Others

S. Barman, J.—Plaintiff is the petitioner in this civil revision from an order of the Subordinate Judge of Bhubaneswar whereby he dropped further proceeding in the plaintiff''s suit being an application u/s 20 of the Arbitration Act for filing an arbitration agreement in Court.

Plaintiff and defendants 1 and 2 were partners under a partnership deed, dated September 26, 1949 in which there was an arbitration clause for reference of any dispute between the parties to arbitration. After dispute arose the plaintiff applied u/s 20 of the Arbitration Act numbered O. S. No. 16 of 1960, the opposite party defendants in the suit being defendants 1 and 2 who were duly noticed. Defendants 1 and 2 filed written statement and issues were framed accordingly. The dispute between the parties was referred to three arbitrators to make an award in writing. On July 30, 1962 the arbitrators filed two awards. According to the majority award the plaintiff was to pay certain sum to the defendants while according to the minority award the plaintiff was to get certain sum from the defendants. After receipt of the award notice was given to both parties regarding filing of the awards.

The parties were called upon to file objections to the awards by a certain date. Both parties filed objection. The plaintiff wanted to have the majority award set aside while defendants 1 and 2 wanted to modify the awards. Both the objections were set down for hearing on November 17, 1962, On that date the defendants raised a new plea that the subsequent proceeding after the filing of the award is to be dropped as it is not within the scope of Section 20 of the Arbitration Act. The defence point is that all proceedings after July 30, 1962 when the awards were filed are to be dropped. On January 8, 1963 the learned Subordinate Judge accepting the defendants'' plea made an order that further proceeding in the suit be dropped, and the iuit was disposed of accordingly. Hence this civil revision filed by the plaintiff.

The main point urged on behalf of the plaintiff petitioner herein is that by virtue of Sub-section (5) of Section 20 of the Arbitration Act the Court should not have dropped the proceedings but should have proceeded in accordance with the other provisions of the Act. Section 20(5) is this;

"Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provisions of this Act so far as they can be made applicable."

The petitioner strongly relied on the words "the other provisions of this Act" which, according to the petitioner, include, among other provisions, Sections 17, 30 and 33 of the Act; that Sub-section (5) of Section 20 has been added to the section so as to attract all the other remaining sections of the Act to be made applicable to a proceeding u/s 20 of the Act.

In my opinion on a plain reading of Sub-section (5) of Section 20 the petitioner''s point is not tenable. The scheme of Section 20 which is the only section in Chapter III under the caption "arbitration with intervention of a Court where there is no suit pending" and the sequence in which the different subsections of Section 20 have been placed clearly show the intention of the legislature namely, that the word ''arbitration'' occurring after the word ''thereafter'' in Sub-section (5) of Section 30 means the arbitration by the arbitrator or arbitrators appointed in accordance with the provisions of the preceding Sub-section (4), which reads thus:

"Where no sufficient cause is shown, the Court shall order the agreement to be filed and shall make an order of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Court."

This in my view is supported by a Division Bench decision of the Patna High Court reported in Nagarchand Goenka Vs. Surendra Nath Sarkar, .

It is thus clear that Section 20 is for proceedings before the arbitrator and not before the Court After the award is filed, the proceeding in arbitration cases and the arbitrator becomes functus officio. The words "the other provisions of this Act" in Sub-section (5) of Section 20 which are intended to be made applicable to an arbitration proceeding before the arbitrator are, inter alia, Section 13 laying down the powers of arbitrator, Section 14 for signing and filing the award, Section 27 regarding powers of arbitrators to make an interim award, and such other provisions so far as they can be made applicable to a proceeding before the arbitrator. As soon as the award is filed by the arbitrator, any matter in connection with the award such as grounds for setting aside the award u/s 30 or an application for challenging the existence or validity of an arbitration agreement or an award u/s 33, and such other applications for matters as provided in the Act are all intended to be in proceedings before the Court and not before the arbitrator.

In fact, in the present case the plaintiff on August 20, 1962 had filed in Court an application for setting aside the majority award under Sections 30 and 33 of the Act. It is in the said proceedings in Court that the parties will get appropriate reliefs. The position that proceedings u/s 33 are intended to be proceedings separate from a proceeding before the arbitrator is further made clear by the rules of the High Court including such application in the list of cause which are to be entered under the head "Miscellaneous Judicial Cases" (General Rules and Circular Order of the 1949 1 HCC 145

In this view of the case, the learned Sub ordinate Judge was justified in making the order by which further proceeding in the suit u/s 20 of the Arbitration Act was directed to be dropped. The order of the learned Subordinate Judge is accordingly upheld. This civil revision is dismissed with costs. Hearing fee Rs. 80.