ORDER
F. I. Rebello, J.
1. Both these Motions are being taken together as disposal of one will have the effect on disposing the other.
2. The petitioners in Notice of Motion No. 2411 of 1998 were the respondents in Arbitration Petition No. 223 of 1998. The petitioners therein had an award in their favour. They approached this Court on the ground that no application for setting aside the award was made within 30 days. It was contended on behalf of the petitioners/respondents therein that the Award was in terms of section 34(3) of the Arbitration and Conciliation Act, 1996. The said contention was rejected on the ground that the proceedings were initiated under the Arbitration Act, 1940 and were saved by section 85 of the Arbitration and Conciliation Act, 1996. In view of that a decree was passed in terms of prayer clauses (a), (b) and (c). This order is sought to be reviewed and/or this Court called upon to exercise its inherent powers in Notice of Motion No. 2411 of 1998.
Notice of Motion No. 3129 of 1998 has been taken out by the petitioners in Arbitration Petition No. 251 of 1998. The said petition was filed to challenge the Award dated 20th April, 1998. In the affidavit of Shri Naresh C. Goyal in support of Notice of Motion in paragraph 5, it is set out that the petitioners Union of India were under the wrong impression and belief that the proceedings for setting aside the award were to be filed in accordance with the proceedings of the Arbitration and Conciliation Act of 1996 and it is only after the decree was passed by this Court on 5th August, 1998 that the petitioners came to realise that the proceedings have to be filed under the Arbitration Act, 1940. For the sake of the record it may be recorded that no where in the Arbitration Petition No. 25 of 1998 is there any averment that the petition has been filed under the Arbitration and Conciliation Act, 1996 and on the contrary in the Synopsis the only reference is made to Arbitration Act of 1940. By the Notice of Motion the petitioners have prayed that the delay in filing the petition be condoned for the reasons set out in the affidavit in support of the Notice of Motion.
Notice of Motion No. 3129 of 1998 can be considered only if Notice of Motion No. 2411 of 1998 in Arbitration Petition No. 223 of 1998 is allowed. With the above background, I may now proceed to consider Notice of Motion No. 2411 of 1998. For the sake of clarity also the parties are referred to as ‘the Union of India’ and ‘M/s. Kothari and Company’ respectively.
3. The Review Applicant/Union of India have principally sought review of the order on the following grounds:
a) That the period for making the award had not been extended and consequently no decree could have been passed ?
b) The order in fact was passed under the Arbitration and Conciliation Act, 1996 and not under the Arbitration Act, 1940 and to that extent also there is an error apparent on the face of the record and hence the order need to be reviewed.
4. Before dealing with the said two grounds I may advert to some relevant facts. By an agreement of 14th October, 1986 M/s. Kothari and Company agreed to instal at its own costs a Coloured Closed Circuit Television System at Bombay V.T. (Main Line) Railway Station of Central Railway subject to the terms and conditions set out in the Agreement. M/s Kothari and Company filed an Arbitration suit being Arbitration Suit No. 1079 of 1991 as difference had arisen between the parties. By judgment and Order dated 10th August, 1993 the arbitration suit was disposed of with a direction to the General Manager to arbitrate upon all claims made by the 1st respondent in its letter 14th August, 1990 in pursuance of clause 39 of the Agreement. On 10th November, 1993 the General Manager appointed Shri V.V. Deo as the Sole Arbitrator. On 14th June 1994 the Arbitrator published his award. The said Award came to be challenged by the Union of India in Arbitration Petition No. 155 of 1994 under section 30 read with section 33 of the Arbitration Act, 1940. By judgment and Order dated 1st September, 1997 a learned Single Judge of this Court allowed the same in terms of prayer clause (a) of the Arbitration Petition and set aside the Award and remitted the matter to the same Arbitrator. On 16th October, 1997 and 6th November, 1997 the General Manager referred the case to Sole Arbitrator Shri V.V. Deo by letter dated 16th October, 1997. On 20th April, 1998 the Sole Arbitrator published his award. The award was filed in the office of the Prothonotary and Senior Master on 27th April, 1998. Notice of filing the award was given on 30th April, 1998. The Union of India was served on the same date in the Office of the General Manager at the address referred to in the cause title. Thereafter, the Union of India filed Arbitration Petition No. 251 of 1998 on 11th July, 1998.
5. It would be advisable to refer to the order of the learned Single Judge dated 1st September, 1997 in Arbitration Petition No. 155 of 1994 as it is that order which is the bone of contention, more specifically paragraphs 9 and 10 which reads as under:-
“9. Shri Kamdar urged that it is not necessary to set aside the award since the Arbitrator can be directed to consider the counter claim separately. It is not possible to accept the argument of Shri Kamdar. It is well settled that where the Arbitrator leaves undetermined part of the matter referred and it cannot be separated from the portions which have been dealt with so as to enable the Arbitrator to deal with the portion left out separately, the only course open for the Court is to set aside the entire award and remit the matter back to the Arbitrator.
10. In the result, petition is made absolute in terms of prayer clause (a). The matter is hereby remitted back to the Sole Arbitrator Shri V.V. Deo for reconsideration of the disputes between the parties in the light of the observations made in this Judgment. The Arbitrator is directed to decide the matter expeditiously and in any event within four months from today.”
It is thus clear that the award was set aside only because the counterclaim was not decided.
It may also be necessary to set out as to how the Arbitrator himself understood these directions. There is a substantial difference in the Arbitration Act, 1940 and the Arbitration and Conciliation Act, 1996. Under the Arbitration Act, 1940 the Award had to be filed in the Court. Limitation to challenge the Award would only start after the Court service of notice on the parties. In the instant case this procedure has been followed. In so far as the Act of 1996 is concerned, the only requirement is that the Arbitrator serves notice of the award on the parties. There is no requirement of filing the Award in the Court. If the award is not challenged within the time stipulated it can be executed as a decree. There is also a substantial difference in a matter of execution of award passed under the Act of 1940 and Act of 1996.
6. With the above background the fist challenge need to be considered namely that time was not extended. That ground need not detain us for long as on behalf of M/s Kothari and Company, learned Counsel has placed on record the orders dated 1st December, 1997 and Order dated 16th February, 1998 whereby time was extended for making the Award. The Award has been passed within the time as extended by order dated 16th February, 1998. In the light of that there is no merit in so far as the first contention is concerned.
7. That brings us to the second contention that the order of this Court dated 1st September, 1997 is not an order remitting the matter back to the Arbitrator. It is contended that after the Award was set aside there was no question of remitting the matter. Any such remission it is pointed out is null and void. In this light, it is pointed out that the proceedings before the Arbitrator were fresh proceedings that is after the Arbitration and Conciliation Act, 1996 had come into force and consequently the award is under the Arbitration and Conciliation Act, 1996.
On the other hand on behalf of M/s Kothari and Company, their learned Counsel contended that the order has remitted the award. That can be seen from the directions issued by the Court to the Arbitrator to reconsider the dispute in the light of the observations made in the judgment. It is therefore, contended that these are continuation of proceedings and consequently by virtue of section 85 of the Arbitration and Conciliation Act, 1996 they are saved.
The point as canvassed and in issue is whether the Court having come to the conclusion that the Award is under the Arbitration Act, 1940 can review the same on the ground of error apparent on the face of the record. Can it be said that the finding of this Court that the award was passed under the Arbitration Act, 1940 discloses an error apparent on the face of the record. In Shetty’s Construction Co. Pvt. Ltd. v. Konkan Railway Construction and another, , the Apex Court after considering the provisions of section 85 of the new Act read with section 21 of the new Act has held, that so read together, the provisions of new Act would apply, if request for reference of the dispute to arbitration is received by the respondent on the new Act coming into force. In the instant case there has been no request by M/s. Kothari and Company after the Act of 1996 came into force to refer the dispute to arbitration. The only reference was made earlier pursuant to which the award was made and set aside by a learned Single Judge of this Court. In these circumstances, the ratio of the Shetty’s Constructions Co. Pvt. Ltd. (supra) will apply to the facts of the case and it cannot be said that the award in the present case is under the Arbitration and Conciliation Act, 1996 unless it is possible to construe otherwise from the order of this Court dated 1st September, 1997.
8. Having said so in fact it is necessary to deal with the other aspect of the matter that the learned Single Judge could not after setting aside the Award have remitted the matter. Under the Act of 1940 an Award can be set aside under section 30. An Award could be remitted under section 16. Award can be remitted for the purpose of what is set out in section 16(1) by the process of judicial interpretation. Courts have now held that even if an award is set aside under section 30, an order for remission can also be made under section 16. If an Award is remitted, the Court is called upon to fix time within which the Arbitrator or Umpire shall submit his decision to the Court. In the instant case a perusal of the order of this Court dated 1st September, 1997 is clear. The Court itself was of the opinion that the matter has to be remitted. The Court thereafter in paragraph 10 has specifically directed the same Arbitrator to reconsider the disputes, in the light of the observations made in the judgment. This order of the Court has not been challenged by the parties. Parties have thereafter proceeded to appear before the Arbitrator. It is no doubt true that subsequent to the order of learned Single Judge the General Manager has purported to make a separate reference. To my mind this would have arisen only in the event the said M/s Kothari and Company has called on the General Manager to refer the dispute. In the instant case, the arbitrator has assumed jurisdiction not because of the reference by the General Manager but because of the directions of this Court. In fact as required by sub-section (2) of section 16, this Court also directed the Arbitrator to dispose of the matter within four months of the order of the Court. Such a direction could only have been given if the Arbitrator had exercised power under section 16 as admittedly this was not a direction in an arbitration suit filed in this Court. In this background, I need to refer to some judgments which were brought to my notice on behalf of M/s Kothari and Company.
In Niranjan Kumar Mittal v. Pramod Kumar Mittal, 1986(1) Arbitration Law Reporter 413, a Division Bench of the Delhi High Court was considering a situation similar like that in the present case. It was also contended there by the learned Counsel as contended now on behalf of the Union of India, that if an award is set aside, the Award cannot be remitted. The Division Bench of Delhi High Court expressed thus “we cannot imagine a case in which the Award is remitted back for reconsideration and yet remains alive. In any case of remission of an Award the previous Award, or part of it becomes non-operative and in that sense it is ‘set aside.’ Thereafter the Court observed as under:
“We are of the view that the learned Single Judge when deciding the case from which this appeal has arisen has used the words, ‘set aside’ in the sense that the award is sent back for reconsideration and, therefore, ceases to exist. The words ‘set aside’ are not used in the same sense in which the Patna High Court used these words in the judgment reported as Satish Chandra v. Paliram Agawal, A.I.R. 1921 Patna 161. In that case not only the award was ‘set aside; the appointment of the arbitrators also came to an end.”
Even otherwise it is not possible to accept that a Court would pass an order to remit, contrary to the provisions of the Act. No Court will pass such an order. The order/directions, therefore, will have to be read in conformity with the provisions of the Act.
I may also refer for that purpose to para 696 of Halsbury’s Laws of England, Vol. 2, 4th Edition Reissue, which read as under:-
“The effect of remission is to revive the jurisdiction of the arbitrator with regard to the matters remitted. The whole or only a part of an award may be remitted. The Court may also, expressly or impliedly, restrict the revival of the arbitrator’s jurisdiction to reconsideration of a particular aspect of a matter referred. Where the whole of an award is remitted, it become wholly ineffective, and the arbitrator resumes his authority in the reference. Even where only some of the matters referred are remitted, it may be that there is nevertheless no enforceable award even as to the matters not remitted. The Court may make it a condition of remission that the applicant should pay such part of the award as would not be affected. The arbitrator may not make fresh findings in relation to matters not remitted.”
Having said so, I am clearly of the opinion, that the award was passed under the Act of 1940 and consequently this Notice of Motion has to be rejected.
9. Once this Notice of Motion is rejected, the decree stands confirmed and consequently the Notice of Motion No. 3129 of 1998 in Arbitration Petition No. 251 of 1998 stands dismissed.
10. Both Notices of Motion disposed of accordingly. Consequently Arbitration Petition No. 251 of 1998 stands dismissed.
11. Learned Counsel for the Union of India seeks a stay of the order for eight weeks. Order stayed as prayed for.
12. Notices of Motion disposed of accordingly.