JUDGMENT
Deepak Gupta, J.
1. The present appeal under Section 39 of the Arbitration Act, 1940 is directed against the order passed by the learned District judge, Hamirpur in Arbitration Case No. 1 of 1998, decided on 8.11.2005 whereby he has dismissed the objections filed by appellant to the award dated 23.5.1994 passed by the Arbitrator Shri Anand Sarup, Advocate and has made the award the rule of the Court. I would be pertinent to mention that the case is governed by the provisions of the Arbitration Act, 1940.
2. The facts necessary for disposal of the case are that appellant, Bihari Lal and respondents No. 1, 2 and 4 Hem Raj, Surinder Nath and Suiekh Chand are the sons and respondent No. 3 Parsino Devi is the widow of late Bakshi Ram, son of Nikka Ram. Bakshi Ram expired on 21.8.1978. He left behind huge moveable and immoveable properties. His property situate at Shiv Nagar, Ward No. 4, Hamirpur was mutated in the name of all the parties in equal shares in accordance with the will of Bakshi Ram, dated 10.8.1978. Other properties of the deceased were situated at Gandhi Nagar within the Municipal Limits of Hamirpur and also at Nagrota Gazian. The deceased was also possessed of agricultural land in a number of villages.
3. Suiekh Chand and Surinder Nath instituted a suit for declaration that that they are joint owners in possession of the property at Gandhi Nagar, Hamirpur. Bihari Lal claimed exclusive ownership and possession of the said property and claimed that the six shops had been built by him out of his own funds. The learned Senior Sub Judge, Hamirpur rejected the claim of Bihari Lal. Bihari Lal also instituted a suit for rendition of accounts against the respondents and this suit was also dismissed. The appellant, Bihari Lal instituted appeals against the said judgments and decrees passed against him. It appears that there were other disputes also between the family members.
4. During the pendency of the proceedings before the appellate Court all the parties entered into an arbitration agreement whereby they agreed to appoint Shri Anand Sarup, Advocate, Hamirpur as the sole arbitrator to decide what was the joint property (moveable and immoveable property) of the parties at the time of the death of their predecessor, Bakshi Ram and to partition this entire moveable and immoveable property by metes and bounds between the parties in equal shares. It would be pertinent to mention that in the partition agreement it was also mentioned that it was for the arbitrator to decide whether to receive or not to receive any evidence in support of the claim of the parties. The parties specifically agreed as follows:
1. That the Arbitrator shall complete and announce his award on or before 30.9.1990.
2. That all the parties shall put up their respective claims about their said joint property before the Arbitrator within one month from today. It would be upto the Arbitrator to receive or not to receive any evidence in support of the said claims of the parties. He may take fresh evidence on those claims or he may rely upon any evidence or judgments of the Courts where the cases of the parties had been pending and some of them have been decided.
3. That no party shall have a right to produce the evidence before the Arbitrator without his permission.
4. That thereafter the Arbitrator shall decide the joint property (moveable and immoveable) of the parties, at the time of the death of said Bakshi Ram on 21.8.1978 and then partition the said property (moveable and immoveable) by metes and bounds between the parties in equal shares and announce his award on 30.9.1990.
5. In terms of the agreement entered into between the parties, the Arbitrator entered into reference. The Arbitrator not only invited objections, but asked both the parties to produce evidence before him. He also recorded the statement of the parties and finally prepared the award on 23.5.1994 and filed the same in the Court of learned District Judge, Hamirpur on 30.5.1994. Notice of the filing of the award was issued to the parties as to why the award be not made rule of the Court by the learned District Judge.
6. The appellant objected to the award being made rule of the Court. Various objections were raised and one of the objections was with regard to jurisdiction of the learned District Judge. The learned District Judge vide his order dated 16.4.1998 held that in view of the fact that the value of the property was more than Rs. 10,00,000/-, the Court had no jurisdiction to appoint an Arbitrator or to make the award a rule of the Court. This order was challenged before this Court in FAO No. 241 of 1998. Vide order dated 4th April 2005 the appeal was allowed and it was ordered that without entering into the controversy with regard to the interpretation of law regarding the pecuniary jurisdiction of the learned District Judge the matter shall be considered to have been transferred to the file of the learned District Judge from the High Court and on such transfer the learned District Judge was directed to revive the arbitration case and dispose it in accordance with law. After the said order was passed the learned District Judge has after recording the evidence of the parties and hearing arguments made the award rule of the Court. Aggrieved against the said order of the learned District Judge the present appeal has been filed.
7. I have heard Mr. Bhupender Gupta, learned Senior Advocate, on behalf of the appellant land Mr. G.D. Verma, learned Senior Advocate as also Mr. Ramakant Sharma, Advocate, for the respondents.
8. On behalf of the appellant there are mainly two grounds raised for setting aside the award and consequently the order of the Court below. The first ground raised is that since the award has been passed after the period agreed for in the agreement end also after the extended period granted by the learned District Judge has expired, the Arbitrator had become functus officio and had no jurisdiction to make the award.
9. The second ground of challenge is that the Arbitrator has misconducted himself. In this behalf there are various grounds taken by the learned Counsel for the appellant to urge that the Arbitrator has misconducted himself and the proceedings. It is submitted that the Arbitrator permitted the claims to be filed after the period given in the Arbitration agreement had expired and, therefore, he misconducted himself and the proceedings. Mr. Gupta has urged that the Arbitrator has wrongly relied upon the joint statements of the parties at page 103 of the Arbitration file even though Hem Raj had refused to sign the same. He submits that the award passed on this statement is not binding. Further, according to Mr. Gupta, the said statements do not bear any date and this also amounts to misconduct within the meaning of Arbitration Act. Another ground taken is that the Arbitrator did not prepare a proper inventory, especially of the moveable property. It is submitted on behalf of the Objector-appellant that the Arbitrator entered into reference on 26.4.1990 and he prepared the inventory on 9.11.1991 giving sufficient time to the respondents to remove the moveable property which was in their possession. It is further submitted that no reasonable opportunity was given to the appellant, Bihari Lal to lead evidence and the matter was decided behind his back and that the Arbitrator has acted unfairly. It is also submitted that part of the property which was personal property of the petitioner. Bihari Lal was treated to be joint property of all the parties. According to Mr. Gupta the Arbitrator has also wrongly relied upon the findings of the trial Court while coming to certain conclusions on merits. In this behalf he submits that the decision of the trial Court was not final and had been challenged in appeal and it was during the pendency of the appeals in which the judgments and decrees of the trial Court were under challenge that the Arbitrator had been appointed and, therefore, the Arbitrator should not have relied upon the findings given by the trial Court. It is also submitted that the Arbitrator has not properly partitioned the properties and that the partition is not proper and will create more problems between the parties. According to Mr. Gupta as per the partition the Arbitrator has allotted the built up areas and open areas to the different parties in such a manner that they do not have contiguous land and built up area and, therefore, it will cause greater problem and the award being totally unreasonable is liable to be set aside.
10. On the other hand, Mr. G.D. Verma, learned Senior Advocate and Mr. Ramakant Sharma, Advocate, argue that the Arbitrator did not become functus officio and in any event under Section 28 of the Arbitration Act, 1940 the Court has power to extend the time even after the award has been passed. It is further submitted that the jurisdiction of the Court to interfere in the award of the Arbitrator is very limited and no ground of misconduct has been made out and as such the appeal should be dismissed.
11. I shall first take up the issue whether the Arbitrator had become functus officio and the award is, therefore, without jurisdiction. From the material on record it is apparent that initially the Arbitrator kept applying for extension of time and the Court was granting extension of time from time to time, sometimes on the joint request of the parties and sometimes on the request of one party or on the request of the Arbitrator. The Arbitrator also filed applications for extension of time and in these applications it was submitted that the division of the property involves complicated questions of fact and law and the parties had raised various disputes and as such extension was granted. On 6.8.1991 the Arbitrator also filed an application that the parties started beating and abusing each other and their family members also joined in the said fight. The parties were summoned and directed to co-operate with the Arbitrator. It is also apparent that the mode of partition for agricultural land had been sent by the Arbitrator to the revenue officials including the Tehsildar and also to the Consolidation Officer for making necessary entries with regard to the partition of the land. The last extension of time by consent of the parties was granted by the Court on 20.5.1993 and the time to file the award with the consent of the parties was extended upto 30.6.1993. Thereafter, it appears, that the present applicant, Bihari Lal moved some application before the trial Court taking objection to the extension of time. The learned District Judge on 17.5.1994 on an application filed by Surinder Nath directed the Arbitrator to file the award within one week. The award was prepared on 23.5.1994, i.e. within the period of one week, but was filed in the Court on 30.5.1994. The order of 17.5.1994 clearly granted extension of time to file the award. This order was never challenged by the appellant.
12. Section 28 of the Arbitration Act, 1940 reads as follows;-
28. Power to Court only to enlarge time for making award.-(1) The Court may, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarge from time to time, the time for making the award.
(2) Any provision in an arbitration agreement whereby the arbitrators or umpire may, except with the consent of all the parties to the agreement, enlarge the time for making the award, shall be void and of no effect.
13. It is clear that the Court can enlarge the time for making the award. The award has been prepared on 23.5.1994. No doubt the word used in the order of the learned District Judge was that the award should be filed within one week, but in fact the order should be read to mean that the award should be made within one week. Under Section 28 of the Arbitration Act the Court could only extend the time for making the award. Mr. Gupta has contended that keeping in view the law laid down by the apex Court, the Arbitrator became functus officio and as such the award is totally illegal and could not be made rule of the Court. According to him it is only the Court which can extend the time and not the Arbitrator. Reference has been made to the judgment of the apex Court reported in State of Punjab v. Hardyal , wherein the apex Court held as follows:
9. A perusal of these provisions indicates that it is open to the parties to an arbitration agreement to fix the time within which the arbitrator must give award, but it has to be so stated in the agreement itself. If per chance no time has been specified by the parties in the arbitration agreement, then by virtue or operation of Section 3 read with Clause 3 of the First Schedule the award must be given within four months of the arbitrator 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.
10. Sub-section (1) of Section 28 is very wide and confers full discretion on the Court to enlarge time for making the award at any time. The discretion under Sub-section (1) of Section 28 should, however, be exercised judiciously. Sub-section (2) of Section 28 also makes it evident that the Court alone has the power to extend time. It further provides that a clause in the arbitration agreement giving the arbitrator power to enlarge time shall be void and of no effect except when all the parties consent to such enlargement. It is not open to arbitrators at their own pleasure without consent of the parties to the agreement to enlarge time for making the award.
14. Reliance is also placed on behalf of the appellant on a judgment of the Delhi High Court reported in The National Small Scale Industries Corporation v. V.K. Agnihotri and Ors. , wherein the Delhi High Court following the judgment of the apex Court held that after the expiry of time the Arbitrator became functus officio and could not proceed further without getting extension of time.
15. Reliance is also placed upon a judgment of the Calcutta High Court reported in Vishanji Dungarmal Futnani v. Mohanlal Dungarmal Futnani and Ors. , wherein also it has been held that where the Arbitrators themselves extend the time for making the award, the award is void.
16. To the similar effect is the judgment of Gujarat High Court reported in State of Gujarat and Anr. v. Aarcee Construction Company .
17. Keeping in view the entire law on the subject there can be no manner of doubt that the Arbitrator has no jurisdiction to extend the time for making the award on his own. The time for making the award can be extended only either with the consent of the parties or by the Court. The Arbitrator becomes functus officio only with regard to the making of the award. If he has made the award within the time granted to him by the Court, it cannot be said that he become functus officio to file the award. Filing of the award is different from making of the award. In my opinion, the Arbitrator in fact did not become functus officio since the award was made prior to 24.5.1994. He had been granted time to file the award upto 24.5.1994 vide order of the learned District Judge dated 17.5.1994. Therefore, in my opinion the award was made within time.
18. Even assuming for the sake of argument that the award was not made within time since it was filed on 30.5.1994, I feel that there is reasonable justification for extending the time in filing the award. Section 28 specifically provides that the Court can even extend the time for making the award even after the award has been made. The apex Court in State of Punjab v. Hardyal (supra) clearly held that the Court could extend the time at any stage and there was a very wide discretion with the Court to extend the time. It would be pertinent to refer to the following observations of the apex Court in State of Punjab v. Hardyal (supra):
14. The policy of law seems to be that the arbitration proceedings should not be unduly prolonged. The arbitrator therefore has to give the award within the time prescribed or such extended time as the Court concerned may in its discretion extend and the Court alone has been given the power to extend time for giving the award. As observed earlier, the Court has got the power to extend time even after the award has been given or after the expiry of the period prescribed for the award. But the Court has to exercise its discretion in a judicial manner. The High Court in our opinion was justified in taking the view that it did. This power, however, can be exercised even by the appellate Court. The present appeal has remained pending in this Court since 1970. No useful purpose will be served in remanding the case to the trial Court for deciding whether the time should be enlarged in the circumstances of this case. In view of the policy of law that the arbitration proceedings should not be unduly prolonged and in view of the fact that the parties have been taking willing part in the proceedings before the arbitrator without a demur, this will be a fit case, in our opinion, for the extension of time. We accordingly extend the time for giving the award and the award will be deemed to have been given in time.
19. In the present case the award was made on 23.5.1996 within the extended period granted by the Court. It was, however, filed on 30.5.1994. It would be pertinent to recapitulate that since 1978 the brothers had been fighting over the property left behind by their father giving rise to many cases. The Arbitrator had been appointed on 27th March, 1990. He had entered into reference and I find from the file of the Arbitrator that he had virtually completed all the proceedings by 1993 and thereafter the matter got delayed because of the fact that reference had to be made to the revenue authorities also. Evidence and arguments had been completed prior to 1993.I also find that on a number of occasions the parties including the present appellant had requested for adjournments. The disputes between the parties have been going on since 1978. The family members have been fighting for almost 20 years and, in my opinion, it is a fit case where extension of time should have been granted and the learned District Judge rightly enlarged the time by one week for filing of the award. The Court has exercised its discretion in a judicious manner for valid reasons and I see no ground to interfere in the exercise of this discretion.
20. As far as the objections on merits are concerned, in my view, none of these objections fall within the ambit of Section 30 of the Arbitration Act, 1940. The only ground available under the said Act was that the Arbitrator has misconducted himself or the proceedings. The apex Court in a number of judgments has held that the award can only be set aside if there is error apparent on the face of the record. An erroneous decision of an Arbitrator cannot be set aside.
21. Coming to the specific grounds raised by the petitioner, I find that the claim of all the parties was entertained by the Arbitrator and all the parties were given more than sufficient opportunity to lead evidence before him and also to produce necessary documents. No party had taken objection before the Arbitrator that the claim is belated and should not be entertained. As far as the preparation of the inventory of moveable property is concerned, from a perusal of the record of the Arbitrator it is clear that the parties kept blaming each other and each party stated that it did not have the keys of the almirah/locker in which the moveable property was kept. The inventory could not be prepared because of the non-co-operation by the parties and not because of any fault of the Arbitrator. The almirahs had to be broken open and thereafter the inventory was prepared. As far as the immoveable properties are concerned, the main objection is that the Arbitrator has held some of the personal properties of the appellant to be joint properties. The parties had specifically referred the question whether the properties are joint or not, for adjudication to the Arbitrator. He has decided the same. Therefore, there is no jurisdictional error in the award of the Arbitrator holding that the property is joint Great emphasis has been laid on the fact that the Arbitrator has relied upon the judgments of the Civil Court in coming to the conclusion with regard to the jointness of the properties. No doubt the said judgments were under challenge in appeal when the matter was referred to the Arbitration. However, in the arbitration agreement itself the parties specifically agreed that the Arbitrator could rely upon the judgments of the Courts where the cases of the parties were pending. Therefore at this stage the appellant cannot be heard to say that the Arbitrator could not have relied upon these orders. To satisfy the conscience of this Court I have not only gone through the entire award, but also through the record of the Arbitrator. The Arbitrator has not solely based his award on the judgment of the Civil Sub Judge. That is only one of the pieces of evidence taken into consideration. He has also relied upon the orders passed by the revenue authorities as also the oral statements of the parties including Parsino Devi, widow of the deceased. According to the Arbitrator she (Parsino Devi) was a disinterested party as the dispute was mainly between the four sons. On the perusal of the entire material with the Arbitrator held the properties to be joint.
22. With regard to the objection raised to the partition of the properties I find that the Arbitrator got the building plan prepared by a draftsman and thereafter the parties were asked to first settle the matter amongst themselves with regard to the distribution of various built up areas. He has divided the property keeping in consideration various relevant factors. The parties had agreed and empowered the Arbitrator to partition the property by metes and bounds. Even if there may be some slight error in his award, the same cannot be set aside on this ground. I find that the Arbitrator has equitably distributed the properties. The award is just and fair.
23. It was also contended that the Arbitrator has not given opportunity to the present appellant to lead evidence and the matter was decided behind his back. I find from the record that till 1993 the appellant was actively associating himself in the Arbitration proceedings. After the claims were filed the appellant kept appearing and the he was given sufficient opportunity to lead evidence and put forth his case Detailed statement of Bihari Lal was recorded on 15.12.1990. The statements of the other parties were also recorded on subsequent dates. All the parties including Bihari Lal had agreed that cross-examination would be done by interrogatories. Interrogatories were filed and cross-examination was accordingly done of all the witnesses. All the parties including Bihari Lal were also given opportunity to file written arguments. The Arbitrator has been more than fair in his proceedings and I find that he has not misconducted himself or the to proceedings.
24. In view of the above discussion I uphold the judgment of the learned District Judge dated 8.11.2005 making the award of the Arbitrator Shri Anand Sarup Advocate, dated 23.5.1994 as rule of the Court. The appeal is accordingly dismissed with costs assessed at Rs. 5,000/-.