GIRDHARILAL Vs. SURENDRANATH MUKARJEE

JUDGEMENT

(1.) 1. This is an application by the parties to a suit which was referred to arbitration against an order of the Additional District Judge, Saugor, directing them to pay Rs. 150 to each of the three arbitrators. The arbitrators themselves had asked for a sum of Rs. 200 each for their services, but no objection by them to the amount awarded has been taken before me. It is strenuously contended on behalf of the applicants that the Court had no jurisdiction whatever to award any remuneration to the arbitrators for their services unless there was an express agreement to that effect and that even then such an amount is only recoverable by a suit. It is urged that para. 13, Schedule 2, Civil P.C., has no application to any sums allotted to arbitrators by way of remuneration and can apply only to the costs which are incurred by the arbitrators in the execution of their duty. The paragraph runs: The Court may also make such order as it thinks fit respecting the costs of the arbitration where any question arises respecting such costs and the award contains no sufficient provision concerning them.

(2.) IT is represented that the word "also" and the position of the paragraph following para. 12, which deals with the power to order, modify or correct an award, lead to the conclusion that the costs of arbitration to which the paragraph refers means only such costs as would be considered costs in an ordinary civil proceeding and must exclude any question of remuneration. In England it was at one time held that the appointment of an arbitrator was not of such a nature as to raise a demand for payment in the absence of an express promise to pay him for his services: Virany v. Warne (1801) 4 Esp. 47 and Burroughes v. Clarke (1801) 1 DPC 48; but that is not the law in England as it now stands, and it is now the rule that the appointment of an arbitrator must be taken to imply a promise to remunerate him at a reasonable rate: Willis v. Wakeley Brothers (1891) 7 TLR 604. In Llandrindod Wells Water Co. v. Hawksley (1904) 68 JP 242, it was stated that where the parties have chosen their own arbitrator, they must be taken to have intended to pay him at the rate ordinarily charged by persons of his experience, and they must pay his fees, unless it is proved that the charges are extortionate.

(3.) AN attempt to support the proposition that the Court had no jurisdiction whatever to award remuneration to the arbitrators is made by a reference to Mulchand v. Narinjan Dass (1894) 94 PR. 1894, but in that case it was admitted in argument that para. 13, Schedule 2 (then Section 519, Civil P.C.) would have no application to the particular case since no award was filed and the reference to arbitration was cancelled soon after it was made. What was laid down in that case was that if para. 13 did not apply, it was impossible to bring the jurisdiction of the Court to order remuneration to arbitrators within paras. 2 and 3, Schedule 2 (at that time Sections 507 and 508, Civil P.C.) Another case which the applicants cited was Arunachala Iyah v. Louis Dreyfus and Co. A.I.R. 1928 Mad. 370. There it was held that when the Court was of opinion that there was no valid reference to arbitration, there could be no jurisdiction in the Court to pass an order as to costs of the award. As there was no question here of the invalidity of the award, the case is of no assistance. In Thadomal Menghraj A.I.R. 1930 Sind 190, it appears to have been tacitly admitted that the remuneration of arbitrators would come within the ambit of para. 13, Schedule 2, Civil P.C., since an objection was taken in revision that the amount awarded to the arbitrators was excessive and that it should be reduced. The arbitrators' claim in that case was entered at the end of the award after their signatures and it was held that it formed no part of the award.