R.L.ANAND, J. - (1.) UNION of India has filed the present revision and it has been directed against the judgment dated 15.1.1999 passed by Additional District Judge, Jalandhar, who dismissed the appeal of Union of India by affirming the order dated 24.7.1996 passed by Additional Civil Judge (Senior Division), Jalandhar, who allowed the objections of M/s. Abbotts and Company and set aside the award dated 10.6.1988.
(2.) SOME facts can be noticed in the following manner :- There was an arbitration clause in the agreement entered into between the petitioner and the respondent-Company. The matter was referred to the arbitrator in accordance with the agreed condition of the agreement. The arbitrator gave the award on 10.6.1988 in favour of Union of India. The Company filed the objections that Union of India has illegally and unilaterally made the reference to the arbitrator and in these circumstances the reference is not valid. It was also the objection of the Company that the award has been made after four months of entering upon the reference. Notice of the objection petition was given to the Union of India, who filed the reply stating that it was entitled to recover Rs. 94,335.22 but the contractor failed to deposit the amount. The claim was filed before the arbitrator, who gave the award. From the pleadings of the parties, the following issues were framed by the learned trial Court : 1. Whether the award dated 10.6.1988 is liable to be set aside on the ground mentioned in paragraph No. 5 of the objection petition ? OP Objector 2. Whether the objector is barred by his act and conduct from filing the present objection ? OPR 3. Whether the objection petition has been filed within limitation ? OPO 4. Relief.
(3.) BOTH the parties led evidence before the trial Court and vide order dated 24.7.1996 the learned Additional Civil Judge (Senior Division), Jalandhar allowed the objections and set aside the award. The reasons of allowing the objections are contained in para Nos. 6 and 7 of the order which read as under :- "6. As per admitted case of the respondent, the arbitrator entered into reference on 28th October 1986, but give his award on 10.6.1988. The award has, therefore, been admittedly made and signed by the arbitrator after the expiry of the statutory period of four months as required by the first schedule of the Arbitration Act, 1940. In case of the arbitrator could not pronounce and sign the award within a period of four months then he was required to get permission of the court to extend the time for making the award as required under Section 28 of the Arbitration Act, 1940, but this has not been done in the present case. The reference made in the present case is unilateral one i.e. made by the UOI alone. On this issue Shri D.N. Bahri, learned counsel for the objector has argued that where the reference to the arbitrator has been made unilaterally without referring the claim of the objector then the award is liable to be set aside. In this regard the learned counsel for the objector has placed reliance on the ruling reported in AIR 1973 Allahabad page 49, Jagan Nath Kapoor and another v. Premier Credit and Instrument Corporation (P) Ltd., AIR 1972 Punjab and Haryana page 207 titled as UOI v. Hari Krishan Joshi. It has been held in the ruling reported in AIR 1972 Punjab and Haryana page 207 that one sided reference to arbitration is illegal until and unless the other party has refused to join in the reference. When it is desired to take advantage of an arbitration clause it is necessary that the party seeking the reference should first call upon the other party to join in the submission and it is only when the other party has refused to join that a unilateral reference becomes competent. This has also been held in the ruling reported in AIR Allahabad page 49 as under : It is true that the Arbitration Act does not specially provide for a joint reference by the parties to an arbitrator out of court. Yet in the very nature of arbitration proceedings, where the adjudicator is chosen by common consent of the parties, it is but natural that their dispute, differences, claims should also be jointly referred by them for decision of the arbitrator. The use of the words 'claim' and 'difference' in clause 16(b) of the agreement is significant. It obviously refers to the respective claims of the parties against each other. 7. In the present case the arbitrator has not given the award within the statutory period of four months, and the reference to the arbitrators was made unilaterally by the UOI. The arbitration award, therefore, cannot be said to stand scrutiny of law and is liable to be set aside. This issue is therefore decided in favour of the objector." ;