Case: Rikhabdas Vs. Ballabhdas And Others

say, finds the statement of some erroneous legal proposition which is the basis of the award, it can remit the award to the arbitrator for reconsideration and Want of registration is a defect de hors the award or the decision of the arbitrator, and so in our judgment is not covered by cl. (a) of S. 16 (1), Arbitration Act of 1940. What was said there about a want of registration is clearly equally applicable to a want of stamp. 7. Mr. Pathak appearing for the respondent contended that under S. 14 (1) of he Arbitration Act it was clearly the duty of the arbitrator to inform the parties of the amount of stamp duty payable on the award. Section 14 (1) is in these terms: Section 14 (1) When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award .We are unable to see how this section can provide the basis for the order made in this case. It only says that the arbitrators shall inform the parties of the fees and charges payable. Even assuming that the word charges includes duty payable for the stamp to be affixed to the award, at best, this section would support an order directing the arbitrators to supply this information. It would not justify an order requiring the arbitrators to inscribe the award afresh on a stamped paper and resubmit it to court. As at present advised, we have grave doubts if the fees and charges mentioned in S. 14 (1) include the stamp duty payable on the award. Section 17 of the Stamp Act requires that stamping should be at the time of execution. Under S. 14 (1) of the Arbitration Act, it is only after the signing of the award that is, its execution, that the arbitrators are required to supply the information about the fees and charges. It is, of course, no part of the duty of the arbitrators under the Act or otherwise to find the costs of stamp themselves. Therefore it is difficult to appreciate how the word charges mentioned in this section includes stamp. But on this question it is not necessary for us to express any final opinion in this case. 8. Mr. Pathak contended that even if the case did not come within S. 16(1) (c) of the Arbitration Act, the order in the present case can be supported under S. 151 of the Code of Civil Procedure which preserves the inherent power of a court to make such orders as may be necessary for the ends of justice. It is true that S. 41 of the Arbitration Act makes the provisions of the Code of Civil Procedure applicable to proceedings before a court under the Arbitration Act. But it is well known that after making his award the arbitrator is functus officio. To cite one authority for this proposition we may quote the observations of Mellish L. J. in Mordue v. Palmer, (1870) 6 Ch A 22 at p. 31: I think the result of the cases at law is that when an arbitrator has signed a document as and for his award, he is functus officio, and be cannot of his own authority remedy any mistake. In the present case, ex hypothesi, the award has already been made and the arbitrator has therefore become functus officio. It is that award which requires stamp. Section 151 of the Code cannot give the court power to direct the arbitrator to make a fresh award; that would be against well-established principles of the law of arbitration. It would again be useless to have another copy of the award prepared and stamped for the copy would not be the award and no action in a court can be taken on it. The order cannot therefore be supported by S. 151 of the Code. It is of some interest to read here the following passage from Russel on Arbitration (14th Ed.) p. 325 : The usual practice in preparing an award is to have two copies made of it. One the arbitrator signs, which then becomes the original award, and this is delivered to the party who takes up the award. The other copy is available for the other parties if they apply for it. The original award, before it is available for any purpose whatsoever, must be duly stamped, but there is no obligation upon the arbitrator to stamp it, and he does not usually do so. We should observe here that the last paragraph in the aforesaid quotation does not appear in the 16th edition of Russels work. Perhaps this is because in England an award is no more required to be stamped by virtue of S. 35 Sched. 8 of the Finance Act, 1949 which was passed after the 14th edition was published. 9. Lastly, Mr. Pathak tried to support the order under Ss. 13 (d) and 15 (b) an (c) of the Arbitration Act. A bare perusal the provisions mentioned would show that the order made in this case cannot be based on any of them. Section 13 (d) deals with correction of clerical mistakes or accidental slips in the award, neither of which we think an omission to stamp, is. Furthermore, S.13 is only an enabling section giving certain powers to the arbitrator. The arbitrator cannot be compelled to exercise these powers. Section 15 deals with a courts power to modify or correct an award. In the present case, the Court did not purport to exercise that power. 10. We, therefore, think that the Division Bench was in error in thinking that an order could be made remitting the award to the arbitrator with a direction to re-write it on a stamped paper and re-submit it to court. That is the only point that we decide in this case.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]We think that the Division Bench of the High Court was clearly in error. Under S. 16 of the Arbitration Act an award can be remitted to the arbitrators only for reconsideration. When it is remitted for rewriting it on a stamped paper, it is not remitted for reconsideration. Reconsideration by the arbitrators necessarily imparts fresh consideration of matters already considered by them. Now they can only consider and give a decision upon matters which are referred to them under the arbitration agreement. It follows that the reconsideration can only be as to the merits of the award. They reconsider nothing when they re-write the award on a stamped paperIt is, of course, no part of the duty of the arbitrators under the Act or otherwise to find the costs of stamp themselves. Therefore it is difficult to appreciate how the word charges mentioned in this section includes stamp. But on this question it is not necessary for us to express any final opinion in this caseIt is true that S. 41 of the Arbitration Act makes the provisions of the Code of Civil Procedure applicable to proceedings before a court under the Arbitration Act. But it is well known that after making his award the arbitrator is functus officioIn the present case, ex hypothesi, the award has already been made and the arbitrator has therefore become functus officio. It is that award which requires stamp. Section 151 of the Code cannot give the court power to direct the arbitrator to make a fresh award; that would be against well-established principles of the law of arbitration. It would again be useless to have another copy of the award prepared and stamped for the copy would not be the award and no action in a court can be taken on it. The order cannot therefore be supported by S. 151 of the CodeWe should observe here that the last paragraph in the aforesaid quotation does not appear in the 16th edition of Russels work. Perhaps this is because in England an award is no more required to be stamped by virtue of S. 35 Sched. 8 of the Finance Act, 1949 which was passed after the 14th edition was publishedA bare perusal the provisions mentioned would show that the order made in this case cannot be based on any of them. Section 13 (d) deals with correction of clerical mistakes or accidental slips in the award, neither of which we think an omission to stamp, is. Furthermore, S.13 is only an enabling section giving certain powers to the arbitrator. The arbitrator cannot be compelled to exercise these powers. Section 15 deals with a courts power to modify or correct an award. In the present case, the Court did not purport to exercise that power10. We, therefore, think that the Division Bench was in error in thinking that an order could be made remitting the award to the arbitrator with a direction to re-write it on a stamped paper and re-submit it to court. That is the only point that we decide in this case.