Case: Rikhabdas Vs. Ballabhdas And Others

The arbitrator in due course entered upon the reference and made and filed his award in court on July 14, 1955. The award concerned partisan of certain properties between the wife and children of one Bhairon Bux2. The award was however unstamped and unregistered: An objection was taken to a judgment being passed on such an award. On such objection, the trial court passed an order remitting the award to the arbitrator for re-submitting it to the court on a duly stamped paper and after getting it registered3. Against this order the High Court at Nagpur was moved in revision. The learned Single Judge hearing the revision application took the view that the award required to be stamped. But he felt that it could not be remitted to the arbitrator under S. 16 of the Arbitration Act which is the only provision under which an award can be remitted to an arbitrator. It appears that there was an earlier judgment of the Nagpur High Court in the case of Ramkumar v. Kushalchand, AIR 1928 Nag 166, in which it had been held that where the award was unstamped it could under paragraph 14 of schedule I to the Code of Civil Procedure be remitted to the arbitrator with a direction to re-write it on a stamped paper and re-submit it to court. The provisions of that paragraph of the Code have now been substantially reproduced in S. 16 of the Arbitration Act. The trial judge had based himself on this earlier judgment of the High Court. The learned Single Judge was apparently not satisfied with the correctness of the decision in Ramkumars case AIR 1928 Nag 166, and he referred three questions for decision by a larger bench of that High Court. The questions referred were ;(a) Is the award made on a reference by the Court on an application under Section 20 of the Arbitration Act chargeable to stamp duty?(b) Is such an award compulsorily registrable when it relates to partition of immovable property of the value of one hundred rupees and upwards?(c) Has the Court powers under Section 16 (c) of the Arbitration Act of 1940 or otherwise to remit an award to the arbitrator or umpire to get it stamped and/or registered?4. The matter was thereupon heard by a Division Bench of the High Court constituted by two learned Judges. Before them it was agreed by both the parties that the award required to be stamped. This disposed of the first question. The learned Judges felt that it was not necessary at that stage of the proceeding to answer the second question, namely, whether the award required registration. In the result they only answered the third question as to whether an award could be remitted under S. 16 (c) of the Arbitration Act to the arbitrator to get it stamped and they answered that question in the affirmative. They held that a want of stamp would be an illegality apparent on the face of the award and therefore the case would fall under S. 16 (1) (c) of the Arbitration Act. They also held, following the case of Lakhmichand v. Kalloolal, 1958 Nag LJ 504, that the copying of the award on a stamped paper was purely ministerial, and making of an award did, not deprive the arbitrator of the authority to copy an award on the requisite stamp paper. They approved of the decision in AIR 1928 Nag 166. The present appeal is against this judgment of the Division Bench.

Court's reasoning:
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.