# [1962] 2 S.C.R. 720

- **Citation:** [1962] 2 S.C.R. 720
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Bench:** B:P. Sinha, K. l;\uBBA R . .\o, RAGRUllAR DAYAL, T. R. MuDROLKAR
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1962-2-s-c-r-720-2288
- **Pages:** 13

## Headnote

Arbitration-Rcfcre.nce-l:{ofice in tvriting by party to arbitration to act-Tim.q within u;hich aniarrl must be 1nade-Arbitra·
tion Act, 19f0 (16 of 194~), l'ir•t Scfiedu!e r. 3.
The appe)lant, the respondents land -2 and their·mother referred their dispute to arbitration by a registered agreement.
Within 10 d,ays;thereof the arbitrators entered on the rJ>ference.
After. about a year \he mother of the parties died ~nd the
arbitrators 'did not proceed with the enquiry.
About a year
thereafter the appellant gave a notict; to the arUitrators request·
ing them to proce"ed with the refrrence and give their award.
The arbitrators made an award. The appellant filed an ,application iti the Court prayipg for filing of the award and making.
it a rule of the coutt. The 1cspondents I and 2 as defendants
raised objections, one of \vhich was that the award v.·as not
given 'within the time prescribed by law.
The Civil Judge
rejected· the objections and made a decree.
On appeal the
High "Court found that the award was made after the limitation
period and set aside the decree of the Civil Judge and dismissed the suit.
Appellant's case was that r.3 of First Schedule to the
Arbitration Act provided for alternative periods for arbitrators
to make their award. Under second alternative an award
could be made withia 4 months from date of notice to arbitrators to act and hence award was \vithin tim~. ~
The question \Vas whether the notice to act if given
subsequent to the arbitrators entering on reference, the period
should be computed from the former date or from the latter
date.
Held, (per Sinha, C. J., Subba Rao and Mu~holl~•ir, JJ.),
that r. 3 of the First Schedulp to the Arb1trat10n Act,
1940, is mandatory, the object being to prescribe a time limit
in the interest of expeditious disp?sal of arbitratioi; proceedin~s. It imposes a duty on the arbitrators to make their award
within one or other of the three alternative, periods mentioned
therein. The party can only ask the arbitraior to actjfhe is
legally bound t\) act under the reference. A·Ifotice to act can
'
/}
2 S.C.R. SUPREJYIE COURT REPORTS
721
only be given when an· arbitrator is not acting i.e. he has rcfu.
sed or negl,ected to discharge his duty.
·'
The worc\s u.enterRon the reference" occurring in r. 3 of
First Sch·edule are not synonymous with the words ''to actu.
The words· "to act" is more con1prehensive and 6f ~ wider
import thcin the words ''to enter on the ·reference.. u
A notice to act may be given before or after the arliit·
rators enter~d upon tht reference. If notice to act is given
before they entered upon the reference, ·the four months would
be computed from the date they entered· upon the reference.
If a party gives notice t9 act within A- months after: the arb{.
trators entered upon the reference, the arbitrardrs ca.n make an
award \Vithin 4 months from the date of such notice. And jn
that event,_ after the expiry of the sai~ 4 moD.th~ the arbitrators
become functus ojficio unless the period is extended by .court
under s. 28 of the Act; such period np y also be ex tended by
the court, thongh the a\vard ha~ hecn faL:tualJy inadd, otherwise 'the document rlescribeci as an nward \voulcl be treate1d
as non e.st.
'
Per Raghnbar Daynl,.J.-The J?~riod of 4'months under
T.1'3 Of First Schedule is to rfln fron1· the date of arbiti-ator
entering on the reference~or from the .date oI) which .atbitrator
is called upon to act bY..nn~ice in '\vriting from a:ny part)>. If
arbitrator has entered on reference, ~er.iod of 4 months begiri's
to run from the q~i:e of entering "On .. 1"efei:ence. Any hoticC
subsequently given calling upon to act v..Jill not rr!ake the period
of 4 months start afresh and suc-h notice is nor cOnrempiatecf by
r. 3 and it 'vould be ineffective. .It is not necessary to .consider
whether the notice servec.l after expiry of 4 months is a good
notice or nQt.
But in yie\v of s .. : 28 of the Act, So long as the
power vested in the arhiYratnrs to tjeyi<le the dispt\te i

## Text

1961
Moy,'·
720 SUPREME COURT REPORT[l962J
·HAR! SE;ANKAB, LAL
SHAMBHUNATH PRASAD AND OTHERS
(B:P. SINHA, C.J., K. l;\uBBA R . .\o, RAGRUllAR
DAYAL and ,T. R. MuDROLKAR, JJ.)
Arbitration-Rcfcre.nce-l:{ofice in tvriting by party to arbitration to act-Tim.q within u;hich aniarrl must be 1nade-Arbitra·
tion Act, 19f0 (16 of 194~), l'ir•t Scfiedu!e r. 3.
The appe)lant, the respondents land -2 and their·mother referred their dispute to arbitration by a registered agreement.
Within 10 d,ays;thereof the arbitrators entered on the rJ>ference.
After. about a year \he mother of the parties died ~nd the
arbitrators 'did not proceed with the enquiry.
About a year
thereafter the appellant gave a notict; to the arUitrators request·
ing them to proce"ed with the refrrence and give their award.
The arbitrators made an award. The appellant filed an ,application iti the Court prayipg for filing of the award and making.
it a rule of the coutt. The 1cspondents I and 2 as defendants
raised objections, one of \vhich was that the award v.·as not
given 'within the time prescribed by law.
The Civil Judge
rejected· the objections and made a decree.
On appeal the
High "Court found that the award was made after the limitation
period and set aside the decree of the Civil Judge and dismissed the suit.
Appellant's case was that r.3 of First Schedule to the
Arbitration Act provided for alternative periods for arbitrators
to make their award. Under second alternative an award
could be made withia 4 months from date of notice to arbitrators to act and hence award was \vithin tim~. ~
The question \Vas whether the notice to act if given
subsequent to the arbitrators entering on reference, the period
should be computed from the former date or from the latter
date.
Held, (per Sinha, C. J., Subba Rao and Mu~holl~•ir, JJ.),
that r. 3 of the First Schedulp to the Arb1trat10n Act,
1940, is mandatory, the object being to prescribe a time limit
in the interest of expeditious disp?sal of arbitratioi; proceedin~s. It imposes a duty on the arbitrators to make their award
within one or other of the three alternative, periods mentioned
therein. The party can only ask the arbitraior to actjfhe is
legally bound t\) act under the reference. A·Ifotice to act can
'
/}
2 S.C.R. SUPREJYIE COURT REPORTS
721
only be given when an· arbitrator is not acting i.e. he has rcfu.
sed or negl,ected to discharge his duty.
·'
The worc\s u.enterRon the reference" occurring in r. 3 of
First Sch·edule are not synonymous with the words ''to actu.
The words· "to act" is more con1prehensive and 6f ~ wider
import thcin the words ''to enter on the ·reference.. u
A notice to act may be given before or after the arliit·
rators enter~d upon tht reference. If notice to act is given
before they entered upon the reference, ·the four months would
be computed from the date they entered· upon the reference.
If a party gives notice t9 act within A- months after: the arb{.
trators entered upon the reference, the arbitrardrs ca.n make an
award \Vithin 4 months from the date of such notice. And jn
that event,_ after the expiry of the sai~ 4 moD.th~ the arbitrators
become functus ojficio unless the period is extended by .court
under s. 28 of the Act; such period np y also be ex tended by
the court, thongh the a\vard ha~ hecn faL:tualJy inadd, otherwise 'the document rlescribeci as an nward \voulcl be treate1d
as non e.st.
'
Per Raghnbar Daynl,.J.-The J?~riod of 4'months under
T.1'3 Of First Schedule is to rfln fron1· the date of arbiti-ator
entering on the reference~or from the .date oI) which .atbitrator
is called upon to act bY..nn~ice in '\vriting from a:ny part)>. If
arbitrator has entered on reference, ~er.iod of 4 months begiri's
to run from the q~i:e of entering "On .. 1"efei:ence. Any hoticC
subsequently given calling upon to act v..Jill not rr!ake the period
of 4 months start afresh and suc-h notice is nor cOnrempiatecf by
r. 3 and it 'vould be ineffective. .It is not necessary to .consider
whether the notice servec.l after expiry of 4 months is a good
notice or nQt.
But in yie\v of s .. : 28 of the Act, So long as the
power vested in the arhiYratnrs to tjeyi<le the dispt\te is not
\v'ithdrawn, they continue to be cb1npCtent to acf 6n expectation that period for I'l:laking a\vard \VOuld be extended by cotti't.
Arbitrators ~'<!nter on ·a reference as ~oon as they. accept, their
appointment and con1::-aunicafe to .each other about the reference.
This is earlier than starting the proceedings.
Callirig upon
arbitrators to act include.:; asking them to enter on the reference
or to ao anything in connection with reference excePt asking
them to do the routine acts.
. ln the present case arbitrators made rhe
1award \l'hen the
arbi~rators ha<l no jurisdiction', it having been' made 'afier the
expiry of 4 rr1onths from their enre__ring 6n the reference.
Crvn, APPELLATE J.URI;DICTION : CiyiJ A:epea,l
No. 219 of 1958.
"
1961
-
H ari Shankar
Lal
v.
Shambhunath
Pra1ad
1961
H ari Bhiinkar
Lal
v.
Shambhunalh
Prasod
SubbaRaoJ.
722
SUPREME COURT REPORTS
[1962)
Appeal from the judgment and decree dated
January 5, 1954 of the Allahabad High Court,
in First Appeal from Order No. 353 of 1953.
S. K. Kapur and Ganp1t Rai, for the appellant.
A. N. Goyal, for respondents Nos. 1-2.
1961. May 4, The Judgments of the Court
were delivered by
SUBBA RAO, .J.-This appeal by certificate
raises a question of construction of r. 3 of the First
Schedule to the Arbitration Act, 1940 (10 of 1940)
(hereinafter referred to as the Act).
The facts material to the question raised may
be briefly stated. The appellant and respondents
I and 2 are brothers.
On August 17, 1948, the
appellant and respondents 1 and 2 and their
mother by a registered deed of agreement referred
their dispute regarding the partition of two houses in
the city of Banaras to two arbitrators, respondents 3
and 4. Within 10 days of the reference, the said
arbitrators gave notice to the parties and began
to take evidence i.e., they entered on the reference.
On July 25, 1949, Rajwanti, the mother of the
appellant and respondents 1 and 2 died, and the
arbitrators did not proceed with the. inquiry. On
August 31, 1950, i.e., more ;than one year after the
death of Rajwanti, the appellant gave a notice to
the arbitrators requesting them to proceed with the
reference and give the award at an early date. On
October 1, 1950, i.e., within 4 months from the date
of the notice, the arbitrators made an award and
it was duly registered. On January 23, 1951, the
appellant filed an application under ss. 14(2) and
17 of the Act in the Court of the Civil Judge, Banaras, praying that the said award be filed and be
made a rule of the court.
The said application
was registered as a suit ; the appellant was placed
in the position of plaintiff and the respondents. in
that of defendants. The respondents raised various objections to the said application ; one of the
objections, with which only we are now C)oneerned,
2 S.C.R. SUPREME COURT REPORTS
723
was that the award was not given within the
time fixed by law. The learned Civil
Jud~e
rejected the objections and made a decree ln
terms of the award. On appeal, the High Court
came to the conclusion that the award was made
after tbe expiry of the period of limitation, and
on that finding set aside the decree of the• learned
Civil Judge and dismissed the suit with costs.
Hence this appeal.
Learned counsel for the appellant contends
that r. 3 of the First Schedule. to the Act provides
for alternative periods within which arbitrators
have to make their award, that under the second
alternative an award could be made within 4
months from the date of not!ce issued by a party
calling upon the arbitrators to act, and that, as in
the present case the notice to act was given by
the appellant to the arbitrators on August 31,
1950, the award made by them on October 3, :t950,
was within the time prescribed.
'l'he answer to the questiOn raised turns upon
the true meaning of the provisions ofr. 3 of the
First Schedule to the Act. It will be convenient at
the outset to read the relevant provisions of the
Act.
Section 3 of the Act reads :
"An arbitration a.greement, unless a different intention is expressed therein, shall be
deemed to include the provisions set out in
First Schedule in so far as they are applicable to the reference."
Rule 3 of the First Schedule to the Act is as
follows :
"The arbitrators shall make their award
within four months after entering on the reference or after having been called upon to act
by notice in writing from any party to the
1961
HariSkaril:cir
Lal
v.
Shambhunath
PN>aa<I
Subba Rao J.
l!JGl
Hll!ri ShankM
Lal
v.
Shamhkunath
Piasad
Subba Rao J.
72!
SUPREME COURT REPORTS
(1962]
arbitration agreement or within such exten·
ded time as the Court may allow."
Section 28 says:
"(l) 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
tho time for making the award."
Section 3 of the Act makes the period prescribed
in the First Schedule for making an award a term
of the arbitration agreement.
Rule 3 of the First
Schedule to the Act is couched in a mandatory form
and it imposes a duty on the arbitrators to make
their award within one or other of the three alternative periods mentioned therein. The first construction suggested by learned counsel for respon.
dents is that the words "entering on the reference"
in the first clause of the rule and the words "to
aut" in the second clause thereof are synonymous
and they mean the same thing. This would make
the second alternative unnecessary in many cases,
for if the words "to act" means "to enter on the
reference" there is no need for fixing two separate
periods; for, on that construction, notice would
always precede the act of entering on the reference
and, therefore, the first alternative would serve
the purpose. On that construction, the only purpose it serves is that a party may forct:: the pace by
calling upon the arbitrators, who are delaying to
enter on the referen•:e, to aot expeditiously.
If
the Legislature intended to give such a limited
scope to the said rule, it would not have used two
different sets of words in the two alternatfre clauses
and difforent starting points for cornμuting the
period of four month~. The word "acL" i;; certainlv more comprehensive than the' words "cmter on
the reforence.'' The distinction between the said
two sets of words has been brought out with clarity
in Baring-Gould v. Sharpington Combined Pick
2 S.C.R. SUPREME COURT REPOR,TS
725
and Shoi·el Syndicate('). There,
on January 11,
1898, one of the parties served on the arbitrators
a notice in writing addressed to both the arbitratorn requiring them to appoint an umpire ; on
J<'ebruary 15, 1898, the arbitrators appointed an
umpire ; the arbitrators did not make any award
but on April :JO, 1898, the umpire madf• hii< award;
it was contendwl that by the notice requiring the
arbitrators to appoint an umpin;_. 1.hey had not
been "called on to act" within
the meaning of
Schedule I (c), to tht' Arbitration Act, 1889, and
consequently the three months within which the
arbitrators were required by that clause to make
their award had not expirnd, and the jurisdiction
of the umpire had not arisen and his award was
invalid. In that context it became necessary to
decide what the words " called on to act" mean
and whether they were synonymous with tho words
"called on to enter on the reference."
Lindley,
M.R., adverting to that contention observed at p.
91:
"The three months are to run first "after
entering on the reference" ; and then in the
alternative, after "having been called on
to act" ............ If they are
'called on to
act' as arbitratorn, it must mean that they
are called on to do an act as arbitrators.
It appears to me that these arbitrators were
'ca.Jled on to act' by the notice to appoint
an umpire ; and there was very good reason
for making the period of three months run
from that time.· If the arbitrators do ndt
'enter on the reference', and they >1re 'called
on to act', it is an intimation to them that
they are called on to do the work.
I can
'.10t agree with Stirling .J. that 'called on
to act' means 'called upon t(, enter on the
reference'. Being called on to do anything
as an arbitrator is being called on to act.
That the appointing of an umpire is an act done
by the arbitrators as arbitrators is obvious. To
(I) (1899) 2 Ch. D. BO.
1961
Hari ShankrJr
Lal
v.
Sh ambh.1111.atlt
Pra•wi
Stcbba Rao J.
1961
Bari 'Sha11kar
!Jal
v.
Sftambhr,,Mth
· Pratad
SubbaRaaJ.
726
SUPREID] COURT REPORTS
[1962]
do that which they could only do in the character
?f arbitrators is, in my judgment, clearly withm the words, and I think it is within the
sense of the expression used in clause (c)."
No doubt in the above case, unlike in the
present case, the arbitrators were called on to act
before they entered on the reference ; but that
cannot make any difference in the application of
the principle, namely that "to act" is not the same
as " to enter on the reference", and that the former
is ofa wider import than the latter. The Allahab,1d High Court, in Sarda,r Mal Hardat Rai v. Shea
Bakhsh Rai Sri Narain1 1), had to consider the
scope of r. 3 of the First Schedule to the Act in a
different context. There, on January 14-, 1919, a
dispute had been referred to arbitrators; the
award was made on August 23, 1919 ; it was contended that the award had not been made within
three months after the arbitrators entered on the
reference, nor was it made within three months
after having been called upon to act by notice in
writing by one of the parties to the submission.
Piggott and Walsh, JJ., held that the two clauses
were alternative in the sense that when no reference was entered upon at all then the time ran
from the notice calling upon the arbitrators to
act, and that if they had entered on the reference,
they had three months from that moment for
making their award. In that case, the notice to
act was given before the arbitrators entered upon
the reference, and as the award was made within
the prescribed time from the date of entering
upon the reference, though beyond the prescribed
time from the notice asking the arbitrators to act,
they held that the award was within time on the
basis of the second alternative. In neither of tho
two cases the question that now falls to be considered had directly arisen, namely, whether,
if the notice to act was given subsequent to the
arbitrators entering on the referenc<:, the period
(I) ( 1922) I.L.R. 44 All. 432.
.•
2 S.C.R. SUPREME COURT REPORTS
727
should be computed from the former date or from
the latter date. That question arises in this case.
The said discussion leads us to th!( conclusion that though entering on the reference is an
act of the arbitrators, that is not exhaustive of
the content of the word "act" in the second alternative.
But this wide construction, without limitation would defeat the purpose of r.!l.
The object
of the rule is to prescribe a time limit in the interest of expeditious disposal of arbitration proceedings. If under the second alternative notice to
act can be given at any time, it would enable one
of the parties to enlarge the period of time prescribed indefinitely: not only the time limit prescribed would become meaningless but one of the
parties could 8.lso, without the consent of the
other, resuscitate a dead or stale reference. This
could not have been the intention of the Legislature and, therefore, a reasonable construction
should be placed upon the provision.
Such a
limitation on the right of a party to reopen an
abandoned reference is implicit in the words "to
act". A party can ask the arbitrator to act if
he is legally bound to act under the reference.
If after the expiry of four months from the date
of entering on the reference an arbitrPtor can
no longer act, a notice given theriiafter cannot
ask him to act. Realizing this difficulty, learned
counsel for the respondents suggests
that an
arbitrator can act even after four months, though
the award cannot be filed without getting an
extension of time from the court. But the relevant provisions do not support this contention.
The third alternative in r. 3 shows that an
award can be made within the extended time
allowed by the Court. Section 28 of the Act enables the court to extend the time for the making of
the award; extension of time may be given even after
1961
Ilari Shankar
Lal
v.
Shambhunath
Pra8ad
Su5ba RaoJ,
1961
Hari Shankar
Lal
v.
Shambltuna!h
Prasad
Subba Rao J.
728
SUPREME COURT REPORTS
[1962]
the award has been factually made. So till the time
is extended an award cannot be made, though,
when extended, the award factually made may be
treated as an award made within the time so
extended.
To put it differently, if time was not
extended by court, the document described as
an award would be treated as non est. In this
view, the second alternative in r. 3 can be invoked
only in a case where a notice to act has been
given to the arbitrators either before the arbitrators entered on the reference or after they have
entered on the reference but before the period of
four months from that date has run out,
It is said that this construction also may
start off a chain of notices which may lead to the
same result sought to be avoided by it.
The
argument is that if one of the parties gives a
notice to act, it gives the arbitrators 4 months
from that date to act and if before the expiry of
the 4 months from that date of notice another
notict is given, they will get another lease of life
and so on indefinitely. Though there is some
plausibility in the criticism, it is answered by our
confining the right to give notice by a party to
the period of four months from the date the
arbitrators entered upon the reference. Nor the
apprehension that a party may go on giving
number of notices to act within the said 4 months
from the date of the arbitrators entering upon
the reference, each notice giving a fresh period of
4 months, has any basis. A notice to act can
only be given when an arbitrator is not acting
i.e., he has refused or neglected to discharge his duty
Therefore, every notice cannot give a fresh pericd
unless in fact the arbitrators refused or neglrcted
to act before such notice is given.
The legal
position may be formulated thus : (a) a notice to
act may be given before or after the arbitrators
entered upon the reference, (b) if notice to
act is given before they entered upon the reference, the four months would be computed from
2 S.C.R. SUPREME COURT REPORTS
7~9
the date they entered upon the reference, (c) if a
party gives notice to act within 4 months after the
arbitrators entered upon the reference, the arbitrators can make an award within 4 months from the
date of such notice, and
(d) in that event,
after the expiry of the said 4 months the arbitrators
become functus officio, unless the period is extended by court under s. 28 of the act ; such period
may also be extended by the court, though the
award has been factually made.
In the present case, the notice was given
long after the expiry of four months from the
date when the arbitrators entered on the reference and, therefore, they could no longer act
pursuant to the notice calling upon them to act.
The proper course should have been to apply
to the court for extension of time under s. 28 of
the Act. We, therefore, agree with the conclusion arrived at by the High Court, though on
different grounds.
In the result, the appeal fails and is dismissed
with costs.
RAGHUBAR
DAYAL, J.-r agree with the
order proposed, but for different reasons, which I
now state.
The period of four months under r. 3 of the
First Schedule to the Arbitration Act is to run
from the date of the arbitrators entering on the
reference or from the date on which they have
been called upon to act by notice in writing
from any party to the
arbitration
agreement.
If the arbitrators have entered .upon the reference, the period of four months begins to
run from the date they entered on the reference.
Any notice subsequently given to them calling
upon them to act will not make the period of
four months start afresh from the date of the
service of the notice.
Such a notice would be
ineffective for the purposes of dett1rmining the
1961
H ari S hanka r
Lal
v.
Shambhunath
Prasad
Subba Rao J.
Raghubat
Dayal,J.
1961
Hari Shankar
Lal
V,
- JShambl.unath
Praoad
RaGhular
Ea~al J.
730
SUPREME COURT REPORTS
[1962]
period of four months within which the arbitrators had to make the award.
In fact, there
would be no valid occasion for giving such a notice
subsequent to the arbitrators entering on the
reference. Parties cannot prompt them fo1· conducting their enquiry or taking steps in connection with the enquiry. Even if they do, in case
the arbitrators were lethargic, such a notico
is not contemplated by r. 3 of the First Schedule.
A case may possibly arise when an arbitrator, by his conduct, indicates that he refuses to act
,and that it becomes necessary for a party to give
notice to the other arbitrator to appoint another
person arbitrator in his place. The appointment of
arbitrators, would be complete after the fresh arbitrator has been appointed. The proceedings taken
previously would have come to an end as infructuous. The period of four months, therefore, would
start in accordance with the provisions of r. 3 of the
First Schedule and not from the date on which any
party had called upon the remaining arbitrators t.o
appoint an arbitrator in the place of one who had
refused to act. Sections 8 and 9 of the Arbitration
Act provide for the appointmE>nt of an arbitrator
by the Court in place of such defaulting arbitrator.
The view that the fresh period of limitation
will begin to start from the date of the notice if it
be served within the period of four months whioh
had begun to run from the date on which the arbitrators entered on the reference, would mean that
any of the parties will be able to extend the period
by just giving a notice, to the arbitrators within the
original period of four months. Such en effect of a
unilateral notice could not have been intended by
the Legislature. If one can extend the time-the
original period of four monthc-by giving a notice
within that period, t.here is no reason "hy another
fresh period of four months should not start by the
giving of a second notice to the arbitrate rs to act,
2 S.C.R. SUPREME COURT REPORTS
731
before the expiry of the period extended by the
first notice.
If this he possible, the period for
making the award can be extended without any
limit by any of the parties. This is what must have
been in the mind of Lindley, M. R., in BaringGould' 8 Case(') when he said:
"The arbitrators have three months within which to make their award, and the umpire
has another month after the expiration of
those three months. Every one agrees, although the enactment does not expres8ly say
so, that the time from which the three m'onths
are to be reckoned is the first of the two
periods mentioned, and not the last. If it
were the last, the proceedings might be very
unreasonably postponed."
The enactment under consideration there, is to be
found quoted at the bottom of page 86 and, but for
the period of three months instead of four months,
is in identioal terms with those of r. 3 of the First
Schedule.
In the present case, the arbitrators did enter
on the ~eference by the end of August, 1948, and
therefore the award made on Octoher 3, 1950
was made beyond the period of four months of the
arbitrators' entering on the reference, and was
therefore made when the arbitrators had no jurisdiction to make it.
In this view, it is not necessary to consider
whether the notice to act, served after the period
of four months had expired, is a good notice or not,
or whether the arbitrators are competent to act in
expectation of getting the time extended by the
Court or not. I am, however, inclined to the view that
in view of the provisions of s. 28, it is not possible to
say that the arbitrators are not competent to act after
the expiry of the period of f01tr months from tlte
date of their entering on the reference. The provisions of this section contemplate the arbitrators
(1) (1899) 2 Ch, D. BO, 91.
1961
Haii Shanka•·
Lal
v.
Sl1ambhunath
Pra&ad
Ra,ghubar
Dayal J.
1961
H " Shankar
Lal
v.
Shambhunath
Prrwul.
Ragkubar
Dayal J.
732
SUPREME COURT REPORTS
[1962)
having made the award beyond the period of limitation without having previously obtained the order
of the Court extending the time of making the
award. This implies that the arbitrators would
have carried on their proceedings and would have
made the award subsequent to the expiry of the
period during which they should have made the
award. The competency of the arbitrators to act
in pursuance of the reference arises out of the reference made by the parties and is not dependent on
the period during which they ought to make the
award. So long as the power vested in them to
decide the dispute between the parties is not withdrawn, they continue to be competent to act on the
reference in expectation that the period for making
the award would be extended by the Court.
I also do not consider it necessary to decide
in this case as to when arbitrators can be said to
enter on the reference or what is meant by 'their
being called upon to act' by notice under r. 3 of the
First Schedule. I simply note that I agree with
the view expressed in lossifoglu v. Ooumantaros (')
that arbitrators enter upon a reference as soon as
they have accepted their appointment and have
communicated with each other about the reference.
This is a stage earlier than their starting the proceedings in the presence of' thP, parties or under
some peremptory order compelling them to conclude the hearing ex parte. '('_,ailing upon the arbitrators to act' does include asking the arbitrators to
enter on the reference but may also include asking
them to do anything in connection with the reference
except asking them to do the routine acts connected
with the enquiry.
Appeal dismissed.
(') 1941) I K.B. 396.