Case No: Civil Appeal No. 10 of 1972
Court: Appellate Division ,,
Advocate: Syed Ishtiaq Ahmed,,
Citation: 28 DLR (AD) 21
Case Year: 1976
Appellant: Government of Bangladesh and others
Respondent: M/s. Samir & Co.
Delivery Date: 1975-11-20
Syed A.B.M. Husain, CJ.
Ahsanuddin Choudhury, J.
Kemaluddin Hossain, J.
D. C. Bhattacharya, J.
Government of Bangladesh and others
M/s. Samir & Co
November 20, 1975
Arbitration Act (X of 1940)
Section 8 (1)(2)
Power of a party to appoint an arbitrator in the contengencies referred to in clauses (a)(b) & (c) of sub-section (1) and the jurisdiction of the Court to appoint the arbitrator acting under sub- section (1) after expiry of 15 clear days after service of notice by the party making the application of the Court.
Words & Phrases
‘Jurisdiction of a Court’
In legal parlance, by jurisdiction of a Court, it is generally meant to be the authority or power which is conferred upon a Court by the Legislature to hear and determine a cause between the parties and to carry the judgment into effect. …… (17)
Cases referred to-
Council Vs. Bilas Singh, 52 C.W.N. 54; Sanday Patrick Vs. Mayammal, 7 I.C. 588; R. Vs. Bolton, reported in (1835-42) All England Reporter 71; Hriday Nath Roy Vs. Ram Chandra Barma Sarma, I.L.R. 48 Calcutta 138; Ashutosh Sikdar Vs. Behari Lal Kirtania, ILR 35 Cal. 61; Viswas Balwant Davarc Vs. Bala Chandra Ganesh Thakur, reported in A.I.R. 1931 Bom 539; The Governor General of India in Council Vs. Bilas Singh, and Nalini Ranjan Guha Vs. Union of India, A.I.R. 1954 Cal. 462.
Syed Ishtiaq Ahmed, Additional Attorney-General, with Mahmudul Islam, Assistant Attorney-General, instructed by A.W. Mallik, Advocate-on-Record.—For the Appellants.
Ahmadur Rahman Khan, Advocate, instructed by Md. Nurul, Huq, Advocate-on-Record.—For the Respondent.
Civil Appeal No. 10 of 1972.
(From the Judgment and Order dated 9.7.70 passed by the Dacca High Court in Civil Rule No. 1739 of 1969).
This appeal by special leave is against an order of a Division Bench, of the Dacca High Court refusing to interfere in exercise of its revisional jurisdiction, with an order made by the First Court of Subordinate Judge, Dacca appointing an Arbitrator under section 8(2) of the Arbitration Act. This appeal was filed by Pakistan and two of its officers and is now being prosecuted by Bangladesh.
2. Respondent Firm is a Government Contractor who was given earth filling work for development of the site for construction of the Telephone Factory at Tongi on the basis of an agreement dated the 23rd of May, 1966, executed by Samir Mia, Managing Partner of the Respondent Firm, on the one hand, and the Superintending Engineer, Regional Civil, Pak P.W.D. on behalf of the President of Pakistan on the other. According to Clause 25 of the said Agreement, all questions and disputes concerning the work under the said agreement were to be referred to the Superintending Engineer to be nominated by the Chief Engineer, Pak. P.W.D. for arbitration according to law.
3. A dispute having arisen on completion of the aforesaid work between the parties as to the amount of money to be paid to the Respondent Firm, Mr. M. I. Rajput, Superintending Engineer, Pak. P.W.D. was appointed sole Arbitrator by the Chief Engineer, Pak. P.W.D., to adjudicate the said dispute. The Arbitrator entered into reference on the 2nd April, 1968 but he having failed to give the award within the prescribed period of 4 (four) months from 2-4-68, the First Court of Subordinate Judge, Dacca was moved by him for extension of time in what was registered as Miscellaneous Case No. 78 of 1968. Extension was granted from time to time and the matter having been heard by the Arbitrator in the meantime, the 25th of April, 1969 was fixed for submission of the award, but Mr. Rajput, the Arbitrator by his letter dated the 7th April, 1969 withdrew himself from the office of the Arbitrator. Respondent Firm thereafter prepared an application under section 8 of the Arbitration Act in which three names were suggested for appointment of arbitrator and served a copy of the said application upon the appellants asking them to treat the said copy of the application as a written notice to concur in the appointment of an arbitrator as contemplated in section 8 of the Arbitration Act. This notice was dated the 23rd of April, 1969 and is admitted to have been actually served upon the appellants on the 25th of April, 1969.
4. An application under section 8 of the Arbitration Act was filed by the Respondent Firm in the First Court of Subordinate Judge, Dacca on the 25th April, 1969 for appointment of an arbitrator in Misc. Case no. 75 of 1968 which was initiated by the former Arbitrator for extension of time.
5. A petition of objection was filed on behalf of Opposite party No. 4, Civil Engineer, Pak. P.W.D. on the 14th of June, 1969 in which various objections were raised. It was also stated in the said petition of objection that Chief Engineer, Pak. P.W.D. had already appointed Mr. A.H. Siddiqui, Superintending Engineer, and Pak. P.W.D., Karachi as Arbitrator in the matter on the 10th June, 1969 and that as such the Court had no jurisdiction to appoint an arbitrator under section 8 of the Arbitration Act.
6. One of the objections which was seriously pressed at the time of the hearing was that the service of a copy of an application under section 8 of the Arbitration Act could not be taken to be a proper service of notice as contemplated in section 8(2) of the Act and that since the service of the so-called notice did not take place at least 15 days before the filing of the application, the Court had no jurisdiction to appoint an arbitrator.
7. The learned Subordinate Judge who heard the matter was of the view on the question of the proper service of notice that the copy of the application which was served upon the opposite parties sufficiently conveyed the Applicant's request to the opposite parties to concur in the appointment of an arbitrator from among the three persons named therein and could therefore be deemed to be a sufficient notice as contemplated in section 8 of the Act.
8. On the question of the Court's jurisdiction to entertain a pre-mature application, it was argued on behalf of the opposite parties relying upon a decision of the Calcutta High Court in the case of the Governor General of India in Council Vs. Bilas Singh, reported in 52 C.W.N. 54 that the Court had no jurisdiction to entertain an application under section 8 of the Act before the lapse of 15 clear days after the service of the notice ES required under sub-section (2) of section 8 of the Act. The learned Subordinate Judge distinguished the said Calcutta case by pointing put that no notice under the aforesaid provision of law was at all served in the said case and held, relying upon the decision in the case of Sanday Patrick Vs. Mayammal, 7 I.C. 588, that it was not the filing of the application but the appointment of an arbitrator which was subject to the condition of the service of notice.
9. As to the subsequent appointment of an arbitrator by Chief Engineer, Pak. P.W.D., it was observed by the learned Subordinate Judge that the Chief Engineer should not have restored to this device after the service of the notice of the case and it being done for the purpose of by-passing and forestalling the decision of the Court amounted to contempt of the Court and had no legal validity.
10. Overruling all the objections taken on behalf of the opposite parties, the learned Subordinate Judge appointed one Mr. Azizur Rahman as the sole Arbitrator to adjudicate the dispute between the parties.
11. The Dacca High Court being moved in its revisional jurisdiction on behalf of the Chief Engineer, Pak. P.W.D. and the Executive Engineer, Civil Division, Pak. P.W.D. against the aforesaid order held that what was intended by the Legislature by enacting sub-section (2) of section 8 was that the Court itself would not derive its jurisdiction to make an order of appointment until the expiry of 15 days from the date of service of the notice and that the filing of an application for the purpose of appointment of a new arbitrator before the expiry of the said period was at the most an irregularity which did not vitiate the proceeding itself and refused to interfere with the order of appointment of the arbitrator on that view of the matter.
12. Leave was granted by the Supreme Court of Pakistan to consider the nature and scope of section 8 of the Arbitral ion Act with reference to the question as to jurisdiction of the Court to entertain an application under the said provision before the expiry of 15 days from the date of the service of the notice under subsection (2) of the said section and to make an order of appointment of an arbitrator on such an application.
13. Learned Additional Attorney-General, appearing on behalf of the appellants, has contended that the service of notice as contemplated in section 8(2) of the Act is not a question of mere procedure but is of jurisdiction and that the condition precedent to the exercise of any power under the aforesaid provision of law, including entertainment of an application thereunder, is that 15 clear days shall have to elapse after the service of the notice asking the other parties to concur in the appointment of an arbitrator before such an application can be entertained by the Court. According to the learned Counsel. The question of jurisdiction is to be decided with reference to the facts existing at the date of the commencement of the proceeding in question and not to those which happened subsequently. In support of his contention the learned Additional Attorney-General has referred to tin following passage from the book, Jurisdiction and Legality by Mr. Amnon Rubinstein (1965), at page 215:—
"The question of jurisdiction, it has been said, is determinable at the commencement, not at the conclusion of the enquiry. The Court which examines the jurisdiction of another inferior tribunal must confine itself to asking whether at the preliminary stage of the proceedings, want of jurisdiction could have been established. Facts which cropped up at a later stage, even though established by evidence, must be ignored".
14. The proposition as has been enunciated above appears to have been taken from a judgment of the Court of Queen's Bench delivered by Lord Denman, C.J., in 1841 in the case of R. Vs. Bolton, reported in (1835-42) All England Reporter 71. The learned Additional Attorney-General has placed his reliance on that decision also and has drawn our attention to the following observation of the learned Chief Justice-
15. It should be pointed out that what has been considered by the learned Chief Justice in the above mentioned case and also in the cited passage of the book, Jurisdiction and Legality was entirely different from what is before us in this case. There the question of jurisdiction of the Court over the subject-matter was under enquiry, that is to say, whether the Magistrate had jurisdiction to enquire and determine a particular charge as disclosed in the information lodged before the said Magistrate. It was observed by the Court of the Queen's Bench in course of its judgment in the said case that where the charge laid before the Magistrate as stated in the information, did not amount in law to an offence over which they had a jurisdiction, their finding the party guilty by a conviction in the very terms of the statute would not avail to give him jurisdiction. It was, however, found on the facts of the said case that the charge as stated in the information was perfectly within the jurisdiction of the Magistrate.
16. We are concerned in the mutant case, according to the learned Counsel for the appellants, with the question of violation of the time limit prescribed for presentation of an application under section 8(2) of the Arbitration Act. The contention is that the party who is seeking for an appointment of an arbitrator by the Court under the aforesaid provision of law must wait for a period of 15 days after the service of the notice before he can invoke the jurisdiction of the Court for such an appointment and if the Court initially has no jurisdiction on the basis of a premature application, such jurisdiction cannot be subsequently acquired by the Court in the same proceeding on the expiry of the scheduled period. In support of the aforesaid contention reliance was placed upon a Single Judge decision of the Calcutta High Court in the case of the Governor General of India in Council Vs. Bilas Singh, reported in 52 C.W.N. 54 which was also cited before the Court of the first instance and the High Court but was distinguished by the said Court.
17. In legal parlance, by jurisdiction of a Court is generally meant to be the authority w power which is conferred upon a Court by the Legislature to hear and determine a cause between the parties and to carry the judgment into effect. In an illuminating judgment delivered in a Full Bench decision of the Calcutta High Court in the case of Hriday Nath Roy Vs. Ram Chandra Barma Sarma, reported in I.L.R. 48 Calcutta 138 same case 24 C.W.N. 723 same case A.I.R. 1921 Cal. 34, Mookerjee, A.C.J. discussed the nature of jurisdiction of a Court in the following manner at pages 147-148 of the report:—
"This jurisdiction of the Court may be qualified or restricted by a variety of circumstances. Thus, the jurisdiction may have to be considered with reference to place, value, and nature of the subject-matter. The power of a tribunal maybe exercised within defined territorial limits. Its cognizance may be restricted to subject-matters of prescribed value. It may be competent to deal with controversies of a specified character, for instance, testamentary or matrimonial causes, acquisition of lands or public purposes, record of rights at between landlords and tenants. This classification into territorial jurisdiction, pecuniary jurisdiction and jurisdiction of the subject-matter is obviously of a fundamental character. Given such jurisdiction, we must be careful to distinguish exercise of jurisdiction from existence of jurisdiction for fundamentally different are the consequences of failure to comply with statutory requirements in the assumption and in the exercise of jurisdiction. The authority to decide a cause at all and not the decision rendered therein is what makes up jurisdiction; and when there is jurisdiction of the person and subject-matter, the decision of all other questions arising in the case is but an exercise of that jurisdiction, the extent to which the conditions essential for creating and raising the jurisdiction of a Court or the restraints attaching to the mode of exercise of that jurisdiction, should be included in the conception of jurisdiction itself, it sometimes a question of great nicety."
18. The inherent lack of jurisdiction of a Court is to be, therefore, judged with reference to the place, value and nature of the subject-matter but the Legislature may, however, lay down certain conditions for the exercise of such a jurisdiction and the question of great nicety sometimes arises as to the consequence of contravention of such condition. Mookerjee, J., (as he then was) in an earlier Full Bench decision of the Calcutta High Court in the case of Ashutosh Sikdar Vs. Behari Lal Kirtania, ILR 35 Cal. 61, same case 11 C.W.N. 1011 very lucidly dealt with this question in the following manner at page 72 of the report :—
"The only rule, therefore, that may be adopted is that, when the provision of a statute has been contravened, if a question arises as to how far the proceedings are affected by such contravention, it must be determined with regard to the nature, scope, and object of the particular provision which has been violated. As pointed out in Mcnamara on Nullities and Irregularities, no hard and fast line can be drawn between a nullity and an irregularity; but this much is clear, that an irregularity is a deviation from a rule of law which does not take away the foundation or authority for the proceeding, or apply to its whole operation whereas a nullity is a preceding that is taken without any foundation for it, or is so essentially defective as to be of no avail or effect whatever, or is void and incapable of being validated. It may be conceded that the application of this doctrine to an individual case may sometime by attended with difficulty. One test, however, is well-established, and is often useful; as was observed by Mr. Justice Coleridge in Holmes Vs. Russell (1841) 9 Dowl. 487, "it is difficult sometimes to distinguish between an irregularity and a nullity; but the safest rule to determine what is an irregularity and what is a nullity is to seen whether the party can waive the objection; if he can waive it, it amounts to an irregularity; if he cannot, it is a nullity ". To the same effect are the observations of Mr. Justice Taunton in Garrett Vs. Hooper (1831) 1 Dowl. 28".
19. The point was further developed at age 74 of the same report in the following words:
"It is well-settled, however, that no general rule can be laid down as to whether a provision in a statute is absolute or directory. It was ruled by Lord Combell, L.C. in the Liverpool Borough Bank Vs. Turner (1860) 2 D.G.G. & J. 50 that no universal rule can be laid down as to whether mandatory enactment shall be considered directory only, or obligatory, with an implied nullification for disobedience; it is the duty of Courts of Justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed'. To the same effect, are the observations of Lord Penzance in Howard Vs. Bodington (1877) 2 P.D. 203, 211 and of Griffith C.J. in Chanter Vs. Blackwood (1904) 1 Com. L.R. 39 at page 51. When the object of the statute has been determined, if the statutory provision is not based on grounds of public policy, and is intended only for the benefit of a particular person or class of persons, the conditions prescribed by the statute are not considered as indispensable and may be waived, because everyone has a right to waive, and to agree to waive, the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, and which may be dispensed with without infringement of any public right or policy. This rule it expressed by the maxim of law. Quilibet potest renunciare juri pro se introducto; any one may renounce a law introduced for his own benefit."
20. Craies on Statute Law (6th Ed. 1963) has stated this proposition at page 269 in the following words:—
"As a general rule, the conditions imposed by statutes which authorise legal proceedings arc treated as indispensable to giving the Court jurisdiction. But if it appears that (he statutory conditions were inserted by the Legislature simply for the security or benefit of the parties to the action themselves, and that no public interests are involved, such conditions will not be considered indispensable and either party may waive them without affecting the jurisdiction of the Court."
21. We are to examine the relevant provision of section 8 of the Arbitration Act in the light of the principles referred to above in order to appreciate the validity of the contention of the learned Additional Attorney-General on this point, and for the said purpose it will be useful to quote the provision of section 8 of the Arbitration Act, which is to the following effect:—
"Section 8. (1) In any of the following cases—
(a) where an arbitration agreement provides that the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not, after differences have arisen, concur in the appointment or appointments; or
(b) if any appointed arbitrator or umpire neglects of refuses to act, or is incapable of acting, or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy; or
(c) where the parties or the arbitrators are required to appoint an umpire and do not appoint him; any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy.
(2) If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties."
22. It will appear that under sub-section (1), in any of the three contingencies as stated in clauses (a)(b) and (c), any party may propose the appointment of an arbitrator or umpire, as the case may be, and serve a notice upon the other party or arbitrator, as the case may be, to concur in such appointment. The jurisdiction of the Court to make an appointment under sub-section (2) arises only when the parties have failed to come to an agreement in this regard. Time of clear 15 days is allowed under the said sub-section to the parties concerned to come to an agreement in regard to the appointment of a new arbitrator or an umpire. Failure of the parties to reach an agreement in this matter appears to be the foundation of the Court's power of appointment and such a failure to come to an agreement may be inferred, if one party lets the other party know his choice of a new arbitrator or umpire by serving a notice upon him and the other party does not communicate his concurrence within 15 days of the said notice. Service of notice as contemplated in sub-section (2) of section 8 seems to be necessary for the purpose of ascertaining as to whether an agreement is possible in regard to the appointment of a new arbitrator.
The question as to the import of a notice under section 8(1) of the Act and the effect of its non-service appears to have been considered by the various High Courts in the subcontinent in several cases.
23. A Single Judge of Allahabad High Court appears to have had an occasion to consider this question in the case of Abdul Ghani Vs. Dindayal reported in I.L.R. 41 All. 576, where it was held that the authority of the Court to appoint an arbitrator did not arise until the necessary conditions precedent had been fulfilled and that inasmuch as the plaintiff failed in that case to serve a notice as required by paragraph 5, sub-paragraph (1) of Schedule 2, of the Civil Procedure Code (analogous to section 8 of the Arbitration Act, 1940) and apply to the Court in the manner laid down in paragraph 5, sub-paragraph (2), the Court had no authority to make the necessary appointment. Another Single Judge of the same High Court expressed a similar view in the case of Ram Lagon Tewary Vs. Phantangam Lahar, reported in A.I.R. 1928 AH. 674.
24. The same view appears to have been adopted by a Division Bench of the said High Court (Sen and Niyamatullah, JJ.) in the case of Jagannath Sahu Vs. Chhedi Sahu, A.I.R. 1929, All. 144. No notice as required under paragraph 5(2) of Schedule 2, C.P. Code having been served, the appointment of an arbitrator by the Court was held in the said case to be invalid.
25. The same question again came up for consideration before another Division Bench of the same High Court (Sulaiman, A.CJ. and Niyamatullah, J.) in the case of Paran Lal Vs. Roop Chand, A.I.R. 1931 All 761, where one of the several arbitrators having refused to act, the Court by an order dated the 23rd of August, 1939 directed the parties to nominate another arbitrator but before any nomination could be made by the parties, the plaintiff applied to the Court on the 2nd September, 1929 praying for supercession of the arbitration agreement. The Court rejected the said application and by its order dated the 3rd September, 1929 appointed a sole arbitrator to adjudicate the dispute on the ground that the other arbitrators also neglected to act. The newly appointed arbitrator, however having refused to act, another arbitrator was appointed by the Court on the 7th day of September, 1929.
26. Niyamatullah, J. accepting the view expressed in the earner two cases of the Allahabad High Court, as has been referred to above, held that in the absence of a notice by one of the parties to the other to appoint an arbitrator the Court had no power to appoint an arbitrator. Acting C.J. Sulaiman (as he then was) however, expressed some doubt on the question as to whether the requirement of service of notice affected the jurisdiction of the Court to appoint an arbitrator and made the following observations in course of a separate judgment delivered by him, at page 764 :—
"There is certainly authority for the view that if the procedure laid down in R. 5 Sch. 2, as regards the giving of notice and the opportunity to the other party to be heard, is not followed, the Court has no power to appoint a new arbitrator. It is however not necessary for me to decide in this case whether the Court would be acting without jurisdiction and its order would be ultra vires if that procedure had not been followed. It may well be said with equal force that the rule as to notice and the opportunity to the opposite party to be heard is a rule of procedure, and the failure to comply with it would not amount to want of jurisdiction. I have however no doubt in my mind that the act of the Court would be illegal and there would be material irregularity in procedure so as to bring the case within the scope of S.115".
27. The learned Acting Chief Justice was further of the opinion that the failure of the party concerned to file a formal application and the maxing of the order of appointment by the Court without waiting for a period of 7 days (as required under paragraph 5, sub-paragraph (2) of Schedule 2, C.P. Code) after the service of the notice or at any rate without giving sufficient time to the parties to nominate an arbitrator were irregularities but being of the view that such irregularities were revisable under section 115 of the Code, agreed with Niyamatullah, J. that the impugned order dated 7-9-29 should be set aside.
28. A Single Judge of the Bombay High Court (Broomfield, J.) expressed the opinion in the case Viswas Balwant Davare Vs. Bala Chandra Ganesh Thakur, reported in A.I.R. 1931 Bom 539 that the power of the Court to appoint a new arbitrator in place of the one who refuse to act arose not from the refusal but from tin failure of one of the parties to appoint an arbitrator after formal notice to do so.
29. A Division Bench of Oudh Chief Court in the case of Daroga Prasad Vs. Barati Lal, reported in A.I.R. 1939 Oudh 540, having found that the 7 clear days as prescribed under paragraph 5(2) of Schedule 2 C.P. Code had not elapsed in respect of one of the defendants before the Court of the Subordinate Judge made the order of appointment of fresh arbitrators, expressed their view, following the decisions of the Allahabad High Court as mentioned above, to the effect that where a Court appointed an arbitrator without complying with the prescribed formalities his action was without jurisdiction or at least tainted with material irregularity.
30. In the two Single Judge decisions of the Calcutta High Court, namely, The Governor General of India in Council Vs. Bilas Singh, and Nalini Ranjan Guha Vs. Union of India, A.I.R. 1954 Cal. 462, the service of a notice to concur in the appointment as proposed by one party was considered to be an essential precondition to the making of an application under section 8(2) of the Arbitration Act.
31. A Division Bench of Madras High Court of the Indian jurisdiction had to consider, in the case of Union of India Vs. Mangal Das, reported in A.I.R. 1958 Madras 296, the question of the validity of the appointment of an umpire before the expiry of 15 clear days, as provided in section 8(2) of the Act. The decision of the Court on this point has been expressed in the following words:
"****Section 8(2) is only an enabling section. The party whose notice was ignored is enabled by s. 8(2) to apply to the Court for the appointment of an Umpire. The scheme underlying s. 8 is that the default of a party to the reference or even the default of an arbitrator should not normally result in the arbitration agreement itself becoming abortive. Consent, of course, is of the very essence of arbitration. Reading s. 8(1)(c) and s. 8(2) together it is clear that even where the arbitrators were requested by the parties to appoint an Umpire, if the request was complied with and an Umpire was appointed and that appointment was accepted by the parties, the validity of the appointment cannot be challenged on the ground that appointments was made more than 15 days after the parties had asked the arbitrators to appoint an Umpire."
32. An analysis of the various decisions of the different High Courts noted above shows that the general view which has been taken in those decisions is that service of notice by one party asking the other party to council in the appointment proposed by him and the failure of the other party to concur in the said proposal in compliance with the said notice is the essential condition precedent to the exercise of the jurisdiction by the Court to make the necessary appointment. The correct construction of the provision of section 8(2) also sends support to this view.
33. The period of 15 days which is allowed to the other party after the service of the required notice for his concurrence is a necessary condition for the exercise of the power of appointment by the Court. In one case, namely, Sanday Patrick Vs. Mayammal, 7 Indian Cases, 588, the view appears to have been correctly taken that the said condition is attached to the exercise of the Court's power of appointment and not to the making of an application by a party. It can at best be said that the cause of action under sub-section (2) of section 8 would notarise until the expiry of 15 clear days from the date of service of the notice, because an agreement between the parties on the question of the appointment of a new arbitrator on any day within the said period will take away the jurisdiction of the Court to intervene. An application filed before the expiry of the said period may thus be regarded as premature in that particular circumstance, and the application may be dismissed, if it is taken up for hearing before the expiry of the said period. If, however, the party served with the notice, does not communicate his concurrence within the said period on the question of the selection of an arbitrator, the application which was previously filed would be deemed to be perfectly in order after the expiry of the said period. The acquisition of jurisdiction by the Court is dependent upon the failure of the parties to reach an agreement within the specified time, and not on the application which may be filed to invoke the said jurisdiction, as that is obviously a matter of procedure.
34. This period of 15 days as prescribed in section 8(2), in our opinion, is, to all intents and purposes, a directory, and not an obligatory, provision, even, for the purpose of exercise of the power of appointment by the Court. As we have seen, the High Court of Madras of Indian Jurisdiction has, we think correctly taken the view in the case reported in A. I. R. 1958 Madras 296 that even if an agreement is reached between the parties as regards the appointment of an arbitrator or of an umpire beyond the period of 15 days but before the jurisdiction of the Court is invoked by an application, the Court ceases to have any jurisdiction to exercise its power of appointment in the matter. On the other hand, if the Court exercises its power of appointment after the service of the notice but before the expiry of the period prescribed it cannot be said that the appointment made is without jurisdiction but it can be said that it is an irregular exercise of jurisdiction. We find ourselves in respectful agreement with the view of Sulaiman, Acting Chief Justice as expressed in A.I.R. 1931 All. 761, which the contravention of the condition as to time limit is merely an irregularity and as such it can very well be waived.
35. If we examine the question in the light of the principle as to nullity and irregularity, as has been referred to above, we shall find that this condition as to certain period of time given to the parties to come to an agreement has been introduced for the benefit of certain individuals, namely, the parties to an arbitration agreement and, not for general public good and such benefit may therefore be waived by the party for whose benefit it is likely to operate. This period was 7 days under the old law and it has been enlarged to 15 days under the Arbitration Act of 1940. If a Court exercises the power of appointment before the expiry of the prescribed period and the party concerned after being served with the notice of the proceeding does not choose to raise an objection to the exercise of the Court's power in this regard, this laps on the part of the Court will, no doubt, be deemed to be waived. The party concerned may, of course, object to this irregularity after being served with a notice in the proceeding and, on a proper case of prejudice being made out, the order of appointment may be set aside, but if no objection is taken after the service of the notice, the validity of the order of appointment by the Court cannot be subsequently impugned on this ground.
36. In the instant case, however, the appointment was made by the Court long after the expiry of 15 days after the service of notice under sub-section (1), and after giving a notice to the defendants under sub-section (2) of section 8, of the Arbitration Act, and therefore no question of irregular exercise of jurisdiction does arise in this case.
The result therefore is that this appeal is dismissed but there shall be no order as to costs.