Arbitration time extension under the 1940 Act stands apart from stock exchange bye-laws; award challenge for misconduct failed.

The Bombay High Court noted that section 28(1) of the Arbitration Act, 1940 confers judicial power to enlarge time for making an award even after expiry, and this was not inconsistent with Bombay Stock Exchange bye-laws that gave the Governing Board or President only administrative extension powers. The Court also stated that the bye-laws did not authorise an arbitrator to extend time without consent, so no inconsistency with section 28(2) was shown. On the challenge to the award, the Court held that an entry in earlier hearing notes did not amount to arbitral misconduct, and the adverse inference drawn from the respondent's silence was not perverse or erroneous on the face of the award. The award was sustained.

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Issues: (i) Whether the Court had power under the Arbitration Act, 1940 to extend the time for making the award notwithstanding the Bombay Stock Exchange Bye-laws; (ii) Whether the award was liable to be set aside for alleged arbitral misconduct or for drawing an adverse inference against the respondent.

Issue (i): Whether the Court had power under the Arbitration Act, 1940 to extend the time for making the award notwithstanding the Bombay Stock Exchange Bye-laws.

Analysis: Section 28(1) of the Arbitration Act, 1940 confers power on the Court to enlarge time for making the award even after the time has expired and even after the award has been made. Section 46 operates only where there is an inconsistency between the Act and the arbitration agreement. The relevant Bye-laws permitted extension of time by the Governing Board or President, but that power was administrative and operated in a different field from the Court's judicial power under section 28(1). The Bye-laws did not empower an arbitrator or umpire to extend time without consent, so section 28(2) was not infringed. No inconsistency was shown.

Conclusion: The preliminary objection failed and the Court held that it had power to extend time under section 28(1).

Issue (ii): Whether the award was liable to be set aside for alleged arbitral misconduct or for drawing an adverse inference against the respondent.

Analysis: The record showed that the award was dated 31-7-1995 and there was no attempt to ante-date it. The fact that operative findings were written into notes of an earlier hearing was at most a mistake and did not amount to misconduct. As regards the adverse inference, the respondent remained silent despite repeated reminders and a specific demand, and there was material indicating liability. The inference drawn by the Arbitrators from the respondent's silence was not shown to be perverse or an error of law apparent on the face of the award.

Conclusion: The challenge to the award on these grounds failed and the award was not set aside.

Final Conclusion: The challenge to the award was rejected, while the petition seeking extension of time was allowed, resulting in the award being sustained and a decree being passed in terms of the award.

Ratio Decidendi: The Court's power to enlarge time for making an award under section 28(1) of the Arbitration Act, 1940 is distinct from and not inconsistent with a stock exchange bye-law conferring administrative extension power on the governing body, and a mere clerical or drafting mistake in arbitral notes does not by itself constitute misconduct or vitiate the award.

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