HARI SHANKAR LAL vs SHAMBHUNATH PRASAD AND OTHERS

The Supreme Court held that Rule 3 of the First Schedule to the Arbitration Act, 1940 is mandatory, establishing that arbitrators must make their award within specified time limits. The Court clarified that a notice to act can be given before or after the arbitrators enter on the reference, and if given after, the four-month period for making the award begins from the date of such notice. The Court ruled that the award made after the limitation period was invalid, thus upholding the High Court's decision to set aside the Civil Judge's decree.