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Union of India (Uoi), Through the Director of the Indian Veterinary Research Institute, Izatnagar Vs. Ali Ahmad - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberF.A.F.O. No. 254 of 1962
Judge
Reported inAIR1969All518
ActsLimitation Act, 1908 - Schedule - Article 181; Arbitration Act,1940 - Sections 20
AppellantUnion of India (Uoi), Through the Director of the Indian Veterinary Research Institute, Izatnagar
RespondentAli Ahmad
Appellant AdvocateN.D. Pant, Adv.
Respondent AdvocateVarindra Sarup, Adv.
Excerpt:
.....181 was bound to fail. gopal bhiva (1963)iillj608sc ,it repelled the submission that a claim under section 33-c(2) of the industrial disputes act was barred by article 181 and observed that it is well settled that article 181 applies only to applications which are made under the code of civil procedure, and so, its extension to applications made under section 33-c(2) of the act would not be justified. '.it reiterated that the amendment of articles 158 and 178 could have no effect upon the meaning of that article is long since well settled by judicial construction......statute as originally enacted, some of the articles in the third division referred to the code of civil procedure. among them. article 158 spoke of an application 'under the code of civil procedure, 1908, to set aside an award.' and article 178 referred to an application 'under the same code for the filing in court of an award in a suit made in any matter referred to arbitration by order of the court, or of an award made in any matter referred to arbitration without the intervention of a court' it will be recalled that when the limitation act was enacted on august 7, 1908, the code of civil procedure had already been on the statute book since march 21, 1908, and provision in relation to arbitrations was contained therein in section 89, in clauses (a) to (f) of subsection (1) of section.....
Judgment:

Pathak, J.

1. The appellant, the Union of India, entered into a contractwith the respondent. Ali Ahmad, for the supply of goods. The contract contained an arbitration clause, A difference having arisen between the parties, the appellant filed an application under Section 20 of the Indian Arbitration Act, 1940 before the learned Civil Judge, Bareilly, The application was opposed, inter alia, on the ground that it was barred by time. Before the learned Civil Judge, the respondent relied on Article 181 of the Indian Limitation Act, 1908 while the case of the appellant was that Article 120 applied. The contention of the respondent found favour with the learned Civil Judge and holding that the application was barred by time he rejected it. The appellant has preferred an appeal against that order.

2. The appeal came on for hearing before D.S. Mathur, J. who referred the case to a larger Bench. When the appeal was listed before a Division Bench, the Bench expressed the opinion that the question whether Article 181 of the Limitation Act applied to an application under Section 20 of the Arbitration Act should be considered by a still larger Bench. Accordingly, the matter has now been laid before us.

3. Section 3 of the Limitation Act requires that every suit instituted, appeal preferred, and applications made after the period of limitation prescribed therefor by the first schedule shall be dismissed. The first schedule appended to the Act is divided into three divisions, the first division relates to suits, the second to appeals and the third to applications. In the statute as originally enacted, some of the articles in the third division referred to the Code of Civil Procedure. Among them. Article 158 spoke of an application

'Under the Code of Civil Procedure, 1908, to set aside an award.' and Article 178 referred to an application

'Under the same Code for the filing in Court of an award in a suit made in any matter referred to arbitration by order of the Court, or of an award made in any matter referred to arbitration without the intervention of a Court' It will be recalled that when the Limitation Act was enacted on August 7, 1908, the Code of Civil Procedure had already been on the statute book since March 21, 1908, and provision in relation to arbitrations was contained therein in Section 89, in Clauses (a) to (f) of subsection (1) of Section 104 and in the second schedule. Apart from Articles 158 and 178 of the Limitation Act there were other articles which referred to applications under the Code. None of the Articles in the third division mentioned specifically any other enactment There were articles, such as Article 181, which did not refer to any statute at all. Article 181 dealt with -

'Applications for which no period of limitation is provided elsewhere in this schedule or by Section 48 of the Code of Civil Procedure, 1908.' Now, there are a large number of enactments apart from the Code of Civil Procedure which contemplate the making of an application under one or other of their provisions. The question arose before the Courts in India whether Article 181 governs such applications in the matter of limitation. Ever since Bal Manekbai v. Manekji Kavasji, (1883) ILR 7 Bom 213 the Courts have held that Article 181 refers only to applications under the Code of Civil Procedure, There is a long series of decisions speaking with the same voice, and they include the high authority of the Privy Council in Ramdutt Ramkissen Das v. E. D. Sassoon & Co., AIR 1929 PC 103 and Hansraj Gupta v. Dehradun Mussoorie Electric Tramway Co. Ltd. . A Full Bench of this Court in Shiam Lal J. Dewan v. Official Liquidators : AIR1933All789 adopted the same view.

4. Then the Central Legislature enacted the Indian Arbitration Act, 1940. It was designed to consolidate and amend the law relating to arbitration. It repealed the provisions in the Code of Civil Procedure relating to arbitration. It also effected consequential amendments in Articles 158 and 178 of the Limitation Act, Article 158 now spoke of applications -

'Under the Arbitration Act, 1940, to set aside an award or to get an award remitted for reconsideration' and Article 178 of applications

'Under the Arbitration Act 1940 for the filing in Court of an award.' The amendment of Articles 158 and 178 inspired hope again in those who believed that Article 181 was wide enough to include applications other than applications under the Code of Civil Procedure. Fresh life was fed into the controversy. It appears that at first the protagonists of the more liberal construction of Article 181 met with success. The Punjab High Court in Union of India v. Firm Kiroo Mal Nawal Kishore and the Calcutta High Court in Shah & Co. v. Ishar Singh Kirpal Singh : AIR1954Cal164 held that Article 181 must be taken to refer also to applications under Section 20 of the Arbitration Act, A Bench of this Court in Amarnath v. Union of India, AIR 1967 All 206 came to the same conclusion. The learned Judges were impressed by the consideration that the amended Articles 158 and 178 demonstrated that Articles in the third division could no longer be restricted to applications under the Code and that consequently Article 181 could now be construed as extending to applications made under other enactments.

5. Now, with very great respect, it appears difficult to appreciate how the amendment of Articles 158 and 178 could affect the construction of Article 181 when the language of that article continued unaltered. If the earlier construction given by judicial decisions to Article 181 was good before the amendment of Articles 158 and 178 it continued to be good even thereafter. The amendments effected in 1940 left Article 181 untouched. Unless the basis underlying the previous decisions was shaken and it was successfully demonstrated that those decisions were erroneous, the revolt against the established judicial view could not succeed. Any attempt proceeding upon the amendment of Articles 158 and 178 as evidencing a change, as from the date of this amendment only, in the scope of Article 181 was bound to fail. This was demonstrated by the manner in which the Supreme Court disposed of the controversy in Sha Mulchand & Co. Ltd. v. Jawahar Mills Ltd. Salem : [1953]4SCR351 .

Considering the objection that an application under Section 38 of the Indian Companies Act, 1913 for rectification of the share register was barred by Article 181, the Supreme Court referred to the following observations of the Judicial Committee in (supra).

'It is common ground that the only Article in that schedule which could apply to such an application is Article 181 but a series of authorities commencing with (1883) ILR 7 Bom 213, has taken the view that Article 181 only relates to applications under the Code of Civil Procedure, in which case no period of limitation has been prescribed for the application. .....'

and pointed out that Article 181 has

'in a long series of decisions of most, if not all, of the High Courts, been held to govern only applications under the Code of Civil Procedure. It may be that there may be divergence of opinion even within the same High Court but the preponderating view undoubtedly is that the Article applies only to applications under the Code.'

The Supreme Court declined to favour the view that by the amendment of Articles 158 and 178 a different construction should follow in respect of Article 181. It said that the mere amendment of Articles 158 and 178 could not ipso facto alter the meaning of Article 181 attached to it by a long series of decisions of the different High Courts in India and explained:

'This long catena of decisions may will be said to have, as it were, added the words 'under the Code' in the first column of that Article. If those words had actually been used in that column then a subsequent amendment of Articles 158 and 178 certainly would not have affected the meaning of that Article. If, however, as a result of judicial construction, those words have come to be read into the first column as if those words actually occurred therein, we are not of opinion as at present advised, that the subsequent amendment of Articles 158 and 178 must necessarily and automatically have the effect of altering the long acquired meaning of Article 181 on the sole and simple ground that after the amendment the reason on which the old construction was founded is no longer available.'

It, however, did not pursue the matter further because the controversy before it was capable of resolution on another ground. In a subsequent case, Sarwat Yar Khan v. State of Uttar Pradesh : AIR1959All493 a Division Bench of this Court considered that in view of the observations of the Supreme Court in Sha Mulchand and Co. : [1953]4SCR351 (supra) the view taken by this Court in Amarnath : AIR1957All206 (supra) required reconsideration. Since then the question whether Article 181 is confined to applications under the Code of Civil Procedure has been considered by the Supreme Court in other cases. In Bombay Gas Co. v. Gopal Bhiva : (1963)IILLJ608SC , it repelled the submission that a claim under Section 33-C(2) of the Industrial Disputes Act was barred by Article 181 and observed that

'It is well settled that Article 181 applies only to applications which are made under the Code of Civil Procedure, and so, its extension to applications made under Section 33-C(2) of the Act would not be justified.'

6. Similarly, in Smt, Prativa v. Rupendra Deb : [1964]4SCR69 the Supreme Court held that Article 181 did not apply to an application under Section 4 of Bengal Regulation V of 1799, and that even now Article 181 has to be read as confined to applications under the Code.'. It reiterated that the amendment of Articles 158 and 178 could have no effect upon the meaning of that Article is long since well settled by judicial construction. Then there is the recent decision of the Supreme Court in Wazir Chand v. Union of India : [1967]1SCR303 . That case in fact directly decides that Article 181 only governs applications under the Code of Civil Procedure and that an application under the Arbitration Act, not being an application under the Code, will not be governed by Article 181.

7. It is clear that the point stands concluded by the decision of the Supreme Court in Wazir Chand : [1967]1SCR303 . We are bound by the law laid down, and accordingly we hold that Article 181 of the Indian Limitation Act does not apply to an application under Section 20 of the Indian Arbitration Act. The question is decided accordingly.

8. Let the papers of the case be placed before the Division Bench for disposal of the appeal.

Mahesh Chandra, J.

9. I agree.

R.L. Gulati, J.

10. I agree.


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