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Sarwat Yar Khan Vs. State of Uttar Pradesh and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration;Limitation
CourtAllahabad High Court
Decided On
Case NumberF.A.F.O. NO. 201 of 1955
Judge
Reported inAIR1959All493
ActsArbitration Act, 1940 - Sections 20; Limitation Act, 1908 - Schedule - Article 181
AppellantSarwat Yar Khan
RespondentState of Uttar Pradesh and anr.
Appellant AdvocateMukhtar Ahmad, Adv.
Respondent AdvocateStanding Counsel
DispositionAppeal allowed
Excerpt:
.....long catena of decisions may well be said to have, as it were, added the word 'under the code' in the first column of that article, tf 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. thedispute about the quantum of compensation actually arose when the negotiations failed or succeeded only partially on the 10th of september 1951. it is a dispute arising between the parties in respect of the lease or its subject-matter which is to be referred to arbitration......case, granted him a fresh lease to compensate him for the rights he had got under the original lease. thedispute about the quantum of compensation actually arose when the negotiations failed or succeeded only partially on the 10th of september 1951. it is a dispute arising between the parties in respect of the lease or its subject-matter which is to be referred to arbitration. the question of dispossession or the determination of the compensation was not to be referred unless the parties were at a dispute whether the appellant could be dispossessed or whether the appellant was entitled to compensation or as to what amount of compensation he was entitled to. the parties really came to differ on the 10th of september 1951 when they did not agree on the adjustment of the claim of.....
Judgment:

Raghubar Dayal, J.

1. Sarwat Yar Khan filed an application under Section 20 of the Indian Arbitration Act on the 16th oi August 1954 before the District Judge of Kumaur. alleging that on the 8th of May 1949 the Deputy Commissioner Nainital abruptly cancelled the lease executed by the latter in favour of the appellant on the 7th of July 1945 and took possession of the land along with the houses built by the appellant and the groves and other trees that stood on the land. He also alleged that according to the terms of the lease he was entitled to compensation. He represented to the respondents about his claim for compensation and when they paid no heed to his request he made the aforesaid application praying that the agreement of reference to arbitration contained in the lease deed be filed and a reference be made to the Board of Revenue for determining fhe amount of compensation to which the appellant was entitled.

2. The opposite parties contested the application. They accepted the allegations of the appellant and further stated that they had given 250 acres of land in village Aimnaganj to the appellant in compensation for the land resumed and that the appellant had accepted that land. They pleaded that a duly registered lease had been executed in favour of the appellant on the 10th of September 1951 and that therefore there was no question of any dispute being referred to arbitration. They further pleaded want of jurisdiction and limitation.

3. The learned District Judge of Kumaun dismissed the application on the ground of limitation holding that it should have been filed within three years of the 8th of May 1949 when the right to apply accrued to the appellant on the cancellation of the lease and the arising of a dispute about com-pensation to which he was entitled. He was ot opinion that Article 181 of the First Schedule of the-Limitation Act applied to applications under Section 20 of the Indian Arbitration Act.

4. Sarwat Yar Khan thereupon filed a First. Appeal from Order in this Court. The learned-Judges before whom the appeal was placed for hearing directed the matter to be referred to a Bench of two Judges in view of there being no-direct authority on the question whether Article-181 of the Limitation Act applied to Arbitration Act or not. It is thus that this First Appeal from Order has come before us.

5. In the case of L. Amar Nath v. Union of India : AIR1957All206 , Desai and Beg JJ. held that Article 181 of the Limitation Act, which is a residuary Article, must be held to apply to applications not only under the Code of Civil Procedure but also under the Arbitration Act, for which no provision was made elsewhere in the third division of the First Schedule of the Limitation Act and that therefore an application under Section 20 of the Arbitration Act must be-made within three years of the date on which the right to make it accrues. The Full Bench case of Shiam Lal J. Dewan v. U. P. Oil Mills Co. Ltd. : AIR1933All789 observing:

'It has been held that in view of the fact that all preceding Articles apply to applications-made under the Code of Civil Procedure Article 181 also applies to other applications under the same Code, i.e., the application contemplated there-in is ejusdem generis with the other applications-which are specially specified. In this view of the matter even Article 181 would not have applied, and, of course, none of the other special Articles would have been applicable,'

was not followed as subsequent to the enactment of the Arbitration Act in 1940 two Articles namely 158 and 178 had been added in the third division of the First Schedule--the Articles relating to applications made under the Arbitration Act 1940. Support to the view was obtained from the cases of Union of India v. Firm Kiroo Mal Nawal Ki-shore and Shah and Co. v. Ishar Singh Kirpal Singh and Co. : AIR1954Cal164 . The rationale of this decision loses much of its force in view of the observations of their Lord-ships of the Supreme Court in Sha Mulchand and Co., Ltd. v. Jawahar Mills Ltd., Salem : [1953]4SCR351 , the case which does not appear to have been brought to the notice of the learned Judges, It is observed at page 104.

'It does not appear to us quite convincing) without further argument, that the mere amendment of Articles 158 and 178 can ipso facto alter the meaning which, as a result of a long series of judicial decisions of the different High Courts in India, came to be attached to the language used in Article 181. This long catena of decisions may well be said to have, as it were, added the word 'under the Code' in the first column of that Article, ,Tf 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.'

We are however of opinion that it is not essential for the decision of this appeal to decide whether Article 181 of the First Schedule of the Limitation Act applies to applications under Section 20 of the Arbitration Act. Suffice it to say that if it had been necessary to decide this point we would have referred this question for decision to a larger Bench, as we are of opinion that the view expressed in the case of : AIR1957All206 requires reconsideration both in view of the observations of the Supreme Court and the past history of the non-application of the Limitation Act to such applications which are now covered by Section 20 of the Arbitration Act.

6. It is clear from the aforesaid narration of facts that the dispute between the parties is about the compensation to be paid. A dispute about compensation did not automatically come into existence on the 8th of May 1949 when the lease was cancelled and possession over certain land and buildings taken by the respondents. The appellant claimed compensation and it appears, according to the case of the respondents, that the negotiations about compensation concluded on the 10th of September 1951 when a registered lease was executed in favour of the appellant with respect to certain land given to him on exchange for the land resumed. It is alleged that the appellant agreed to accept this land in exchange. In the circumstances the, real dispute about compensation accrued on or after the 10th of September 1951. Any cause of action for filing an application under Section 20 of the Arbitration Act would arise on or after the 10th of September 1951. Even if Article 181 of the First Schedule of the Limitation Act applies to such an application the application presented on the 16th of August 1954 was within three years of the accrual of such a cause of action.

7. It is contended for the respondents on the basis of Sub-clause (6) of Clause 2 and of Clause 3 of the original lease that the right to apply for arbitration accrued at dispossession on the 8th of May 1949 and not on the loth of September 1951 when a fresh lease with respect to some other land was executed in favour of the appellant, Sub-clause (6) of Clause 2 is in these terms:

'If during the term of this lease, the Government of the United Provinces require the demised land or any part thereof for any purpose, the lessor may determine the whole or part of the lease and may take possession of such land or part as the case may be, but an such case the lessee shall be entitled to such compensation as he would obtain were he dispossessed under the law for the time being in force for compulsory acquisition of land by Government under the provisions of the Land Acquisition Act, 1894.' Clause 3 is: 'The parties hereto agree that every dispute, difference or question which may at any time arise between them or any person claiming under them, touching or arising out of in respert of this lease or the subject-matter thereof, whether during its continuance or after its determinatipn from any cause whatsoever, shall be referred to the arbitration of the Board of Revenue, United Provinces, and his decision shall be final and binding on the parties.'

The respondents had the right to dispossess the appellant. The appellant does not dispute that right of the respondents. The respondents in their turn do not dispute the right of the appellant to com' pensation. They in fact, according to their case, granted him a fresh lease to compensate him for the rights he had got under the original lease. Thedispute about the quantum of compensation actually arose when the negotiations failed or succeeded only partially on the 10th of September 1951. It is a dispute arising between the parties in respect of the lease or its subject-matter which is to be referred to arbitration. The question of dispossession or the determination of the compensation was not to be referred unless the parties were at a dispute whether the appellant could be dispossessed or whether the appellant was entitled to compensation or as to what amount of compensation he was entitled to. The parties really came to differ on the 10th of September 1951 when they did not agree on the adjustment of the claim of compensation by the mere grant of a fresh lease. We are therefore of opinion that this contention for the respondents is not correct and the right to apply for referring the matter to arbitration arose on the 10th of September 1951 and that therefore this application under Section 20 of the Arbitration Act was filed in time.

8. We are therefore of opinion that the ap-plication under Section 20 of the Arbitration Act was filed within limitation.

9. It is further contended for the appellant that the pleader's fee taxed in the decree of the court below at Rs. 1662/8/- should be Rs. 750/- in view of Clause (5) of Rule 24, Chapter XXI General Rules (Civil) corrected up to the 31st March 1934, as amended by correction slip dated the 28th April 1944 whereby the figure of Rs. 750/- was substituted for the figure 'Rs. 500' in this clause. The contention is correct and the learned counsel for the, respondents has nothing to say against it.

10. We therefore allow the appeal with costsset aside the order of the court below and sendthe case back to it for further proceedings according to law. We further direct that the decree prepared by the court below be corrected with respect to the amount taxed for the defendants' pleader's fee: the figure '750' be substituted for thefigure '1662-8-0' and the figure '752' be substituted for the figure '1664-8-0' in the total of thecosts shown as incurred by the defendants and alsofor the same figure shown in the operative portionof the decree.


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