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Anguri Devi Vs. Bal Ram Ganpat Rai and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtPunjab and Haryana High Court
Decided On
Case NumberLetter Patent Appeal No. 79 of 1956
Judge
Reported inAIR1960P& H204
ActsArbitration Act - Sections 14(1), 14(2), 20 and 490; Indian Limitation Act - Schedule - Articles 120, 178 and 181; Indian Companies Act; General Clauses Act - Sections 8; Code of Civil Procedure (CPC), 1908
AppellantAnguri Devi
RespondentBal Ram Ganpat Rai and ors.
Cases Referred and Shah and Co. v. Ishar Singh Kirpal Singh and Co.
Excerpt:
.....thus,. in cases where the state or regional transport authority has not communicated the order of refusal passed to the persons concerned, the period of limitation for filing an appeal would commence from the date when the parties concerned acquire knowledge of passing of the said order. - 181 would not govern a case of this kind although it was laid down quite clearly that art. this long catena of decisions may well be said to have, as it were, added the words 'under the code' in the first column of that article'.if these words be necessary implication were to be considered to have always been there in the first column of art. bhagwat dayal submits that although some of the reasons given in the decisions relied upon may not hold good now in view of the observations of their lordships..........of'178, under the arbitration act, 1940, the notice of thefor days, the filing in court of an award'. making of the award.a division bench of this court in 1955-57 pun lr 253: (air 1955 punj 145), held that art. 178 governed cases falling within s 14(1) of the arbitration act where notice in writing of the making of the award was given. where such a notice was not given by the arbitrator, art. 178 did not apply and the case was not governed by it nor had that article any applicability to applications for enforcement of the award made by parties to the arbitration agreement.in that case certain disputes had been referred to arbitration and an award had been made which was signed by both parties and presented for registration. no further action was taken by the parties till a suit was.....
Judgment:

A. N. Grover, J.

(1) The main point which arises for determination in this appeal is whether any period of limitation is prescribed for an application under Section 14(2) of the Arbitration Act for getting the award filed in Court and for giving notice to the parties of the same and if so, which Article of the Indian Limitation Act will apply.

(2) The facts may shortly be stated. It was alleged that some business was being carried on in partnership between the parties and disputes arose with regard to it which were referred it the arbitration of one Munshi Lal. Although an award is said to have been made in March 1948, the arbitrator gave no notice in writing of making of the award as required by S. 14(1) of the Arbitration Act.

On 11-7-1953, an application was made by Balram respondent for filing of the award and for issue of a notice to the parties with regard to it. An objection was taken on behalf of the appellants that the application was barred by time. Notice was issued to the arbitrator who filed only a copy of the award. One of the issues that was raised was whether the application for the filing of the award was within time. The Court of first instance held that an application made under S. 14(2) of the Arbitration Act was governed by Art. 181 of the Indian Limitation Act.

Consequently the application was dismissed. An appeal was brought to this Court and the learned Single Judge was of the view that the matter was concluded by a decision of a Division Bench of this Court in Ganga Ram v. Radha Kishan, 57, Pun LR 253: (AIR 1955 Punj 145) and that Art. 178 of the Indian Limitation Act did not apply. It was further considered that there was a clear declaration by the Supreme Court that Art. 181 of the Indian Limitation Act applied only to applications made under the Civil Procedure Code and therefore, that Article could not be made applicable. The operative part of the judgment of the learned Single Judge runs as follows:

'The result is that since no notice was served upon the parties, the application cannot be held to be barred by time by the operation of Art. 178 of the Indian Limitation Act. Limitation may be governed by the provisions of Art. 120 or it may be taken that the limitation has not yet begun to run because no notice was served upon the parties. In any view of matter the application was within time and the decision of the lower Court must be set aside'.

After disposing of the point of compulsory registration of the award which was raised before him the learned Judge proceeded to direct that the award be made a rule of the Court. The present appeal under Clause 10 of the Letters Patent is directed against that order.

(3) The first point that has been raised by Mr. Bhagwat Dyal, learned counsel for the appellant, is that the application filed in the present case under S. 14(2) of the Arbitration Act was governed by Article 181 of the Indian Limitation Act which was the residuary Article as Art. 178 did not apply. The aforesaid Article before the amendment made by S. 490 of the Arbitaration Act read with the Fourth Schedule was as follows:

'178. Under the same code for Six months. The date of the award.the filing in Court of an award in asuit made in any matter referred toarbitration by order of the Court orof an award made in any matterreferred to arbitration without theintervention of a Court'The following was substituted for it: Ninety days. The date of service of'178, Under the Arbitration Act, 1940, the notice of thefor days, the filing in Court of an award'. making of the award.

A Division Bench of this Court in 1955-57 Pun LR 253: (AIR 1955 Punj 145), held that Art. 178 governed cases falling within S 14(1) of the Arbitration Act where notice in writing of the making of the award was given. Where such a notice was not given by the Arbitrator, Art. 178 did not apply and the case was not governed by it nor had that Article any applicability to applications for enforcement of the award made by parties to the arbitration agreement.

In that case certain disputes had been referred to arbitration and an award had been made which was signed by both parties and presented for registration. No further action was taken by the parties till a suit was instituted by one of them for a declaration that by the award he had become the owner of the property etc. The suit was decreed by the first Court but the Senior Sub Judge dismissed it. The High Court affirmed the decree of the Senior Sub Judge.

While the appeal was pending in the High Court an application was made under S. 17 of the Arbitration Act for making a decree in accordance with the award. In resisting that application the opposite party pleaded inter alia that the application was barred by time. The first Court found the application to be within time and it was in that connection that the matter came to be examined by the Division Bench at the stage of appeal on a reference having been made by a learned Single Judge.

Harnam Singh J. was of the view that Art. 178 would govern an application made under section 14(1) of the Act and not under S. 14(2). It is not clear from his judgment whether the counsel pressed the applicability of Art. 181. After making a passing reference to an observation of their Lordships of the Supreme Court in Sha Mulchand and Co. Ltd. v. Jawhar Mills Ltd., 1953 SCR 351: (AIR 1958 SC 98), Harnam Singh J. concluded his judgment in the following words:

'In my judgment, Art. 178 of the Indian Limitation Act has no application to applications for the enforcement of the award made by the parties to the arbitration agreement and there being no period of Limitation prescribed for such an application the application made by Radha Kishan must be regarded to be within time'.

Kapur J. wrote a separate judgment. After holding at p. 262 (of Pun LR): (at p. 150 of AIR) that the application filed by Radha Kishan on 2-2-1948 which purported to be under S. 17 of the Arbitration Act 'for making the award the rule of the Court and passing a decree in accordance therewith' was not barred by S. 14(2) and was competent under the provisions of the Arbitration Act read with the rules made by this Court, the learned Judge held that in the absence of a notice of the making of the award under S. 14(1) of the Arbitration Act, Art. 178 of the Indian Limitation Act was not applicable. The learned Judge then observed at p. 263 (of Pun LR): (at p. 151 of AIR) as follows:

'It may be that this is a case where no period of limitation is prescribed, and there is no provision in the Limitation Act, or it may be covered by the rule laid down by the Supreme Court in 1953 SCR 351: (AIR 1953 SC 98), where it was held that Art. 181 applied to applications, under the Code of Civil Procedure, and if an application under the Indian Companies Act is not governed by Art. 181, then Art. 120 would be applicable.

Although this Article applies to suits the Supreme Court has applied it to applications under the Companies Act and it would be analogy by applicable to the present case. I am, therefore, of the opinion that the application made by Radha Krishan was not barred by time when it was made'.

(4) It is contended by Mr. Bhagawat Dyal that the facts were quite different in the case decided by the Division Bench and that authority could not be taken to have finally decided that no period of limitation is prescribed for an application of the nature filed in the present case or that it would be analogy be governed by Art. 120 of the Limitation Act. Reference has been invited to a previous judgment of Kapur J. himself in Union of India v. Kiroo Mal Nawal Kishore, 1952-54 Pun LR 350: (AIR 1952 Punj 423) in which it was held that Art. 181 of the Limitation Act applied to applications made to the Court under the various provisions of the Arbitration Act, in the absence of any other specific Article governing the application.

In that case an application had been made under S. 20 of the Arbitration Act praying for the filing of the arbitration agreement and it was held that Art. 181 applied. It cannot, therefore, be said that the previous Division Bench laid down authoritatively that Art. 181 would not govern a case of this kind although it was laid down quite clearly that Art. 178 would have no applicability where no notice of the making of the award had been given under S. 14(1) of the Arbitration Act.

In Misri Lal v. Bhagwati Prasad, AIR 1955 All 573 and in Jagdish Mahton v. Sunder Mahton, AIR 1949 Pat 393, it was held that Art. 178 would not govern an application under S. 14(2) unless a written notice of the making of the award had been served on the applicant but the further question whether Art. 181 would apply was not considered. Both in the Allahabad and the Patna cases an application had been filed within three years and, therefore, the only question was whether Art. 178 was applicable or not.

(5) It was contended by Mr. Tara Chand Brij Mohan Lal on behalf of the respondent that Art. 178 would be applicable but only the cause of action had not accrued when the application was filed as notice of service of making of an award had not been given. So long as the notice is not given the limitation does not begin to run and as no notice was admittedly given in the present case by the arbitrator of the making of the award the period of limitation could not commence to run at all. It is not possible to accede to this argument because on the language of Art. 178 does not apply in circumstances that obtain the present case.

(6) Mr. Bhagwat Dayal submits that Art. 181 which is the residuary Article would apply by virtue of S. 8 of the General Clauses Act in as much as by necessary implication all application sunder the Code of Civil Procedure should be deemed to be covered by Art. 181 of the Limitation Act and that was the position before the repeal of that part of the Code which was embodied in the Second Schedule containing the provisions relating to arbitration, that part having been re-enacted in the Arbitration Act.

There can be no doubt and it is not even seriously disputed that if the words 'under the Code' had existed in the first column of that Article then by virtue of S. 8 of the General Clauses Act owing to the repeal of the Second Schedule of the Code, the provisions of which are with modifications re-enacted in the Arbitration Act an application not specifically provided for filed under the provisions of the Arbitration Act would be governed by the aforesaid Article.

The only question is that there is no express mention of the Code at the place mentioned above in the aforesaid Article and a great deal of controversy arose whether Art. 181 was confined to applications made under the Code or that it governed applications made under other enactments. In 1953 SCR 351: (AIR 1953 SC 98), Das J. (as he then was) observed that the preponderating view undoubtedly was that Article 181 applied only to applications under the Code (p. 104 of AIR) it was observed:

'This long catena of decisions may well be said to have, as it were, added the words 'under the Code' in the first column of that article'.

If these words be necessary implication were to be considered to have always been there in the first column of Art. 181 then the argument raised by Mr. Bhagawat Dayal would certainly have a great deal of substance. In Moradhwaj v. Bhudar Das (S) AIR 1955 All 353, a Full Bench applied S. 8 of the General Clauses Act in an arbitration case where the question was whether an appellate Court could refer to arbitration the dispute in an appeal.

The Full Bench has laid down that the Arbitration Act incorporates the provisions of the repealed Second Schedule of the Code of Civil Procedure and is in 'pari materia' with that Code. The Limitation Act and the Civil Procedure Code apply to arbitration under the Arbitration Act (vide Ss. 37 and 41 respectively). Words used in Acts 'pari materia' are to be interpreted in one and the same sense, unless the contrary appears.

The provisions of the Arbitration Act in regard to arbitration in pending suits are practically the same as they were in the Second Schedule. In the case of appeals S. 107 read with S. 8 of the General Clauses Act empowers an appellate Court to refer a dispute in a suit for arbitration. In Jagtu v. Bahadur Singh, LPA No. 68 of 1955, decided by G. d. Khosla, Acting C. J. and Dulat J. the Full Bench decision of the Allahabad High Court was followed:

Section 14(2) is in 'pari materia' with para 20 of the Second Schedule as it originally existed in the Code. As that part of the Code has been repealed and re-enacted in S. 14(2) S. 8 of the General Clauses Act would be at once attracted read with Ss. 37 and 41 of the Arbitration Act. Apart from what has been discussed above with reference to the applicability of S. 8 of the General Clauses Act there is authority for the view that Art. 181 of the Limitation Act governs applications made under the Arbitration Act.

In Amarnath v. Union India, AIR 1957 All 206, a Division Bench of the Allahabad High Court held that an application under S. 20 of the Arbitration Act must be made within three years of the date on which the right to make it accrues. AIR 1952 Punj 423 and Shah and Co. v. Ishar Singh Kirpal Singh and Co., AIR 1954 Cal 164 were referred to with approval. Mr. Bhagwat Dayal submits that although some of the reasons given in the decisions relied upon may not hold good now in view of the observations of their Lordships of the Supreme Court in 1953 SCR 351: (AIR 1953 SC 98) but the reason founded on Ss. 37 and 41 of the Arbitration Act appears to be, with respect, sound. It must, therefore, be held that Art. 181 would govern the present case and the Court of first instance rightly held the application to be barred by time under that Article.

(7) It was contended by Mr. Tara Chand Brij Mohal Lal that even if Art. 181 applied the right to apply had not accrued as no notice had been received by the respondent of the making of the award. In the award itself if was stated that it had been announced to the parties on the date, it was made. It is not in those circumstances possible to hold that the right to apply did not arise as soon as the respondent had knowledge of the making of the award.

It is true that under Art. 173 knowledge of making of the award is immaterial but for the purposes of Art. 181 it has not been shown that limitation will not commence to run from the date the award was announced to the parties. The Court of first instance was right in stating that an applicaiton under S. 14(2) was not dependent upon compliance with S. 14(1) of the Arbitration Act.

(8) The next contention that has been raised by Mr. Bhagwar Dayal is that the learned Single Judge erred in ordering that the award be made a rule of the Court of disregard of the provisions of the Arbitration Act relating to giving of a notice of the filing of the award and an opportunity to file objection to the award within the time prescribed and without deciding such objections as might have been raised on the merits.

It is pointed out that the question of limitation was tried as a preliminary issue and there was no determination on the merits with regard to any objections because that stage did not arise as the application under S. 14(2) was held to be barred by time by the trial Court. There is a good deal of force in this contention and it is not possible to see how the award could be ordered to be made rule of the Court in this manner without following the procedure laid down in the Arbitration Act consequent upon an application under S. 14(2) being granted or dismissed.

(9) Mr. Bhagwat Dayal also wanted to assail the view of the learned Single Judge with regard to the necessity of getting the award compulsorily registered. It is unnecessary to decide that point in view of the conclusion that the application was barred by time.

(10) In the result, the appeal is allowed and the order of the learned Single Judge is set aside and that of the trial Court restored with costs.

A.N. Bhandari, C.J.

(11) I agree.

(12) Appeal allowed.


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