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installment Supply Private Ltd. Vs. Mohd. Shabir Khan and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberSuit Appeal No. 196(A) of 1968
Judge
Reported inILR1969Delhi949
ActsArbitration Act, 1940 - Sections 33; Limitation Act, 1963 - Schedule - Article 119
Appellantinstallment Supply Private Ltd.
RespondentMohd. Shabir Khan and ors.
Advocates: G.S. Mathur and; M.S. Khurana, Advs
Cases ReferredPrem Sagar Chawla v. Messers Security and Finance
Excerpt:
.....on the basis of which sardar bahadur had acted as the sole arbitrator, it was an appropriate case for treating the written statements as applications under section 33 of the arbitration act. ; application under section 5 of limitation act praying that the delay in filing the written objections may kindly be condoned or in the alternative time be granted for filing fresh objections to the award. - - copies of the notices were as well reported to have been affixed on the residential houses of the persons who refused personal service......was issued and served on the applellant, madan lal, on september 30, 1957. on november 3, 1967 he filed objections in the nature of a written-statement attacking the validity of the award on various grounds but the objections did nto cantain any prayer at the end nor did it indicate what relief was desired. their lordships of the supreme court observed that there could be no doubt on the scheme of the act that any objection even in the nature of a written-statement which falls under section 30 cannto be considered by the court unless such an objection is made within the period of imitation namely, thirty days, though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting a side the award. on the same reasoning, in.....
Judgment:

Jagjit Singh, J.

(1) Shri Sardar Bahadur acting as an arbitrator made an award on December 2, 1967 and filed that award in this Court, through an application, dated March 14, 1968. Notices were issued to the parties concerned regarding theiling of the award. Notice was served on Messrs Installment Supply Private Limited, in whose favor the award was made. on 3-7-1968. Shri K.K. Bhargava was also served personally on 15-7-1968. Mohd. Shabir Khan, Mst. Mustafiya Begum and Abdul Ali Khan were, however, reported to have refused on that date to receive notices meant for them. Copies of the notices were as well reported to have been affixed on the residential houses of the persons who refused personal service.

(2) The notices which were issued to the parties concerned had required them to file objections, if any, to the award within thirty days of the date of service.

(3) On August 5, 1968, the case came up before the Deputy Registrar (Original). Shri M.S. Khurana appeared for Mohd. Shabir Khan, Mst. Mustafiya Begum and Abdul Ali Khan, who are respondents 1, 2 and 4 in the case. Shri K.K. Bhargava did nto appear and was proceeded against ex-parte.

(4) The Deputy Registrar directed respondents 1, 2 and 4 lo file their 'written objections' on September 19, 1968. On that date the said respondents filed 'written statements', containing objections that they had never executed the arbitration agreement and had neither appointed Shri Sardar Bahadur as sole arbitrator nor had made an arbitration reference to him. On March 12, 1969 three applications (I.A. Nos. 517, 518 and 519) were also filed by them with a prayer for condoning the delay, if any, in filing the 'written objections.' It was mentioned therein that the delay in filing the written objections was bonafide and the result of the order of the Deputy Registrar.

(5) It has to be stated at the outset that the order made by the Deputy Registrar was nto only unwarranted by law but also could result in defeating the right of the respondents of applying to the Court for setting aside the award on one or more of the grounds referred to in section 30 of the Act. Under Article 119(b) of the Limitation Act, 1963, the limitation for an application for setting aside an award or getting an award remitted for reconsideration is thirty days from the date of service of the notice of the filing of the award. Due to the refusal on the part of respondents 1, 2 and 4 to accept personal service the affixation of the notices on their residential houses could amount to due service on them, Any application on their behalf for setting aside the award on one or more of the grounds referred to in section 30 of the Act could, thereforee, be made within thirty days from the date of service, i.e. from July 15, 1968. The Deputy Registrar had no power to extend the period of limitation and it appears that while passing the order for the written objections of respondents 1, 2 and 4 to be filed on 19-9-1968 the fact that the case was under section 14 of the Act and that too an application for setting aside the award on any of the grounds of section 30 of the Act the limitation prescribed by section 119(b) of the Limitation Act would apply were completely lost sight of.

(6) Fortunately the erroneous order of the Deputy Registrar has nto led to any serious consequences for respoundents 1, 2 and 4 did nto apply for setting aside of the award on one or more of of the grounds referred to in section 30 of the Act but through their objections, filed on 19-9-1968, challenged the very existence of the arbitration agreement.

(7) In the case of Madan Lal v. Sunder Lal and another (1) on an award being filed in Court notice of the filing of the award was issued and served on the applellant, Madan Lal, on September 30, 1957. On November 3, 1967 he filed objections in the nature of a written-statement attacking the validity of the award on various grounds but the objections did nto cantain any prayer at the end nor did it indicate what relief was desired. Their Lordships of the Supreme Court observed that there could be no doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under section 30 cannto be considered by the Court unless such an objection is made within the period of Imitation namely, thirty days, though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting a side the award. On the same reasoning, in my opinion, an objection even in the nature of a written-statement which falls under section 33 ofthe Act may in an appropriate case be treated as an application under that section.

(8) The objection of respondents 1, 2 and 4 did specifically challenge the existence of the arbitration agreement on the basis of which Shri Sardar Bahadur, acting as a sole arbitrator, made anaward. Considering all the circumstances it is an appropriate case for treating the written-statements as applications under section 33 of the Act.

(9) Though an application for setting aside an award, on any of the grounds specified in section 30 of the Act, cannto be considered by the Court unless it is made within thirty days from the date of service of the notice regarding the filing of the award yet an application under section 33 of the Act is nto governed by article 119(b) ofthe Limitation Act, 1963. The question whether an application under section 33 of the Act challenging the validity of an award on the ground of non-existence of the arbitration agreement was governed by article 119(b) of the Limitation Act, 1963, was replied to in the negative by a Full Bench of this Court in Prem Sagar Chawla v. Messers Security and Finance (Pvt.) Ltd. (2). The Full Bench also observed that the existence or the validity ofthe arbitration agreement may be challenged by an application under section 33 ofthe Act even though an award on the basis of the supposed arbitration agreement has been made, and even though that application is made after the expiry of the time prescribed by article 119(b) of lthe Limitation Act, 1963.

(10) The written-statements filed by respondents 1. 2 and 4 can be treated as applications under section 33 of the Act challenging the existence of the arbitration agreement. These applications were also nto barred by limitation. No question of condoning the delay in filing the objection, thereforee, arises. f.A.Nos. 517, 518 and 519 being infructurous are dismissed.


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