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R.C. Sood and Co. Pvt. Ltd. Vs. Chawali Devi Chaijhan and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberFirst Appeal No. 63 of 1968
Judge
Reported inILR1971Delhi741
ActsLimitation Act, 1963 - Schedule - Article 137; Arbitration Act, 1940 - Sections 20
AppellantR.C. Sood and Co. Pvt. Ltd.
RespondentChawali Devi Chaijhan and ors.
Advocates: D.R. Madan,; C.D. Jain and; P.K. Seth, Advs
Cases ReferredNityanand M. Joshi vs. The Life Insurance Corporation of India and
Excerpt:
.....the schedule, including article 181 of the limitation act of 1908 governed applications under the code of civil procedure only, it clearly implied that the applications must be presented to a court governed by the code of civil procedure. at best the further amendment now made enlarges the scope of the third division of the schedule so as also to include some applications presented to courts governed by the code of criminal procedure. the learned trial court was, thereforee, clearly wrong in holding that the application filed by the appellant was barred by time. the parliament must be presumed to be well aware of the judicial interpretation of corresponding article 181 of the act of 1908 made by the supreme court in mulchand's case and had parliament intended to prescribe a period of..........serious consideration whether applications to courts under other provisions, apart from civil procedure code, are included within article 137 of the limitation act, 1963, or not.'according to the learned counsel for the respondents, the above observations of the supreme court in effect doubted the correctness of the first reason given in the case of town municipal councit, athani (6). in view of this contention, it was considered dosirable to have this question examined by a larger bench. that is how this appeal has been referred to this bench. (6) there can be no doubt that the supreme court has taken the consistent view following the decision of the privy council in hansraj gupta's case that an application under section 20 of the act was not governed by article 181 of the.....
Judgment:

M.R.A. Ansari, J.

(1) The appellant-company filed an application in the Court of the Commercial Sub Judge, 1st Class, Delhi, under section 20 of the Arbitration Act (hereinafter referred to as the Act). According to the averments in this application, the first respondent herein entered into a hire-purchase agreement dated 10-8-1960 with the appellant-company in respect of a motor vehicle No. Rjl 7766. Under the terms of this agreement, a sum of Rs. 11,400 was to be paid by respondent No. 1 in twelve monthly Installments. Respondents Nos. 2 and 3 stood guarantors for respondent No. 1 for the due performance of the terms of the agreement. This agreement contained an arbitration clause that disputes arising between the parties in respect of this agreement should be referred to the arbitration of the sole arbitrator who was named in the agreement. The first respondent had committed default in the payment of the Installments as per the terms of the agreement and in spite of demand notices issued by the appellant-company, did not pay the amount due. The appellant, thereforee, had to file the petition under section 20 of the Act for referring the disputes between the appellant-company and the respondents to the arbitration of the sole arbitrator named in the agreement.

(2) The application was resisted by the respondents on various grounds. One of the grounds upon which the appellant's application was resisted by the respondents was that the application was time-barred inasmuch as the application was filed more than three years after the respondents had repudiated their liability to pay any amount to the appellant-company. One of the issues which was framed by the trial Court thereforee was 'Whether the petition is within time ?'. The learned trial Court recorded a finding on this issue to the effect that 'the last communication between the parties on the record which gave rise to the cause of action for the present petition was dated 18-4-1962 which is marked as Ex. D/2, and as the present petition was instituted on 26th July, 1966, it was barred by time.' The learned trial Court also held the other issues against the appellant and dismissed the petition filed by the appellant.

(3) The appeal filed by the appellant against the said judgment of the learned trial Court was first heard by one of us (Ansari J.) sitting singly. One of the contentions raised at that stage by the learned counsel for the appellant was that there was no period of limitation prescribed under the Limitation Act for filing an application under section 20 of the Act and that, thereforee, the learned trial Court was wrong in holding that the application filed by the appellant was time-barred. In support of this contention, the learned counsel referred to the following decisions, ' namely.

(4) Cases referred to in items I to 5 were cases under the Limitation Act, 1908, in which it was held that Article 181 of the said Act did not apply to applications under section 20 of the Act. The last case, namely, the case of Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli and others (6) was a case under the Limitation Act of 1963 and it was held in this case that the scope of Article 137 of the new Limitation Act was not materially different from that of Article 181 of the old Limitation Act. On the strength, of these decisions, it was contended by the learned counsel for the appellant that there was no period of limitation prescribed under the Limitation Act of 1963 for filing an application under section 20 of the Act.

(5) The learned counsel for the respondents, however, cited a recent decision of the Supreme Court, namely, Nityanand M. Joshi and another v. The Life Insurance Corporation of India and others : (1969)IILLJ711SC in which the rule laid down in the case of Town Municipal Council, Athani (6) was considered and the following observations were made:

'IT is not necessary to express our views on the first ground given by this Court in Civil Appeals Nos. 170 to 173 of 1968 dated 20-3-1969 : (1969)IILLJ651SC . It seems to us that it may require serious consideration whether applications to courts under other provisions, apart from Civil Procedure Code, are included within Article 137 of the Limitation Act, 1963, or not.'

According to the learned counsel for the respondents, the above observations of the Supreme Court in effect doubted the correctness of the first reason given in the case of Town Municipal Councit, Athani (6). In view of this contention, it was considered dosirable to have this question examined by a larger Bench. That is how this appeal has been referred to this Bench.

(6) There can be no doubt that the Supreme Court has taken the consistent view following the decision of the Privy Council in Hansraj Gupta's case that an application under section 20 of the Act was not governed by Article 181 of the Limitation Act of 1908. The question whether the scope of Article 137 of the new Limitation Act was different from that of Article 181 of the old Limitation Act was considered by the Supreme Court in the case of Town Municipal Council, Athani (6) and it was held that the scope of Article 137 of the new Act was not materially different A from that of Article 181 of the old Act. The Supreme Court gave the following two reasons for this view:

'1.It appears to us that the view expressed by this Court in those cases must be held to be applicable, even when considering the scope and applicability of Article 137 in the new Limitation Act of 1963. The language of Article 137 is only slightly different from that of the earlier Article 181 inasmuch as, when prescribing the three years' period of limitation, the first column giving the description of the application reads as 'any other application for which no period of limitation is provided elsewhere in this division'. In fact, the addition of the word 'other' between the words 'any' and 'application' would indicate that the legislature wanted to make it clear that the principle of interpretation of Article 181 on the basis of ejasdem generis should be applied when interpreting the new Article 137. This word 'other' implies a reference to earlier articles, and, consequently, in interpreting this article, regard must be had to the provisions contained in all the earlier articles. The other articles in the third division to the schedule refer to applications under the Code of Civil Procedure, with the exception of applications under the Arbitration Act and also in two cases applications under the code of Criminal Procedure. The effect of introduction in the third division of the schedule of reference to applications under the Arbitration Act in the old Limitation Act has already been considered by this Court in the case of Sha Mulchand & Co. Ltd., : [1953]4SCR351 (supra). We think that, on the same principle, it must be held that even the further alteration made in the articles contained in the third division of the schedule to the new Limitation Act containing references to applications under the Code of Criminal Procedure cannot be held to have materially altered the scope of the residuary Article 137 which deals with other applications. It is not possible to hold that the intention of the legislature was to drastically alter the scope of this article so as to include within it all applications, irrespective of the fact whether they had any reference to the Code of Civil Procedure. 2. This point, in our opinion, may be looked at from another angle also. When this Court earlier held that all the articles in the third division to the schedule, including Article 181 of the Limitation Act of 1908 governed applications under the Code of Civil Procedure only, it clearly implied that the applications must be presented to a Court governed by the Code of Civil Procedure. Even the applications under the Arbitration Act that were included within the third division by amendment of Articles 158 and 178 were to be presented to Courts whose proceedings were governed by the Code of Civil Procedure. At best the further amendment now made enlarges the scope of the third division of the schedule so as also to include some applications presented to courts governed by the Code of Criminal Procedure. One factor at least remains constant and that is that the applications must be to courts to be governed by the articles in this division. The scope of the various articles in this division cannot be held to have been so enlarged as to include within them applications to bodies other than Courts, such as a quasi-judicial tribunal, or even an executive authority. An Industrial Tribunal or a Labour Court dealing with applications or references under the Act are not courts and they are in no way governed either by the Code of Civil Procedure or the Code of Criminal Procedure. We cannot, thereforee, accept the submission made that this article will apply even to applications made to an Industrial Tribunal or a Labour Court. The alterations made in the article and in the new Act cannot, in our opinion, justify the interpretation that even applications presented to bodies, other than courts, are now to be governed for purposes of limitation by Art. 137.'

(7) It is with reference to the first reason given by the Supreme Court in the above case that the observations reproduced above were made in the case of Nityanand M. Joshi and another v. The Life Insurance Corporation of India and others (7). But these observations, in our view, do not have the effect either of doubting the correctness to the first reason given in the case of Town Municipal Council, Athani (6) or of modifying the rule laid down in that case. All that the Supreme Court observed in Nityanand M. Joshi's (7) case was that the first reason may require serious consideration. The learned counsel for the respondents, Shri C. D. Jain, has not brought to our notice any later decision of the Supreme Court in which it had re-considered the question nor are we aware of any such case. Until and unless the rule laid down in the case of Town Municipal Council, Athani (6) is re-considered and modified, the said rule will be binding on us. thereforee, the position is that Article 137 of the new Limitation Act, 1963 does not prescribe any period of limitation for filing applications under section 20 of the Act. The learned trial Court was, thereforee, clearly wrong in holding that the application filed by the appellant was barred by time. This finding of the learned trial Court is, thereforee, set aside. We do not think it necessary to decide the other questions which arise in this appeal, as they are questions of fact and can be decided by a Single Judge. This appeal will, thereforee, be placed before a Single Judge for disposal in the light of our finding on the question of law stated above.

B.C. Misra, J.

(8) I entirely agree with my lord Ansari, J. However, I wish to add a few words. Whatever be the position with regard to application of Article 137 of the Limitation Act to applications made to the Court under statutes other than the Code of Civil Procedure, I have no doubt that the same does not apply to applications filed under the Arbitration Act, 1940. The reason is Article 119 of the Limitation Act, 1963 deals with the subject of applications under the Arbitration Act. The Parliament must be presumed to be well aware of the judicial interpretation of corresponding Article 181 of the Act of 1908 made by the Supreme Court in Mulchand's case and had Parliament intended to prescribe a period of limitation for applications under section 20 of the Arbitration Act, it would certainly have indicated its intention in Article 119 or would have clarified it in Article 137. In section 5 of the new Limitation Act, a departure from the corresponding provision of the old Act has been exhibited, but no such intention appears in respect of applications under the Arbitration Act. Consequently, the authority of the Supreme Court in Town Municipal Council, Athani vs. Presiding Officer, Labour Court, : (1969)IILLJ651SC following its previous decision has not yet been shaken and it is difficult to accept the submission of the counsel for the respondent that the Supreme Court in Nityanand M. Joshi vs. The Life Insurance Corporation of India and others : (1969)IILLJ711SC intended to unsettle the law and practice relating to applications under section 20 of the Arbitration Act which has been prevalent for a number of years in the absence of any clear words to the contrary contained in Article 137. I have, thereforee, no hesitation in concurring with the order proposed by my Lord.


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