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Narula and Co. Vs. Union of India - Court Judgment

LegalCrystal Citation
SubjectArbitration;Limitation
CourtDelhi High Court
Decided On
Case NumberSuit Appeal No. 774A of 1975 and Interim Application No. 583 of 1976
Judge
Reported inILR1976Delhi412
ActsLimitation Act, 1963 - Sections 5; Arbitration Act, 1940 - Sections 30
AppellantNarula and Co.
RespondentUnion of India
Advocates: B.S. Grewal and; R.K. Anand, Advs
Cases ReferredBasant Lal v. Surendera Prasad and
Excerpt:
.....law was well settled that the court had no power to extend the time prescribed by article 158 for filing an application to set aside an award as section 5 of 1908 act was not applicable by or under any enactment to the proceedings under the act and could not, thereforee, be invoked. then an application to set aside the award is clearly contemplated by section 17 of the act and it is only when no such application has been made within the time allowed or if such an application has been made and has been refused that the court proceeds to pronounce judgment according to the award. if in substance the prayer is for setting aside the award on any of the grounds enumerated in section 30 of the act, then clearly it is an application under the act to set aside an award and consequently the..........this is an application under section 5 of the limitation act, 1963 for condensation of delay in filing objections under section 30 of the arbitration act, 1940 (hereinafter referred to as the act) against the award dated 31-10-1975. (2) certain disputes arose pertaining to contract no. cedz-3/ 65-66 for provision of married accommodation for officers, airmen & amenity buildings etc. around delhi at site no. 1. the said contract contained an arbitration agreement between the parties and thus in pursuance thereof a request was made to brig. harish chandra, director designs, engineer-in-chief's branch, army hq, new delhi to act as an arbitrator in the matter. the said arbitrator took upon himself the task of settling the disputes and made and published his award on 31-10-1975. the.....
Judgment:

S.S. Chadha, J.

(1) This is an application under Section 5 of the Limitation Act, 1963 for condensation of delay in filing objections under Section 30 of the Arbitration Act, 1940 (hereinafter referred to as the Act) against the award dated 31-10-1975.

(2) Certain disputes arose pertaining to contract No. CEDZ-3/ 65-66 for provision of Married Accommodation for Officers, Airmen & Amenity Buildings etc. around Delhi at Site No. 1. The said contract contained an arbitration agreement between the parties and thus in pursuance thereof a request was made to Brig. Harish Chandra, Director Designs, Engineer-in-Chief's Branch, Army Hq, New Delhi to act as an arbitrator in the matter. The said arbitrator took upon himself the task of settling the disputes and made and published his award on 31-10-1975. The original award Along with the arbitration proceedings was received in this Court. Notice of the filing of the award in the Court was served on the counsel for the plaintiff on 4-12-1975. Notice of the filing of the award in the Court was directed to issue to the Union of India. The notice of the filing of the award was served on the Union of India represented by the Chief Engineer, Delhi Zone, Delhi Cantt. on 27-1-1976. The case was listed before the Deputy Registrar on 27-2-1976 for awaiting Service. Till that date none of the parties had filed any objections against the award. The statutory period of 30 days for filing the objections to the award had expired by then. Counsel for the Union of India wanted to file objections to the award and, in fact, filed is 584 of 1976 on 27-2-1976. The present application for condensation of delay in filing the objections to the award was, however, filed on 1-3-1976.

(3) The learned counsel for the plaintiff (respondent to this I.A.) raises an interesting question of law that section 5 of the Limitation Act, 1963 does not apply to objections filed under Section 30 of the Act for setting aside an award. It is urged that no application within the meaning of the Act or the rules framed by the High Court as contained in Chapter 4-B of the High Court Rules & Orders, Volume I, has been filed to which the provisions of Section 5 of the Limitation Act, 1963 can be attracted. According to the counsel Section 33 is the only section under which an application can be made challenging the existence or validity of the arbitration agreement or the award. Section 30 does not. expressly or impliedly speak of any application being made under it, but it only lays down the grounds on which an award can be set aside. The objections under section 30 of the Act filed in is 584 of 1976 is thus not an application within the meaning of Section 5 of the Limitation Act, 1963. Reliance is placed on Saha & Co. v. Ishar Singh Kripal Singh & Co., : AIR1956Cal321 wherein it was held that the Act docs not distinguish between an application turn setting aside an award and an application for the adjudgment of an award to be a nullity and does not contemplate that an application of the former kind should be made under Section 30 of the Act and an application of the latter kind under Section 33. The Act contemplates that all applications challenging an award must be made under Section 33 irrespective of the ground of the challenge and that they must be applications for setting aside the award except in cases where the existence of an award in fact is challenged. Reliance is also placed on Basant Lal v. Surendera Prasad and others A, 1957 Patna 417(2), wherein it was held that proper construction of Sections 30 and 33 would be that all applications challenging an award, irrespective of the ground of the challenge, must be made under Section 33. The counsel urges that Section 33 is the only section under which an application can be made challenging the award and as no such application has been made. the provisions of Section 5 of the Limitation Act, 1963 are not attracted. It was also brought to my notice that in Union of India v. M/s. Vishka,rma Shilpi and Another (1975) 1 Delhi 788, a Division Bench of this Court recorded 'that in para 8 of the judgment of the single Judge there is an observation that Section 5 of the Limitation Act docs not apply to proceedings under the Arbitration Act but this point was not urged either before the learned single Judge or before the Division Bench and it is un-necessary to go into this aspect of the question in that appeal.'

(4) The basic question that requires consideration, thereforee, is whether Section 5 of the Limitation Act, 1963 applies to applications made under the Act. Section 5 of the Indian Limitation Act, 1908 provided that any appeal or any application for a review of judgment or for leave to appeal or any other application to which .the section may be made applicable by or under any enactment for the time being in force may be admitted after the period of limitation prescribed thereforee, when the appellant or applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within such period. The law was well settled that the Court had no power to extend the time prescribed by Article 158 for filing an application to set aside an award as Section 5 of 1908 Act was not applicable by or under any enactment to the proceedings under the Act and could not, thereforee, be invoked. Under the Limitation Act, 1963, Section 5 reads as follows:-

'ANYappeal or any application, other than an application under any of the provisions of Order Xxi of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within such period.'

Instead of enumerating the applications to which the section applies by virtue of its own force and leaving it to the different States or the High Courts to extend its application to the other applications, the present section now automatically applies to all applications except those under Order 21 of the Code of Civil Procedure and may be admitted after the prescribed period if the applicant satisfies the Court that he had sufficient cause for not making the application within such period. The words 'after the prescribed period' suggest that it applies only to those applications for which limitation is prescribed by the Limitation Act, 1963. Under Section 2(5) it is defined that the 'period of limitation' means the period of limitation prescribed for any suit, appeal or application by the Schedule and 'prescribed period' means the period of limitation computed in accordance with the provisions of the Limitation Act 1963. The schedule attached with the 1963 Act, third Division details the applications. Article 119 provides that applications under the Arbitration Act, 1940-

(A)for the filing in court of an award

(B)for setting aside an award or getting an award remitted for reconsideration may be filed within a period of thirty days. In the latter case [he limitation commences from the date of service of the notice of the filing of the award. Thus Section 5 of the Limitation Act, 1963 now applies by virtue of its own force to the application under the Arbitration Act, 1940 for setting aside an award.

(5) Let me now advert to the provisions of the Act. After the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof. Under Section 14(2) of the Act, the arbitrators or umpire may be required to file the award together with the depositions and documents at the request of either party, or any person claiming under such party or if so directed by the Court. After the award is filed in the Court notice of the filing of the award shall be given to the parties by the Court. After the notice of the filing of the award is served on the parties, the question arises how the objections against the award are to be filed or dealt with.

(6) The scheme of the Act relevant for the purposes of this question is to be found in Sections 15, 16, 17, 30, 32 and 33 of the Act. Under Section 15 the power is conferred on the Court to modify or correct an award under certain specified circumstances. Section 16 empowers the Court from time to time to remit the award or any matter referred to arbitration of the arbitrators or umpire for reconsideration upon such terms as it thinks fit. The section further lays down specific grounds under which the Court may remit the award on any of the matters referred to arbitration for reconsideration. The jurisdiction of the Court may be invoked by either party by an application within 30 days of the service of the notice of the making of the award. Then comes Section 17 which enables the Court to pronounce judgment where the Court sccs no cause to remit the award or any of the natters referred to arbitration or to set aside the award. It lays down that the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce the judgment according to the award and upon the judgment so pronounced a decree shall follow. The application to set aside the award is contemplated on the refusal of which the Court can proceed to pronounce judgment. No form has been prescribed for making an application to set aside the award either in section 17 of the Act or elsewhere. Section 30 provides that an award shall not be set aside except on one or more of the following grounds, namely : (a) that an arbitrator or umpire has mis-conducted himself or the proceedings; (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after . the arbitration proceedings have become invalid under section 35; (e) that an award has been improperly procured or is otherwise invalid. Section 32 provides a bar to Suits for any relief relating to the existence, effect or validity of an arbitration agreement or award. It provides that notwithstanding any law for the time being in force no suit shall lic on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in the Act, Section 33 of the Act provides that any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court.

(7) The analysis of the relevant provisions of the Act shows that the validity of award may be challenged under Section 15 which provides for its correction or modification by the Court. It may be challenged under Section 16 which provides for its remission for reconsideration. Then an application to set aside the award is clearly contemplated by Section 17 of the Act and it is only when no such application has been made within the time allowed or if such an application has been made and has been refused that the Court proceeds to pronounce judgment according to the award. The grounds on which an application to set aside the award can be made are to be found in Section 30 of the Act. Thus if an objector wants an award to be set aside on any of the grounds mentioned in Section 30 of the Act, he may make such an application. No special form is prescribed in the Act, Rules or elsewhere for making such an application. In the case before me it is stated in is 584 of 1976 that Union of India wishes to file objections under section 30 of the Act and the objections are enumerated therein. The application is headed as 'Objections under section 30 of the Arbitration Act'. In the last para it is prayed that the award dated 31st October 1975 given by Shri Harish Chandra, Brig. Arbitrator be set aside on the grounds mentioned above. The is bears the Court-fee stamp of Rs. 3.00 payable on applications to set aside the award. The objections raised in is 584 of 1976 are covered by Section 30 of the Act and the objector has prayed for setting aside the award in the objection petition. What the objector desires is that Court should hear those objections against the award and set aside the award. The Court can proceed to pronounce judgment according to the award only if the application to set aside the award is refused. Section 33 of the Act relates to the procedure which has to be adopted for getting an award set aside, while Section 30 confines the power or jurisdiction of the Court to which an application is made for setting aside an award on the grounds mentioned in that section. It may be that the authority for making an application is derived from the general provisions contained in Section 33, as is held in Saha & Co. (supra), or it is contained in Section 17. But whether the application to set aside the award is headed under Sections 17, 30 or 33 of the Act it makes no difference, as it is the substance and not the label that matters. If an attack is directed against the award on any of the grounds specified in Section 30, then impliedly it will amount to a prayer for setting aside the award otherwise the attack is meaningless. If in substance the prayer is for setting aside the award on any of the grounds enumerated in Section 30 of the Act, then clearly it is an application under the Act to set aside an award and consequently the provisions of Section 5 of the Limitation Act 1963 would apply. The application is 584 of 1976 is thus clearly an application to set aside the award dated 31-10-1975.

(8) The facts as disclosed in the present application arc that Cwe, Palam (AF), Delhi Cantt-10 received summons dated 21-1-1976 (Annexure A) Along with letter dated 29-1-1976 (Annexure B) from the Chief Engineer, that a stamp was put by the office of the Chief Engineer on the back of the .summons showing the date of the receipt of summons as 28-1-1976 and the stamp was put after diarising the receipt of summons showing the entry No. 612 dated 28-1-1976, that Cwe, Delhi Cantt. after perusing the summons wrote a letter dated 5-2-1976 (Annexure C) to the Ministry of Law, Justice & Company Affairs for appointing a counsel for purposes of filing objections against the said award, that in the said letter it was mentioned by Shri O. P. Vohra, Survey or of Works, Cwe, Palam that the High Court notice was received in the office of the Chief Engineer, Delhi Zone on 28-1-1976, that the Deputy Legal Adviser accordingly issued instructions to Government Pleader by a letter (Annexure D) in which it was mentioned that the period of limitation for filing objections to the award expires on 27-2-1976, that the objector appeared before this Court on 27-2-1976 and wanted to file objections when it was pointed out that the summons were actually received by the Chief Engineer on 27-1-1976 and not on 28-1-1976 and that the objector wa.s mis-led by the stamp which was affixed on the back of the summons according to which the limitation was calculated and in calculating the limitation for filing objections against the award a bona fide mistake has been committed. The original summons issued by this Court have been annexed as Annexure A and bears the stamp of the Chief Engineer. Delhi Cantt. dated 28-1-1976. The facts disclosed in the application are supported by the affidavit of Shri O. P. Vohra, Surveyor of Works, who-had signed the. letter dated 5-2-1976 pointing out that the High Court notice was received in the office' of the Chief Engineer, Delhi Zone on 28-1-1976. The contention of the learned counsel for the plaintiff is that no case has been made out for the condensation of delay nor does one exist on facts. It is urged that there is an extreme deriliction of duty by the officials of the objector in not correctly putting the date of receipt of the summons as 27-1-1976. The fact established on the record is that the notice was served on the Chief Engineer on 27-1-1976. It is true that there is a lapse in the office of 'the Chief Engineer when the receipt stamp is affixed as 28-1-1976 and not the actual date of the receipt of the notice. The Chief Engineer forwarded the original summons to Cwe, Palam with the covering letter dated 29-1-1976. It is thereafter that the original notice was seen by the Commander Works, Engineer as well as by the Deputy Legal Adviser in the Ministry of Law, Justice and Company Affairs. This gave a bona fide impression that the limitation of filing the objections has to be counted from 28-1-1976 and thus expires on 27-2-1976. The objector has explained the circumstances for one day's delay in presenting the objections against the award, that both the C.W.E. and the Deputy Legal Adviser were misled by the date of receipt of the summons on its back. No want of bona fides arc imputable to any of the agents of the objector nor any inaction can be attributed to them. The only attack is that the negligence of a party's agent is in law the negligence of the party himself and docs not furnish a, sufficient cause for the condensation of delay. Negligence is the absence of proper care, caution and diligence; of such care, caution and diligence as under the circumstances reasonable and ordinary prudence would require to be exercised. It is a relative term and depends upon the circumstances of each particular case. Affixing of the receipt stamp a day late by the office of the Chief Engineer is incompetency of the official. He had no opportunity for deliberation as to the effect of his short-coming, and by careless conduct did not diarise the notice the same. day, but put off the job to the next day. In my opinion, such a conduct does not amount to negligence in law. On facts, thereforee, I find that sufficient cause has been made out by the objector for the exercise of my discretion for condensation of one day's delay in filing the objections against the award.

(9) Apart from it a notice of any proceedings to the Central Government would be valid only if it was either sent to the Secretary to the Government or to any other officer who may be authorised to act for the Government in respect of judicial proceedings or to the pleader as defined in Rule 8(B) of Order Xxvii of the Code of Civil Procedure. Order Xxvii of the Code of Civil Procedure provides for suits by or against the Government or public officers in their official capacity. Rule 2 of this order provides that persons being ex-officio or otherwise authorised to act for the Government in respect of any judicial proceedings shall be deemed to be the recognised agents by whom appearances, acts and applications under this Code may be made or done on behalf of the Government. Rule 3 provides that in suits by or against the Government instead of inserting in the plaint the name and description and place of residence of the plaintiff or defendant, it shall be sufficient to insert the appropriate name as provided in section 79 of the Code. Section 79 provides that in suit by or against the Government the authority to be named as plaintiff or defendant in the case of a suit by or against the Central Government shall be the Union of India. Rule 4 of the Order Xxvii provides that the Government pleader in any Court shall be the agent of the Government for the purpose of receiving processes against the Government issued by such Court. Rule 8(B)(a) of th6 said order defines the terms 'Government pleader' in relation to any suit by or against the Central Government as the pleader as Government may appoint whether generally or specially for the purposes of the said order. The practice and the procedure adopted by this Court is that the notices are sent to the Central Government Standing Counsel as provided in the aforesaid rules. In the absence of any provision of law or any rules of business or a,ny statutory rule it is not possible to hold that the Executive Engineer was empowered to accept notice on behalf of the Union of India and that the receipt of the notice of the filing of the award received in his office constituted sufficient notice to the Union of India so as to commence the period of limitation for filing objections to the award. The notice of the filing of the award in the Court is deemed to have been served on 27-2-1976 when the Central Government Standing Counsel put in appearance on behalf of the Union of India. The objections contained in is 584 of 1976 are. thereforee, entertained as within time. There will be no order as to costs.

(10) Notice of is 584 of 1976 issued. Reply to the application to be filed before the Deputy Registrar on 22nd July. 1976.


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