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Patel Purshottamdas Motilal Vs. Patel Chhotabhai Motibhai - Court Judgment

LegalCrystal Citation
SubjectArbitration;Limitation
CourtGujarat High Court
Decided On
Judge
Reported in(1979)1GLR918
AppellantPatel Purshottamdas Motilal
RespondentPatel Chhotabhai Motibhai
Cases ReferredMafizuddin Bhuyan and Anr. v. Alimuddin Bhuyan and Ors.
Excerpt:
.....application. air 1950 assam 191. a division bench of that high court has laid down that whether objections to an award are dismissed on merits or they are dismissed on the ground that they are filed beyond time, the court by dismissing them in effect refuses to set aside the award and such an order is clearly appealable under section 39. clause (vi) in sub-section (1) of section 39 uses the expression 'setting aside or refusing to set aside an award'.the language of clause (vi) is not circumscribed by the words 'on merits'.therefore, when an order has set aside an award or refused to set aside an award on any ground whatsoever, the order becomes appealable under section 39(1). if the court has refused to set aside the award on merits, indeed the order is appealable; indeed in the..........for time to file his objections. ultimately he filed them on 7th december 1977. the learned trial judge dismissed them on the ground that they were barred by limitation.2. it is that order which is challenged in the first appeal as well as in the civil revision application. the civil revision application has been filed on the assumption that the first appeal may not be maintainable.3. now the undisputed factual position is as follows. the arbitrator made his award on 21st september 1977. on that very day he took the signature of the plaintiff on the award in token of his having pronounced it. therefore, the plaintiff had on 21st september 1977 notice of the arbitrator having made the award. article 119(b) of the limitation act provides that an application for setting aside an.....
Judgment:

S.H. Sheth, J.

1. The plaintiff and the defendant are brothers. On 15th September 1955, partition of the joint family estate between them was effected. Plaintiff thereafter was running Bidi business. On account of some physical handicap, he was unable to run it. Therefore, he authorized the defendant to run it on his behalf and executed in that behalf a power of attorney dated 19th September 1956. For 17 years the defendant carried on the plaintiff's business. The plaintiff in 1973 found that the defendant had been mismanaging the business. He, therefore, cancelled his power of attorney on 23rd March 1973. Disputes arose between the par-ties in the matter of the plaintiff's business which was run by the defendant for 17 years. They, therefore, agreed on 6th April 1973 to refer the disputes to an arbitrator. The disputes were referred to the arbitrator. The arbitrator did not make award and, therefore, that arbitration failed. Thereafter Suit No. 38 of 1974 was filed under Section 20 of the Arbitration Act, 1940, for direction that arbitration agreement be filed in Court. It was decreed. Thereafter disputes were referred to the arbitrator. On 21st September 1977 the arbitrator made his award. On 23rd September 1977 the arbitrator gave the parties notice that he was filing the award in Court. On 26th September 1977 it was filed in Court. Within 30 days thereafter the parties were required to file objections. The plaintiff, however, made several applications for time to file his objections. Ultimately he filed them on 7th December 1977. The learned trial Judge dismissed them on the ground that they were barred by limitation.

2. It is that order which is challenged in the first appeal as well as in the Civil Revision Application. The Civil Revision Application has been filed on the assumption that the first appeal may not be maintainable.

3. Now the undisputed factual position is as follows. The arbitrator made his award on 21st September 1977. On that very day he took the signature of the plaintiff on the award in token of his having pronounced it. Therefore, the plaintiff had on 21st September 1977 notice of the arbitrator having made the award. Article 119(b) of the Limitation Act provides that an application for setting aside an award made under Arbitration Act, 1940 can be made within thirty days from the date of service of the notice of the filing of the award. The award was filed on 26th September 1977. The plaintiff knew of it on that day. Therefore, the plaintiff was required to make an application to set aside the award on or before 26th October 1977. He, however, made an application for setting aside the award or what he calls lodged objections to the award on 7th December 1977. Before the expiry of the period of limitation, he made an application on 10th October 1977 to the learned trial Judge for granting him time to file objections to the award. The learned trial Judge granted time to file objections to the award until 18th October 1977. On that day, a fresh application for time was made to the learned trial Judge who granted it and extended time until 25th October 1977. On 25th October 1977 the learned trial Judge granted a similar application extending time until the 4th November 1977. On 4th November 1977 on a similar application made the learned trial Judge, the learned trial Judge granted time until 1st December 1977. On 1st December 1977 the learned trial Judge made the following order on such application: 'Granted if law permits to file objections'; and adjourned the case to 7th December 1977. On that day, the plaintiff filed objections to the award or, in other words, he made an application to set aside the award. Under these circumstances, the question which we are required to consider is whether the plaintiff's application to set aside the award was barred by time. The first aspect of this contention is whether Section 5 of the Limitation Act is applicable to an application for setting aside an award made under Arbitration Act, 1940. A reference has been made to the decision of the Supreme Court in Ramlal and Ors. v. Rewa Coalfields Ltd. : [1962]2SCR762 This decision has no application to the instant case because though it sets out the principles which should be borne in mind while construing Section 5 of the Limitation Act, it does not lay down that Section 5 is applicable to an application for setting aside an award made under Arbitration Act, 1940.

4. The next decision to which reference has been made is more apposite. In Kawahing Akbar v. Raldeosingh Akbar AIR 1957 Nagpur 57, the question whether sec. 5 was applicable to an application for setting aside an award directly arose. A Division Bench of the Nagpur High Court laid down that Section 5 of the Limitation Act, 1908 did not apply to such applications under the Arbitration Act, 1940 and that, therefore, Section 5 could not be invoked for extending time for making an application to set aside the award. A perusal of that decision shows that Section 5 of the Limitation Act 1908 could not be invoked because it was not made applicable to such applications under the Arbitration Act. It is, therefore, necessary to turn to Section 5 of the Limitation Act, 1908. It provided as follows:

Any appeal or application for a review of judgment of for leave to appeal or any other application to which this 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 therefore, when the appellant or applicant satisfies the Court that he had a sufficient cause for not preferring the appeal or making the application within such period.

It is clear, therefore, that Section 5, by virtue of its own force, was made applicable to appeals, applications for review of judgments and applications for leave to appeal. It applied to other applications only if it was made applicable by or under any other enactment. It appears from the decision of the Nagpur High Court that the Arbitration Act did not make Section 5 applicable to such applications made thereunder. Therefore, Section 5 of the Limitation Act, 1908 was not applicable to such applications made under the Arbitration Act. Section 5 of the Limitation Act, 1963 is materially different from its repealed counterpart. It provides as follows:

Any appeal 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.

It is clear, therefore, that Section 5 by virtue of its own force now applies to all appeals and applications except application made under the provisions of Order XXI of the Code of Civil Procedure. The expression 'any application', in our opinion, will include an application made under the Arbitration Act to set aside an award. When Section 5 is read in light of Article 119 in the Schedule to the Limitation Act, 1963 it becomes clear beyond all doubts that sec. 5 applies to applications made under the Arbitration Act, 1940 and specified in Article 119 of the Limitation Act, 1963. If Section 5, by virtue of its own force, was not applicable to such applications made under the Arbitration Act, 1940, the Legislature would not have used the expression 'any application' and prescribed the period of limitation for making applications under the Arbitration Act, 1940 for the purposes specified in Article 119. It is, therefore, clear that Section 5 of the Limitation Act, 1963 has been widely worded and, in our opinion, its effect is wide enough to make it applicable to applications under the Arbitration Act, 1940 specified in Article 119.

5. The next question which has been raised is whether, in the instant case, the learned trial Judge was in error in rejecting the application after having granted time to the plaintiff to lodge objections to the award. All the applications for time which the plaintiff made expressly stated that time be granted to him for filing objections to the award. He did not leave it to the learned trial Judge to infer the purpose for which he made those applications., Therefore, when the learned trial Judge granted him time to file objections he did so for the purpose which the plaintiff specified in his applications. The plaintiff relied upon those orders and waited to file his objections to the award. On 1st of December 1977 the learned trial Judge made a very curious order which we have reproduced in the earlier part of this judgment. He granted time to the plaintiff if the law permitted the plaintiff to file his objections to the award. Such an order was made because the learned trial Judge was not sure of the position in law nor did he take trouble to ascertain what the position in law was. If he had looked at the Arbitration Act, he would have easily realised that the plaintiff had the right to file objections to the award. Secondly, if he had a look at the provisions of the Limitation Act, he would have realised that the plaintiff would be required to do so within thirty days and that he had the discretion to extend time if he so thought fit to enable the plaintiff to file his objections. He did not take care to do so and made a very curious or ambiguous order. Therefore, the question which arises is what is the effect of the order which the learned trial Judge made on 1st December 1977. We have no doubt in our minds that he extended time until 7th December 1977. He only conditioned that order by the rider that the extended time could be availed of by the plaintiff if law conferred upon him jurisdiction to extend time. Section 5 certainly conferred upon him jurisdiction to do so and, therefore, the net effect of the order which the learned trial Judge made on 1st December 1977 was to extend time until 7th December 1977 for enabling the plaintiff to file objections to the award.

6. It has been argued by Mr. Majmudar that no application for condoning delay was made by the plaintiff. Ordinarily, a party who wants to avail himself of the benefit of Section 5 of the Limitation Act makes an application setting out grounds which, in his opinion, constitute 'sufficient cause' and praying for condonation of delay and for admitting to hearing an appeal or application which is otherwise time barred. In the instant case, the plaintiff did not make such an application. Was that omission on the part of the plaintiff fatal to his case? In our opinion, though an application for condoning delay is ordinarily necessary, it is not a mandatory requirement of law. In a given case, even on an oral application, the Court has got the jurisdiction to condone delay if the facts and circumstances of the case so warrant. In the instant case, several orders which the -learned trial Judge made granting time to the plaintiff to file his objections themselves constituted a 'sufficient cause' and, therefore, it could not be said that the oral application made by the plaintiff to take his objections on record which otherwise appeared to be time-barred was not maintainable or suffered from a fatal omission to state the 'sufficient cause'. The learned trial Judge was, therefore, in error in dismissing the plaintiff's application in limine on the ground that it was barred by time. He ought to have admitted it to file and heard it on merits and decided it.

7. It has been argued by Mr. Majmudar that appeal against the impugned order is not maintainable. He has invited our attention to Section 39 of the Arbitration Act which, inter alia, provides that appeal shall lie from an order setting aside or refusing to set aside an award. He has argued that in absence of any objections to the award from the plaintiff, the order which the learned Judge made neither set aside the award nor refused to set aside. All that the learned trial Judge did was to pass decree in terms of the award under Section 17 of the Arbitration Act. Mr. R.N. Shah has invited our attention to the decision of the Andhra Pradesh High Court in Veeraswamy Chetty v. Varadish Chetty and Ors. AIR 1957 Andhra Pradesh 493. On the basis of this decision, it has been argued by Mr. Shah that rejection of objections on the ground of limitation amount to refusing to set aside the award. In this behalf he has further relied upon the decision of the Assam High Court in Mafizuddin Bhuyan and Anr. v. Alimuddin Bhuyan and Ors. AIR 1950 Assam 191. A Division Bench of that High Court has laid down that whether objections to an award are dismissed on merits or they are dismissed on the ground that they are filed beyond time, the Court by dismissing them in effect refuses to set aside the award and such an order is clearly appealable under Section 39. Clause (vi) in Sub-section (1) of Section 39 uses the expression 'setting aside or refusing to set aside an award'. The language of Clause (vi) is not circumscribed by the words 'on merits'. Therefore, when an order has set aside an award or refused to set aside an award on any ground whatsoever, the order becomes appealable under Section 39(1). If the Court has refused to set aside the award on merits, indeed the order is appealable; but if the Court has refused to set it aside on the ground of limitation, even then, it is a refusal to set aside the award. In our opinion, therefore, since in the instant case the learned trial Judge refused to set aside the award on the ground that objections to it filed by the plaintiff were barred by time, the order made by him was appealable under Section 39(l)(vi). The contention raised by Mr. Majmudar that the appeal is not maintainable cannot, therefore, succeed. Indeed in the instant case, the plaintiff has out of abundant caution instituted the appeal as well as the Revision Application.

8. For the reasons which we have stated the learned trial Judge was in error in dismissing the objections on the ground that they were barred by limitation and in passing the decree in terms of the award. We therefore, allow the appeal, set aside the order made and the decree passed by the learned trial Judge and remand the case to him with a direction that he shall decide on merits the objections filed by the plaintiff to the award and proceed further according to law. Since we have allowed the appeal, there shall be no order on the Civil Revision Application. Rule therefore stands discharged. Civil Application for stay now does not survive. Therefore, rule is discharged. There shall be no order as to costs in all the three proceedings in the circumstances of the case.


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