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Sree Sree Ma Engineering and Co. Vs. State of West Bengal and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration;Limitation
CourtKolkata High Court
Decided On
Case NumberAppeal No. 59 of 1983 Award Case No. 165 of 1981
Judge
Reported inAIR1986Cal370,90CWN80
ActsLimitation Act, 1963 - Article 119; ;Arbitration Act, 1940 - Sections 14(2), 30 and 33
AppellantSree Sree Ma Engineering and Co.
RespondentState of West Bengal and anr.
Appellant AdvocateH.M. Dutt, Adv.
Respondent AdvocateP.S. Bose, Adv.
DispositionAppeal allowed
Cases ReferredState of West Bengal v. A. Mondal.
Excerpt:
- .....to mr. dutt, the said application was made within 30 days from the date of service of the notice of filing of the award as prescribed under article 119(b) of the limitation act, 1963.10. mr. dutt contends that for the purpose of limitation the time runs from the date of service of the notice of filing of the award issued by or emanating from the court it is also argued by mr. dutt that the appellant might have had notice of making or publishing the award earlier or might have full knowledge of the award having received the money awarded before receipt of the notice under section 14(2) of the arbitration act, but that would not amount to a notice of filing of the award within the meaning of the limitation act.11. he submits that notice issued by the court under section 14(2) of.....
Judgment:

Prabir Kumar Majumdar, J.

1. This is an appeal against the judgment and order dated 10th May, 1982 passed by a learned single Judge of this Court dismissing the application of the appellant under Sections 30 and 33 of the Arbitration Act for setting aside an award.

2. By a contract in writing being Tender No. 15-MH of 1963-64 the appellant was allotted a portion of the work for silt clearance of the river Peali from Uttarbhag Pumping Station up to Hobka Between chainage 350 and chainage 450, the estimated value whereof came to the tune of Rs. 2,13,992/-. The said work was to be completed within 2 1/2 months from the date of commencement of work. The said contract contained an arbitration clause.

3. The appellant completed the work after several extensions of time being allowed by the respondent at the request of the appellant. The respondent, however, imposed penalty to the extent of 10% of the value of the work. The appellant disputed amongst others the right of the respondent to impose such penalty in the facts and circumstances of the case. The disputes arose between the parties. The matters in dispute referred to the arbitration of one Shri D. P. Chatterjee the then Special Engineer, Salt Reclamation Board in terms of the arbitration clause contained in the said contract were (a) wrong measurement, (b) bailing out water, (c) forfeiture of security deposit and interest, and (d) imposition of penalty.

4. On or about 27th January, 1964 the said arbitrator entered upon the reference. The arbitrator made and published his award on 19th November, 1966 allowing a part of the appellant's claim.

5. The arbitrator on 9th September, 1969 sent the award under a covering letter to the Registrar, Original Side of this Court. By a letter dated 30th July, 1981 the Assistant Registrar of this Court informed the appellant that the said award was forwarded to this Court by the arbitrator and requested the appellant to take steps for filing the award as the same could not be filed in absence of certain steps to be taken by the appellant. The appellant thereafter complied with the said requisitions and duly furnished the requisite, stamps.

6. Thereafter, the appellant on 5th November, 1981 received notice under Section 14(2) of Arbitration Act from the Registrar, Original Side of this Court that the award had been filed on 15th September, 1981.

7. The appellant being aggrieved by the said award made an application on 4th December, 1981 for setting aside the said award on the grounds contained in the said application.

8. The learned Judge dismissed the said application on the ground that the said application was barred by laws of limitation holding, inter alia, that the appellant having received the full amount awarded in its favour had full knowledge of the said award and had due notice of the same. The application was made beyond 30 days of such notice. The learned Judge dismissed the application as the same was barred by laws of limitation.

9. Mr. H. M. Dutt, the learned Counsel appearing for the appellant contended that the said application for setting aside the award was made within 30 days of receipt of the notice under Section 14(2) of the Arbitration Act, 1940. Mr. Dutt contends that the said notice was issued by this Court on 3rd November, 1981 and the appellant received the same on 5th November, 1981. The application for setting aside the said award was made on 4th ' December, 1981. Therefore, according to Mr. Dutt, the said application was made within 30 days from the date of service of the notice of filing of the award as prescribed under Article 119(b) of the Limitation Act, 1963.

10. Mr. Dutt contends that for the purpose of limitation the time runs from the date of service of the notice of filing of the award issued by or emanating from the Court It is also argued by Mr. Dutt that the appellant might have had notice of making or publishing the award earlier or might have full knowledge of the award having received the money awarded before receipt of the notice under Section 14(2) of the Arbitration Act, but that would not amount to a notice of filing of the award within the meaning of the Limitation Act.

11. He submits that notice issued by the Court under Section 14(2) of the Arbitration Act, 1940 is the notice referred to in Article 119(b) of the Limitation Act, 1963. It is also his submission that it would be clear from Sub-section (2) of Section 14 of the Arbitration Act that the arbitrator or the Umpire shall cause the award or signed copy of it, together with depositions and documents which may have been taken and proved before them, to be filed in Court. After filing of such award in Court it is the Court which shall give notice to the parties of filing of the award. Therefore, in his submission, any notice by the arbitrator of making and publishing award or forwarding such award to Court for being filed, is not a notice of filing the award within the meaning of Article 119(b) of the Limitation Act or Sub-section (2) of Section 14 of the Arbitration Act It is also his submission that even if a party challenging the award receives a notice from Court, as in this case, for taking requisite steps such as furnishing stamps for filing the award, it is not a notice of filing of the award within the meaning of the Arbitration Act or the Limitation Act.

12. In support of his above submissions Mr. Dutt relies on a decision of a Division Bench of this Court in the case of State of West Bengal v. A. Mondal reported in : AIR1985Cal12 . In that case the petitioner challenging the award received a letter from the respondent on 29th September, 1983 informing the petitioner of the filing of the award in Court by the arbitrator on 29th September, 1983. The petitioner in that case received the notice under Section 14(2) of the Arbitration Act on 12th October, 1983. The respondent opposed the said application of the petitioner on the ground, inter alia, that the same was barred by limitation. This Court held in that case that the period of limitation should be computed from the date of receipt of notice issued by the Court under Section 14(2) of the Arbitration Act. According to the said decision the letter written by a party informing about filing of the award in Court would not provide a starting point of limitation for setting aside the Award.

13. Mr. P. S. Bose, learned Counsel appearing for the respondent reiterated the contentions made by the respondent before the Court of first instance. The learned Counsel drew our attention to the statement of the appellant in paragraph 40 of the petition. It is stated by the appellant that it had no notice of the said award until receipt of the notice on 30th July, 1981 issued from the office of Assistant Registrar, Original Side of this Court Mr. Bose has also drawn our attention to paragraph 9 of the affidavit of one Saradindu Sekhar Chatterjee affirmed on behalf of the respondent In that paragraph the deponent had stated that the appellant had duly received a copy of the award dated 19th November, 1966 under a covering letter dated 21st November, 1966 sent by the arbitrator to the petitioner. Mr. Bose, the learned Counsel for the respondent submits that the appellant had notice of the award on the day the said letter dated 21st November, 1966 was received by the appellant or at most when the appellant had received the said letter dated 30-7-81 from the Assistant Registrar, Original Side, of this Court. He contends that the application for setting aside the award was made beyond 30 days from receipt of either the letters dated 21st November, 1966 or the letter dated 30th July, 1981. Mr. Bose also contends dial the notice of filing of the award must not necessarily emanate from Court Such notice may be from any other source. Mr. Bose further submits that even if it is accepted that the notice should emanate from Court, then the letter dated 30th Jury, 1981 issued by the Assistant Registrar, Original Side, of this Court, should be taken as such notice of filing of the award issued by or emanated from Court.

14. We cannot accept the submissions of Mr. Bose. The letter dated 21st November, 1966 from the arbitrator forwarding the copy of the award to the petitioner cannot be taken as 'notice of filing the award' because the award was not then filed in Court as would appear from the letter dated 30th July, 1981 issued by the said Assistant Registrar of this Court. Secondly, even if such a letter is accepted as a notice of filing of the award, such letter or notice cannot be taken as notice of filing of the award issued by the Court to the parties within the meaning of Sub-section (2) of Section 14 of the Arbitration Act.

15. Now let us consider the effect of the letter dated 30th Jury, 1981 from the said Assistant Registrar of this Court The said letter dated 30th July, 1981 at page 112 of the Paper Book is set out below :

'C.R. No. 3111 dt. 30-7-81 In the High Court at Calcutta Original Side.

To

1. M/s. Shree Shree Ma Engineering Co:; 5, Dharamtola Street Calcutta 13.

2. .....

3. .....

Re : Tender No. 15 MH of 1963-64 Re : Award dated 19-11-66

M/s. Shree Shree Ma Engineering Co. Claimant v. The State of West Bengal Respondent.

The above Award was forwarded to this Court on 10th day of Sept. 1969 for filing. It is regretted that the same has not been filed till today. The office is feeling difficulty as many such unfiled awards have accumulated in the office in course of time to the inconvenience of the office.

You are, therefore, requested to take immediate steps for filing the same. If, however, the said Award is not filed within three weeks from the date hereof the Award will have to be kept in a dump and will not be attended to in future without a special order of the Court.

Yours faithfully,

Sd. Illegible.

30-7-81

Assistant Registrar.'

16. It will appear from the letter set out above that the Assistant Registrar of this Court informed the appellant that 'the above award was forwarded to this Court on 10th day of September, 1969 for filing. It is regretted that the same has not been filed till to-day.' The appellant was requested by the said letter to take immediate steps for filing the same. Therefore, it was neither a notice of filing the award within the meaning of Article 119(b) of the Limitation Act nor a notice given by the Court of the filing of the award within the meaning of Sub-section (2) of Section 14 of the Arbitration Act.

17. From a reading of Sub-section (2) of Section 14 of the Arbitration Act, it is clear that after the arbitrator files the award in Court, 'the Court thereupon gives notice to the parties of the filing of the award'. Therefore, what is contemplated is that such notice of filing of the award should be issued by the Court. Further, such notice should be issued after filing of the award by the arbitrator or the umpire. The expression 'the Court shall thereupon give notice' makes it clear.

18. Now the question is whether such notice by the Court should be formal or informal, or should it be in writing or a constructive one. The Supreme Court in the case of Nilkantha v. Kasinath, reported in : [1962]2SCR551 observed that the notice which the Court is to give need not be in writing after pointing out the difference in the provisions of the two sub-sections, that is, under Sub-section (1) of Section 14 the arbitrators or umpire having made and signed the award shall give notice in writing to the parties of making and signing the award, and under Sub-section (2) of Section 14 the court shall thereupon give notice to the parties of the filing of the award. The Supreme Court held in that case that such notice may be formal or informal or it may be oral or in writing.

19. Another question may arise whether the notice of filing of the award as contemplated in Article 119(b) of the Limitation Act should mean the notice issued from Court or a notice from any other source. In other words, should the period of limitation run from date of service of the notice of filing of the award or from the date of notice, actual or otherwise from any other source? Mr. Bose, learned Counsel for the respondent, submits that such notice must not necessarily emanate from Court, but such notice may be from any other source. Such notice may be formal or informal actual or constructive. This Court in the case of State of West Bengal v. A. Mondal : AIR1985Cal12 (supra) observed as follows:

'In our opinion, the notice referred to in Article 119 Limitation Act, is a notice under Section 14(2), Arbitration Act. Such a notice may be formal, informal or constructive, but it must emanate from the Court. The view which we take finds support from an unreported Bench decision of this Court in Union of India v. Harcharan Singh. A.F.O.O. No. 105 of 1977, disposed of on May 27, 1982. In that case, it has been observed that the notice under Section 14(2) Arbitration Act, need not be in writing and it may be oral or constructive or even informal, but the notice must be such that it should emanate from or through the instrumentality of the Court. There must be some action taken by the Court or something done by the court which resulted in the party being put up with notice or imparting knowledge to the party that the award has been filed in Court. Most respectfully, we endorse the view expressed in the above unreported Bench decision.'

20. We respectfully agree with above observations of this Court in the case of State of West Bengal v. A. Mondal.

21. We are of the view that such notice of filing of the award must emanate from Court. The provisions contained in Sub-section (2) of Section 14 of the Arbitration Act are clear on the point. We are also of opinion that the notice of filing of the award referred to in Article 119(b) of the Limitation Act should be a notice contemplated under Section 14(2) of the Arbitration Act, 1940 and not a notice from any other source.

22. In our opinion, in the instant case, the starting point of limitation should be from the date of service of notice dated 3rd November, 1981 issued by this Court under Section 14(2) of the Arbitration Act.

21 We hold that the appellant's application for setting aside the award was made within the prescribed period of limitation. The said notice under Section 14(2) of the Arbitration Act was received by the appellant on 5th November, 1981 and the application for setting aside the award was made within 30 days from the date of service of such notice.

24 Mr. Bose, the learned Counsel for the respondent also submits that the appellant having received full payment under the award cannot now challenge the said award. He also submits that the arbitrator has not forwarded either the original award or signed copy of the award for filing. The award sent to the Registrar of this Court was a mere copy of the award. Therefore, there is no award before the Court. As such the application for setting aside the award cannot be made under Sections 30 and 33 of the Arbitration Act.

25. Mr. Dutt, the learned Counsel alsosubmits that the award should be set aside since the award filed in this Court was neither the original award nor a signed copy of it within the meaning of the Arbitration Act Such award filed in Court, according to him, is not binding on the appellant and should be set aside. Regarding acceptance of sura under the award Mr. Dutt contends that such payment was accepted by the appellant without prejudice to its rights. Mr. Dutt also submits that arbitrator committed an error appearing on the face of the award inasmuch as the arbitrator assessed penalty contrary to law.

26. The learned Judge rejected the appellant's application only on the ground of limitation. Therefore, in this appeal we need not make any observation on the contentions as to the merits of the case.

27. For the reasons aforesaid, the appeal is allowed. The judgment and the order of the learned Judge are set aside. We remand the application for disposal on merits. In the facts and circumstances of the case, there will be no order as to costs.

RN. Pyne, J,

1. I agree.


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