w w w . L a w y e r S e r v i c e s . i n



Hindustan Copper Limited v/s Paramount Limited

    Civil Miscellaneous Appeal No. 626 of 2017

    Decided On, 10 May 2018

    At, High Court of Rajasthan Jaipur Bench

    By, THE HONOURABLE MR. JUSTICE MOHAMMAD RAFIQ & THE HONOURABLE MR. JUSTICE ALOK SHARMA

    For the Appearing Parties: A.K. Bhandari, Vaibhav Bhargava, P.S. Shukla, Advocates.



Judgment Text

Mohammad Rafiq, J.

1. This appeal is directed against the judgment dated 30.11.2016 passed by the Commercial Court, Jhunjhunu (for short 'the Commercial Court') by which objection filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Act of 1996') and application 34(3) of the Act of 1996 and application under Section 14 of the Limitation Act have been dismissed.

2. Facts of the case are that an award was passed by the Sole Arbitrator, Mr. A. P. Choudhary on 23.06.2006. Aggrieved thereby, the appellant, M/s. Hindustan Copper Limited filed an application before this Court purporting to be an application under Section 34 of the Act of 1996. As per the respondents, this application was converted into a civil miscellaneous appeal on the request of the appellant on 06.10.2006.

Please Login To View The Full Judgment!

The matter remained pending before this Court for as long as 2 years and finally, Single Bench of this Court vide its order dated 11.02.2008 dismissed the appeal as not maintainable, however, with liberty to the appellant to file the objections before the District Judge having jurisdiction. It was thereafter that the appellant filed objections under Section 34 of the Act of 1996 on 05.03.2008 before the District Judge, Jhunjhunu along with application under Section 14 of the Limitation for condonation of delay. Thereafter, application under Section 34 (3) of the Act of 1996 was also filed by the appellant on 01.02.2014. Upon enforcement of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, the matter was transferred to the Commercial Court, Jhunjhunu, which Court vide impugned judgment dated 30.11.2016 dismissed the objections raised by the appellant as time barred.

3. On hearing learned Senior Counsel appearing on behalf of the appellant, learned counsel for the respondents and perusing the impugned judgment, we find that undisputed facts are that the appellant instead of filing objection under Section 34 of the Act of 1996 before the Principal Civil Court, i.e. the District Judge, Jhunjhunu, directly filed such objections before this Court. Such petition was registered as an appeal which was finally dismissed as not maintainable. The objections that were subsequently filed before the Court of District Judge, Jhunjhunu were accompanied by an application under Section 14 of the Limitation Act. Section 14 of the Limitation Act provides that in computing the period of limitation for any suit, the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceedings relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. Sub-section (2) of Section 14 of the Limitation Act provides that in computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. As per Section 34 (3) of the Act of 1996, the appellant was required to file objections before the principal civil court within a period of three months from the date of receipt of arbitral award.

4. However, proviso thereto stipulates for condonation of delay up to 30 days in filing of such objections. But the appellant instead of filing such objections before the principal civil court, i.e. Court of District Judge, pursued such remedy by filing objections directly before this Court. Clearly, the appellant had taken steps to challenge the correctness of award by filing objections within reasonable time, but not before the proper forum. Therefore, provisions of Section 14 of the Limitation, in our considered view, would be attracted in the present case.

5. We are, in taking that view, fortified from the judgment of the Supreme Court in Consolidation Engineering Enterprises Vs. Principal Secretary, Irrigation Department & Others, (2008) 7 SCC 169. Argument before the Supreme Court in that case was that even if the Limitation Act is applied to the Courts by virtue of Section 43 of the Act of 1996, Section 14 of the Limitation Act is excluded by reason of proviso to Section 34 (3) of the Act of 1996 and at best, prosecution before a wrong forum can be considered as a sufficient cause for explaining the delay, in which event also condonation of delay cannot be for a period in excess of 30 days. Since the Legislature has chosen not to incorporate any provision for the time spent before the wrong court, Section 14 of the Limitation Act would be inapplicable. Repelling that argument, the Supreme Court in para 54 of the judgment held as under:

"54. On the other hand, Section 14 contained in Part III of Limitation Act does not relate to extension of the period of limitation, but relates to exclusion of certain period while computing the period of limitation. Neither subsection (3) of section 34 of the AC Act nor any other provision of the AC Act exclude the applicability of Section 14 of the Limitation Act to applications under Section 34 (1) of the AC Act. Nor will the proviso to section 34 (3) exclude the application of Section 14, as Section 14 is not a provision for extension of period of limitation, but for exclusion of certain period while computing the period of limitation. Having regard to Section 29 (2) of Limitation Act, Section 14 of that Act will be applicable to an application under Section 34 (1) of the AC Act. Even when there is cause to apply Section 14, the limitation period continues to be three months and not more, but in computing the limitation period of three months for the application under Section 34 (1) of the AC Act, the time during which the applicant was prosecuting such application before the wrong court is excluded, provided the proceeding in the wrong court was prosecuted bona fide, with due diligence. Western Builders, (2006) 6 SCC 239 therefore lays down the correct legal position."

6. In view of above, it must be held that the provisions of Section 14 of the Limitation Act do not relate to extension of period of limitation, but it provides for exclusion of certain period while computing the period of limitation. Since Section 14 of the Limitation Act is held applicable to the proceedings under Section 34 of the Act of 1996, the filing of the objections by the appellant in the present case directly before this Court, may be under erroneous legal advise, should be taken to have prosecuted remedy provided under Section 34 of the Act of 1996 before a wrong forum in good faith as this Court could not have entertained such petition for the defect of jurisdiction and therefore, rightly dismissed the appeal of the appellant as not maintainable, however, with liberty to the appellant to file such objections before the proper court. The period so consumed by the appellant before this Court would, therefore, be liable to be excluded for the purpose of computation of limitation.

7. We are, therefore, persuaded to set aside impugned judgment dated 30.11.2016 passed by the Commercial Court and remit the matter to the Commercial Court concerned for deciding objections filed by the appellant as early as possible, but not later than the period of three months from the date copy of this judgment is produced before it. Amount of Rs. 1, 92, 93, 500/- deposited by the appellant pursuant to interim order of this Court dated 26.04.2017 shall abide by the final order that may be passed by the Commercial Court on the objections of the appellant. In the event amount aforesaid is liable to be refunded to the appellant, it shall carry interest @ 9% p.a. for the duration the amount aforesaid was retained by the respondents. Since unified Commercial Court for the entire State has been established at Jaipur, this matter shall stand remitted to that Court for deciding objections of the appellant within the aforementioned period of three months.

8. With the aforesaid directions and observations, the appeal stands disposed off
OR

Already A Member?

Also