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Union of India v/s Poorti Metal Industries

    Misc.Appeal 849 of 2002

    Decided On, 18 January 2005

    At, High Court of Madhya Pradesh


    For the Appearing Parties: Anoop Nair, V.R. Raov, Advocates.

Judgment Text

(1.) IN this appeal preferred under Section 39 of the Indian Arbitration Act, 1940 (for brevity, 'the Act'), the appellant has called in question the judgment and decree dated 7-5-2001 passed by the learned XII Additional District Judge in Civil Suit No. 21-A/1999 whereby he has directed the award passed by the arbitrator to be made rule of Court on the ground that the objection put forth by the present appellant under Sections 30 and 33 of the aforesaid Act was filed beyond limitation of thirty days. That apart, the learned Judge has observed that there is no merit in the said objection.

(2.) ASSAILING the aforesaid order, it is submitted by Mr. Anoop Nair, learned Counsel for the appellant that the learned Trial Judge has committed gross illegality in making the award rule of Court by rejecting the objection, though there is enough material to show that the requisite grounds for setting aside the award under Section 30 of the Arbitration Act, 1940 were available. Learned Counsel has submitted that had the objection been considered in proper perspective, the appellant would have been able to show apart from other things certain legal misconducts, which could have weighed with the Court for nullifying the award. It is urged by the learned Counsel for the appellant that the order passed by the Court below is sanctuary of errors.

(3.) MR. Rao, learned Counsel appearing for the respondent has supported the order passed by the learned Judge and submitted that he has correctly refused to entertain the objection as no objection was filed within thirty days.

(4.) THE centripodal issue that arises for consideration is whether an objection under Section 30 of the Act could be filed beyond thirty days. Article 119 of the Limitation Act provides for limitation for certain action to be taken under Arbitration Act, 1940. The said article reads as under :-

Description of suit Period of Time from which period Limitation begins to run 119. Under the Arbitration Act, 1940 (10 of 1940)- (a) for the filing in Court of Thirty days The date of service of the an award; notice of the making of the award. (b) for setting aside an award Thirty days The date of service of the getting an award remitted Notice of the filing of the for reconsideration. award.

(5.) IT is worth noting that various High Courts have arrived at different conclusions with regard to the power of the Court to condone the delay in the perspective of Article 119 of the Indian Limitation Act, 1963. We need not refer to the said decisions inasmuch as in the case of Essar Construction v. N. P. Rama Krishna Reddy, (2000) 6 SCC 1994, a two Judge Bench of the Apex Court, after referring to various provisions of the Act in Paragraphs 32 and 33, has expressed the view as under :-

"32. Apart from the decision not being relevant to the issue before us, it is entirely distinguishable in law. Section 5 of the Limitation Act, 1963 is now applicable to all applications under the Arbitration Act. Provided that the delay is sufficiently explained, there is no such compulsion on the Court to reject an application filed beyond the prescribed period of limitation nor is there any question under Section 30 beyond the period of limitation. 33. We therefore conclude that the order of the Senior Civil Judge rejecting the application of the respondent under Section 5 was appealable under the 1940 Act. The application under Section 115 of the Code therefore did not lie. Despite the fact that this issue was neither raised before nor considered by the High Court, we can not make a blinkered view of the situation in law. Had the issue been raised, it would have been open to the High Court to have converted the revision petition into an appeal. "

(6.) IN another decision rendered in the case of Union of India and Ors. v. Manager, Jain and Associates, AIR 2001 SC 809 : 2001 Arb. W. L. J. 275 (SC), the Apex Court in Paragraphs 17 and 18 laid down as follows :-

"17. In our view, as discussed above, the provisions of CPC are specifically made applicable and there is no reason to hold that Order IX, Rule 13 would not be applicable in case where judgment is pronounced under Section 17 of the Act in absence of objection application tendered by the party objecting to the award. For all purposes such decree is ex parte for the party objecting to the award. Under CPC ex parte decree has no technical meaning. Order IX, Rule 6, CPC provides that where the plaintiff appears and the defendant does not appear when the suit is called for hearing, then if it is proved that summons was duly served, the Court may make an order that suit be heard ex parte. After passing such order if a decree is passed ex parte against the defendant, under Rule 13, the Court has power to set it aside if it is satisfied that summons was not duly served or that defendant was prevented by any sufficient cause from appearing when the suit was called on for hearing. Similarly, if party objecting to the award satisfies to the application was not tendered within prescribed time, Court has power to set aside such decree. Therefore, if application for setting aside the award is filed beyond the prescribed time and sufficient cause for condoning the delay in filing objection application is established, the Court has power to set aside such decree by following the procedure prescribed under Order IX, Rule 13, CPC. 18. Further, large part of the controversy involved in this appeal is covered by the decision rendered by this Court in Essar Construction v. N. P. Rama Krishna Reddy [ (2000) 6 SCC 94]. The Court observed that because of the applicability of Section 5 of the Limitation Act, 1963, if the Court has not pronounced judgment for whatever reason, although the time prescribed for making the application has expired and an application for setting aside the award is made with a prayer for condonation of delay, the Court can not pronounce judgment until the application is rejected. The Court also observed that even after a decree is passed under Section 17, an application under Section 30 can be entertained provided sufficient cause is established. In either case, the rejection of the application would be a refusal to set aside the award. In case where such application is rejected on the ground that it is delayed and no sufficient cause has been made out under Section 5 of the Limitation Act, it would be an appealable order under Section 39 (1) (vi) of the Act. "

(7.) IN view of the aforesaid pronouncements of law by the Apex Court, there can be no trace of doubt that Section 5 of the Limitation Act would be applicable to file an objection under Sections 30 and 33 of the Act. At this juncture, for the sake of completeness, we would refer to a decision rendered in the case of Union of India v. Popular Construction Co. , (2001) 8 SCC 470 : 2001 Arb. W. L. J. 600 (SC). In the aforesaid case, Their Lordships have held Section 5 of the Limitation Act is not applicable as regard certain action under the Arbitration and Conciliation Act, 1996. We quote with profit Paragraphs 12 and 13 of the said decision :-

"12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are "but not thereafter" used in the proviso to Sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29 (2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the Court could entertain an application to set aside the award beyond the extended period under the proviso, would render the phrase "but not thereafter" wholly otiose. No principle of interpretation would justify such a result. 13. Apart from the language, "express exclusion" may follow from the scheme and object of the special or local law : "[e] in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the Court to examine whether and to what extent the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation". "

(8.) IT is noteworthy that in Paragraph 16, Their Lordships have drawn distinction between the Arbitration Act, 1940 and Arbitration and Conciliation Act, 1996.

(9.) THE distinction makes the position quite vivid. Once, we have held that Section 5 of the Limitation Act is applicable, the question that remains is terms and condition. Mr. Rao, learned Counsel appearing for the respondent made a feeble submission that no application for condonation was filed. Mr. Nair controverted the same. However, Mr. Rao has submitted that if an application

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is filed seeking condonation of delay within specified time from the date of order before Additional Judge, it may be condoned but heavy costs be imposed. Mr. Rao appearing for the respondent left it to the discretion of this Court. In view of the aforesaid, we are inclined to direct that if the application for condonation of delay is filed within a period of four weeks from today, the same shall be condoned by the rule making Court subject to payment of Rs. 15,000/to the respondent by way of Bank Draft. If the delay is eventually condoned on being satisfied on the compliance of terms and conditions, the learned Judge shall proceed according to the law and dispose of the proceeding within four months therefrom. (10.) RESULTANTLY, the appeal is allowed and the judgment passed by the learned Trial Judge is set aside and the matter is remitted to him for doing the needful keeping in view the directions mentioned above. However, there shall be no order as to costs.