NAGARBHAI MOTIBHAI MAKWANA v. DISTRICT PANCHAYAT — 1983 DIGILAW 60 (GUJ)

JUDGMENT B. K. Metha, J. This appeal, at the instance of the original applicant - firm, who are the building contractors, is directed against the order of the learned Civil Judge (S.D.) Mehsana dated March 31, 1981 dismissing the application of the appellant to set aside the award made by one Shri G. T. Panchigar, Superintending Engineer, Gandhinagar Panchayat, dated October 16, 1976. It appears that the appellant had filed a suit, being Special Civil Suit No. 115 of 1973 for recovery of Rs. 11,000/- against Mehsana District Panchayat - respondent No. 1 herein. The said Panchayat had filed a Cross Regular Civil Suit No. 281 of 1973 against the present appellant for recovery of Rs. 8,029.45 Ps. after giving credit for the amount claimed by the appellant in their suit. It appears that the learned Civil Judge was moved jointly by the parties of the aforesaid two suits by their application dated July 19, 1975 (Ex. 39) to refer the entire dispute to the arbitration of one Shri B. K. Engineer Superintending Engineer, Gandhinagar District Panchayat. Accordingly, a reference was made to said Shri B. K. Engineer by the learned Civil Judge by his order of July 30, 1975. Unfortunately, however, before the said Arbitrator could decide the matter, he was transferred and the Civil Court was accordingly informed by him by his letter of March 25, 1976 (Ex. 40). The learned Civil Judge, therefore heard the parties and appointed Shri G. T. Panchigar, who succeeded Shri B. K. Engineer as Superintending Engineer, Gandhinagar Panchayat. It is common ground that this order was made by the learned Civil Judge in August 1976. The said Arbitrator fixed October 14, 1976 as the date of hearing and informed the parties accordingly. Nobody remained present on behalf of the appellant - firm on the said date with the result that the Arbitrator made the award on October, 16, 1976. It is not clear from the order of the learned Civil Judge as the whether the Arbitrator had served the notice to the parties as required under Section 14(1) of the Arbitration Act. The learned Civil Judge, with respect to him, confused the obligation of service of notice by the Arbitrator under Section 14(1) and by the Court under Section 14(2) of the Arbitration Act. The learned Civil Judge, with respect to him, confused the obligation of service of notice by the Arbitrator under Section 14(1) and by the Court under Section 14(2) of the Arbitration Act. While discussing the point No. 6 for determination as to whether notice under Section 14(2) of the Arbitration Act is required, and, if yes, what is its effect for its non-compliance, the learned Judge has recorded that the Arbitrator had informed by registered post A/D on or about October 23, 1976 about the making of the award to the present appellant. It appears that the Arbitrator had filed the award as required under Section 14(2) in the Court on October 26, 1976. The appellant - firm had filed on application being Application No. 63 of 1976 before the Civil Judge, (S.D.) Mehsana praying for setting aside the award of the Arbitrator. The award was assailed broadly on about four grounds. In the first place, it was assailed on the ground that there was no valid reference to Shri G. T. Panchigar. In the second place, the award was viliated since it was not made within the time originally stipulated by the learned Civil Judge. In the third place, the award was also challenged on the ground that it was bad in law, inasmuch as no notice as required under Section 14(2) was served on the appellant, and lastly, it was assailed on the ground that the Arbitrator misconducted himself in not affording adequate opportunity of hearing to the appellant. None of these objections impressed the learned Judge, who was also of the opinion that the application for setting aside the award was time barred. He, therefore, by his order of March 31, 1981 dismissed the application for setting aside the award. It is this order which is challenged in this appeal under Section 39 of the Arbitration Act. Broadly, two questions arise for my determination. In the first place, whether the application to set aside the award was beyond the period of limitation as prescribed under Article 119 of the Limitation Act. Secondly, the award is vitiated inasmuch as there was no valid reference and because the award was made beyond the stipulated time and, in any case, the Arbitrator misconducted himself in failing to give notice as required under Section 14 of the Arbitration Act and failed to furnish adequate opportunity of hearing to the appellant-applicant. Secondly, the award is vitiated inasmuch as there was no valid reference and because the award was made beyond the stipulated time and, in any case, the Arbitrator misconducted himself in failing to give notice as required under Section 14 of the Arbitration Act and failed to furnish adequate opportunity of hearing to the appellant-applicant. So far as the first question is concerned, I am of the opinion that the learned Judge was clearly in error in holding that the application of the appellant to set aside the award of the Arbitrator was time barred. The relevant article which would be attracted in the present case would be Art. 119 of the Lim. Act, 1963. The material part of Art. 119 reads as under :- ----------------------------------------------------------------------------- Description of suit Period of Time from which limitation period begins of run. ----------------------------------------------------------------------------- 119 Under the Arbitration Act; 1940, - ----------------------------------------------------------------------------- (a) x x x x x x x x x ----------------------------------------------------------------------------- (b) for setting aside an Thirty days. The date of service of award or getting an the notice of the filing award remitted for of the award. reconsideration. ----------------------------------------------------------------------------- The period of limitation prescribed for making an application for setting aside an award or getting the award remitted for reconsideration is 30 days or/and the time from which the period begins to run is the date of service of the notice of filing of the award. It should be noted that Section 14 provides for the award to be signed and filed in the Court. Section 14(1) enjoins the Arbitrator or Umpire to sign the award and give notice in writing to the parties of the making and signing thereof. Section 14(2) provides that the Arbitrator or Umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court, and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, to be fixed in Court along with the depositions and documents which may have been taken and proved before him and upon such filing the Court is enjoined to give a notice to the parties of the filing of the award. Now these two obligations of service of notice operate in different fields. Now these two obligations of service of notice operate in different fields. Section 14(1) obliges the Arbitrator or the Umpire to sign the award and give notice in writing to the parties of making and signing of the award. Section 14(2) provides for the two obligations - one for the Arbitrator or the Umpire and another for the Court. The Arbitrator or the Umpire has to file the award, if so required by the parties, or any person claiming under such party, or if so directed by the Court, together with any depositions and documents which may have been taken and proved in the course of the arbitration proceedings. The Court is also equally obliged, after such filing of the award together with the depositions and documents, to serve notice on the parties about the factum of filing on the award and the accompanying document Article 119(a) of the Limitation Act provides a limitation for filing in the Court of an award, while Clause (b) of Article 119 provides limitation for setting aside an award or getting an award remitted for reconsideration. The present case is pertaining to an application made by a partly who is aggrieved by the award for setting aside such award. It is, therefore, Article 119(b) which would be applicable. The limitation prescribed is 30 days which commences to run from the date of service of the notice of filing of the award. It is, therefore, clear that the limitation prescribed under Clause (b) would commence to run from the date of service of the notice of filing of the award by the Court under Section 14(2), though such a notice can be oral and not necessarily to be in writing as required under Section 14(1) vide : Nilkantha Sidramappa v. Kashinath. ( AIR 1962 SC 666 ) It is though not clear as to when the Court served the notice on the appellant about the filing of the award, it is an admitted position that the Arbitrator had filed the award in the Court on October 26, 1976 and the application was moved by the appellant for setting aside the award on November 26, 1976. It is, therefore, reasonable to conclude that in no case this application could be said to be time barred. It is, therefore, reasonable to conclude that in no case this application could be said to be time barred. The learned Judge has, while discussing the point No. 6 for his determination, recorded that the Arbitrator informed by registered post A/D on or about October 24, 1976, about the making of the award to the present appellant and, therefore, there is a clear compliance with Section 14(1) of the Arbitration Act in the present case. The grievance of the appellant was that he was neither served by the Court with the notice as required under Section 14(2) nor by the Arbitrator as required under Section 14(1). The learned Judge has held that notice under Section 14(1) is good enough and, therefore, it cannot be urged that the award is vitiated on that count. The learned Judge appears to be of the view that the obligation cast under Section 14(2) of the Arbitration Act is only when the award has been filed by the Arbitrator himself without the intervention of the Court on the part of the parties. It is no doubt true that the present arbitration reference was in suits, but Section 25 of the Arbitration Act lays down that the provisions of other Chapter shall so far as they can be made applicable apply to the arbitration under Chapter IV dealing with arbitration in suits. The necessity of notice by the Court, where the arbitration award has been filed in the Court, is with a view to enable the party to file objections against the award, or to enable him to make an appropriate application, if he is so advised for setting aside the award or for remitting the award for further consideration. The essence of the notice is with a view to ensure that the party aggrieved by the award may take appropriate proceedings for setting aside the award within the limitation prescribed. If, therefore, notice is not served under Section 14(2) of the Arbitration Act, the question of limitation would be irrelevant since the limitation is not commenced to run. In the present case, in so far as the appellant had filed application on the 30th day from the date of the filing of the award, I do not think that the learned Judge was right in holding that the application for setting aside the award was time barred. In the present case, in so far as the appellant had filed application on the 30th day from the date of the filing of the award, I do not think that the learned Judge was right in holding that the application for setting aside the award was time barred. So far as the challenge to the award is concerned, I do not think there is any merit in it. As far as the first limb of the challenge is concerned, viz., there was no valid reference to Shri G. T. Panchigar, I do not think there is any substance in, it since after the Civil Court was informed by Shri B. K. Engineer that he has been transferred from the post of Superintending Engineer, Gandhinagar Panchayat, the learned Judge heard the parties and made afresh order of appointment of Shri G. T. Panchigar in place of Shri B. K. Engineer somewhere in August, 1976. The first ground of attack should, therefore, be rejected. As regards the award being beyond the time originally stipulated, I do not think that the objection is well-founded. Section 28 of the Arbitration Act empowers the Court, if it thinks fit, whether the time for making the award has been made or not, to enlarge from time to time the time for making the award. In other words, the Court has power to enlarge the period of making the award from time to time and this power can be exercised before or after the time originally fixed has expired and before or after the award has been made, though beyond time. It is no doubt true that the original order appointing Shri B. K. Engineer provided for three months, period for making the award below Ex. 39 dated July 30, 1975. The said Engineer informed the Civil Court somewhere on 23rd March, 197 that he was transferred and would, therefore, not be able to complete the arbitration proceedings. It is in August, 1976 that Shri G. T. Panchigar was appointed in place of Mr. Engineer and he was required to make the award as expeditiously as possible. He made the award on October 16, 1976 and filed it in the Court on October 26, 1976. It is in August, 1976 that Shri G. T. Panchigar was appointed in place of Mr. Engineer and he was required to make the award as expeditiously as possible. He made the award on October 16, 1976 and filed it in the Court on October 26, 1976. An order directing "TAKID" to be issued to the Arbitrator and fixing the date for hearing has been held to be extending the time for filing the award (Debir-ud-Din v. Amina Bibi, AIR 1925 Cal 475 and Radha Kishan v. Madho Krishna, AIR 1952 All 856 ). Similarly, where the award is filed late in the Court and the Court, instead of taking notice of the delay, directs the party to file objections within prescribed time, the Court is impliedly held to have extended the time vide : Bokaro and Rampur Ltd. v. Dr. Prasun Kumar ( AIR 1968 Pat 150 )(FB). In the present case, therefore, I do not think that the learned Judge was in any way in error in holding that the time was impliedly extended. The third ground of attack that since no notice was served under Section 14(1) or Section 14(2) of the Arbitration Act, the award was vitiated, has no substance since the obligation prescribed under Sections 14(1) and (2) is for purposes of enabling the parties to file their objections or to move the Court for setting aside the award. They are, therefore, rot mandatory provisions of law. Assuming them to be mandatory, it cannot be urged that the breach of mandatory provision would render the award non est if the provision is not in public interest and one which can be waived by the parties vide : Commr. of Income-tax, Gujarat v. Smt. Vimlaben Bhagwandas Patel. The last ground of objection was that the appellant was not given sufficient opportunity of hearing. I do not think that the ground can be successfully pressed into service since it was the appellant who defaulted itself in appearing before the Arbitrator in spite of service of notice of hearing to him. It, therefore, cannot be said that the Arbitrator had not given an opportunity to the appellant. It is no the contrary the appellant had itself not availed of the opportunity. The result is that this appeal fails and is dismissed with no order as to costs. Appeal dismissed.