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1992 DIGILAW 77 (GAU)

State of Manipur v. Tectona, Clive Road Calcutta

1992-04-09

H.K.SEMA, W.A.SHISHAK

body1992
H. K. Sema, J. - This appeal preferred by the appellant State of Manipur under section 39 of the Arbitration Act is directed against the order dated 3.10.85 passed by the Sub-Judge 2, Manipur in Judicial Misc. Case No. 59 of 1985 arising out of original (M. S. No. 9/82/18/83) rejecting the appellant's application filed under section 33 read with section 30 (a) of the Arbitration Act on the ground that the application was barred by limitation under Article 119 of the Limitation Act, 1963. 2. Avoiding the details, the material facts giving rise to the present appeal may be briefly stated as under:- An agreement was entered into between the Government of Manipur, Forest Department, represented by Conservator of Forest with M/s Tectona, a registered firm, the respondent herein on 12.4.1972, inter alia that the respondent shall extract felled timber from the forest of Manipur boardering territory of Burma for period of two (2) years we 12.4.1972 on payment of royalty. By subsequent agreement of lease dated 15.2.75 the specified period for extraction of timber was extended for another term of two (2) years commencing from 15.2.1975 to 14.2 1977. The term of the lease agreement thus stood expired on 15.2.1977. It appears that clause 28 of the lease agreement entered into between the parties on 12.4.1972 and) clause 25 of the lease agreement, signed on 15 2.75 are in parimateria. Clause 25 of the lease agreement dated 25.2.75 on which the parties are basing the respective claim is reproduced below: "That in the event of any question or dispute arising regarding the interpretation of any of the conditions of this agreement or the due performances or observance of the same or any other matter relating to this agreement, the question or dispute shall be referred to the Government of Manipur whose decision thereon shall be final and binding on both the parties." 3. We have heard Mr. Promod Chandra Singh, learned counsel for the appellant as well as Mrs. Kumaramangalam, learned counsel for the respondent. 4. It is the specific case of the appellant herein that the clause 25 of the lease agreement thus show no reference to arbitration in the event of any dispute arising between, the parties. However application was made under section 8 and 20 of the Arbitration Act, 1940 on 11.2.1980 before the Sub-Judge 2, Manipur which was registered as Judicial Misc. It is the specific case of the appellant herein that the clause 25 of the lease agreement thus show no reference to arbitration in the event of any dispute arising between, the parties. However application was made under section 8 and 20 of the Arbitration Act, 1940 on 11.2.1980 before the Sub-Judge 2, Manipur which was registered as Judicial Misc. Case (Arbitration) No. 14 of 1980 for appointment of an Arbitrator. This petition was resisted by the appellant herein contending that there was no arbitration agreement between the parties and the Court has no jurisdiction to appoint an Arbi­trator. It was also contended that the claim of the respondent was barfed by limitation. An Arbitrator was however, appointed. The learned Arbitrator submitted the first award on 15.12.83 in favour of the claimant-respondent for a sum of Rs. 5, 25, 106.49. But the claimant made an application before the learned Sub-Judge 2, Manipur for setting aside the award on the ground that the learned Arbitrator had failed to consider some of the claims of he claimant. The learned Sub-Judge 2, Manipur by an order dated 13.3.84 set aside the award of Arbitrator and remitted the matter to the same Arbitrator for afresh consideration. The learned Arbitrator thereafter, by an order dated 31.7.84 made second award in favour of claimant amounting to Rs.'" 32,01,255.00. From the order sheet it appears that the award was filed before the Court on 31.7.84 itself and the same was notified to the parties fixing 22.8.84 for further proceeding. The order sheet dated 22.8.84 which has been filed in this paper book at page 215 is reproduced below as this date is important for our present purpose. "22.4.84 Parties by their counsel present. The learned Government Advocate orally pray for time Allowed. Fix 18.9.84 for further proceeding". Then in between, many dates were fixed which we are not concerned at the moment for the purpose of disposal of this present appeal. The next important date which we are concerned is the order sheet dated 20.4.85 reproduced below:- "20.4.85 : Parties are present by their counsel. It is adjourned till 13.5.85 for further proceeding vide Judicial Misc. Then in between, many dates were fixed which we are not concerned at the moment for the purpose of disposal of this present appeal. The next important date which we are concerned is the order sheet dated 20.4.85 reproduced below:- "20.4.85 : Parties are present by their counsel. It is adjourned till 13.5.85 for further proceeding vide Judicial Misc. Case No. 59/85." Although the order sheet does not indicate clearly that objection petition was filed on that day i.e. 20.4.85, it is admitted by the appellant that the objection under section 33 read with section 30 of the Arbitration Act was filed on 20.4.85. In the objection filed it is contended by the appellant, inter alia, that the award is non-est and subsequent award made by Arbitrator after setting aside first award was without jurisdiction inasmuch as the award once made and filed in the Court, the Arbitrator has become functus officio. The learned Sub-Judge 2, Manipur rejected the application dated 20.4.85 of the appellant by an order dated 3.10.85 on the ground that it was barred by limitation under Article 119 of the Limitation Act. 5. In this case two important questions arises for our consideration, firstly whether the application filed by the appellant before the trial Court was under section 30 or section 33 of the Arbitration Act. Secondly, whether the provision of Article 119(b) of the Limitation Act or Article 137 of the Limitation Act is applicable in this case. 6. In this case, the Arbitrator filed the award before the Court below on 31.7.84 in terms of section 14(2) of the Arbitration Act. Notices of filing of the award was notified to the parties on 31.7.84. On 22.8.84 the learned counsel for the appellant prayed for time orally and the same was allowed. The application under section 33 read with section 30 of the Arbitration Act was filed on 20.4.85. Section 30 of the Arbitration Act provides grounds for setting aside the award for which the limitation prescribed under Article 119(b) of the Limitation Act is 30 days. But in section 33, a provi­sion has been made to the parties to an arbitration agreement for challenging the existence or validity to an arbitration agreement for which no period is prescribed under Article 119(b) of the Limitation Act. But in section 33, a provi­sion has been made to the parties to an arbitration agreement for challenging the existence or validity to an arbitration agreement for which no period is prescribed under Article 119(b) of the Limitation Act. In the petition filed under section 33 read with section 30 of the Arbitration Act by the appellant before the Court below on 20.4.85 the specific plea was taken in paragraph 9 of the petition which is reproduced below:- "9. That the agreement dated 12.4.72 and 15.2.75 between the plaintiff/ claimant and the defendants/opposite party do not contain Arbitration Clauses or agreements to refer the dispute to an Arbitrator. Thereafter, the appointment of the aforesaid Arbitrator L. Indrajit Singh and reference to them to decide the disputes are without jurisdiction and the awards made by him are also without jurisdiction." Further, in the prayer portion it was prayed "to adjudge that the award as invalid and non existent. This clearly shows that the objection application was filed by the appellant under section 33 of the Arbitration Act. To declare the award adjudge and non existent and to challenge the existence or validity of an arbitration agreement under section 33 of the Arbitration Act no period has been prescribed under Article 119 of the Limitation Act. 7. Article 119 of the Limitation Act prescribed for (a) the filing in Court of an award 30 days (b) setting aside award and or getting an award remitted for re-considera­tion 30 days. Section 30 and 33 of the Arbitration Act are not co-extensive and therefore, by the application for setting aside the award under section 30 of the Arbitration Act for which the period has been prescribed under Article 119(b) of the Limitation Act. There is no period prescribed under Article 119 for an application under section 33 of the Arbitration Act challenging the existence or validity of an Arbitration agreement and, therefore, Article 137 of the Limitation Act would be applicable and not Article 119. 8. On this point different High Courts has given different views. In Joseph Phillip vs.. There is no period prescribed under Article 119 for an application under section 33 of the Arbitration Act challenging the existence or validity of an Arbitration agreement and, therefore, Article 137 of the Limitation Act would be applicable and not Article 119. 8. On this point different High Courts has given different views. In Joseph Phillip vs.. Verkey Mathai, AIR 1978 Kerala 208, the Division Bench took the view that sections 30 and 33 of the Arbitration Act mentioned grounds on which an award was liable to be set aside and the application before the lower Court was made for setting aside the award on any of the grounds mentioned and therefore, the period prescribed under Article 119 of the Limitation Act and not Article 137 would be applicable. The facts of the case in hand is different from the facts, in which their Lordships has taken the view because in Joseph (supra) objection was filed with a prayer to set aside the award. In the case in hand, petition was filed under section 33 of the Arbitration Act challenging the existence or validity of an arbitration agreement with a prayer to adjudge that the award as invalid and non-existent. In another case, State of Bihar vs. CP Singh & another, AIR 1983 NOC 209 (Patna) the learned Single Judge had held : "When the objection does not fall under section 30 of the Arbitration Act, Article 119 of the Limitation Act had no application and where a ground for challenging the validity of the award is that the reference was illegal, it must be treated and dealt with as one coming under section 33 and could be entertained without any bar of limitation". In Foods Fats and Fertilisers Ltd. vs. Ramkishan Das Radhakishan, AIR 1986 MP 223, Division Bench had held in paragraph 13 of the judgment that an application under section 33 challenging the existence of an arbitration agreement between the parties for which no prescribed limitation is provided for in the Third Division to the Schedule under Article 119 of the Limitation Act, and, therefore, Article 137 would be applicable. In Kerala State Electri­city Board vs. VT Kunhaliumma, AIR 1977 SC 282 , the Apex Court had held in paragraph 21 of the judgment that the changed definition of the words 'applicant' and 'application' contained in sections 2(a) and 2(b) of the Limita­tion Act indicates the object of the Limitation Act is to include petitions, original or otherwise, under special laws and that the interpretation which was given to Article 181 of the 1908 Limitation Act on the principle of ejusdem generis is not applicable with regard to Article 137 of the 1963 Limitation Act. Article 137 stands in isolation from all other Articles in part 1 of the Third Division. 9. In view of our aforestated discussion and reasons, we hold that an application filed by the appellant herein before the learned trial Court on 20.4.85 under section 33 of the Arbitration Act would be covered by Article 137 of the Limitation Act and not under Article 119 of the Limitation Act. The order dated 3.10.85 passed by the learned Sub-Judge 2, Manipur rejecting the appellant's application as time barred is hereby set aside. The case is remitted to the Court below with a direction to hear the parties on the appli­cation dated 20.4.85 on merit. Appeal allowed. Parties are asked to bear their own costs.