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2000 DIGILAW 181 (JK)

CAPT. MOHAN SINGH v. UNION OF INDIA

2000-09-04

ARUN KUMAR GOEL

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JUDGMENT ARUN KUMAR GOEL, J. - Facts as revealed from the record of this case are that the petitioner was granted dealership of a retail Outlet of Motor Spirit (MS) and High Speed Diesel (HSD) being a disabled ex-serviceman during Indo-Pak War of 1971, as according to him because of gallantry shown during the said war he was also awarded Veerchakra. Thus retail Outlet was allotted with a view to rehabilitate him. He is running this Outlet as its sole Proprietor under the name and style of Paramjit Filling Station, Gandhi Nagar, Jammu. For sale of MS and HSD Dispensers were installed at the aforesaid Filling Station. 2. On account of shortage of diesel in the month of November, 1978, respondent-Indian Oil Corporation (IOC) closed the dispenser of HSD. There is no dispute between the parties that a written agreement was entered upon between them for running the aforesaid Outlet. 3. According to petitioner closure of this Dispenser of HSD was with the assurance that it would be restored shortly. This is what was held out as well as agreed to between the parties when same was ordered to be closed in November, 1978 as per petitioner. On the other hand stand of the Indian Oil Corporation is that in addition to shortage of diesel, there used to be long ques of vehicles for getting diesel with the result that sale of MS was being affected. In this view of the matter the Dispenser of HSD was ordered to be closed and at no point of time any assurance was held out to the petitioner as alleged by him. 4. In the aforesaid background when Indian Oil Corporation did not restore the HSD Dispenser, petitioner was constrained to file Writ Petition No. 77/90 in this Court which was finally disposed of on 10-12-1990. 4. In the aforesaid background when Indian Oil Corporation did not restore the HSD Dispenser, petitioner was constrained to file Writ Petition No. 77/90 in this Court which was finally disposed of on 10-12-1990. In this petition prayer made by the petitioner was in the following terms : "to restore the retail Outlet facility for High Speed Diesel (HSD) on the ground that he was given an assurance and promise by the respondents that this facility would be restored to him after it was withdrawn in 1979." On the other hand stand of the Indian Oil Corporation in this writ petition was that though initially retailership was given to the petitioner of MS and HSD but latter was withdrawn and it was converted into MS facility because of acute shortage of HSD as also on account of long ques of buses and trucks were seen at that time. It was further its case that HSD to MS was made with the consent of petitioner. Arbitration Clause was also set up as a defence regarding non-maintainability of the writ petition. Finally this petition was dismissed with the following observations : "There being no merit in this petition, the same is, therefore, dismissed in limini. The petitioner is at liberty to invoke the arbitration agreement, if so advised, on the merits of the case." Record of the arbitration proceedings further suggests that after the passing of aforesaid order in the writ petition, Indian Oil Corporation did not appoint an Arbitrator, as such petitioner was constrained to file A.A. No. 205/91 for appointment of an Arbitrator to adjudicate the dispute, and in it CMP No. 94/93 was also filed. It came to be finally disposed of in the following terms : "Arbitration Application No. 205 of 1991 has been moved by the petitioner for appointment of an Arbitrator to adjudicate the disputes that had arisen between the parties. Petitioner has filed this CMP stating that during the pendency of the Arbitration Application, respondent No. 2 had appointed Shri Arun Jyoti, Deputy General Manager (Lubes), Indian Oil Corporation Limited as the sole Arbitrator and adjudicate upon the dispute and differences between the parties. Mr. Joginder Singh submits that petitioner has no objection to the appointment so made. He prays that in the light of the action taken by respondent No. 2, Arbitration Application No. 205 of 1991 had become infructuous and seeks its withdrawal. Mr. Joginder Singh submits that petitioner has no objection to the appointment so made. He prays that in the light of the action taken by respondent No. 2, Arbitration Application No. 205 of 1991 had become infructuous and seeks its withdrawal. This application is allowed and A.A. 205/91 is dismissed, as such." Above named Arbitrator seems to have proceeded in the matter before whom claims/counter claims were filed by the parties. This officer was succeeded by R. K. Gupta, who was appointed in place of original Arbitrator as noted in the order extracted hereinabove. He was also transferred and thereafter Sh. S. K. Garg was appointed as sole Arbitrator. 5. Upon entering reference, on 15-10-1996 he called for statement of claims/counter claims from the parties along with copies of documents which they wish to reply. Needful was done by the petitioner on 15-11-1996 followed by the statement of claim of respondents. Rejoinder of the petitioner was taken on record by the Arbitrator on 4th April, 1997. Thereafter both the parties appear to have filed documents on which they wanted to reply. 6. On the basis of respective contentions urged on behalf of the parties Arbitrator framed the following issues on 29th May, 1997 : "(1) Whether the disputes raised by the claimant are within the period of limitation? (2) Whether the claimant are entitled to get restoration of HSD outlet facility, as alleged by the claimant ? (3) Whether the claimant have suffered any loss ? If so, of what amount and whether the claimant are entitled to get any damages/compensation from IOC. (4) Whether the disputes raised by the claimant are barred by the general principles or res judicata ?" Issues No. 1 to 3 were decided against the petitioner, whereas Issue No. 4 was decided against respondent-Indian Oil Corporation. It may be noted that after framing of issues as aforesaid time was allowed to the parties for leading evidence. A perusal of the award shows that this is a case of non-speaking award. 7. Award was filed by the Arbitrator through Shri R. Koul, Advocate which was received on 28-7-1998. Notice of filing of the award was accepted on 3-8-1998 by Shri Rupinder Singh, Advocate on behalf of the petitioner and Shri J. P. Advocate on behalf of Indian Oil Corporation. 7. Award was filed by the Arbitrator through Shri R. Koul, Advocate which was received on 28-7-1998. Notice of filing of the award was accepted on 3-8-1998 by Shri Rupinder Singh, Advocate on behalf of the petitioner and Shri J. P. Advocate on behalf of Indian Oil Corporation. Objections under Sections 30 and 33 of the Arbitration Act were filed by the petitioner on 20-3-1998 in this Court, those are well within time. After receipt of reply on behalf of Indian Oil Corporation following issues were framed by this Court on 9th September, 1998 : "(1) Whether the Arbitrator has mis-conducted himself and in the proceedings ? OP Objector. (2) Whether the award is invalid, if so, how ? OP Objector." Shri Rupinder Singh, learned counsel for the petitioner has submitted that the award is liable to be set aside as the Arbitrator has mis-conducted himself as well as the proceedings because the agreement in question for the grant of dealership of MS and HSD was not looked into by the Arbitrator. Regarding findings on Issue No. 1 it is specifically urged by Mr. Rupinder Singh that those findings are patently incorrect and contrary to record. He further submitted that the mis-conduct in the instant case is writ large and as such he has prayed for allowing the objections amongst others on account of the award being invalid. All these pleas have been controverted by Shri. J. P. Singh, learned counsel appearing for Indian Oil Corporation. In the aforesaid circumstances Shri Rupinder Singh prayed for remitting the matter to the Arbitrator for adjudication afresh in accordance with law by accepting the objections. 8. What emerges from the narration of aforesaid facts is that the Dispenser of HSD was withdrawn in November, 1979. Petitioner admittedly approached the Court at the earliest in Writ Petition No. 77/90 i.e., after a period of about 11 years. This is for the first time that he made a grievance before the Court. It is not his case that he was not aware of the agreement and or its contents subject to which dealership of MS and HSD was allotted to him. Admittedly there was an arbitration clause in this agreement. 9. As per decisions of the Supreme Court of India, in Wazir Chand Mahajan and another v. The Union of India (AIR 1967 SC 990), and Mohd. Admittedly there was an arbitration clause in this agreement. 9. As per decisions of the Supreme Court of India, in Wazir Chand Mahajan and another v. The Union of India (AIR 1967 SC 990), and Mohd. Usman v. Union of India (AIR 1969 SC 474), there is no prescribed period for applying under Sections 8 and 20 of the Arbitration Act, 1940 (Central Act). With reference to amendment of Articles 158 and 178 of the Limitation Act of 1908 (these provisions of the Central Limitation Act correspond to Articles 158 and 171 of the J&K Limitation Act), what was held in the case of Mohd. Usman (supra) is as under : "(7) Before their amendment by the Indian Arbitration Act, 1940 Article 158 of the Limitation Act applied to applications "under the Code of Civil Procedure, 1908 to set aside an award" and Article 178 applied to applications "under the same Code for filing in Court of an award ........." The Arbitration Act, 1940 amended Articles 158 and 178. The Amended Article 158 applies to applications "under the Arbitration Act, 1940 to set aside an award or to get an award remitted for consideration, that is to say, to applications under Sections 16 and 30 of the Act. The amended Article 178 applies to applications "under the Arbitration Act, 1940 for the filing in Court of an award", that is to say to applications under Section 14 of the Act. In amending Articles 158 and 178 the legislature acted upon the view that the references to the Code of Civil Procedure, 1908 in the second schedule to the Limitation Act could not in the absence of the amendment be construed as references to the Arbitration Act, 1940. At the same time the legislature refrained from amending Article 181 and providing that the article will apply to other applications under the Arbitration Act, 1940. It is manifest that the legislature intended that save as provided in Articles 158 and 178 there would not be any limitation for other applications under the Act. Take the case of an application under Section 28 of the Act for enlargement of the time for making the award. It is manifest that the legislature intended that save as provided in Articles 158 and 178 there would not be any limitation for other applications under the Act. Take the case of an application under Section 28 of the Act for enlargement of the time for making the award. A similar application under paragraph 8 of the second schedule to the Code was governed by Article 181 but a like application under Section 12 of the Indian Arbitration Act, 1899 was not subject to any period of limitation. There is nothing to indicate that for the purpose of limitation Section 20 of the new Act should be regarded as a re-enactment of the corresponding provision of the Code and not of the Indian Arbitration Act, 1899. An application under Section 8 of the new Act corresponding to paragraph 5 of the second schedule to the Code and Section 8 of the Indian Arbitration Act, 1899 stand on the same footing. In the circumstances, it is not possible to construe the implies reference in Article 181 to the Code of Civil Procedure as a reference to the Arbitration Act, 1940, or to hold that Article 181 applies to applications under that Act. The rule of construction given in Section 8(1) of the General Clauses Act cannot be applies, as it appears that the legislature had a different intention. It follows that an application under Sections 8 and 20 of the Arbitration Act, 1940 is not governed by Article 181. The Limitation Act does not prescribe any period of limitation for such an application. It follows that the present application under Sections 8 and 20 is not barred by limitation." Similarly in the case of Wazir Chand Mahajan (supra) it was held as under : "(7) There is no doubt that Clause (1) of Section 37 of the Arbitration Act deals only with the authority of the Arbitrator to deal with and decide any dispute referred to him it has no concern with an application made to the Court to file an arbitration agreement and to refer a dispute to the Arbitrator. After an agreement is filed in Court and the matter is referred to the Arbitrator, it is for the Arbitrator to decide by the application of the law contained in the Limitation Act, whether the claim is barred. After an agreement is filed in Court and the matter is referred to the Arbitrator, it is for the Arbitrator to decide by the application of the law contained in the Limitation Act, whether the claim is barred. But Section 37(1) does not confer authority upon the Court to reject the application for filing of an arbitration agreement under Section 20 of the Arbitration Act because the claim is not made within three years from the date on which the right to apply arose. In dealing with an application for filing an arbitration agreement, the Court must satisfy itself about the existence of a written agreement which is valid and subsisting and which has been executed before the institution of any suit, and also that a dispute has arisen with regard to the subject-matter of the agreement which is within the jurisdiction of the Court. But the Court is not concerned in dealing that application to deal with the question whether the claim of a party to the arbitration agreement is barred by the law of limitation, that question falls within the province of the Arbitrator to whom the dispute is referred. Arbitrator is supposed to and is expected as well as is required to proceed in accordance with law which includes Law of Limitation also. It is well known that after the expiry of limitation regarding initiation of claim by the aggrieved party, petitioner in the present case, an opponent like Indian Oil Corporation gets a valuable right. 10. It was for the Arbitrator to have decided whether the claim is barred by time or not. Para 7 in the case of Wazir Chand Mahajan extracted above, clearly supports this view. Similarly para 8 in the case of Mohd. Usman further re-iterates the same view in the following terms : "(8) In conclusion we must observe that the appellant's claim relates to supplies during the period between April 1, 1945 and March 31, 1946. There is a serious contention whether the claim is barred by limitation. It will be the duty of the Arbitrator to consider this matter carefully and to decide whether or not the claim is so barred." Nothing to the contrary has been brought to my notice. Thus for the aforesaid reasons no exception can be taken to the findings recorded by the Arbitrator under Issue No. 1, which are upheld. 11. It will be the duty of the Arbitrator to consider this matter carefully and to decide whether or not the claim is so barred." Nothing to the contrary has been brought to my notice. Thus for the aforesaid reasons no exception can be taken to the findings recorded by the Arbitrator under Issue No. 1, which are upheld. 11. In this behalf another argument urged by Shri Rupinder Singh in his written submission needs to be dealt with. It was to the effect that the Arbitrator could not adjudicate the matter beyond agreement itself. Whether the claim was within time or not was a matter which want to the root of the case. As such the plea that the Arbitrator had gone beyond the scope of agreement is not correct. At the risk of repetition it may be noted that by afflux of time situation that emerges is that a right to a party may be there but remedy is lost for want of limitation. According to him where a part of the award given by the Arbitrator is severable from the rest of portion, it needs to be done by retaining the portion which is good in law and by setting aside that portion which is covered by Sections 30 and 33 of the Arbitration Act. He placed reliance on Union of India v. Jain Associates and another ((1994) 4 SCC 665 = 1994(1) Arb. LR 494 (SC)). Thus Shri Rupinder Singh urged that after reversing the finding on Issue No. 1 as recorded by the Arbitrator, rest of the award needs to be remitted. This plea cannot be accepted for the view that has been taken hereinabove. 12. Another case relied upon by Shri Singh was State of U.P. v. M/s. Ram Nath International Construction Pvt. Ltd. (AIR 1996 SC 782 = 1996 (Suppl.) Arb. LR 457). Its examination also does not advance the case of petitioner. 13. This is a case of non-speaking award. As such mis-conduct of the Arbitrator as well as of proceedings has to be found out on examination of either the award or the proceedings. There is nothing on the record to hold any such thing so as to record findings in favour of the petitioner on Issues No. 1 and 2 framed by this Court. Arbitrator is a Judge agreed upon by the parties to adjudicate the disputes between them. There is nothing on the record to hold any such thing so as to record findings in favour of the petitioner on Issues No. 1 and 2 framed by this Court. Arbitrator is a Judge agreed upon by the parties to adjudicate the disputes between them. Courts nominally view his award, unless it falls within the four corners of Sections 30 and 33 of the Arbitration Act, to uphold the same. This Court does not sit as a Court of appeal and therefore simply because it would take another view of the whole matter will not upset the award as was urged by Shri Rupinder Singh. This court will not go into the process of reasoning which might have prevailed with the Arbitrator while passing the award, especially when it is a non-speaking one. It is not the case of parties that either under the terms of the agreement or a direction of the Court or by any other instrument Arbitrator was required to give a reasoned and speaking award. Plea of bias raised by Shri Rupinder Singh on behalf of the petitioner is without any material on record. Even otherwise on an overall examination of the whole record of the Arbitrator as well as the impugned award it cannot be said that the Arbitrator has either mis-conducted himself or the proceedings. Similarly it also cannot be said that the award is otherwise invalid in any manner whatsoever. When a reference is made to the claim of petitioner before the Arbitrator as well as in this Court what seems to be the basis for making claim for the restoration of HSD Dispenser is the Doctrine of Promissory Estoppel. However, this doctrine is not spelt out from anything on record. It may not be out of place to notice here that the petitioner has been provided MS Dispenser additionally after the closure of HSD Dispenser. Further there was no commitment made and or promise extended by the respondent-Corporation to restore the HSD Dispenser as claimed by the petitioner. So there arose no question of his having altered his position as claimed. This plea therefore must fail. 14. No other point is urged. 15. Further there was no commitment made and or promise extended by the respondent-Corporation to restore the HSD Dispenser as claimed by the petitioner. So there arose no question of his having altered his position as claimed. This plea therefore must fail. 14. No other point is urged. 15. In view of the aforesaid discussion as well as on the basis of materials on record both Issues No. 1 and 2 are decided against the petitioner-objector and thus the objections under Sections 30 and 33 of the Arbitration Act are hereby dismissed and as a consequence of it award made by the Arbitrator on 13th February, 1998 is hereby made rule of the Court. Decree sheet be drawn accordingly. No costs. Award made rule of the Court.