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Madhya Pradesh High Court · body

2001 DIGILAW 924 (MP)

Union of India (UOI) v. Kanhaiyalal

2001-12-06

DEEPAK VERMA, S.L.KOCHAR

body2001
Judgment ( 1. ) IN this appeal, the questions of adjudication that arise between the parties are whether the objection filed by the appellant on 27-11-1995, was well within the period of limitation of 30 days, on which date, the arbitrator filed the original award and the appellant had filed the objection to it and whether the application filed by the appellant on 7-10-1995 along with the photocopy of the award duly signed by the arbitrator, could be construed as filing of the original award by the arbitrator or on his behalf, as contemplated under provisions of Section 14 (2) of the Arbitration Act, 1940 (for short, the Act) as also whether 7-10-1995 could be considered as the date of issuance of notice to the parties for filing of their objection within a period of limitation of 30 days. ( 2. ) TO resolve the aforesaid dispute, facts in brief are required to be narrated that:-The appellant/union of India, through the Chief Engineer, Jabalpur filed an application under Section 14 of the Act before the Additional District Judge, Indore on 7-10-1995, wherein it is stated that final award was passed by the arbitrator/respondent No. 2 on 18th September, 1995, photocopy of which was filed along with the application, simultaneously, prayer was made in Paragraph 7 of the application for issuance of direction to produce original award in the Court by respondent No. 2/arbitrator. The appellant has also specifically stated that it reserves its right to file objection after production of the original award in Court, so in brief the appellant has prayed for issuance of direction to the arbitrator for filing of the award and after receiving the objection from rival parties to make the award rule of the Court. The claim was made for Rs. 22,86,738. 77 whereas the award was passed for Rs. 34,73,158. 77. ( 3. ) RESPONDENT No. 1 M/s. Kanhaiyalal and Co. , submitted its objection/ reply on 15-3-1996 contending that the appellant had filed an application on 7-10-1995, in which it has been stated that the award was filed on 18-9-1995 and the copy of the same was filed along with the said application. He has also prayed for making the award as rule of the Court as he was in possession of the copy of the award. Hence, he could not have any right to file further objection in that regard. He has also prayed for making the award as rule of the Court as he was in possession of the copy of the award. Hence, he could not have any right to file further objection in that regard. It has also been stated in the application that the objection filed by the appellant on 27-11-1995, was beyond the period of 30 days limitation because it was having knowledge and also copy of the award, which was filed by it on 7-10-1995. So his further objection filed on 27-11-1995 was beyond the period of limitation of 30 days and the same could not be considered. He also submitted that the appellant is also not entitled for condonation or relaxation in limitation under the provisions of the Limitation Act. Respondent No. 2 has also submitted in his application for reserving his right to file detail reply and prayed for dismissal of the objection filed by the appellant. He also prayed for passing the order making the award as rule of the Court and preparation of the decree in pursuance thereof. ( 4. ) THE Appellate Court relying the judgment rendered in Indian Rayon Corpn. Ltd. v. Raunaq and Co. Ltd. , AIR 1988 SC 1054, held that the objection filed by the appellant on 27-11-1995 was beyond the period of limitation of 30 days prescribed in Clause (b) of Article 119 of the Limitation Act. Hence, the same could not be considered and the Appellate Court rejected the objection of the appellant and made award as rule of the Court and directed for preparation of the decree as per award in favour of the respondent No. 1/ Company. ( 5. ) AGAINST the impugned judgment dated 14-10-1996 passed by IInd Additional District Judge, Indore, appellant has filed this Miscellaneous Appeal and submitted that the arbitrator has erred in rejecting his objection dated 27-11-1995 holding it as barred by limitation. ( 6. ) ACCORDING to the appellant, an application was filed on 7-10-1995 under Section 14 of the Act by which specific prayer was made for issuance of direction to the arbitrator to file original award before the Court and after filing of the objection by the parties, the same be decided on merit for making the award as rule of the Court. The original copy of the award was filed in Court on 27-11-1995 and on the same day the appellants filed an objection, which was well within the period of limitation of 30 days. It has also been contended, by the appellant that along with the application dated 7-10-1995 under Section 14 of the Act, original award was not filed. It was only photocopy of the same and as such it could not be construed of filing of the original award for the purpose of computation of the period of limitation and for the purposes of issuance of notice as contemplated under Section 14 (2) of the Act. The appellant has already stated in Paragraph 4 of the application that the original copy of the award was lying with the respondent No. 2, (B. N. Gupta, Additional Director General, EMC Branch, Commissioner House, New Delhi ). Filing of photocopy of the award would not be constructed as filing of the original award and the same could not be considered for computation of period of limitation as well as service of notice upon the parties. Hence, the objection filed by the appellant on 27-11-1995 was within the period of limitation because on the said date, the original award was filed before the Court and for this, there is absolutely no dispute between the parties. ( 7. ) LEARNED counsel appearing for respondent No. 1, has argued relying on the judgments reported in Indian Rayon Corporations case (supra); Krut-tivasa Padhy v. Malti Padhani (AIR 1959 Orissa 113) and Food Corporation of India v. E. Kuttappan ( AIR 1993 SC 2629 ) that photocopy of the award duly signed by the arbitrator was filed by the appellant along with the application dated 7-10-1995 filed under Section 14 of the Act before the Civil Court. Along with the award, carbon copy duly signed by the arbitrator authorising the parties to file and sign copy of the award in Court on his behalf, was filed. Photocopy of the award and copy of the authorisation letter could be considered, as filing of the award at the request of the parties under the provisions of Section 14 (2) of Act. Photocopy of the award and copy of the authorisation letter could be considered, as filing of the award at the request of the parties under the provisions of Section 14 (2) of Act. In the present case, since the appellant filed signed photocopy of the award and signed carbon copy of the authorisation letter along with the application dated 7-10-1995 under Section 14 of the Act, was fully aware of the fact of filing of the award before the Civil Court and thereafter, filing of objection on 27-11-1995 was beyond the period of limitation and the arbitrator has rightly rejected his objection and made the award rule of the Court. ( 8. ) ATTACKING the arguments submitted by the respondent No. 1, learned counsel for the appellant vehemently argued relying on the judgments rendered by the Supreme Court in the case of Secretary, Govt. of Karnataka and Anr. v. Harish Babu ( AIR 1996 SC 3421 ); Food Corporation of India v. E. Kuttappan (supra) and East India Hotels Ltd. v. Agra Development Authority ( AIR 2001 SC 1481 ) that filing of photocopy of the award along with the application dated 7-10-1995, under Section 14 of the Act, could not be construed as filing of the original award before the Court and limitation of 30 days could not be computed from the said date because in the application dated 7-10-1995 itself, the appellant has prayed for issuance of direction to the arbitrator for filing of the original award and also reserve its right for filing the objection whenever copy of the award would be filed by the arbitrator. The contents and language of the application dated 7-10-1995 are very clear and unambiguous for the purpose that photocopy of the award filed along with the application should not be taken as filing of original signed copy of the award together with deposition and documents which have been taken and proved before the arbitrator. It has also been argued that since duly signed original copy of the award along with the documents was filed on 27-11-1995, the limitation of the period of 30 days would commence from this date and the appellant had already filed its objection on the same day. Hence, the objection was well within a period of limitation. ( 9. It has also been argued that since duly signed original copy of the award along with the documents was filed on 27-11-1995, the limitation of the period of 30 days would commence from this date and the appellant had already filed its objection on the same day. Hence, the objection was well within a period of limitation. ( 9. ) HAVING heard learned counsel for the parties and after careful perusal of the record, this Court is of the considered view that the Court below has grossly erred in rejecting of the appellants objection filed on 27-11-1995 holding it to be barred by limitation. ( 10. ) THE Court below has relied upon the judgment rendered in the case of Indian Rayon Corporation Ltd. v. Raunaq and Co. Pvt. Ltd. (supra), has no application in favour of the respondent in the facts and circumstances involved in the present case, on the contrary, this judgment is supporting the case of the appellant. The Supreme Court has held as under:-" in order to be effective both for the purpose of obtaining the judgment in terms of the award and for setting aside the award there must be (a) filing of the award in the proper Court, (b) service of notice by the Court or its office to the parties concerned, (c) such notice need not necessarily be in writing. It is upon the date of service of such notice that the period of limitation begins and under Clause (b) of Article 119 of the Act, the limitation expires on the expiry of the thirty days of the service of that notice for an application for setting aside of the award. If the substance is clear, the form of the notice is irrelevant but the notice of the award having been filed in the Court is necessary. The filing in the Court is necessary and the intimation thereof by the Registry of the Court to the parties concerned is essential. Beyond this, there is no such statutory requirement of any technicality under Section 14 (2) of the Act. " ( 11. The filing in the Court is necessary and the intimation thereof by the Registry of the Court to the parties concerned is essential. Beyond this, there is no such statutory requirement of any technicality under Section 14 (2) of the Act. " ( 11. ) IN the light of the discussion on facts and in law arrived by the Supreme Court in this judgment, it is crystal clear that filing of the award in proper Court and service of notice to the parties, are two essential ingredients for adjudication of the dispute and for making the award rule of the Court and for passing of decree. In the case on hand, photocopy was filed by the appellant on 7-10-1995 though it was signed by the arbitrator but in the application, the appellant has specifically and unambiguously prayed for issuance of direction to the arbitrator by the Court for filing of the original award and has also prayed in Paragraph 5 of the application for reserving right for filing objection thereof. ( 12. ) UNDER Section 14 of the Act, there are two ingredients, the first is filing of the copy of the award along with the deposition and documents before the Civil Court and the other is issuance of notice to the parties, inviting their objection that could be filed within 30 days from the service of notice to the parties. In the instant case, the Court below has considered filing of the photocopy of the award by the appellant with an application dated 7-10-1995 and also computed the period of limitation of 30 days from this date whereas original award was filed on 27-11-1995 and the objection therefor, was filed by the appellant the same day i. e. on 27-11-1995. Hence, the ratio decided by the Supreme Court in the judgments reported in Secretary, Govt. of Karnataka and Anr. v. Harish Babu (supra) and East India Hotels case (supra) are duly applicable on factual and legal aspects involved in the present case. The judgments (supra) cited by the respondent No. 1 are distinguishable on the point that in fact copy of the original award duly signed by the arbitrator was not filed by the appellant along with the application dated 7-10-1995. The judgments (supra) cited by the respondent No. 1 are distinguishable on the point that in fact copy of the original award duly signed by the arbitrator was not filed by the appellant along with the application dated 7-10-1995. If the appellant was construing the filing of the photocopy of the award signed by the arbitrator as per authorisation letter as filing of the original award, he would have not made specific prayer in the application for issuance of direction for filing the original award and reserving its right for filing objection after filing of the original award. In Paragraphs 5 and 7 of the application, a specific prayer, for reserving right of the appellant for filing objection and after filing of original award and for deciding the objection of the parties on merit if so, was made. ( 13. ) IN view of the aforesaid factual and legal scenario of the case, this Court is of the firm view that decree passed by the Trial Court making the award rule of the Court is liable to be set aside and is accordingly set aside with a direction to remand the case to IInd Additional District Judge, Indore for deciding the issues involved, on the basis of the objection filed by the rival parties, after hearing them, in accordance with law. ( 14. ) THERE shall be no order as to cost.