NORTH INDIA LIGHT WEIGHT v. HINDUSTAN INSECTICIDES LTD.
2006-09-14
REVA KHETRAPAL
body2006
DigiLaw.ai
REVA KHETRAPAL, J. ( 1 ) THE sole question which arises for consideration in this case is whether there is any period of limitation for an arbitrator to file the award in court. ( 2 ) THE factual matrix is undisputed. On 26th July, 1990, a direction was issued to the petitioner (hereinafter referred to as the claimant) by the learned arbitrators to deposit a sum of Rs. 8,000/- towards cost and expenses of the arbitration proceedings within a period of one week to enable them to make and publish the award. The proceedings of 26th July, 1990 were sent to the parties on 30th July, 1999 for necessary compliance. Thereafter, on 30th August, 1990, the learned arbitrators made the award. By letter dated 24th September, 1990, an intimation was sent to the parties that the arbitrators had made and signed the award in the matters referred to them on 30th August, 1990 and that certified copies of the award would be sent to the parties after receipt of the sum of Rs. 8,000/- towards costs and expenses of arbitration proceedings, which the claimant had still to deposit as directed by the Bench on the last date of hearing. Admittedly, the said deposit was not made by the claimant till 6th january or in the subsequent years 1991, 1992 and 1993. ( 3 ) ON 6th January, 1994 eventually the claimant deposited the sum of rs. 8,000/- and pursuant thereto, the arbitrators by letter dated 9th February, 1994 sent certified copies of the award for information and compliance of the parties at an early date. Further, parties were directed to indicate whether they would comply with the award voluntarily or whether they desired to have the award filed to make it a rule of the court. On 9th March, 1994, the claimant requested the arbitrators for filing of the award in the competent court for making the same a rule of the court. Ultimately, on 14th February, 1995, the arbitrators at the request of the claimant, sent the award for filing in this court for making the same a rule of the court. ( 4 ) THE respondent/objector contends that since the award was filed on 14th february, 1995, i. e. , almost five years after making of the same on 30th August, 1990, filing of the award is barred by limitation.
( 4 ) THE respondent/objector contends that since the award was filed on 14th february, 1995, i. e. , almost five years after making of the same on 30th August, 1990, filing of the award is barred by limitation. Reliance is placed in this context on a decision of the Apex Court in the matter of Patel Motibhai naranbhai and Anr. vs. Dinubhai Motibhai Patel and Ors. AIR 1996 SC 997 , wherein it is held that Article 137 of the Limitation Act, 1963 bars the arbitrator from filing any award in court if it is filed after three years of making the same. In the said case, the plaintiff had filed a suit, claiming his rights over the suit properties on the basis of an award dated 26th February, 1986 passed by the arbitrator. The maintainability of the said suit was questioned on the ground that the suit was in effect filed to enforce an award which had neither been registered nor made rule of the court in accordance with law. Promptly, thereafter, on 8th February, 1992, the plaintiff (Jayantikumar Ishwarbhai Patel)asked the arbitrator to file the award passed on 26th February, 1982 in court and, after a long lapse of six years, the arbitrator (Dinubhai Motibhai Patel)not only made an application for filing the award in court but also applied for a decree in terms of the award. ( 5 ) IN the aforesaid facts, the Hon'ble Supreme Court at pages 998-999, paras 7,9 and 10 of the Report held as follows:-"7. The only question that falls for determination in this case is whether the arbitrator could after a long lapse of nearly six years from the date of the award file his Award and ask for a decree in terms of the Award, especially when neither of the two parties made any application for filing of the Award in Court even after receiving intimation of making of the Award. . . . . . . . ". "9. Under Sub-section (2) of Section 14 a duty is cast upon the arbitrator to file the award or cause the award to be filed in the Court at the request of the party to the arbitration agreement or if so directed by the Court.
. . . . . . . ". "9. Under Sub-section (2) of Section 14 a duty is cast upon the arbitrator to file the award or cause the award to be filed in the Court at the request of the party to the arbitration agreement or if so directed by the Court. There is no provision which requires the arbitrator to apply to the Court for filing of the award and pass a decree in terms of the award. An application for filing the award in Court has to be made within thirty days from the date of service of the notice of making of the award under Article 119 of the Limitation Act. Even if it is held that Article 119 will apply only to an application made by a party and not by the arbitrator. Article 137 will come in the way of the arbitrator's making any application beyond the period of three years from the date of making of the award. 10. Faced with the situation that an application for filing the Award in court under Section 14 (2) of the Arbitration Act has become barred by limitation, Jayantikumar Ishwarbhai Patel induced the Arbitrator to make an application for filing of the Award and also for making the Award the rule of the Court. In other words, Jayantikumar Ishwarbhai Patel, a party to the dispute, with the help of the Arbitrator, did indirectly what he could not have done directly. We are of the view that law cannot be allowed to be circumvented in this fashion. The Court should have declined to entertain the application moved by the Arbitrator nearly six years after making of the Award. Without the application of the Arbitrator, the application made by Jayantikumar Ishwarbhai patel under Section 14 (2) could not survive. The Court should not come to the aid of a party where there has been unwarrantable delay in seeking the statutory remedy. Any remedy must be sought with reasonable promptitude having regard to the circumstances. 11. In our view, the respondents Nos. 3 to 5 cannot be allowed to circumvent the law with the help of the Arbitrator and obtain indirectly an order under Section 17 of the Arbitration Act, which they could not do directly".
Any remedy must be sought with reasonable promptitude having regard to the circumstances. 11. In our view, the respondents Nos. 3 to 5 cannot be allowed to circumvent the law with the help of the Arbitrator and obtain indirectly an order under Section 17 of the Arbitration Act, which they could not do directly". ( 6 ) ON the strength of the ratio of the judgment in Patel Motibhai naranbhai's case (supra), learned counsel for the objector contended that the award was liable to be set aside as filing of the same was barred by limitation. ( 7 ) LEARNED counsel for the claimant sought to counter the plea that filing of the award in court was barred by limitation by contending that though the award was made and signed by the learned arbitrators on 30th August, 1990, the same was withheld due to non-payment of Rs. 8,000/- as lien and after the claimant deposited the said balance amount towards costs and expenses of arbitration proceedings on 6th January, 1994, the award was filed by the arbitrators to be made a rule of the court. Counsel for the claimant further contended that as, in the meantime, there had been litigation amongst the two groups of the claimant company, which resulted in filing of a company petition, permission had to be sought from the Hon'ble Company Judge for deposit of rs. 8,000/- for which sufficient time was spent in the court and this was the reason why the deposit of Rs. 8,000/- was delayed. It was vehemently denied by counsel for the claimant that filing of the award before this court in February, 1995 was on account of inaction of the claimant or that the claimant failed to comply with the directions of the learned arbitrators for making deposit of rs. 8,000/- within time. It was submitted that there was no limitation for the arbitrators to file the award in court and, in this context, reliance was placed upon the decisions of the Hon'ble Supreme Court in Champalal Versus mst. Samrathbai AIR 1960 SC 629 and of this Court in Moti Ram Versus Mangal Singh and Ors. ILR (1971) II Delhi 451 and M/s. Chaudhary Gulzar Singh Versus m/s. Frick India Ltd. AIR 1979 Delhi 97.
Samrathbai AIR 1960 SC 629 and of this Court in Moti Ram Versus Mangal Singh and Ors. ILR (1971) II Delhi 451 and M/s. Chaudhary Gulzar Singh Versus m/s. Frick India Ltd. AIR 1979 Delhi 97. It was pointed out that in Champalal's case (supra), the Supreme Court held that Article 178 of the Limitation Act applies to an application made by the parties and not to the filing of the award by the arbitrator. Corresponding Article in the Limitation Act, 1963 is Article 119 where the words are similar to the words of Article 178 of the Limitation act, 1908. Consequently, in Moti Ram's case (supra), the Delhi High Court held that the application moved by the arbitrator to file the award in court seven years after the same was made was not barred by limitation, as there was no provision in the Limitation Act which was applicable to an application made by the arbitrator to file the award under Section 17 of the Arbitration Act. Both the cases of Champalal and Moti Ram were referred to and relied upon by the learned Single Judge of this Court in the case of M/s. Chaudhary and Gulzar Singh (supra ). ( 8 ) HAVING heard learned counsel for the parties and scrutinized the record, in my considered opinion, the contention raised by counsel for the claimant in the instant case is clearly unsustainable in view of the law enunciated by the Supreme Court in Patel Motibhai Naranbhai's case (supra ). The supreme Court held that faced with the situation that an application for filing the award in court under Section 14 (2) of the Arbitration Act had become barred by limitation, Jayanti Ishwarbhai Patel induced the arbitrator to make an application for filing of the award and thereby did indirectly what he could not have done directly. The Apex Court then went to express anguish at the way the law had been circumvented in this fashion, holding that the court should not have come to the aid of a party where there had been "unwarrantable delay in seeking the statutory remedy". It further held that any remedy must be sought with "reasonable promptitude" having regard to the circumstances.
It further held that any remedy must be sought with "reasonable promptitude" having regard to the circumstances. ( 9 ) IN the instant case, by no stretch of imagination it can be said that the claimant acted with reasonable promptitude after the arbitrators made their award on 30th August, 1990. Admittedly, the deposit of Rs. 8,000/- towards costs and expenses of the arbitration proceedings was made on 6th January, 1994 for which no plausible reason has been assigned. A somewhat vague plea has been raised that two groups of shareholders in the company had got embroiled in litigation in the Company Court and as such the order of the Company Judge was required for the deposit of Rs. 8,000/- by the petitioner company. No details whatsoever in this regard have been given. The order of the Company Judge which is heavily relied upon has not been filed, the date of the same has not been mentioned nor are any particulars of the Company Petition given. No evidence is thus forthcoming on the record to substantiate the reason given by the claimant for the delay in the deposit of Rs. 8,000/- by the petitioner-claimant. ( 10 ) THEN again, it is not known as to what prevented the petitioner-claimant from moving the court after 9th February, 1994 for making the award a rule of the court. Unconscionable delay was caused in the filing of the award and in seeking the statutory remedy. As held by the Apex Court in Patel Motibhai naranbhai (supra), even it is held that Article 119 of the Limitation Act will apply only to an application made by a party and not by the arbitrator, Article 137 will come in the way of the arbitrator making an application for filing of the award beyond the period of three years from the date of making of the same. ( 11 ) INDISPUTABLY, in the instant case, there is unexplained and unwarranted delay of almost five years in the filing of the award. The inevitable result is that it must be held that the filing of the award is barred by limitation in view of the law laid down by the Hon'ble Supreme Court referred to hereinbefore.
( 11 ) INDISPUTABLY, in the instant case, there is unexplained and unwarranted delay of almost five years in the filing of the award. The inevitable result is that it must be held that the filing of the award is barred by limitation in view of the law laid down by the Hon'ble Supreme Court referred to hereinbefore. The claimant cannot be allowed to circumvent the law and to obtain indirectly an order under Section 17 of the Arbitration Act, which it could not have obtained directly in view of the long lapse of time. The award is accordingly set aside. The petition is allowed leaving the parties to bear their own costs.