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2008 DIGILAW 700 (MP)

Amarjit Singh v. Armor Finance and Commerce Ltd.

2008-05-15

N.K.MODY

body2008
ORDER N.K. Mody, J. 1. This order shall also govern the disposal of FA No. 270/2002 as in both the cases parties and the dispute is one and the same. MA No. 368/2005 is against the order dated 25-09-2004 passed by VI ADJ, Indore in MJC No. 13/ 2004 whereby the application filed by appellants under Section 34 of the Arbitration and Conciliation Act, 1996 (which shall be referred hereinafter as 'AC Act') was dismissed, while FA No. 270/2002 is against the order dated 04-03-2002 passed by VI ADJ, Indore in civil suit No. 1 - A/2002 whereby the suit filed by appellants and the application filed under Section 34 of the AC Act was dismissed. 2. Short facts of the case are that respondent M/s. Armor Finance and Commerce Limited, Indore gave loan for purchase of Maruti 800 car to the tune of Rs. 1,91,000/- to deceased Gurudevsingh, whose legal representatives are appellants herein. The total amount was repayable in 24 installments alongwith interest for which 24 advance cheques were given by deceased Gurudevsingh and each of the cheque was amounting to Rs. 10,580/- The dispute arose between the parties as the amount was not paid in time. In the circumstance deceased Gurudevsingh filed a suit for declaration and permanent injunction on 20-03-1996 before learned Court below wherein it was prayed that respondent be directed to hand-over the second key of the car and also the registration book. During pendency of the suit, the car was seized by respondent on 01-12-1997. 3. In the said suit an objection was raised by respondent to the effect that as per the loan agreement between the parties in case any dispute arise, then, the matter has to be referred before Arbitrator, therefore, Civil Court has no jurisdiction. Vide order 25-03-1998 learned Court below directed the parties to appoint arbitrator to resolve the dispute and the suit was stayed till the passing of award. In compliance of the order passed by learned Court below vide order dated 05-05-1998 respondent appointed Mr. Ajay Bankada as arbitrator who has initiated the arbitration proceedings and passed the final award on 25-05-1999 whereby deceased Gurudevsingh held liable for payment of Rs. 2,62,406/- alongwith interest @ 24% per annum. In compliance of the order passed by learned Court below vide order dated 05-05-1998 respondent appointed Mr. Ajay Bankada as arbitrator who has initiated the arbitration proceedings and passed the final award on 25-05-1999 whereby deceased Gurudevsingh held liable for payment of Rs. 2,62,406/- alongwith interest @ 24% per annum. Since the civil suit was pending at the time when award was passed, therefore, on 25-06-1999 deceased Gurudevsingh moved an application under Section 33 of the AC Act, whereby the validity of award was challenged. During pendency of the application and also the suit, another application was filed by deceased Gurudevsingh on 21-01-2000 under Section 34 of the AC Act in the suit itself. During pendency of both the applications filed by deceased Gurudevsingh i.e., under Section 33 and 34 of the AC Act as well, deceased Gurudevsingh died on 04-09-2000. Vide order dated 04-03-2002 the applications filed by deceased Gurudevsingh under Sections 33 and 34 of the AC Act and also the suit was dismissed against which the first appeal is filed by present appellants which is numbered as 270/2002. Thereafter appellants filed an application under Section 34 of the AC Act on 18-11-2002 wherein the validity of award dated 25-05-1999 is challenged. These proceedings were registered as MJC No. 13/2004. During pendency of these proceedings the car was sold in execution proceedings by learned Court below for a sum of Rs. 56,000/- on 09-09-2003. Thereafter, vide order dated 25-09-2004 learned Court below after hearing the respondent and also recording the evidence dismissed the application filed by appellants under Section 34 of the AC Act, against which the present appeal has been filed. 4. Learned Counsel for the appellant submits that learned Court below committed error in dismissing the petition/objections filed by the appellant and also the application for condonation of delay. It is submitted that since the appellant was prosecuting the remedy before the forum, which was having no jurisdiction, therefore, time spent by the appellant before the Court, which was having no jurisdiction ought to have been excluded. It is submitted that since the appellant was prosecuting the remedy before the forum, which was having no jurisdiction, therefore, time spent by the appellant before the Court, which was having no jurisdiction ought to have been excluded. For this contention reliance was placed on a decision of Hon'ble Apex Court in the matter of State of Goa v. Western Builders reported in 2007 (1) MPLJ 7, wherein Hon'ble Apex Court has held as under: There is no provision made in the Arbitration and Conciliation Act, 1996 that if any party has bonafidely prosecuted its remedy before the other forum which has no jurisdiction then in that case whether the period spent in prosecuting the remedy bonafidely in that Court can be excluded or not. As per the provisions, Sub-section (3) of Section 34 which prescribes the period of limitation (3 months) for moving the application for setting aside the award before the Court then that period of limitation will be applicable and not the period of limitation prescribed in the Schedule under Section 3 of the Limitation Act, 1963. Thus, the provision of moving the application prescribed in the Limitation Act, shall stand excluded by virtue of Sub-section (2) of Section 29 as under this special enactment the period of limitation has already been prescribed. Likewise the period of condonation of delay i.e., 30 days by virtue of the proviso. By virtue of Section 43 of the Act of 1996, the Limitation Act applies to the proceedings under the Act of 1996 and the provisions of the Limitation can only stand excluded to the extent wherever different period has been prescribed under the Act, 1996. Since there is no prohibition provided under Section 34, there is no reason why Section 14 of the Limitation Act not be read in the Act of 1996, which will advance the cause of justice. If the statute is silent and there is no specific prohibition then the statute should be interpreted in the manner which advances the cause of justice. The view taken by the Court below excluding the applicability of Section 14 in the proceeding is not correct. 5. Reliance was also placed on a decision in the matter of Union of India v. Shring Construction Co. The view taken by the Court below excluding the applicability of Section 14 in the proceeding is not correct. 5. Reliance was also placed on a decision in the matter of Union of India v. Shring Construction Co. Pvt. Ltd. reported in 2007 (1) MPLJ 211, wherein Hon'ble Apex Court after following the decision in the matter of State of Goa (supra) has held that appellant was prosecuting remedy before the High Court by filing writ petition should have been considered and the delay should have been condoned. However, it appears that the question with regard to applicability of Section 14 of the Limitation Act was not examined by the High Court as well as the District Judge. In view of the decision in State of Goa v. Western Builders (supra) it is just and proper to remit this matter back of the Trial Court to decide whether the application for setting aside the award under Section 34 of the Arbitration and Conciliation Act filed by the appellant could be considered to be within the period of limitation i.e., after deducting the period spent by the appellant in prosecuting the remedy before the High Court. 6. Learned Counsel for the appellant submits that in the facts and circumstances of the case learned Court below committed error in dismissing the suit and the petition/objections filed by the appellant. 7. Mr. U.K. Choukse, learned Counsel for the respondent submits that the learned Court below has rightly dismissed the objections as the same were barred by time. It is submitted that the learned Court below was having no jurisdiction to condone the delay, as the provisions of Section 5 of the Limitation Act are not applicable in the proceedings filed under Arbitration & Conciliation Act. For this contention reliance was placed on a decision in the matter of Union of India v. Popular Construction Co. reported in AIR2001SC4010 , wherein the Hon'ble Apex Court has held as under: The provisions of Section 5 Limitation Act, 1963 are not applicable to an application challenging an award, under Section 34 and as such there was no scope for assessing sufficiency of the cause for the delay beyond the period prescribed in proviso to Section 34. The crucial words in Section 34 are 'but not thereafter' used in the proviso to Sub-section (3). The crucial words in Section 34 are 'but not thereafter' used in the proviso to Sub-section (3). This phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the Court could entertain an application to set aside the Award beyond the extended period under the proviso, would render the phrase 'but not thereafter' wholly otiose. Apart from the language, 'express exclusion' may follow from the scheme and object of the special or local law. The history and scheme of the 1996 Act support the conclusion that the time limit prescribed under Section 34 to challenge an Award is absolute and unextendable by Court under Section 5 of the Limitation Act. The Arbitration and Conciliation Bill, 1995 which preceded the 1996 Act stated as one of its main objectives the need 'to minimise the supervisory role of Courts in the arbitral process'. This objective has found expression in Section 5 of the Act which prescribes the extent of judicial intervention in no uncertain terms. The 'part' referred to in Section 5 is Part I of the 1996 Act which deals with domestic arbitrations. Section 34 is contained in Part I and is therefore subject to the sweep of the prohibition contained in Section 5 of the 1996 Act. 8. Learned Counsel for the respondent submits that in the facts and circumstances of the case learned Court below has rightly dismissed the suit and the objections filed by the appellant which requires no interference. 9. Mr. Ajay Bagadia, learned Counsel for the intervener submits that intervener has deposited a huge amount under the orders of the Court. It is submitted that intervener is bona fide purchaser with full consideration, while the appellant is not bona fidely prosecuting the appeal. It is submitted that to obtain the stay in ex parte, it was wrongly alleged by the respondent that the amount was deposited by the appellant. It is submitted that intact no amount was deposited by the appellant. 10. From perusal of the record it appears that immediately after the seizure of the Car the suit was filed by the appellant and in that very suit vide order dated 23-03-98 arbitrator was appointed by the learned Court below. It is submitted that intact no amount was deposited by the appellant. 10. From perusal of the record it appears that immediately after the seizure of the Car the suit was filed by the appellant and in that very suit vide order dated 23-03-98 arbitrator was appointed by the learned Court below. After passing of the award objections were filed by the appellant under Section 33 of the Act on 25-06-1999 and on 21 -01 -2000. During pendency of the objections on 18-11 -2000 appellant filed another application under Section 34 of the Act, while the suit was dismissed on 04-03-2002. Since separate objections were filed by the appellant, therefore, no illegality has been committed by the learned Court below in dismissing the suit filed by the appellant. In view of this FA No. 270/02 is having no force and has rightly been dismissed by the learned Court below. 11. So far as the impugned order passed in MA No. 368/05 is concerned, since the arbitrator was appointed in the Civil Suit, therefore, the objections were also filed by the appellant in that very suit within time as the award was passed on 25-05-99 and the objections were filed on 25-06-99. It is true that Hon'ble Apex Court has held that the provisions of Section 5 of the Limitation Act are not applicable for condoning the delay in filing the objections against the award, but in the present case it was not the application for condoning the delay but the application was for excluding the time spent by the appellant in prosecuting the objections. The award was dated 25-05-99, appellant prosecuted the objections in the Civil Suit from 25-06-99 to 04-03-02, when the fresh objections were filed by the appellant by moving an appropriate application. 12. In the facts and circumstances of the case, keeping in view the position of law as held by Hon'ble Apex Court, this Court is of the view that the learned Court below committed error in dismissing the objections filed by the appellant. This Court is also of the view that appellant has proved beyond doubt that the appellant prosecuted the objections in the Civil Suit before the wrong Forum, bona fidely. 13. This Court is also of the view that appellant has proved beyond doubt that the appellant prosecuted the objections in the Civil Suit before the wrong Forum, bona fidely. 13. It is true that the intervener has deposited some amount for purchase of the suit property, but since the objections filed by the appellant has not been taken into consideration on the ground that it was barred by time, this Court is of the view that learned Court below committed error in dismissing the application and also in dismissing the objections filed by the appellant. Intervener is free to withdraw the amount deposited by him. In view of this, MA. No. 368/05 filed by the appellant stands allowed. The impugned judgment dated 25-09-04 passed by the learned Court below stands set aside. FA No. 270/02 filed by the appellant stands dismissed, as the same has become infructous. Copy of the order be placed in the record of FA No. 270/2002. No order as to costs.