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Himachal Pradesh High Court · body

2009 DIGILAW 115 (HP)

STATE OF H. P. v. HIMACHAL TECHNO ENGINEERS

2009-03-06

SANJAY KAROL

body2009
JUDGMENT SANJAY KAROL, J. Before the matter started Mr. S. R. Sharma, learned counsel for the respondents, stated at the bar that keeping in view the provisions of Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'), even though for the post award period his clients are entitled to statutory interest @ 18% per annum but, however, his clients agree to accept the interest at such rate as has been awarded by the arbitrator for the period up to the date of the award. Statement accepted and taken on record. The petitioners are referred to as 'the State' and the respondents are referred to as 'the contractor'. Certain disputes having been arisen between the parties in relation to Agreement No. 91 (2002-2003), "for the augmentation of LWSS Hamirpur Town from River Beas in Tehsil and District Hamirpur", the matter was referred to the arbitrator in accordance with the terms of the agreement. Shri O. P. Sharma, Arbitrator-cum-Superintending Engineer, I & PH Circle, Sunder Nagar, adjudicated the dispute and passed the impugned award dated 05.11.2007. In terms of the award, the contractor/present respondent has been awarded a sum of Rs. 15,03,204 inclusive of interest up to the date of award. For post award period the award is silent with regard to the interest. The present objection petition under Section 34 of the Act was filed by the State on 11.03.2008. The petition is accompanied by an application being OMP No. 71/2008, filed under Section 34(3) of the Act seeking condonation of delay in filing the objection petition. The contents of the same are reproduced in its entirety : "2. That there had been some delay of about 28 days in filing the application under Section 34 of the Arbitration and Conciliation Act, 1996 due to the fact that long process of official channels was to be exhausted before filing the application and this official process has caused delay in filing the application which was beyond the control of the applicant and the application could not be filed within the stipulated period of 30 days. Hence, the present application under Section 34(3) of the Arbitration and Conciliation Act, 1996. 3. That the aforesaid award was announced by the learned arbitrator on 05.11.2007 and the copy of the same has been received by the Executive Engineer, I & PH Division, Hamirpur on 13.11.2007. 4. Hence, the present application under Section 34(3) of the Arbitration and Conciliation Act, 1996. 3. That the aforesaid award was announced by the learned arbitrator on 05.11.2007 and the copy of the same has been received by the Executive Engineer, I & PH Division, Hamirpur on 13.11.2007. 4. That the Executive Engineer, I & PH Division, Hamirpur examined the case and submitted the proposal to the Superintending Engineer, I & PH Circle Hamirpur, vide letter dated 18.12.2007 and the proposal was examined in the office of the Superintending Engineer, I & PH Circle, Hamirpur and submitted it to the Chief Engineer (CZ), I & PH Deptt. Mandi vide letter dated 02.01.2008 which has been received in the office of the Chief Engineer (CZ) on 04.01.2008. The award was forwarded to the Engineer-in-chief, I & PH Department, Shimla vide letter dated 11.01.2008. 5. That the case was examined in the office of the Engineer-in-chief, I & PH Department, Shimla and opined that this is a case to be agitated by way of appeal in the Hon'ble High Court of H.P. The opinion of the Law Deptt. of Engineer-in-chief has been conveyed to the Superintending Engineer, I & PH Circle, Hamirpur on 05.03.2008. 6. Thereafter, the case for appeal was processed by the Executive Engineer through Assistant Engineer, I & PH Sub-Division, Hamirpur by hand and the appeal was prepared in the office of the Engineer-in-chief and sent to the office of learned Advocate General for vetting on 07.03.2008 and the learned Advocate General vetted the appeal on the same day. 7. The draft appeal has been faired out and filed on 10.03.2008." In reply to the said OMP, the contractor has taken a specific objection that the original petition having been filed even beyond the period of 3 months and 30 days, the court has got no power to condone the delay. The contractor has also placed on record, by way of an application being OMP No. 467/2008, the certificate issued by the Sr. Supdt. Post Offices, Hamirpur Division, Hamirpur stating : "Speed Post Article No. EE887629006IN dated 06.11.2007 A/T XENI & PH, Hamirpur (HP). It is to inform you that the speed post under reference was delivered to the addressee on 10.11.2007." In reply to the said OMP, the State itself has placed on record the certificate issued by the Sr. Supdt. Supdt. Post Offices, Hamirpur Division, Hamirpur stating : "Speed Post Article No. EE887629006IN dated 06.11.2007 A/T XENI & PH, Hamirpur (HP). It is to inform you that the speed post under reference was delivered to the addressee on 10.11.2007." In reply to the said OMP, the State itself has placed on record the certificate issued by the Sr. Supdt. Post Offices which also reads as under : "To The XEN IPH Division Hamirpur (HP) - 177001. No. : CR/RTI/CPIO-8/08 dated at Hamirpur (HP) the 22nd October, 2008. Subject : Disposal of Bhojpur Sub-Post Office Speed Post Article No. EE887629006IN dated 06.11.2007 addressed to XEN IPH Division, Hamirpur (HP) - 177001. Ref. : Your Letter No. IPH-HMR-Court case/2008-2009/12890 dated 22.10.2008. It is to inform you that the above noted speed post article was delivered to the addressee on 10.11.2007. Attested photocopy of the delivery slip dated 10.11.2007 is enclosed for reference. Sd/- Sr. Supdt. Post Offices, Hamirpur Division, Hamirpur - 177001." In the said reply, the respondents have also stated that : "Copy of which is annexed as Annexure RA/2. It is clear from the receipt that the same has been got received from a Beldar/Chowkidar who was in the office on 10.11.2007 when it was holiday. Therefore, any delivery made to unauthorised worker that is Beldar/Chowkidar cannot be said delivery to the authorised/responsible/official/officer of the department." It is not in dispute that the arbitrator had sent a signed copy of the impugned award to the parties by way of speed post. It is also not in dispute that it is the very same letter sent by the arbitrator enclosing the signed copy of the award, which was received by the petitioners in its office on 10.11.2007. The facts which thus emerge are that the arbitrator passed the award on 05.11.2007, sent the signed copy of the impugned award, which has been filed along with the present case, to the parties and the petitioners received the same on 10.11.2007 in its office. The court was closed on 8th March, 2008 being a second Saturday and 9th March, 2008 being a Sunday. 10th March, 2008 being Monday the courts were open. The present petition was filed on 11.03.2008. The delay sought to be explained in OMP No. 71/2008, to my mind, has not been sufficiently explained. The court was closed on 8th March, 2008 being a second Saturday and 9th March, 2008 being a Sunday. 10th March, 2008 being Monday the courts were open. The present petition was filed on 11.03.2008. The delay sought to be explained in OMP No. 71/2008, to my mind, has not been sufficiently explained. There is nothing on record to show that the applicant, in any manner, was prevented by sufficient cause from making the application within a period of three months. From the explanation given in the application it is to be seen that from the time the Executive Engineer forwarded the copy of the award on 13.11.2007, it reached the office of the Advocate General only on 07.03.2008. The Chief Engineer sent the award to the Superintending Engineer, Hamirpur vide letter dated 18.12.2007 who in turn sent it to the Chief Engineer, Mandi vide letter dated 04.01.2008. Why it took 17 days to reach the said office has not been explained. The Chief Engineer sent the award to the Engineer-in-chief, Shimla on 11.01.2008, which I assume must have reached by about 17.01.2008. The opinion to file objections was conveyed by the office of the Chief Engineer, Shimla to the Superintending Engineer only vide letter dated 05.03.2008. What transpired between 17.01.2008 and 05.03.2008, in the office of the Engineer-in-chief has not been explained. No day-to-day movement of the file has been explained. Ordinarily, the limitation was to expire on 09.02.2008. The State is not an illiterate, ignorant litigant. It has a full-fledged department of law at its assistance. It has been dealing with such like cases and is aware of the urgency involved in the matter. The delay ought to have been explained properly and adequately. In the present case, there is no doubt that the officers have been extremely negligent in pursuing the matter as it has been dealt in a routine manner. Be that as it may be, even if it were to be assumed, hypothetically though, that the cause for the delay stands sufficiently explained, even then the same cannot be condoned as the petition was filed after the statutory period prescribed in the proviso to Section 34(3). The relevant provisions of the Act are reproduced as under : "34. Be that as it may be, even if it were to be assumed, hypothetically though, that the cause for the delay stands sufficiently explained, even then the same cannot be condoned as the petition was filed after the statutory period prescribed in the proviso to Section 34(3). The relevant provisions of the Act are reproduced as under : "34. xxx xxx xxx (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal : Provided that if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter." In Union of India v. Popular Construction Co., (2001) 8 SCC 470 = 2001 (3) Arb. LR 345 (SC) while interpreting the said provision, the Apex Court has held that 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. It further held that : "14. Here 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" [4(v) of the Statement of Objects and Reasons of the Arbitration and Conciliation Act, 1996]. This objective has found expression in Section 5 of the Act which prescribes the extent of judicial intervention in no uncertain terms : '5. Extent of judicial intervention - Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.' xxx xxx xxx 16. Extent of judicial intervention - Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.' xxx xxx xxx 16. Furthermore, Section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award "in accordance with" sub-section (2) and sub-section (3), sub-section (2) relates to grounds for setting aside an award and is not relevant for our purposes. But an application filed beyond the period mentioned in Section 34, sub-section (3) would not be an application "in accordance with" that sub-section. Consequently, by virtue of Section 34(1), recourse to the court against an arbitral award cannot be made beyond the period prescribed. The importance of the period fixed under Section 34 is emphasized by the provisions of Section 36 which provide that "where the time for making an application to set aside the arbitral award under Section 34 has expired ....... the award shall be enforced as per the Code of Civil Procedure, 1908 in the same manner as if it were a decree of a court". This is a significant departure from the provisions of the Arbitration Act, 1940. Under the 1940 Act, after the time to set aside the award expired, the court was required to "proceed to pronounce judgment according to the award and upon the judgment so pronounced a decree shall follow". Now the consequence of the time expiring under Section 34 of the 1996 Act is that the award becomes immediately enforceable without any further act of the court. If there were any residual doubt on the interpretation of the language used in Section 34 the scheme of the 1996 Act would resolve the issue in favour of curtailment of the court's powers by the exclusion of the operation of Section 5 of the Limitation Act." The Apex Court in Consolidated Engg. Enterprises v. Principal Secy. Irrigation Deptt., (2008) 7 SCC 169 = 2008 SCACTC 207 (SC) = 2008 (2) Arb. LR 139 (SC) has held that a bare reading of sub-section (3) of Section 34 read with the proviso makes it abundantly clear that the application for setting aside the award on the grounds mentioned in sub-section (2) of Section 34 will have to be made within three months. LR 139 (SC) has held that a bare reading of sub-section (3) of Section 34 read with the proviso makes it abundantly clear that the application for setting aside the award on the grounds mentioned in sub-section (2) of Section 34 will have to be made within three months. The period can further be extended, on sufficient cause being shown, by another period of 30 days but not thereafter. The section itself creates a distinction and provides the period in months and days. It takes into account the variation in the number of days which may be falling in the month for which the total period is to be calculated. Period of three months is to be calculated from 11.11.2007, i.e. one day after the date of the receipt of the letter which was on 10.11.2007. Hence, three months period would end on 09.02.2008 and if 30 days were to be taken from 10.02.2008, the period for filing the petition (in any event) would have expired on 10.03.2008 whereas the same was filed on 11.03.2008. The period of three months has been calculated as under : From 12.11.2007 to 11.12.2007 = 1 month From 11.12.2007 to 10.01.2008 = 2 months From 10.01.2008 to 09.02.2008 = 3 months. And 30 days as under : 20 days February 28 (being a leap year) 10 days March 2008. Therefore, the court has got no power to extend the said period of 30 days, hence the application cannot be allowed. A similar view was also taken by a Single Judge of the Delhi High Court in Union of India v. Wishwa Mittar Bajaj & Sons, 2007 (2) Arb. LR 404 (Del.). The relevant passages from the said report are reproduced as under : "25. It now becomes necessary to examine the manner in which the limitation would require to be calculated. Section 34(3) provides a period of three months for filing objections to the award from the date on which the party making the objections has received the arbitral award. The expression "three months" has not been defined by any statute. However, the expression 'month' has been the subject-matter of judicial interpretation in several pronouncements. The same has also been defined by the Halsbury's Laws of England (Volume 37), 3rd Edition in Paragraph 143, wherein it is described thus : '143. The expression "three months" has not been defined by any statute. However, the expression 'month' has been the subject-matter of judicial interpretation in several pronouncements. The same has also been defined by the Halsbury's Laws of England (Volume 37), 3rd Edition in Paragraph 143, wherein it is described thus : '143. Calendar month running from arbitrary date - When the period prescribed is a calendar month running from any arbitrary date the period expires with the day in the succeeding month immediately preceding the day corresponding to the date upon which the period starts; save that, if the period starts at the end of a calendar month which contains more days than the next succeeding month, the period expires at the end of the latter month.' 26. Such meaning of a 'month' was accepted by this court in the pronouncement of the Division Bench reported at AIR 1973 Delhi 58 - Daryodh Singh v. Union of India and others. In this behalf, the court held thus : '15. The deposit of the amount of Rs. 4,500 was actually made on May 16, 1960. It has, therefore, to be seen whether the deposit was made 'two months prior to 15.07.1960'. In its ordinary accepted sense the expression 'month' means a 'calendar month' and not a 'lunar month'. xxx xxx xxx Thus, one month counted from July 15, 1960 would be on June 16 and the second month counted from June 16 would be on May 17, 1960. Evidently, therefore, the deposit made on May 16, 1960 was two months prior to July 15, 1960.' 27. In AIR 1970 AP 234 - In Re. : S. Metha the court considered the expression 'three months of the date' in Section 106 of the Factories Act, 1948. It was held by the court that month has to be construed as the calendar month as per the English calendar. 28. Therefore, the expression 'three months' in Section 34(3) has to be construed as three calendar months from the date on which the signed award made by the arbitrator was delivered to the party." Mr. Thakur has contended that there is no delay beyond 30 days as three months would have expired on 10.02.2008 and 30 days after 10.02.2009 would expire on 12.03.2008. I am afraid it is not so. For the aforesaid reasons, the application for condonation of delay is dismissed. Thakur has contended that there is no delay beyond 30 days as three months would have expired on 10.02.2008 and 30 days after 10.02.2009 would expire on 12.03.2008. I am afraid it is not so. For the aforesaid reasons, the application for condonation of delay is dismissed. The arbitration case as also the pending applications are dismissed. However, the statement of the learned counsel for the contractor is taken on record.