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2010 DIGILAW 215 (JK)

Balwant Singh & Sons v. Union Of India

2010-04-23

SUNIL HALI

body2010
1. This order will dispose of all the four arbitration applications, as common question of law is involved in all the petitions. 2. In AA no. 23/2001, for execution of a civil contract for construction of accommodation for Army personal, the work was allotted to the petitioner under Contract No. CEUZ-31/ 86-87. The date of commencement of the contract was fixed for 28.02.1987 and the date for completion of work was fixed as 28.02.1989 and the value of the contract was for a sum of Rs. 62,11,139.80. Dispute arose in respect of the execution of the contract as a result of which the arbitration clause in the agreement was invoked by the petitioner. It may also be noted that dispute arose on account of cancellation of the contract by the respondents on 30.04.1993. It transpires that respondents appointed Shri T. K. Mittal as the arbitrator on 30.04.1998 to adjudicate upon the dispute between the parties. The arbitrator passed an ex-parte award on 30.05.2000. 3. According to the petitioner the award was received by him on 22.06.2000. The award came to be filed in this Court on 27.04.2001. Feeling aggrieved of the award, petitioner has filed petition under Section 30/33 of the Arbitration Act for setting aside the award dated 30.05.2000. 4. The grounds of challenge are that (a) that the agreement was executed in the year 1987 and in view of the amendment effected, the arbitrator was required to pass a reasoned award, which has not been done in the present case; (b) That the award has been filed by the arbitrator beyond the period of limitation as contemplated by Article 178 of the Limitation Act; (c) That the arbitrator has unilaterly accepted the up-dating of the claims at the behest of the respondents, which he could not have done, once the dispute was referred to him. 5. 5. The stand of the respondents, on the other hand, is that (a) That there is no period of limitation provided for filing of the award by the arbitrator in the court; (b) That since the petitioner has absented himself before the arbitrator and the claim of the respondents was not contested by him, as such, the award was passed not on the basis of up-dated claims but what could be gathered from the record produced by the petitioner; (c) That the award passed by the arbitrator is reasoned one and does not suffer from any illegality. 6. I have heard the learned counsel for the parties. 7. In order to understand the scheme of the Act, it be seen that an award cannot be made rule of the Court unless the same is filed in the Court and requisite notice is issued to the parties. The provisions which require a notice to be served after the award has been received, is contained in Section 14 of the Act. In order to understand the import of Section 14, it is necessary to reproduce the provisions of Section 14. Which reads thus:- "14. Award to be signed and filed: (1) When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award. (2) The arbitrators or umpires shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award. (3) Where the arbitrators or umpire state a special case under clause (b) of Section 13, the Court, after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall form part of, the award." 8. (3) Where the arbitrators or umpire state a special case under clause (b) of Section 13, the Court, after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to, and shall form part of, the award." 8. Sub Section (1) of Section 14 above speaks of a notice to the parties which has to be necessarily in writing. This is the only provision under which the parties are entitled to get notice of making the award. If the service of notice has been effected on the parties, giving them information regarding making of the award, the filing of the award has to be on the behest of either of the parties on their own or on the directions of the Court. The parties may request the arbitrator to file the award in the Court or approach the Court for issuance of such directions to the arbitrator. The arbitrator is bound to file the award in the Court on receiving such directions. If the award has been filed in the Court, it is bound to give notice of filing of the award to the parties. On this being done, the parties have the option either to accept the award or get it set aside or modified. The award can be set aside on the grounds mentioned in Section 30 of the Act, that too on an application under the Act as provided under Section 33 of the Act. 9. Following things are clearly visible after examining the import of the scheme of the Act:- (a) That a notice in writing has to be given by the arbitrator to the parties, informing them about the award having been made; (b) That it is at the option of the parties that the arbitrator is required to submit the award in the Court; (c) That after receipt of the award, the Court is required to issue notice to the parties, who have the option to either accept the award ort seek its modification or setting aside. 10. A plain reading of this provision clearly mentions that the arbitrator is not required to file the award on its own and rightly there is no period of limitation provided to do so. The statute castes an obligation on the parties to ask the arbitrator to file the award in the Court after receipt of notice. 10. A plain reading of this provision clearly mentions that the arbitrator is not required to file the award on its own and rightly there is no period of limitation provided to do so. The statute castes an obligation on the parties to ask the arbitrator to file the award in the Court after receipt of notice. This option has to be exercised by the parties within a period of 90 days, as contemplated by Article 178 of the Limitation Act. 11. The period of Limitation, as indicated above, would start running from the date the arbitrator informs the parties about making of the award. So the parties are required to take steps to have the award filed in the Court within 90 days from the date of receipt of notice from the arbitrator. If no steps have been taken by the parties within the prescribed period, seeking a direction to the arbitrator to file the award, the same will be hit by Article 178, which clearly mentions that the award has to be filed in the Court within 90 days from the date of service of making of the award. The service of making of the award has reference to Section 14 (1) of the Act, which calls upon the arbitrator to serve a copy of the notice to the parties for making the award. 12. Now in the present case it is contended by the petitioner-objector that the arbitrator has informed him about the passing of the award on 22.06.2000, however, he has not produced any notice in this behalf. The respondents, however, have not specifically denied this averment of the petitioner. It also transpires from the record that Chief Engineer, Udhampur Zone, vide his communication dated 31.10.2000 has directed one Shri Arun Kumar, ASW, 138- Works Engineers C/O 56 APO to file the original award along with connected documents on behalf of the Chief Engineer Udhampur Zone, in this Court. On this communication having been sent the award has been finally filed in this Court on 27.04.2001. 13. From the aforementioned communication it clearly envisages that the award has been filed by the claimant- respondent. The award has not been filed by the arbitrator in the present case. The communication indicates that award has been filed by Arun Kumar, ASW, on behalf of Chief Engineer Udhampur Zone. 13. From the aforementioned communication it clearly envisages that the award has been filed by the claimant- respondent. The award has not been filed by the arbitrator in the present case. The communication indicates that award has been filed by Arun Kumar, ASW, on behalf of Chief Engineer Udhampur Zone. Communication dated 27.04.2001 indicates that the award has been filed on behalf of the arbitrator. 14. As discussed above, the award seems to have been filed by the arbitrator at the behest of the claimant-respondent and on their request. 15. It is not in dispute that the award has been passed against the present petitioner-objector and he could not be expected to take steps to have the award filed in the Court. It was left for the respondents to have taken steps for seeking a direction to the arbitrator to file the award in the Court, as contemplated in Section 14(2) of the Act. So what clearly emerges from the above discussion is that procedure as envisaged under 14(1) and 14(2) has not been complied with. Assuming that a notice under Section 14(1) was issued, it was left to the parties to direct the arbitrator to file the award or by the intervention of the Court to ask him to file the award in the Court. This has not been done. The other aspect is that if it is assumed that there was notice of award having been published by the arbitrator, as contemplated by Section 14(1), the same has been filed beyond the period of limitation which is 90 days from the date of service of notice for making the award and is clearly hit by Article 178 of the Limitation Act. 16. In the present case, the mode of service has to be in writing by the arbitrator under Section 14(1) of the Act. None of the parties have contested that the said mode has not been complied with, as such, it has to be concluded that requirement of Section 14(1) has been complied with. 17. A Division Bench of this Court in Smt. Gian Kour v. S. Atma Singh, reported in 1978 JKLR, 516, has held as under:- "Article 178 requires an application for filing of an award to be made within 90 days from the date of service of the making of an award. 17. A Division Bench of this Court in Smt. Gian Kour v. S. Atma Singh, reported in 1978 JKLR, 516, has held as under:- "Article 178 requires an application for filing of an award to be made within 90 days from the date of service of the making of an award. The terminus a quo is the date of service of the making of the award. This Article itself does not speak of the manner in which such a service is to be made. This naturally takes one back to the provisions of the Arbitration Act itself to find our whether any mode of such a service is provided in the Act because if such a mode is provided in the Act, only that mode has to be followed and no other mode. Law is now well settled, that if an act is to be done in a particular manner it shall be done in that manner alone, or not done at all. Sub Section (1) of Section 14 speaks of a notice to the parties which has to be necessarily in writing. This is the only provision under which the parties are entitled to get notice of making an award. The conclusion is, therefore, inescapable that service mentioned in Art.178 refers to the notice provided in sub-section (1) of Section 14 of the Act and a verbal notice would not be the one contemplated by Art. 178 of the Limitation Act." 18. The Apex Court in Patel Motibhai Naranbhai and anr v. Dinubhai Motibhai Patel and ors, reported as (1996)2 SCC 585, while dealing with the issue as to whether the award can be enforced under Section 17 of the Act in a situation where the same has been filed beyond the period of limitation, has observed as under:- "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. 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 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 Arbitrators making an application beyond the period of three years from the date of making of the award." 19. From the aforementioned discussion it clearly emerges that the award has been filed beyond the period of limitation, as provided by Article 178 of the Limitation Act and, as such, cannot be enforced as a decree. Since the award could not have been filed beyond the period of limitation, as such, procedure envisaged after filing of the award for either setting aside or making it rule of the Court, cannot proceed as the award has been filed after 90 days after its service on the parties. As such, the award in the present form cannot be executed and made rule of the Court. However, it is open for the Arbitrator to file the award in the Court subject to just exceptions of limitation. 20. Similarly in other connected petitions being AA nos. 24, 25 and 26 of 2001, three different civil contracts were allotted to the petitioner under contract Nos. CEUZ-12/86-87, CEUZ-3/85-86 and CEUZ-27/87-88 respectively. These contracts were also cancelled/terminated in April, 1993. The same arbitrator namely Shri T. K. Mittal, was appointed as arbitrator for settlement of disputes in these contracts also. The arbitrator passed the ex- parte awards in these contracts on the same date i.e. 30.05.2000 and notices were issued to the parties of the signing and publishing of the awards. The awards in these contracts also came to be filed in the Court in the similar circumstances, as in AA no. 23/2001, on 27.04.2001. Therefore, since a common question of law is involved in all the four petitions, the findings returned in AA no. 23/2001 shall be applicable to these Arbitration petitions, being AA nos. 24, 25 and 26 of 2001. 21. 23/2001, on 27.04.2001. Therefore, since a common question of law is involved in all the four petitions, the findings returned in AA no. 23/2001 shall be applicable to these Arbitration petitions, being AA nos. 24, 25 and 26 of 2001. 21. Consequently the awards passed in these three contracts also cannot be executed and made rule of the Court. 22. The other issues raised by the objector need not to be addressed in view of the aforementioned facts. 23. The objections filed by the objector are, accordingly, allowed. 24. Record be sent back to the Arbitrator forthwith.