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2013 DIGILAW 347 (JK)

State Of J&K v. K. B. & Co.

2013-05-30

BANSI LAL BHAT, MUZAFFAR HUSSAIN ATTAR

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Muzaffar Hussain Attar, J. 1. On 16th September, 1988 the learned Single Judge of this Court appointed Shri Amar Nath Saraf, retired District and Sessions Judge as Arbitrator. The Arbitrator was appointed on the application filed under Section 20 of the Jammu and Kashmir Arbitration Act, 2002 (1945 A.D) (for short `Act of 2002'). The Arbitrator published award on 12.02.1990 and filed the same in the Court. On 28.02.1990 in AA No. 41/1990 notice was issued to the parties about the filing of the award and for filing of objections. The notice was accepted on 14.03.1990 on behalf of the appellants. The receipt of notice has not been disputed by the learned counsel for the appellants either before the learned Single Judge or before us. The appellants filed objections on. 14.05.1990 wherein they prayed for setting aside the award. The appellants filed objections on the grounds which are enumerated therein. 2. In terms of the J&K Limitation Act, 1995 (1938 A.D) ( For short `Act of 1995') the period prescribed for filing of objections is 30 days from the date of service of notice of filing of the award. Since the learned Single Judge has recorded in the impugned order that appellants did not join issue on the date of receipt of notice on 14.03.1990, objections filed on 14.05.1990 were thus barred by time. Resultantly, by order dated 29.08.2000, the award published by the arbitrator vide order dated 12.02.1990 was ordered to be made rule of the Court. It is this order which is called in question in this appeal. 3. Mr. Bhat, learned counsel for the appellants submitted that the objections filed by the appellants were in essence an application filed under Section 33 of the Act of 2002 and no limitation period is prescribed for filing the said application. He invited attention of the Court to the grounds enumerated in the objections and submitted that reading of the grounds projected in the objections would show that Section 33 of the Act of 2002 is attracted and Section 30 thereof is not attracted. Learned counsel for the appellants also invited our attention to the award in a bid to demonstrate that the arbitrator has not passed a speaking order and the objections filed by the appellants have not been considered. Learned counsel for the appellants prayed for allowing of this appeal. 4. Mr. Learned counsel for the appellants also invited our attention to the award in a bid to demonstrate that the arbitrator has not passed a speaking order and the objections filed by the appellants have not been considered. Learned counsel for the appellants prayed for allowing of this appeal. 4. Mr. Bhat, learned counsel for the appellants in support of his contentions referred to the judgments reported in AIR 1960 Patna 201 Deep Narain Singh and ors v. Mt. Dhaneshwari and ors and AIR 1967 Jammu and Kashmir 120 M.I. Shahdad v. Mohd. Abdullah Mir and ors. 5. Learned counsel for the respondent submitted that after receipt of the notice the appellant as also the respondent filed objections in respect of the award and sought setting aside /modification of the same. Learned counsel submitted that objections filed by respondent were withdrawn. Learned counsel prayed for dismissal of appeal. 5. In order to appreciate the arguments, it is appropriate to take note of Section 30 and 33 of the Act of 2002 and Article 158 of the Act of 1995. "30. Grounds for setting aside award.- An award shall not be set aside except on one or more of the following grounds namely:- (a) that the arbitrator or umpire has misconducted himself or the proceedings; (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under Section 35. (c) That the award has been improperly procured or is otherwise invalid." "33. Arbitration agreement or award to be contested by application.- Any party to an arbitration agreement or any person claiming under desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits. Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit." Description of Application Period of Limitation Time from which period begins to run 158. Under the Jammu and Kashmir Arbitration Act,  to Set aside an award or to get an award remitted for reconsideration" Thirty days The date of service of the notice of filling of the award. 6. Under the Jammu and Kashmir Arbitration Act,  to Set aside an award or to get an award remitted for reconsideration" Thirty days The date of service of the notice of filling of the award. 6. Perusal of the impugned order would reveal that it has not been the case projected before the learned Single Judge by the learned counsel for the appellants that they had filed application under Section 33 of the Act of 2002. In fact they have not joined the issue before the learned Single Judge on this count. They are, thus, precluded from stating that objections were not filed under Section 30 but same were filed under Section 33 of the Act of 2002. 7. However, we deem it appropriate to consider and deal with the argument of learned counsel for the appellants that the objections shall be deemed to have been filed under Section 33 of the Act of 2002, so as to bring the case of the appellants out of the rigor of Limitation Act. 8. Paragraph 2 of the objections filed by the appellants before the learned Single Judge is taken note of: "2. That the respondent challenges the propriety legality and correctness of the award on the following grounds amongst others:- (a) That it has escaped the consideration of the learned Arbitrator that the departmental purchase committee has carefully considered the tenders and had come to the conclusion that it would be in the interest of the Govt. to consider the rates separately for old and new bottles and waive off condition making supply of 50:50 of new and old bottles. (b) It had also escaped the consideration of the learned arbitrator that the departmental purchase committee had decided the discretion of fixing ratio for purchase of new and old bottles be left with the Dy. Excise Commissioner (Executive) Jammu who had been authorised to place orders for purchase of new bottles during the year exceeding 25% of the total requirement. (b) It had also escaped the consideration of the learned arbitrator that the departmental purchase committee had decided the discretion of fixing ratio for purchase of new and old bottles be left with the Dy. Excise Commissioner (Executive) Jammu who had been authorised to place orders for purchase of new bottles during the year exceeding 25% of the total requirement. (c) That the learned Arbitrator weighting the factual position and the larger interest of the Government revenue has given the award in a mechanical manner is as much as that the learned arbitrator in the award has not made any reference to the naked facts that negotiations were held by the respondent with all the tenderers making it clear to them that while offering revised rates they should quote rates inclusive of all the present taxes. (d) The award is untenable for the reasons that the learned Arbitrator has not appreciated that petitioner himself had offered the ratio of old and new bottles 25:75 respectively which are as under:- New bottles Old bottles 750 MLRs. 159/-per gross Rs. 78.50 pergross 500 ML Rs. 123/- per gross Rs. 47.50 250 ML Rs. 92/- Rs. 41.50 (e) That the learned arbitrator has also not returned the award issue wise so that the whole matter could have been explained. In true perspective and as such the award returned tentamounts that it is bad in tenable under rules. (f) That without perusing the record which was very much with the learned arbitrator and inspite of the facts that the petitioner himself had negotiated separate rates for new and old bottles and was fully conceives that the ratio of old and new bottles will in no case be more than 25% of the quantity required had given the award. The award is bad also on the grounds that the learned arbitrator has not discussed the statements recorded by the parties during the course of the reference. There is sketely reference to the statement of respondents witness Sh. Gian Singh without any discussion as is evident and to the statement of the evidence of the petitioner. (g) That the award has been given hasty in as much as that there is absolutely nothing on record to contradict the stand of the respondents nor any reasoning has been given to demolish the stand of the answering state. Gian Singh without any discussion as is evident and to the statement of the evidence of the petitioner. (g) That the award has been given hasty in as much as that there is absolutely nothing on record to contradict the stand of the respondents nor any reasoning has been given to demolish the stand of the answering state. Therefore, the award is liable to be set aside for misconduct." 9. Section 30 refers to the grounds for setting aside the award. This section provides that the award shall not be set aside except on one or more of the grounds enumerated in Clause (a) to (c). Clause (a) of Section 30 provides that award can be set aside on the ground that the arbitrator or umpire has mis-conducted himself or the proceedings. Clause (c) provides that award can be set aside on the ground that it is improperly procured or is otherwise invalid. The grounds taken in the objections for setting aside /modification of award are covered under Clause (a) and (c) of the Act of 2002. Section 33 refers to the arbitration agreement or award to be contested by application. The said Section provides that a person desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits. Proviso appended to the said Section provides that application can be ordered to be set down for hearing on other evidence also. Section 30 authorises for setting aside the award only on the grounds as enumerated in Clause (a) to (c) thereof, whereas application filed under Section 33 can be filed for seeking setting aside or modifying the award also on any of legally acceptable grounds which are not provided in Section 30. 10. In our considered view the objections filed by the appellants for setting aside modification of the award were filed under Section 30 of the Act of 2002. The objections were to be filed within 30 days from the date of receipt of the notice as prescribed by Article 158 of the Limitation Act. Admittedly, the objections have been filed beyond prescribed period. The learned Single Judge has thus rightly refused to entertain the objections of the appellants. 11. The objections were to be filed within 30 days from the date of receipt of the notice as prescribed by Article 158 of the Limitation Act. Admittedly, the objections have been filed beyond prescribed period. The learned Single Judge has thus rightly refused to entertain the objections of the appellants. 11. In Patna case (supra) facts were that notice of filing of award was not served and further more the validity of the award on the ground of invalidity of the reference was challenged. Since the notice of filing of the award was not served no limitation period would be attracted. In this case, notice of filing of award has admittedly been served. In the case on hand, the award was not challenged on the ground of invalidity of the reference. In Patna case, award was also challenged on the invalidity of the reference which ground is not covered by Clause (a) to (c) of Section 30 of the Act of 2002. This judgment proceeds on different facts and is of no assistance to the appellants. 12. In the M.I. Shahdad's case (supra) an application under Sections 30 and 33 was filed for seeking setting aside/modification of the award. 13. In this case, admittedly the objections in terms of Section 30 were filed an application under Section 33 of the Act of 2002 was not filed. As stated hereinabove that before the learned Single Judge the appellants have not argued that they have filed application under Section 33 of the Act. The contention of the learned counsel for the appellants that objections are to be treated under Section 33 of the Act of 2002, cannot be accepted on this score also. 14. Learned counsel for the appellants lastly submitted that the interest at the rate of 24% is quite harsh and shall not be allowed in the facts and circumstances of the case. 15. For our above discussion, we decline to interfere with the impugned judgment, except to the extent of reducing the rate of interest. 16. We, however, find that interest at the rate of 24% is highly excessive. We, accordingly, provide that interest would be allowed at the rate of 18%. 17. For our above recorded reasons, we dispose of the appeal with the aforesaid modification.