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2016 DIGILAW 739 (ALL)

STATE OF U. P. v. VINOD KUMAR NISHAD

2016-03-01

KRISHNA MURARI, RAGHVENDRA KUMAR

body2016
JUDGMENT Hon’ble Raghvendra Kumar, J.—Heard learned Additional Chief Standing counsel for the appellant and Sri Rakesh Pandey, learned counsel for the claimant. 2. This First Appeal From Order has been preferred assailing the judgment and award dated 28.10.2015 passed by learned District Judge, Bhadohi at Gyanpur in Misc. Arbitration Case No. Nil of 2015 (Sarvajanik Nirman Vibhag Prakhand, Sant Ravi Das Nagar through its Executive Engineer v. Vinod Kumar Nishad) whereby the application moved on behalf of the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act of 1996) has been rejected. 3. According to the appellant-opposite parties, the respondent-claimant used to perform the work under contract with the appellant-Department and used to submit bills belatedly, for which the Department was not obliged to make payment but the Arbitrator appointed in the case allowed the claim and passed an award. The respondent claimant did not perform the work as per the prescribed standard and the defect was brought to his notice and thereafter he agreed for the deduction and received the amount after deduction. The award in the instant case was made on 10.10.2010 which was transmitted to the State Government on 31.12.2010. In the meantime, the respondent-claimant moved an application for execution of the award. The Department again moved an application to the Government seeking permission to comply with the award or accord permission for filing the appeal on 14.1.2015. The Government has conveyed a decision on 15.5.2015 according permission to file appeal before the competent Court. The copy of the award was not transmitted in accordance with law. 4. The case of the claimant respondent is as follows : The grounds on which the application under Section 34 of the Act has been moved are baseless and false. The copy of arbitral award was handed over to the parties on 10.10.2010. The Section 34 sub-section (3) of the Act provides for the period of limitation within which the application for setting aside the award ought to have been moved. The application of the appellant is barred by time and is not maintainable. 5. It has been contended on behalf of appellant that Section 29 of Indian Limitation Act has inter play in reference to special Act viz. Act of 1996. The period of limitation starts running from the date of service of Award. The application of the appellant is barred by time and is not maintainable. 5. It has been contended on behalf of appellant that Section 29 of Indian Limitation Act has inter play in reference to special Act viz. Act of 1996. The period of limitation starts running from the date of service of Award. A prayer for condonation of delay under Section 5 of Limitation Act as such may be made in the light of Sec. 29 of the Limitation Act. The Act of 1996 does not expressly exclude the operation of law of limitation in a matter governed by the Act of 1996. 6. Further contention is that mere service is not sufficient within the meaning of the Act instead there should be knowledge of the award. 6-A For appreciating the controversy involved in the case, it appears essential to quote Section 34 of Act of 1996, which is as under : “34. Application for setting aside arbitral award—(1) 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). 6-A For appreciating the controversy involved in the case, it appears essential to quote Section 34 of Act of 1996, which is as under : “34. Application for setting aside arbitral award—(1) 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). (2) An arbitral award may be set aside by the Court only if - (a) the party making the application furnishes proof that - (i) a party was under some incapacity, or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case, or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration : Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) The Court finds that,— (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with the public policy of India. Explanation.—Without prejudice to the generality of sub-clause (ii), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81. Explanation.—Without prejudice to the generality of sub-clause (ii), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81. (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. (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside arbitral award. 7. A simple perusal and reading of the aforesaid provision makes it clear that the legislature has contemplated limitation of 3 months from the date of receipt of copy of the arbitral award by the party for taking recourse to set aside the award. Such an application can be entertained by the Court within 30 days after the expiry of aforesaid period of 3 months provided the applicant is able to demonstrate that there he was prevented from moving the application within the stipulated period of three months by sufficient cause and not thereafter. 8. The issue was considered by the Apex Court in Union of India v. M/s. Popular Construction Co., AIR 2001 SC 4010 , as well as by this Court in the First Appeal from Order No. 763 of 2015 State of U.P. v. M/s. Harnam Singh and First Appeal From Order (D) No. 687 of 2015 Sunil Kumar Bhatt v. National Highways Authority of India and others, decided respectively on 24.3.2015 and 15.5.2015. 9. 9. The issue is no longer res integra and directly came up for consideration before the Hon’ble Apex Court in the case of Union of India v. M/s. Popular Construction Co., AIR 2001 SC 4010 (Supra) where also the application under Section 34 of the Act, 1996 to set aside the arbitral award was made much after the prescribed period of limitation. The Hon’ble Apex Court answered the issued as under : “5. The issue will have to be resolved with reference to the language used in Sections 29(2) of the Limitation Act, 1963 and Section 34 of the 1996 Act. Section 29(2) provides that : “Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law.” 6. On an analysis of the section, it is clear that the provisions of Section 4 to 24 will apply when : (i) there is a special or local law which prescribes a different period of limitation for any suit, appeal or application; and (ii) the special or local law does not expressly exclude those Sections. 7. There is no dispute that the 1996 Act is a ‘Special law’ and that Section 34 provides for a period of limitation different from the prescribed under the Limitation Act. The question then is - is such exclusion expressed in Section 34 of the 1996 Act? 7. There is no dispute that the 1996 Act is a ‘Special law’ and that Section 34 provides for a period of limitation different from the prescribed under the Limitation Act. The question then is - is such exclusion expressed in Section 34 of the 1996 Act? The relevant extract of Section 34 reads : 34 “Application for setting aside arbitral award—(1) xxx xxx xxx xxx xxx (2) XXX XXX XXX XXXX 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.” 8. Had the proviso to Section 34 merely provided for a period within which the Court could exercise its discretion, that would not have been sufficient to exclude Section 4 to 24 of the Limitation Act because “mere provision of a period of limitation in howsoever peremptory or imperative language is not sufficient to displace the applicability of Section 5”. The Hon’ble Apex Court relying upon the Constitution Bench judgment in Vidyacharan Shukla v. Khubechand Baghel, AIR 1964 SC 1099 , observed in paragraph 10, 11 & 12 as under: “10. This decision recognizes that it is not essential for the special or local law to, in terms, exclude the provisions of the Limitation Act. It is sufficient if on a consideration of the language of its provisions relating to limitation, the intention to exclude can be necessarily implied. As has been said in Hukum Narain Yadav v. Lalit Narain Mishra. “If on an examination of the relevant provisions it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act” 11. As has been said in Hukum Narain Yadav v. Lalit Narain Mishra. “If on an examination of the relevant provisions it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act” 11. Thus, where the legislature prescribed a special limitation for the purpose of the appeal and the period of limitation of 60 days was to be computed after taking the aid of Sections 4, 5 and 12 of the Limitation Act, the specific inclusion of these sections meant that to that extent only the provisions of the Limitation Act stood extended and the applicability of the other provisions, by necessary implication stood excluded. 12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are ‘but not thereafter’ used in the proviso to sub-section (3). In our opinion, 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. No principle of interpretation would justify such a result.” 10. The pivotal question for consideration is before us whether in view of the specific provision of limitation contained under Section 34 sub clause (3) of Act of 1996, the Section 5 read with Section 29(2) of the Indian Limitation has any inter play or not. ? 11. The intentio legis of Section 34 of Act of 1996 can be gathered from the language employed by legislature in the Section itself specifically providing of period of limitation whether it intended to exclude operation of the provision of Limitation Act. Sub-section 3 of Section 34 provides the period of limitation for 3 months for moving an application for setting aside the award from the date on which the party making that application had received the arbitral Award or, if a request has been made under Section 33, from the date on which that request had been disposed of by arbitral tribunal. It can safely be discerned that a period of 3 months is to be reckoned for the period of setting aside award from the date of receipt of arbitral award as provided under Section 34, the date on which request under Section 33 of Act of 1996 has been disposed of. Legislature further made an enabling provision for making the application for setting aside the award under Section 34 within a period of 30 days after expiry of the period of 3 months provided the applicant satisfies the Court that he was prevented by sufficient cause. Further period of extension has been provided by way of proviso appended to sub-section 3 of Section 34. The legislature in its wisdom has added the words, ‘but not thereafter’ in the proviso to sub-section 3. These crucial words have been employed by the legislature purposely intending to shun the scope of provisions of Indian Limitation Act. This clearly goes to indicate an express exclusion of general provision of limitation contained in Section 5 read with 29 (2) of the Indian Limitation Act in the matters coming in the ambit of Section 34 of Act of 1996. In view of the language employed by the legislature in the Section 34 and its proviso (3) of the Act of 1996, the inference can safely be discerned that legislature contained the period of limitation for 3 months for moving an application for setting aside award and enabled the applicant or party to avail a further period of one month provided the conditions or covenants provided in the proviso to Section 34(3) are attracted and satisfied. 12. In view of the above, the argument advanced by learned counsel for the appellant that the provision of limitation Act will be applicable in the proceedings under Section 34 of the Act of 1996 for setting aside the award is rendered without force and cannot be sustained. 13. It has been admitted on behalf of the appellant that the copy of the award dated 10.10.2010, was transmitted to the Government on 31.12.2010 which clearly indicates that prior to the sending of the copy of the award to the State Government, Public Works Department Sant Ravi Das Nagar had come to know the contents of the award. 13. It has been admitted on behalf of the appellant that the copy of the award dated 10.10.2010, was transmitted to the Government on 31.12.2010 which clearly indicates that prior to the sending of the copy of the award to the State Government, Public Works Department Sant Ravi Das Nagar had come to know the contents of the award. Since the award was transmitted to the State Government, more so, an application was also sent on 14.11.2015 to the Government by the Public Works Department, Bhadohi seeking permission to file an appeal or to comply the award. These circumstances clearly establish that the Department not only received the copy of the award but it had come to know the contents of the award. The argument in this regard cannot be sustained. 14. Being a Court of first appeal, after critical appraisal of the impugned order we do not find any illegality or infirmity in the order impugned rejecting the application of the appellant under Section 34 of the Act. 15. No other point has been pressed or highlighted before us. 16. We do not find any justification to interfere with the award. 17. The appeal is bereft of merit and is, accordingly, dismissed.