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Tripura High Court · body

2018 DIGILAW 257 (TRI)

Chairman-cum-Managing Director v. Horizon Hi-Tech Engicon Ltd.

2018-09-11

AJAY RASTOGI

body2018
JUDGMENT : 1. Instant appeal u/S.37 of the Arbitration & Conciliation Act 1996 has been filed assailing the order dt.15.06.2018 passed by the Ld. District Judge, West Tripura, Agartala rejecting the application filed by the appellant u/S.34(3) of the Arbitration & Conciliation Act 1996 read with S.14 of the Limitation Act 1963 praying for condoning the purported delay of 16 days in filing the application u/S.34 for setting aside the arbitral award dt.26.04.2016 passed by the Ld. Sole Arbitrator. 2. The minimal facts, in brief, which manifest from the record are that the appellant filed application u/S.34 of the Act 1996 being No. Misc.(Arb.) 4/2016 for setting aside the arbitral award dt.26.04.2016 passed by the Ld. Sole Arbitrator in connection with case No.SKD/Arb.P.No.11/2015. Indisputedly, the application was filed within the statutory period on 18.07.2016. 3. It appears that at the relevant point of time while the application was filed u/S.34 of the Act 1996 it escaped notice of the appellant of an amendment being made on 31.12.2015 published in the gazette of 01.01.2016 whereby sub-sec.(5) of S.34 was inserted that an application u/S.34 shall be filed only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit endorsing compliance with the said requirement. 4. The respondents filed their written objection questioning the maintainability of the application filed u/S.34 of the Act 1996 holding that since the appellant has failed to comply with the mandate of S.34(5) of the Act which indisputedly came into force on the day of filing the application and in the given circumstances the application filed u/S.34 of the Act is not maintainable. 5. At the given point of time there was a conflicting views of the respective High Courts as to what will be the effect of S.34(5) of the Act 1996 which has been inserted by Act No.3 of 2016 w.e.f. 23.10.2015 in the Arbitration & Conciliation Act 1996. In the given circumstances, application was filed by the appellant u/O.XXIII R.1(3) read with S.151 CPC to withdraw the application filed within the statutory period with liberty to file afresh after due compliance of the mandate of S.34(5) of the Act 1996. 6. In the given circumstances, application was filed by the appellant u/O.XXIII R.1(3) read with S.151 CPC to withdraw the application filed within the statutory period with liberty to file afresh after due compliance of the mandate of S.34(5) of the Act 1996. 6. At the given stage, the respondents’ counsel also recorded having no objection if the appellant wants to withdraw the application with liberty to file fresh application which came to be disposed of on 10.11.2017 permitting the appellant to withdraw the application filed u/S.34 of the Act with liberty to file fresh and accordingly the fresh application was filed by the appellant after due compliance of the mandate of S.34(5) of the Act with an affidavit annexed thereto on 30.11.2017 u/S.34(3) read with S.14 of the Limitation Act for exclusion of the period which was earlier consumed and treating the present application filed under Limitation Act and to be heard on merits. 7. The subsequent application filed by the appellant u/S.34(3) of the Act 1996 read with S.14 of the Limitation Act was contested by the respondents which persuaded the learned trial Judge and accordingly the later application filed came to be rejected on 15.06.2018 denying the appellant of taking benefit of S.14 of the Limitation Act for exclusion of the period earlier consumed which is the subject matter of challenge in the instant appeal. 8. Counsel for the appellant submits that as regards the interpretation u/S.34(5) of the Act is concerned the question is no more res integra after the judgment of the Apex Court in Civil Appeal No.7314/2018, State of Bihar & Ors. vs. Bihar Rajya Bhumi Vikas Bank Samiti(decided on 30.07.2018) holding the compliance of S.34(5) to be directory entailing consequence of noncompliance of S.34(5) of the Act would not deprive the substantive right of the parties conferred under the Act 1996. 9. vs. Bihar Rajya Bhumi Vikas Bank Samiti(decided on 30.07.2018) holding the compliance of S.34(5) to be directory entailing consequence of noncompliance of S.34(5) of the Act would not deprive the substantive right of the parties conferred under the Act 1996. 9. Counsel for the appellant further submits that the appellant was prosecuting the earlier arbitration petition in good faith and with due diligence and after objection being raised by the respondents by filing additional preliminary objections regarding maintainability of the application because of noncompliance of S.34(5) of the Act 1996 and there being a conflicting views about the applicability of S.34(5) of the Act held by some High Courts being mandatory and that given point of time application was filed by the appellant u/O.XXIII R.1(3) read with S.151 of CPC for withdrawal of the application with liberty to file fresh and with the consent of the respondents permission was granted permitting him to withdraw the application with liberty to file fresh application. 10. In the given circumstances, the period consumed deserves to be excluded u/S.14(2) of the Limitation Act 1963 and further submits that the application filed u/S.34 be considered by computing the period of limitation u/S.34(3) of the Arbitration & Conciliation Act 1996 and further submits that the expression “other cause of a like nature” described u/S.14(1) should be read as ejusdem generis with the words “defect of jurisdiction”. 11. Per contra, counsel for the respondents submits that although the application initially filed was within the statutory period and permitted to be withdrawn with liberty to file afresh with the consent of the respondents but still the appellant is entitled to seek the benefit of S.14(2) of the Limitation Act only if there was any “defect of jurisdiction” and the expression, “other cause of a like nature” has to be construed as ejusdem generis with the words “defect of jurisdiction”, which was not the case of the appellant, in the given circumstances he was not entitled to claim exclusion of the period u/S.14(2) of the Limitation Act and their subsequent application has been rightly rejected by the learned trial Judge under order impugned. 12. I have heard the counsel for the parties and with their assistance perused the material available on record. 13. 12. I have heard the counsel for the parties and with their assistance perused the material available on record. 13. The question regarding noncompliance of notice contemplated u/S.34(5) in the present circumstances is no more res integra in the light of the judgment of the Apex Court in Civil Appeal No.7314/2018, State of Bihar & Ors. vs. Bihar Rajya Bhumi Vikas Bank Samiti holding it to be directory and in the ordinary course this court could not have non-suit the claim of the appellant, but at the given point of time when the application was filed within the statutory period as envisaged u/S.34(3) of the Act since the law was not clear and few High Courts held the requirement of S.34(5) to be mandatory and there was an objection being raised by the respondents regarding maintainability of the application because of noncompliance as being impressed upon to be mandatory in character as envisaged u/S.34(5) of the Act and at the relevant point of time as advised moved application u/O.XXIII R.1(3) CPC for withdrawal of the application with liberty to file fresh and with the consent of the respondents having no objection permission was granted by the learned Judge to withdraw the application with liberty to file fresh under its order dt.10.11.2017 and immediately after due compliance of the requirement of S.34(5) of the Act 1996 later application was filed on 30.11.2017 u/S.34(1) read with S.14(2) of the Limitation Act for exclusion of the period which was earlier consumed and treating the subsequent application within the period of limitation and to be examined on merits. 14. It is not the case of the respondents that the appellant had intentionally or deliberately had not issued notice u/S.34(5) of the Act 1996 with a view to delay the proceedings or to harass the respondents or that the appellant had received any undue benefit due to non-service of notice. At the given point of time it was a bona fide belief in the mind of the litigant whether such notice contemplated u/S.34(5) was mandatory or directory. The reason brought on record indicates that the appellant has not taken any advantage of not giving any notice u/S.34(5) prior to the date of lodging such arbitration petition. At the given point of time it was a bona fide belief in the mind of the litigant whether such notice contemplated u/S.34(5) was mandatory or directory. The reason brought on record indicates that the appellant has not taken any advantage of not giving any notice u/S.34(5) prior to the date of lodging such arbitration petition. This fact cannot be ruled out that the appellant under the bona fide belief as to whether the said notice contemplated u/S.34(5) was mandatory or directory is apparent from the conduct of the appellant and in view of the application having been withdrawn immediately after the objection being raised by the respondents and at the earliest opportunity the subsequent application came to be filed after due compliance of S.34(5) of the Act on 30.11.2017 at least this Court can observe that it cannot be said that the appellant had not prosecuted the petition bona fide in good faith and with due diligence. 15. The Apex Court in the judgment of Union of India & Ors. vs. West Coast Paper Mills Ltd. & Anr. reported in (2004) 3 SCC 458 had an occasion to examine the very expression “other cause of a like nature” as envisaged u/S.14(2) of the Limitation Act and observed as under: “………………………However, Section 14 of the Limitation Act is wide in its application, inasmuch it is not confined in its applicability only to cases of defect of jurisdiction but it is applicable also to cases where the prior proceedings have failed on account of other causes of like nature. The expression "other cause of like nature" came up for the consideration of this Court in Roshanlal Kuthalia and Ors. v. R.B. Mohan Singh Oberai, (1975) 4 SCC 628 and it was held that Section 14 of the Limitation Act is wide enough to cover such cases where the defects are not merely jurisdictional strictly so called but others more or less neighbours to such deficiencies. Any circumstance, legal or factual, which inhibits entertainment or consideration by the court of the dispute on the merits comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right.” 16. Any circumstance, legal or factual, which inhibits entertainment or consideration by the court of the dispute on the merits comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right.” 16. Taking assistance of the judgment of the Apex Court in the facts of the instant case in my view the expression, “other cause of a like nature” has to be construed liberally and a situation of this nature whether notice u/S.34(5) was contemplated before filing the arbitration application u/S.34 the same has to be read as ejusdem generis for analogous to the words “defect of jurisdiction”. 17. This fact can also not be ruled out that the respondents themselves have raised objection in their additional written objection questioning the maintainability holding that without prior notice u/S.34(5) of the Act 1996 the arbitration application was not maintainable and once the application was filed for withdrawal with liberty to file fresh on the consent of the respondents which is very much evident from the order passed by the learned Judge dt.10.11.2017 in my considered view the objection it falls under the expression, “other cause of a like nature”. 18. Almost in a similar facts and circumstances the matter has been considered by the High Court of Bombay in Commercial Arbitration Petition No.453/2017, Maharashtra State Road... vs. Simplex Gayatri Consortium(decided on 19.04.2018) granting the benefit of exclusion of time to the appellant u/S.14(2) of the Limitation Act. The relevant paragraph of the judgment reads ad infra: “41. In my view the petitioner has made out a case for exclusion of time under section 14(2) of the Limitation Act, 1963 for a period from 26th July, 2017 to 31st August, 2017. There is thus no delay in filing arbitration petition by the petitioner. The preliminary objection raised by the respondents that the petition is barred by limitation has thus no merit and is accordingly rejected. The parties are directed to make submissions on the merits of the arbitration petition.” 19. The judgment relied upon by the respondents in support of their contention in (2002) 6 SCC 336 , Deena(dead) through LRs v. Bharat Singh(Dead) through LRs & Ors. The parties are directed to make submissions on the merits of the arbitration petition.” 19. The judgment relied upon by the respondents in support of their contention in (2002) 6 SCC 336 , Deena(dead) through LRs v. Bharat Singh(Dead) through LRs & Ors. may not be of any assistance for the reason, the expressions, “defect of jurisdiction” and “other cause of a like nature” as referred to u/S.14(2) of the Limitation Act was considered by the Apex Court in the circumstances where the previous suit filed by the respondents was decreed by the trial court and the defendant had filed appeal against the judgment & decree of the trial court and the earlier suit was withdrawn for the reason that one of the mortgager had not been impleaded in the suit. In the given circumstances, it was observed by the Apex Court that the party was not entitled to invoke exclusion of right in the proceedings as envisaged u/Sec.14(2) of the Limitation Act. 20. In my considered view, the appellant has made out a case for exclusion of the time u/S.14(2) of the Limitation Act 1963 and consequently the order passed by the learned trial Judge impugned dt.15.06.2018 is hereby quashed & set aside. The application filed by the appellant u/S.34 of the Act 1996 on 30.11.2017 be treated within the period of limitation and the arbitration petition be heard on merits and it is expected from the learned Judge to decide the arbitration petition expeditiously in accordance with law. Parties shall record their presence before the learned Judge on 24.09.2018. 21. Copy be sent to the Ld. Trial Judge for compliance.