Om Prakash Mittal vs Vinod Kumar Mittal And Others
2018 Latest Caselaw 921 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Reserved
 
Court No. - 3
 

 
Case :- FIRST APPEAL FROM ORDER No. - 1159 of 2012
 

 
Appellant :- Om Prakash Mittal
 
Respondent :- Vinod Kumar Mittal And Others
 
Counsel for Appellant :- Rakesh Kumar Chaudhary,Swapnil Kumar
 
Counsel for Respondent :- Rakesh Pandey,Achyutanand Pandey,Pankaj Kumar Shukla,Pankaj Sharma,Rahul Sahai,Santosh Kumar Singh,V.K. Kushwaha
 

 
connected with
 
Case :- FIRST APPEAL FROM ORDER No. - 374 of 2013
 

 
Appellant :- Om Prakash Mittal
 
Respondent :- Vinod Kumar Mittal And Others
 
Counsel for Appellant :- Swapnil Kumar
 
Counsel for Respondent :- Rahul Sahai
 

 
Hon'ble Pankaj Mithal,J.

Hon'ble Rajiv Joshi,J.

(Delivered by Hon'ble Rajiv Joshi, J.)

The appellant- Om Prakash Mittal has filed this appeal (FAFO No. 1159 of 2012) under Section 37 of Arbitration and Conciliation Act, 1996 (hereinafter referred as the Act) against the order of the District Judge, Mathura dated 23.12.2011 in Misc. Arbitration Case No. 38 of 2009, whereby the application/objection of the appellant filed under Section 34 of the Act was rejected.

The facts as reflect from the record are thus:

On the basis of some arbitration agreement dated 5.6.2007, an award dated 19.6.2007 was passed by three arbitrators. The appellant filed objection against the said award under Section 34 of the Act on 29.7.2009 with the assertions that the appellant and the respondents are real brothers and their father late Ramji Das was doing business of coal at Mathura and had acquired immovable property at Mathura individually and as Karta of the Hindu Undivided Family; that the appellant fell ill with mental depression in and about the year 2006 and was put under constant medical supervision with the result he was not able to attend the affairs of business and that he could recover fully from the ailments only in March/April 2009 after a long treatment. Taking advantage of the absence of the applicant and his family members, who were busy in taking care of the applicant, the respondents started creating disputes and pressurizing the applicants by various ways. Under the above circumstances, the wife of the appellant Smt. Anjana Agarwal was compelled to file two suits for permanent prohibitory injunction being Original Suit No. 361 of 2009 and 364 of 2009 before the court of Civil Judge (Senior Division) Mathura, wherein both the suits, the civil court by an interim injunction dated 27.5.2009 restrained the defendants therein from dispossessing the plaintiffs from the suit property except with due process of law.

It was further stated that against the aforesaid interim injunction orders, two writ petitions were filed before this Court being Writ Petition No. 29486 of 2009 and 29487 of 2009 (Om Textile Mills Vs. Anjana Agarwal) and in the said writ petitions, copy of the award dated 19.6.2007 was annexed as annexure-2, which was made available to the appellant by his wife Smt. Anjana Agarwal on 28.6.2009; the said firm M/s. Om Textiles Mill through- respondent no.3, moved application in the Suits No. 361 of 2009 and 364 of 2009 pending before civil court for their impleadment as a party and in support of the said applications, photocopies of hand written award dated 19.6.2007 and 9.11.2008 were filed, which were provided to the appellant on 7.7.2009 by Smt. Anjana Agarwal, the plaintiff of the aforesaid suit.

It was further averred in the objection that the appellant was shocked and surprised to read the contents of the alleged award dated 19.6.2007, which were delivered by arbitrators stating that they have been appointed by the appellant and the respondents to adjudicate the disputes, although, the appellant never appointed these arbitrators nor had referred any dispute to be adjudicated by them as arbitrator. In fact, the appellant was not aware of any arbitral proceedings even the signed copy of the alleged arbitration award was never provided to the appellant and still does not have any copy except typed and photocopy of the hand written award provided to Smt. Anjana Agarwal and the copies of undated certificates provided by the Registrar of the firm to the appellant.

It was further stated that in the award, the objection filed by the appellant was within time as the limitation started from the date when the signed copy of the award by the arbitrators, was provided to the appellant and therefore, objection under Section 34 of the Act be treated as within time and be decided on merits.

The objection filed under Section 34 of the Act were registered as Misc. Case No. 38 of 2009 (Om Prakash Mittal Vs. Vinod Kumar Mittal and others). The objection was contested by respondent nos. 2 and 3 namely Govind Saran Mittal and Anil Kumar Mittal and was proceeded ex parte against the respondent no.1 Vinod Kumar Mittal. The joint written statement and supplementary affidavit were filed by the respondent nos. 2 and 3 and the appellant had filed rejoinder affidavit and supplementary rejoinder affidavit.

During the course of hearing of the aforesaid miscellaneous arbitration case, the original record of the alleged arbitration proceeding resulting in award dated 19.6.2007, were summoned from the alleged arbitrators by the District Judge, Mathura. The Distric Judge, Mathura vide impugned order dated 23.12.2011, has dismissed the application/objection filed under Section 34 of the Act for setting aside the aforesaid award as barred by limitation and simultaneously, rejected the objection of the appellant on merits. The order of the District Judge is challenged by the appellant in the present appeal.

We have heard Sri Swapnil Kumar, learned counsel for the appellant, Sri Ashok Mehta, Senior Advocate assisted by Sri Rahul Sahai, learned counsel for the respondent nos. 2 and 3 and Sri Santosh Kumar Singh, learned counsel for the respondent no.1 and perused the record.

Learned counsel for the parties addressed the Court on the point of limitation and therefore, we are proceeding with the question of limitation first.

The District Judge has recorded that the appellant has signed the award and also received the copy of the award and endorsement in this regard has been made on the back of the award, therefore, the award dated 19.6.2007 was well within his knowledge and the objection/application was filed on 29.7.2009, which is beyond the period of limitation as prescribed under Section 34 (3) of the Act.

Sri Swapnil Kumar, learned counsel for the appellant submits that the objection filed by the appellant under Section 34 of the Act is within time as per the Section 34 (3) read with Section 31 (5) of the Act as admittedly the signed copy of the award was never supplied to the appellant. He further submits that on the back page of the award, his signatures were forged and his signatures on the award has been manipulated as during the business transaction, his signatures on blank papers were obtained by the respondent, which were used for that purpose.

Learned counsel for the appellant further contends that there is no arbitral agreement dated 5.6.2007 and on a bare reading of the contents of the said agreement, it cannot be said that the said document is an arbitral agreement. Even there is no reference and the entire arbitral proceeding was concluded in a day and the appellant had no information about the said proceeding. In fact, the respondents have obtained the award by playing fraud in collusion with the arbitrators.

On the other hand, Sri Ashok Mehta, learned Senior Advocate argued that the application under Section 34 of the Act was filed after two years, one month and 10 days after receiving copy of the award on 19.6.2007, while the limitation to file the objection/application under Section 34 of the Act is 3+1 month only and not thereafter as provided under Section 34 (3) of the Act. He further submits that during the period between 19.6.2007 (the date on which the award was passed) to 29.7.2009, the appellant took the full advantage of the award, which indicates that the appellant has complete knowledge of the proceedings as well as the award and under these circumstances, the limitation applies from the date of knowledge and the District Judge has rightly rejected the objection of the appellant as barred by limitation.

We have considered the rival submissions of the parties and gone through the record.

In the objection filed under Section 34 of the Act, the appellant has specifically stated that the entire arbitral proceedings are ex parte and he had no knowledge about passing of the award by the arbitrators and his signatures on the award was manipulated by the respondents, which were obtained on blank papers and further his signatures on the receipt on award are forged by them.

The District Judge has not at all considered these objections raised by the appellant and no specific finding has been recorded in this regard. Even the signatures obtained on the back side of the award showing that the copy has been received by the appellant, has not been tallied by calling report from any hand writing expert.

Now, the crucial question involved in the present appeal is whether the period of limitation for making an objection/application under Section 34 of the Act for setting aside the arbitral award is to the reckoned from the date of copy of the award is received by the objector by any means or from any source or it would start running from the date of the signed copy of the award is delivered to the objector by the arbitrator?

The two provisions, which are relevant to answer the aforesaid question are Sections 31 and 34 of the Act. Section 34 of the Act, which deals with form and contents of arbitral award, provides as under:

"Section 31. Form and contents of arbitral award-

(1) An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal.

(2) -------

(3) -----

(4) ------

(5) After the arbitral award is made, a signed copy shall be delivered to each party.

(6) ------

(7) ------

(8) ------"

(emphasis added)

Section 31 (1) obliges the arbitrator to make an award in writing and to sign it and Sub Section (5) then provides that the signed copy of the award would be delivered to each party. Normally, the signed copy of the award would be delivered to the party by the arbitrator himself.

Section 34 of the Act then provides for filing application for setting aside the award and Sub Section (3) of Section 34 lays down the period of limitation for making the application in the following terms:

"Section 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) ------

(3) An application for setting aside may not be made after three months have lapsed 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) --------"

The expression "parties making that application had received the arbitral award" cannot be read in isolation and it must be understood in the light of what it said in Section 31 (5) that requires signed copy of the award to be delivered to each party.

From reading of two provisions together, it is quite clear that the limitation prescribed under Section 34 (3) of the Act would commence only from the date a signed copy of the award is delivered to the party making the application for setting aside it.

The said proposition was also accepted by Hon'ble Apex Court in the case of State of Maharashtra and others Vs. ARK Builders Private Limited (2011) 4 Supreme Court Cases 616. Paragraph 15 of the said judgment is quoted as under:

"The highlighted portion of the judgment extracted above, leaves no room for doubt that the period of limitation prescribed under section 34(3) of the Act would start running only from the date a signed copy of the award is delivered to/received by the party making the application for setting it aside under section 34(1) of the Act. The legal position on the issue may be stated thus. If the law prescribes that a copy of the order/award is to be communicated, delivered, dispatched, forwarded, rendered or sent to the parties concerned in a particular way and in case the law also sets a period of limitation for challenging the order/award in question by the aggrieved party, then the period of limitation can only commence from the date on which the order/award was received by the party concerned in the manner prescribed by the law."

The said view was again reiterated by the Apex Court, a subsequent decision in the case of Benarsi Krishna Committee and others Vs. Karmyogi Shelters Private Limited (2012) 9 Supreme Court Cases 496. The relevant paragraphs 16 and 17 of the said judgment are quoted as under:

"16. The view taken in Pushpa Devi Bhagat's case (supra) is in relation to the authority given to an Advocate to act on behalf of a party to a proceeding in the proceedings itself, which cannot stand satisfied where a provision such as Section 31 (5) of the 1996 Act is concerned. The said provision clearly indicates that a signed copy of the Award has to be delivered to the party. Accordingly, when a copy of the signed Award is not delivered to the party himself, it would not amount to compliance with the provisions of Section 31 (5) of the Act. The other decision cited by Mr. Ranjit Kumar in Nilakantha Sidramappa Ningshetti's case (supra) was rendered under the provisions of the Arbitration Act, 1940, which did not have a provision similar to the provisions of Section 31 (5) of the 1996 Act. The said decision would, therefore, not be applicable to the facts of this case also.

17. In the instant case, since a signed copy of the Award had not been delivered to the party itself and the party obtained the same on 15th December, 2004, and the Petition under Section 34 of the Act was filed on 3rd February, 2005, it has to be held that the said petition was filed within the stipulated period of three months as contemplated under Section 34 (3) of the aforesaid Act. Consequently, the objection taken on behalf of the Petitioner herein cannot be sustained and, in our view, was rightly rejected by the Division Bench of the Delhi High Court."

In case of Kuldip Kumar Sood Vs. Punjab Tourism Development Corporation Ltd. 2004 (2) Shimla Law Journal 1228, the Single Judge of the Himanchal Pradesh High Court took the view that Section 31 (5) of the Act provides that after arbitral award is made, signed copy shall be delivered to each party and therefore, date of delivery of such signed copy shall be the date of receipt of arbitral award for the purposes of under Section 34 (3) of the Act. Paragraph 9 and 10 of the said judgment is quoted as under:

"9. Sub-section (5) of Section 31 of the Act provides as under:

After the arbitral award is made, a signed copy shall be delivered to each party.

10. It is clear from the above provisions that the arbitrator is under an obligation to deliver a signed copy of the arbitral award to each of the parties. It is thus the date of deliver of such copy which shall be the date of 'receipt of the arbitral award' for the purpose of sub-section 3 of Section 34 of the Act. Therefore, the period of limitation shall start running from such date."

From the above discussion, it is quite apparent that the limitation run from the date of signed copy of the award by the arbitrator has been provided to the appellant. The District Judge has not at all considered the limitation point from the said point of view.

So far as the question that the District Judge on the one hand, rejected the objection of the appellant under Section 34 of the Act as barred by limitation, on the other hand proceeded with the merit of the objection when it decided that the objections were barred by limitation.

A bare perusal of the impugned order reveals that the District Judge has not only rejected the objection as barred by limitation but has also dealt with the merits of the application/objection filed under Section 34 of the Act and dismissed the same as well.

The Supreme Court in Tin Plate Co. of India Ltd. Vs. State of Bihar and others 1998 (8) SCC 272 held that when the writ petition was dismissed by the High Court on the ground of alternate remedy it was not open for it to have expressed any opinion on the merits of the petition as it may have the effect of influencing the decision of the alternate forum.

The Supreme Court in Noharlal Verma Vs. District Cooperative Central Bank Ltd. Jagdalpur 2008 (14) SCC 445 clearly laid down that if application is barred by limitation the Court has no jurisdiction to decide it on merits. The relevant paragraphs of the above decision are quoted below:

"32. Now, limitation goes to the root of the matter. If a suit, appeal or application is barred by limitation, a court or an adjudicating authority has no jurisdiction, power or authority to entertain such suit, appeal or application and to decide it on merits.

33. Sub-section (1) of Section 3 of the Limitation Act, 1963 reads as under:

"3. Bar of limitation. - (1) Subject to the provisions contained in Sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed although limitation has not been set up as defence."

(emphasis supplied)

Bare reading of the aforesaid provision leaves no room for doubt that if a suit is instituted, appeal is preferred or application is made after the prescribed period, it has to be dismissed even though no such plea has been raised or defence has been set up. In other words, even in absence of such plea by the defendant, respondent or opponent, the court or authority must dismiss such suit, appeal or application, if it is satisfied that the suit, appeal or application is barred by limitation."

The aforesaid decision has been followed in numerous other decisions by various High Courts specially the Allahabad High Court.

Thus, in view of the above, we are of the opinion that once the objection/application filed by the appellant under Section 34 of the Act has been rejected by the court below as barred by limitation, it was not open for it to have adjudicated the application on merit.

In view of the aforesaid circumstances, we are of the opinion that the court below has not at all considered the point of limitation in the light of observations made above and held that the objection of the appellant is barred by limitation in a casual manner.

We, therefore, allow the First Appeal From Order No. 1159 of 2012 and set aside the impugned judgment and order dated 23.12.2011 passed by the District Judge, Mathura and remit the matter to the District Judge, Mathura to restore the objection of the appellant under Section 34 of the Act to its original number and decide the same afresh in accordance with law in the light of the observations made hereinabove uninfluenced by any observation or finding recorded in the impugned order expeditiously within a period of six months from the date of production of certified copy of this order.

Insofar as First Appeal From Order No. 374 of 2013 is concerned, learned counsel for the appellant submitted that it has become infructuous and the same is dismissed accordingly.

No order as to cost.

Order Date :- 25.05.2018

Noman