The General Marketing And ... vs Union Of India
1996 Latest Caselaw 179 Del

JUDGMENT

Arun Kumar, J.

1. In the disputes arising between the parties Justice D. R. Khanna, a retired Judge of this court, had been appointed as an Arbitrator vide order dated 26th July, 1993 passed by this court. The learned Arbitrator published his award on 19th April, 1994 and through a letter bearing the same date the award and the proceedings were forwarded by the Arbitrator to this court. The award along with proceedings was actually filed in this court on 22nd April, 1994. A copy of the letter of the Arbitrator dated 19th April, 1994 forwarding the award to this court appears to have been delivered to the petitioner by the Arbitrator. On 25th April, 1994 the learned Counsel for the petitioner wrote a letter to the Union of India through Directorate General of Supplies and Disposal, Jeewan Tara Building, Parliament Street, New Delhi informing about the filing of the award in this court by the Arbitrator on 22nd April, 1994. The counsel for the petitioner further called upon the Union of India to make payment of the sum awarded by the Arbitrator along with interest at 10% per annum from January 1976 onwards with costs. This letter was sent by registered post and the receipt of this letter is not denied by the respondent Union of India. This letter appears to have been received by the Union on India on 29th April, 1994. This court on 20th July, 1994 ordered notice of filing of the award to issue to the parties. According to the Union of India the court notice regarding filing of award was served on it on 28th July, 1994. Objections against the award were filed on behalf of Union of India on 16th August, 1994. The objections have been registered as I.A. 7708/94. In reply to the objections against the award the petitioner claimant, apart from alleging that the objections have no merits stated, that the objections are barred by time. On 28th March, 1995 following issues were framed :

(1) Whether the objections are barred by limitation ?

(2) Whether the award is liable to be set aside on the grounds as taken in the objection petition ?

(3) Relief.

The Court further directed that issue No. 1 be treated as a preliminary issue. The matter has come up before me for decision on issue No. 1.

2. The relevant facts for purposes of decision of issue No. 1 have already been stated above and I may note that there is no dispute between the parties about these facts. The matter is purely legal.

3. In this connection Section 14 of the Arbitration Act and Article 119 of the Limitation Act are the relevant provisions of law. The same are reproduced as under :

14. Award to be signed and filed. - (1) When the Arbitrator 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 Arbitrator or Umpire shall, at the request of any party in the arbitration agreement of 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 deposition 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."

"119. Under the

Arbitration Act 1940 :

  

  (a) ***  
 

  (b) for setting aside an award      Thirty days     The date of service     or getting an award                             of the notice of the     remitted for reconsideration.                   filing of the award."  
 
 

4. As per the later portion of sub-section (2) of Section 14 of the Arbitration Act the requirement is that the "Court shall thereupon give notice to the parties of the filing of the award." According to the learned Counsel for the petitioner claimant the notice dated 25th April, 1994 issued by the Counsel for the claimant to the Union of India, which was admittedly received by the Union of India is sufficient compliance of the requirement of notice of filing of award as contained in the above provision of law. It is further contended that the period of limitation, i.e., the period of 30 days shall start running from the date of service of the said notice on Union of India which in the present case is alleged to be 29th April, 1994. On this basis it is urged that the objections filed by the Union of India on 26th August, 1994 in this court were clearly barred by time and cannot be entertained. On the other hand the learned Counsel for the Union of India submits that the Court notice regarding filing of award was ordered to be issued only on 20th July, 1994 and was served on the Union of India on 28th July, 1994 and, therefore, the period of limitation has to be counted from 28th July, 1994 and the objections filed on 26th August, 1994 were clearly within time.

5. The statutory requirements regarding service of notice of filing of award as contained in Section 14(2) was subject matter of interpretation by the Supreme Court in Nilkantha v. Kashinath . It was held that there is no ground to construe the expression 'date of service of notice' to mean only a notice in writing served in a formal manner. It was held that the notice envisaged in the said provision need not be a formal notice in writing. The notice can be given orally. The communication of the information to the pleader of the party, that an award has been filed is sufficient compliance with the requirements of sub-section (2) of Section 14 with respect to the giving of the notice to the parties concerned about the filing of the award. It was further held that notice to the pleader is notice to the party in view of the provisions of Rule 5 of Order III, C.P.C. In the said case the facts were that on 21st February, 1948 in the presence of pleaders for the parties the Civil Judge adjourned the matter 'for parties' say to the Arbitrator's report' to 22nd March, 1948. Further on 7th September, 1948 the guardian of the objector had sought time to file statement after having received summons from court on 5th September, 1948. The objections against the award were filed on 9th November, 1948. The question was whether these objections were filed within time. It was held that when the case was adjourned by the Civil Judge on 21st February, 1948 for parties' say to the Arbitrator's report in the presence of the pleaders of the party that was sufficient notice to the parties of filing of the award and that would be the starting point for limitation. The court observed :

"(10) We see no ground to construe the expression 'date of service of notice' in Col. 3 of Art. 158 of the Limitation Act to mean only a notice in writing served in a formal manner. When the Legislature used the word 'notice' it must be presumed to have borne in mind that it means not only a formal intimation but also an informal one. Similarly, it must be deemed to have in mind the fact that service of a notice would include constructive or informal notice. If its intention were to exclude the later sense of the words 'notice' and 'service' it would have said so explicitly. It has not done so here. Moreover, to construe the expression is meaning only a written notice served formally on the party to be affected, will leave the door open to that party, even though with full knowledge of the filing of the award he has taken part in the subsequent proceedings to challenge the decree based upon the award at any time upon the ground that for want of a proper notice his right to object to the filing of the award had not even accrued. Such a result would stultify the whole object which underlies the process of Arbitrator - the speedy decision of a dispute by a Tribunal chosen by the parties."

6. Both parties have relied on Indian Rayon Corporation Ltd. v. Raunaq & Co. Pvt., Ltd. . In this case an award was filed in the High Court on 4th February, 1977. A party to the award filed an affidavit on 4th February, 1978 stating that the award had been wrongly filed in the High Court and it should be taken off the file. On 30th July, 1981, notice under Section 14(2) of the Arbitration Act was served on the party. The party applied for certified copy on 18th August, 1981 and filed an application under Section 30 of the Arbitration Act to set aside the award on 8th September, 1981. In view of the affidavit filed by the party on 4th February, 1978 in the High Court stating that the award had been wrongly filed in that court it was held that the party must be deemed to have acknowledged that the award had been filed and it had notice in respect thereof. Thus, 30th July, 1981 on which the court notice under Section 14(2) of the Arbitration Act was served on the party, was not accepted as the date from which limitation for filing objections to the award would start running. It was held that the party had notice of the filing of the award much prior to the said date, therefore, the objections were filed beyond time and were barred by limitation. Relaying on Nilkantha (supra) the court held that the communication by the court to the parties concerned or their counsel of the information that an award has been filed was sufficient compliance with the requirements of sub-section (2) of Section 14 of the Act. Further it was accepted that the expression 'give notice' in sub-section (2) of Section 14 of the Act simply means giving intimation of the filing of the award. Such intimation need not be given in writing and could be communicated orally or otherwise. The following observations in M/s. Indian Rayon Corporation (supra) really clinch the issue :

"If the substance is clear, the form of the notice is irrelevant but the notice of the award having been filed in the court, is necessary. The filing in the court is necessary and the intimation thereof by the Registry of the court to the parties concerned, is essential. Beyond this there is no statutory requirement of any technical nature under Section 14(2) of the Act."

7. From the aforesaid decisions of the Supreme Court it is clear that :

(a) the award must be filed in Court.

(b) intimation of filing of the award by the court to the parties is essential.

(c) the intimation need not be in writing and could be oral or otherwise.

(d) so far as the notice is concerned the substance has to be clear. The form of the notice is irrelevant.

There must be service of notice or intimation or communication of the filing of the award by the court to the parties.

8. The above, principles were further extended in Food Corporation of India v. E. Kuttappan . In this case one of the parties to the award had through its Counsel filed the award before the court and the court had accepted it. The same party wanted to file objections against the award. The act of the pleader of the party concerned in filing the award in court was taken as the starting point of limitation for purposes of filing objections against the award. It was held that the mute language inherent in action of the court did convey to the party placing the award before, it, the factum of the award being filed in court.

9. The two decisions of the Supreme Court referred to herein before were followed. What really weigh with the court was the act of the pleader of the party of placing the award before the court and the court accepting it for purposes of further action. This is what that was sought to be referred as the 'mute language inherent in the action of the court', which conveyed to the party concerned the fact that the award had been filed in court.

10. The proposition of law emerging from the aforesaid decisions of the Supreme Court has to be applied in the facts of the present case. Having carefully considered the facts of the case in the light of the aforesaid legal position, I am of the view that the element of an act on the part of the court as envisaged in Section 14, sub-section (2) of the Act is missing. In Nilkantha (supra) the case was adjourned for parties' say on the award in presence of Counsel for the parties. So there was an act on the part of the court. In Indian Rayon (supra) the party which wanted to file objections itself filed an affidavit to the effect that the award had been filed in a wrong court which was taken as sufficient to fix knowledge of award in court on the party. In Indian Rayon (supra) the Supreme Court emphasised issuance of notice of filing of award by the court, though it was held that the notice need not be a formal notice. In Food Corp. of India (supra) the award was filed in court by the pleader of the party and was accepted by the court for further necessary action. This was taken as notice of filing of the award, at least to the party which filed it in court, as per the mute language inherent in action of the court.

11. In the present case the learned Counsel for the petitioner wants me to hold that the limitation would start running for purposes of filing objections against the award from the date when notice of Counsel for the claimant was served on the respondent informing the respondent that the Arbitrator had filed the award in Court. I find myself unable to accept that the notice of opposite Counsel that the petitioner had filed the award in court should be taken as the notice of filing of award envisaged under Section 14(2) of the Act. In the notice to a party by the opposite Counsel about the filing of the award there is no act on the part of the Court, there is no act of the party which wants to file objections against the award. The element of court having done anything at all is missing. There is nothing even to say that there was some act on the part of the court which can be construed as the mute language of the court inherent in such an act. Thus, I hold that notice by a party informing the opposite party that the award had been filed in court by the Arbitrator cannot be treated as compliance of the requirement under Section 14(2) of the Arbitration Act regarding notice of filing of award by the court. Issue No. 1 is accordingly decided against the petitioner. It is held that the objections are not barred by limitation.

List the case for hearing and disposal on the remaining issues in the category of 'short cause' on.

12. Issued dismissed.