Renu Narula vs Pratap Chit & Trading (P) Limited ...
1999 Latest Caselaw 1223 Del

JUDGMENT

Dr. M.K. Sharma, J.

1. This petition under Article 227 of the Constitution of India was filed by the petitioner being aggrieved by the order dated 22.10.1996 passed by the Civil Judge dismissing the application filed by the petitioner under Section 5 of the Limitation Act, in Suit No. 169/1995 and 170/1995. An award was passed by the Arbitrator on 24.4.1995. The aforesaid award passed by the arbitrator was filed in the Court of the Civil Judge, Delhi. Notices were issued to the parties informing them about the filing of the award in the Court. The petitioner was served with the notice on 8.8.1995. She filed objections as against the aforesaid award, on 27.10.1995 under Sections 30, 33 and 12 of the Arbitration Act alongwith an application under Section 5 of the Limitation Act praying for condensation of delay in filing the objections. The aforesaid objections as also the application for condensation of delay were taken up for consideration by the Civil Judge and by her order dated 22.10.1996 dismissed the application praying for condensation of delay as also the objections and the award was made a rule of the Court and a decree was passed in terms of the award granting interest @ 12% per annum from the date of the award till realisation.

2. Being aggrieved by the aforesaid judgment/order the present petition has been preferred by the petitioner on which I have heard the learned counsel appearing for the petitioner as also the counsel appearing for the respondents. Counsel for the

respondents raised a preliminary objection that the aforesaid order was an appealable order under Section 39 of the Arbitration Act, for the Civil Judge refused to set aside the award and therefore, was an order as against which an appeal could have been preferred as provided for under Section 39 of the Arbitration Act.

3. Learned counsel appearing for the respondents however, contended that the objections filed by the petitioner were dismissed on the ground of limitation as against which no appeal could be preferred. He also submitted that there is an error apparent in the order passed by the Civil Judge for holding that even for an objection under Section 33 of the Arbitration Act the provisions of the Limitation Act are applicable and therefore, a petition under Article 227 of the Constitution of India is maintainable.

4. I have considered the rival submissions of the counsel appearing for the parties in the light of the records of the case. The award in question was passed by the Arbitrator on 24.4.1995 and the said award was filed in this Court by the arbitrator on 8.5.1995. Notice of filing of the award was sent to the parties and the same was served on the petitioner on 8.8.1995. The Limitation Act provides a period of limitation for filing objections under Section 30 of the Arbitration Act which is 30 days from the date of service of the notice. Therefore, when an award is challenged on any of the grounds as mentioned in Section 30 of the Arbitration Act and a prayer is made for setting aside the said award on any one or more of the said grounds the objections are to be filed within a period of 30 days as provided for under Article 119 of the Limitation Act. Section 33 of the Arbitration Act however, provides that any party to an arbitration agreement or any person claiming under him 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. Therefore, a party is entitled to challenge under Section 33 of the Arbitration Act the existence or validity of an arbitration agreement. In a Full Bench decision of this Court in Prem Sagar Chawla v Security & Finance Ltd.; AIR 1963 Delhi 21, it was held by the Full Bench that ah application under Section 33 challenging the validity of an award on the ground of non-existence of an arbitration agreement is not governed by Article 119(b) of the Limitation Act. It was also held that where the challenge to the award is on the ground of factual non- existence of the arbitration agreement, the case would be one of challenge to the existence of the award in Section 33 and not to its validity in Section 30, with the result that such an award will not be set aside but adjudged as non-existent and that non- existence and invalidity of an arbitration agreement are not grounds for setting aside the award under Section 30 and Article 119(b) of the Limitation Act would not be applicable to such a case. In the aforesaid objections filed by the petitioner apart from praying that the award be set aside on the grounds as mentioned under Section 30 of the Arbitration Act, a plea was also raised in the objection petition that the petitioner never entered into any arbitration agreement with the respondent and that the respondent has fabricated or forged an arbitration agreement and made a unilateral reference to the arbitrator. Therefore,

the application filed by the petitioner was a composite application both under Sections 30 & 33 of the Arbitration Act.

5. It is an admitted position between the parties that the aforesaid objections under Sections 30 & 33 of the Arbitration Act were filed beyond the period of 30 days which is the period of limitation prescribed for filing objections under Section 30 of the Arbitration Act. The said objections were filed in this Court on 27.10.1995. The petitioner also filed an application seeking for condensation of delay in filing the said objections. The said application under Section 5 of the Limitation Act was considered by the Civil Judge and on consideration thereof held that the petitioner had failed to show any justified ground for condensation of delay in filing the objections. The reason given by the petitioner for the delay in filing objections was that she suffered an injury on 1.9.1995 and was immobilised from that date till 19.10.1995. The aforesaid ground was found to be unfounded and without any merit as the petitioner had in fact appeared in the Court in person on 29.9.1995 and had even signed the order sheet of the said date. No documentary evidence was also placed on record by the petitioner indicating that she had in fact suffered an injury on 1.9.1995 and that she was under medical treatment. The plea, therefore, taken in the application under Section 5 of the Limitation Act seeking for condensation of delay, on the face of it is unfounded and contrary to the records of the case. In ray considered opinion, therefore, the Civil Judge was justified in rejecting the application under Section 5 of the Limitation Act as also the objections under Section 30 of the Arbitration Act. However, in the light of the Full Bench decision of this Court the Civil Judge could not have dismissed those objections filed by the petitioner under Section 33 of the Arbitration Act. As the provisions of Article 119 (b) of the Limitation Act are not applicable to an application filed under Section 33 of the Arbitration Act on the alleged ground of non-existence of arbitration agreement, the said application to that extent should have been considered by the trial Court on merits and should have disposed of the same on consideration thereof in accordance with law. Having not done so, the present petition filed by the petitioner stands partly allowed, for the aforesaid objections under Section 33 of the Act go to the root of the matter and could be corrected by exercising superintending powers of this Court under Article 227 of the Constitution of India. The objections stand partly allowed. The matter is remitted back to the Civil Judge to hear and decide the objections filed under Section 33 challenging the validity of the award on the ground of non-existence of the arbitration agreement. It is made clear that only to the aforesaid extent the objections would survive and the said issue shall be decided by the Civil Judge in accordance with law. The aforesaid objections under Section 33 is specifically raised in paragraph 3 of the objections and that issue alone shall be decided by the trial Court. So far the objections of the petitioner under Section 30 are concerned the order of the Civil Judge is upheld and no interference is made in the aforesaid order to the extent stated above. The petitioner stands disposed of in terms of the aforesaid order.