Ircon International Ltd. vs Budhraja Mining And ...
2007 Latest Caselaw 1830 Del

JUDGMENT

Badar Durrez Ahmed, J.

1. These petitions have been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act) against two separate orders both dated 11.08.2003 in respect of two separate Awards dated 23.05.2002 passed by the sole arbitrator. By virtue of the said orders dated 11.08.2003 certain computational/typographical errors have been sought to be corrected in the respective Awards dated 23.05.2002. The issues raised in both these petitions are identical and, therefore, the same are being disposed of by this common judgment. The facts are also somewhat identical.

2. The learned arbitrator had made Awards dated 23.05.2002 in both the cases. According to the respondent there were computational / typographical errors in the said Awards. Therefore, the respondent allegedly filed applications on 18.06.2002 seeking the correction of the said errors made in the said Awards. These applications for corrections were made under Section 33 of the said Act and it is alleged by the respondent that the same were sent to the learned arbitrator under certificate of posting on 18.06.2002. Under the Awards dated 23.05.2002, the petitioner had been given two months time for making payments. On 23.07.2002, the respondent acknowledged that payments had been made in terms of the said Awards. However, on 22.07.2002, the respondent had sent another letter which was also purportedly sent under certificate of posting to the learned arbitrator seeking a decision on its earlier applications of 18.06.2002. The petitioner received notices from the learned arbitrator on 30.07.2002 in respect of the said applications filed on behalf of the respondent under Section 33 of the said Act. On 20.08.2002 the petitioner filed its replies and took the objection with regard to limitation. Thereafter, the respondent also filed applications under Section 5 of the Limitation Act, 1963 for condoning the delay in filing the applications under Section 33 for correction of the computational/typographical errors. The learned arbitrator after hearing arguments passed the impugned orders dated 11.08.2003. In the said orders dated 11.08.2003 he observed that when the purported applications dated 18.06.2002 were sent by the respondent, the learned arbitrator was not available in Delhi during that time. It was also observed that his office had also not received the applications dated 18.06.2002. Though, the reminder dated 22.07.2002 was received by the learned arbitrator. The arbitrator concluded that the respondent did send the applications under Section 33 of the said Act on 18.06.2002 though the same were not received by him or by his office. Furthermore, the learned arbitrator invoked the provisions of Section 5 of the Limitation Act and condoned the delay in filing the said applications under Section 33 of the said Act.

3. On these set of facts the questions that arise for consideration are:

(i) Were the applications under Section 33 of the said Act filed within the period of 30 days stipulated in Section 33(1) of the said Act?

(ii) If not, could the delay be condoned by invoking the provisions of Section 5 of the Limitation Act, 1963?

The leraned Counsel for the parties advanced their arguments on these issues. According to the leraned Counsel for the petitioner, the purported application dated 18.06.2002 was admittedly not received by the learned arbitrator. That being the case, there was no delivery of the application and therefore, mere posting of the application was not sufficient. This, he submitted, was on the assumption that the respondent did post the applications on 18.06.2002. He submitted that the applications ought to have been delivered to and received by the learned arbitrator within the period of 30 days and mere posting would not be sufficient. The leraned Counsel for the petitioner further submitted that since this did not happen and the application was not filed within 30 days as prescribed under Section 33(1) of the said Act, the only avenue available to the respondent was to have the delay condoned provided such a delay could be condoned. In this context he submitted that the time periods stipulated under the said Act were absolute and could not be extended. Therefore, invoking the provisions of Section 29(2) of the Limitation Act, he submitted that Section 5 of the Limitation Act, 1963 could not be invoked so as to extend time for making an application under Section 33(1) of the said Act. For this proposition, he placed reliance on the following two decisions of the Supreme Court:

(i) Hukumdev Narain Yadav v. Lalit Narain Mishra

(ii) Union of Inida v. Popular Construction Co.: 2001 (3) Arbitration Law Reporter 345 (SC)

4. On the other hand, the leraned Counsel for the respondent submitted that the learned arbitrator had arrived at the conclusion that the applications under Section 33 of the said Act were sent by the respondents on 18.06.2002. He also submitted that the provisions of Section 5 of the Limitation Act were clearly applicable as there was no expressed bar on the extension of time in respect of applications under Section 33(1) of the said Act. It was also submitted on behalf of the respondent that even though the application dated 18.06.2002 was not received by the learned arbitrator as indicated in the impugned orders dated 11.08.2003, the learned arbitrator did receive the second application dated 22.07.2002 which was also sent by UPC and which contained a reference to the filing of an application dated 18.06.2002. It is because of this, according to the leraned Counsel for the respondent, that the learned arbitrator came to the conclusion that the delay, if any, could be condoned. The leraned Counsel for the respondent finally submitted that the correction in the computational and the typographical errors was well within the powers of the learned arbitrator and after having condoned the delay he went ahead and made the corrections. Therefore, there is no infirmity in the impugned orders dated 11.08.2003. The leraned Counsel for the respondent placed reliance on a decision of the Supreme Court in the case of Union of India v. Tecco Trichy Engineers and Contractors 2005 (3) Scale 259 to indicate that the delay could be condoned.

5. Section 33 (so much as is relevant) of the said Act reads as under:

33. Correction and interpretation of award; additional award.

(1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties?

(a) a party, with notice to the other party, may request the arbitral Tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award;

(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral Tribunal to give an interpretation of a specific point or part of the award.

(2) If the arbitral Tribunal considers the request made under Sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the arbitral award.

(3) The arbitral Tribunal may correct any error of the type referred to in Clause (a) of Sub-section (1), on its own initiative, within thirty days from the date of the arbitral award.

 (4)    xxxx      xxxx      xxxx         xxxx
 (5)    xxxx      xxxx      xxxx         xxxx
 

(6) The arbitral Tribunal may extend, if necessary, the period of time within which it shall make a correction, give an interpretation or make an additional arbitral award under Sub-section (2) or Sub-section (5). 
 (7)    xxxx      xxxx     xxxx           xxxx
 

A plain reading of the aforesaid provisions indicates that, unless another period of time has been agreed upon by the parties, an application for correction of any computational errors or typographical errors has to be made to the arbitral Tribunal within 30 days from the receipt of the arbitral Award. It is also necessary to observe that the application has to be made with notice to the other party. Sub-section (3) of Section 33 also empowers the arbitral Tribunal to make such corrections on its own initiative within 30 days from the date of the arbitral Award. Sub-section (2) of Section 33 stipulates that the arbitral Tribunal, if it considers the request for corrections to be justified, shall make the corrections within 30 days from the receipt of the request and the same shall form part of the arbitral Award. It is, therefore, clear that there are three different sets of periods of limitation prescribed under the said provisions. The first is the period of 30 days of receipt of the Award by a party during which the said party can request the arbitral Tribunal to correct any computational or typographical errors in the Award. The second period is a period of 30 days for the arbitral Tribunal to make the correction. The third period prescribed is in the case where the arbitral Tribunal seeks to make a correction on its own initiative. The period prescribed is 30 days from the date of the arbitral Award. Since the arbitral Tribunal makes a correction under this provision, on its own initiative, the date of the receipt of the arbitral Award is not relevant and the clock starts running from the date of the arbitral Award itself. In the present case this provision is not in issue but it brings out the nature of the limitation periods prescribed for making corrections of computational errors/ typographical errors. The nature being that it is strictly time bound and cannot be extendable unless provided in the statute itself. The provision for extension of time has been made in Sub-section (6) of Section 33 and it only pertains to the time during which the tribunal may make a correction under Sub-section (2) or Sub-section (5) of the said Section 33. In other words, there is a specific provision for extending the time within which the Tribunal makes the correction after a request is received by it. There is, however, no provision enabling the Tribunal to extend the time for receiving the request from a party to make corrections of computational and/ or typographical errors. This is sufficient indication of the fact that the legislature permitted extension of time to the arbitral Tribunal to decide on the question of corrections but did not permit extension of time by the arbitral Tribunal for receiving an application whereby a party makes a request for carrying out corrections. It is in this context that Sub-section (3) of Section 33 also gains importance. As pointed out above, that provision enables the arbitral Tribunal to make a correction on its own initiative and only 30 days time was granted for doing so and that too from the date of the arbitral Award. There is no provision like Section 33(6) which enables the arbitral Tribunal to correct an error on its own initiative beyond 30 days from the date of the arbitral Award. The position, therefore, is very clear that where the legislature permitted extension of time it did so expressly. In these circumstances, the inescapable conclusion would be that the legislative intent was that the delay, if any, in filing of an application under Section 33(1)(a) of the said Act could not be condoned by invoking the provisions of Section 5 of the Limitation Act. This is so because of the provisions of Section 29(2) of the said Act read in the light of the Supreme Court decisions in the case of Hukumdev (supra) and Popular Construction (supra).

6. Section 29(2) of the Limitation Act, 1963 reads as under:

29. Savings -

(1) xxxx xxxx xxxx xxxx

(2) 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.

 (3)     xxxx     xxxx       xxxx     xxxx
(4)     xxxx     xxxx       xxxx     xxxx
 

A plain reading of the said provision indicates that where a special or local law prescribes a period of limitation different from that provided under the Limitation Act, 1963, then the provisions contained in Section 4 to 24 would apply only insofar as and to the extent to which they are not expressly excluded by such special or local law. The question that arises is whether the provisions of Section 33(1), (2) and (6) of the said Act indicate that the provisions of Section 5 are expressly excluded from operation. While construing the expression expressly excluded, the Supreme Court in Hukumdev (supra) observed that what has to be seen is whether the scheme of the special law and the nature of the remedy provided therein are such that the legislature intended it to be a complete code by itself which alone should govern the several matters provided by it. It was further observed that if on an examination of the relevant provisions it is clear that the provisions of the Limitation Act, 1963 are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. The Supreme Court further held:

In our view, even in a case where the special law does not exclude the provisions of Section 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the Court to examine whether and to what extent the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation.

7. In Union of India v. Popular Construction Co. (supra), the Supreme Court noted that the said Act was a special law and that Section 34 thereof provided for a period of limitation different from that prescribed under the Limitation Act. The question before the Court was whether the exclusion in Section 34 of the 1996 Act was expressed or not. The provisions of Section 34 are slightly different inasmuch as the proviso thereto specifically indicates that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the stipulated period of three months, it may entertain the application within a further period of 30 days, but not thereafter. This was construed by the Supreme Court as amounting to an expressed exclusion in the following words:

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 or 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.

After so concluding, the Supreme Court, following the decision in the case of Hukumdev (supra), observed as under:

13. Apart from the language, 'express exclusion' may follow from the scheme and object of the special or local law. Even in a case, where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the Court to examine whether and to what extend the nature of those provisions or the nature of the subject- matter and scheme of the special law exclude their operation.

Thereafter, the Supreme Court went into the history and scheme of the said Act to support the conclusion that the time limit prescribed under Section 34 to challenge an Award was absolute and unextendable by Court under Section 5 of the Limitation Act. After referring to various Sections including Section 5 of the said Act the Supreme Court observed:

If there were any residual doubt on the interpretation of the language used in Section 34, the scheme of the 1996 Act would resolve the issue in favor of curtailment of the Court's powers by the exclusion of the operation of Section 5 of the Limitation Act.

Thus, the decision arrived at by the Supreme Court in the case of Popular Construction Company (supra) was not merely on the language used in Section 34 but based on the entire scheme of the said Act. The latter portion is equally applicable in the present case. As regards the language employed in Section 33, I have already indicated above that the legislative intent appears to be that the delay, if any, in filing of an application under Section 33(1)(a) of the said Act could not be condoned by invoking the provisions of Section 5 of the Limitation Act. This is so because the intention appears to be clear that the stipulated time period was absolute.

8. This leaves only the discussion of the decision of the Supreme Court cited on behalf of the respondent. In Union of India v. Tecco Trichy Engineers and Contractors (supra) the short question that arose for decision was what is the effective date on which a party could have said to be delivered with and received the arbitral Award as that would be the date from which limitation within the meaning of Sub-section(3) of Section 34 was to be calculated. The question before the Supreme Court was different from the one that arises in the present case. The issue was with regard to the date of delivery of the arbitral Award. In this context the Supreme Court observed that the delivery of an arbitral Award under Sub-section (5) of Section 31 was not a matter of mere formality and it was a matter of substance. It was further observed that delivery of an arbitral Award to a party, to be effective, has to be ``received'` by the party. The Court observed that unless and until the Award was actually received, it could not be construed that the Award had been delivered and, therefore, the time period for making an application for setting aside the said Award under Section 34 of the said Act would not start running until and unless the Award is so delivered and / or received by the party who seeks to challenge the Award. These observations, though on a different context, do not in any way advance the case of the respondents. On the contrary, they tend to support the arguments advanced by the leraned Counsel for the petitioner. This is so because the learned arbitrator had clearly noted in the Award that the applications dated 18.06.2002 were not received by him or by his office. In other words, there was no delivery of the application as contemplated in the said Supreme Court decision. Therefore, the finding of the learned arbitrator that the respondent had posted the applications on 18.06.2002 is of no consequence. What is relevant is that no request for making any corrections was received by the learned arbitrator within the period of 30 days prescribed under the said Act.

9. As a result of the discussion above, the answers to the questions posed in paragraph 3 are that the applications under Section 33 of the said Act were not filed within the period of 30 days stipulated therein. Secondly, the delay in filing the same could not be condoned by invoking the provisions of Section 5 of the Limitation Act, 1963. As such the impugned orders dated 11.08.2003 in both the petitions are liable to be set aside. The same are set aside. It would be open to the parties to challenge the Awards dated 23.05.2002 if the law otherwise permits them to do so. These petitions stand allowed to this extent.