Delhi High Court

Union Of India vs M/S Chadha Engg. Works on 16 April, 2009

Author: Vipin Sanghi

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       Date of Decision: 16.04.2009

%                I.A. No.518/2005 in CS(OS) 1153A/1998


       UNION OF INDIA                                 ..... Petitioner
                              Through:    Mr. Preeti Dalal, Advocate

                      versus

       M/S CHADHA ENGG. WORKS            ..... Respondent
                     Through: Mr. Shiv Khorana & Mr. Ashish
                              Khorana, Advocates

       CORAM:
       HON'BLE MR. JUSTICE VIPIN SANGHI

       1. Whether the Reporters of local papers may
          be allowed to see the judgment?                          No

       2. To be referred to Reporter or not?                       Yes

       3. Whether the judgment should be reported
          in the Digest?                                           Yes

VIPIN SANGHI, J. (Oral)

1. In relation to a contract entered into between the parties,

which contained in arbitration agreement, the disputes were referred

to arbitration of Sh. R.N. Poddar, Additional Legal Advisor to the

Government of India, Department of Legal Affairs, Ministry of Law,

Justice and Company Affairs, New Delhi. The learned arbitrator made

his award dated 09.08.1996. Notice of making of the award was issued

by the learned arbitrator on 09.08.1996 itself to both the parties. At

this stage itself, I may notice that it is not the petitioner's case that the

notice of making an award issued by the learned arbitrator was not

received by it.

2. The award was filed in this Court by one Sh. S.B. Sharan, who

claimed himself to be the sole arbitrator, on 18.05.1998 i.e. nearly 20

months after the making of the award and after the issuance of the

notice of its being made to the parties. The forwarding letter along

with which the award has been filed in this Court records that in

compliance with the request from Union of India, the original award

with the entire proceeding folder is forwarded in the arbitration case of

M/s Chadha Engineering Works, G.T. Road, Jalandhar-140008. It is not

disputed that the petitioner did not move a petition under Section 14 &

17 of the Arbitration Act, 1940 within the period of limitation

prescribed under Article 119(a) of the Limitation Act for the filing of the

award in this Court upon the filing of the award as aforesaid, the

aforesaid suit was registered.

3. In these circumstances, the respondent has moved the

present application under Order 7 Rule 11 CPC to submit that the

aforesaid suit No.1153-A/1998 registered upon the filing of the award

dated 09.08.1996 be rejected as not being maintainable.

4. I have heard learned counsel for the parties and considered

the various judgments relied upon by them.

5. The first submission of Mr. Khorana, learned counsel for the

applicant/respondent is that on a bare perusal of the forwarding letter

whereby the award has been filed in this Court, it is clear that the filing

of the award has not been done by the arbitrator, Sh. R.N. Poddar, or

upon his direction by a person authorized by him, but by another

person, namely, Sh. S.B. Sharan, who claims to be an arbitrator, but

was never appointed as the arbitrator in respect of the disputes

between the parties. Secondly, the said filing was done at the request

of the petitioner, Union of India, and was not a suo moto filing of the

award by the arbitrator in this Court. He submits that a distinction has

been drawn by this Court and by various other courts between filing of

an award suo moto by an arbitrator in a Court, for which no period of

limitation prescribed under the law, and filing of an award by an

arbitrator in a Court at the instance of one of the parties to which

Article 119(a) of the Limitation Act applies. Since the filing of the

award in this Court was done at the instance of the petitioner, it is

submitted that the same was beyond the period of limitation. Mr.

Khorana in support of his submission that the filing of the award in the

present case itself was beyond limitation has relied upon the following

decisions of this Court:

(a) Union of India v. Rajesh Kumar Pradeep Kumar 2002 (65) DRJ 217

(b) Union of India v. Vidarbha Paper Mills Ltd.

CS(OS) 2441/1993 decided on 27.04.2005

6. He has relied upon the few other decisions of other High

Courts on the same issue, but I do not consider it necessary to refer to

them since two coordinate Benches of this Court have expressed their

view on the issue raised by Mr. Khorana and these are binding upon

me. The latter decision in CS(OS) 2441/1993 sets out in extenso the

earlier decision in the case of Rajesh Kumar Pradeep Kumar

(supra). I may, therefore, quote the relevant extract from the latter

decision itself and the same reads as follows:

"1.Learned counsel for the objector presses the limited objection. In reference to the forwarding letter dated 5.10.1993 written to this Court by the learned arbitrator forwarding the award and record of arbitration proceedings, learned counsel submits that since the award has been filed at the instance of UOI and not suo-moto by the learned arbitrator, issue of limitation would have to be decided in context of law laid down by the learned Single Judge of this Court reported as 2002(65) DRJ 217, Union of India Vs. Rajesh Kumar Pradeep Kumar.

2. Forwarding letter dated 5.10.1993 written by the learned arbitrator to the Registrar of this Court records as under :

"In accordance with UOI's request dated 15.9.1993 in the above mentioned case, I am forwarding herewith the original award dated 30.3.1993 in the case along with the complete proceedings of the case, details given below :"

3. Decision cited reads as under:

"2.Although award dated 7th August,1995 has been challenged on diverse grounds but during the course of arguments Sh.M.Dutta for respondent pressed only the ground about award being filed beyond the prescribed period of limitation. It was pointed out that as is evident from covering letter dated19th May,1997 forwarding therewith the th award dated 7 August,1995 by the arbitrator to the Registrar of this Court, the award was sent to court at the request dated 2nd April,1997 made by Union of India (ITB Police). Relying on the decisions in Govt. of Kerala and another Vs. V.J.Chacko, 1995 (2) Arb.LR 50, Seth and Associates Vs. Steel Authority of India, 1998(2) RAJ 528 (Cal) and Patel Motibhai Naranbhai and another Vs. Dinubhai Motibhai & Ors., JT 1996(1) SC 265 it was urged by Shri

M.Dutta that where the award is filed before the court at the instance of a party to the agreement, it has to be considered as an application by that party and in such a case Article 119(a) of Limitation Act,1963 would apply. While refuting the submission, it was contended by Sh.Dalip Singh for petitioner that as the said award was filed before the Court by the arbitrator himself the said Article would not apply. Reliance was placed on the decisions in Champalal Vs. Mst.Samrathbai, AIR 1960 SC 629, M/s Chowdhary and Gulzar Singh Vs. M/s Frick India Pvt.Ltd., AIR 1979 Delhi 97, Moti Ram Vs. Mangal Singh & Ors., ILR (1971) II Delhi 451 and The State Trading Corporation of India Ltd. Vs. Marpro Ltd. U.K., 2000 (2) Arb.LR 605 (Delhi). Notice (at page 5 of the file containing arbitration proceedings) would reveal that both the parties to petition were intimated through registered AD post of making and publishing of award on 7th August,1995 by the arbitrator. Aforesaid covering letter dated 19th May,1997 would show that award was filed therewith at the request dated 2nd April,1997 made by the petitioner (ITBP). To be noted that Seth & Associate's case (supra) was rendered taking note of the ratio of Full Bench decision of Kerala High Court in Government of Kerala and another (supra). In former decision distinction has been made in between filing of award by the arbitrator suo-moto and filing of award by him at the instance of a part to the agreement. Both these decisions fully support the contention referred to above advanced on behalf of respondent that where award is filed in Court by the arbitrator suo-moto but at the instance of a party to arbitration agreement said Article 119(a) would apply and the award if filed beyond 30 days period will be barred by limitation. In none of the aforementioned decisions relied on behalf of petitioner, the question of filing of award by the arbitrator at the instance of one of the parties to arbitration agreement was

either in issue or considered in the said backdrop and the ratio in issue or considered. In the said backdrop and the ratio in aforesaid two decisions, the filing of award dated 7th August,1995, obviously, barred by limitation."

4. Award was published by the learned arbitrator on 30.3.1993. Limitation has this to be governed under Article 119(a) of the Limitation Act,1963 for the reason arbitrator has filed the award in this Court on the basis of request of UOI and not suo- moto.

5. Objections filed by the objector vide IA.No.1440/94 are accordingly allowed. The filing of the award is held to be barred by limitation. The award cannot be made a rule of the Court. Suit stand disposed of without any decree."

7. On the other hand, the submission of learned counsel for the

petitioner/non-applicant is that since there is no prescription of the

period of limitation for filing of an award by an arbitrator, the filing of

the award in this Court cannot be said to be irregular. In support of her

submission, learned counsel for the petitioner relies on M/s

Chowdhury and Gulzar Singh v. M/s Frick India Limited AIR 1979

Delhi 97. She also placed reliance on the Supreme Court decision in

Champalal v. Mst. Samrathbai AIR 1960 SC 629.

8. Having heard learned counsel for the parties, I am of the view

that there is merit in the submission of applicant/respondent. It is

clear from the forwarding letter as paraphrased hereinabove that the

award was filed in this Court at the request of the petitioner, Union of

India, on 19.05.1998. Moreover, the said filing was not by the sole

arbitrator, namely, Sh. R.N. Poddar, but by one Sh. S.B. Sharan, who

never acted as the arbitrator in relation to the disputes between the

parties. The forwarding officer letter does not suggest that Sh. R.N.

Poddar had instructed and authorized Sh. S.B. Sharan to file the award

in this Court. Once the arbitrator Sh. R.N. Poddar had made his award

the arbitration proceedings had come to a close. There was no

question of any other person being appointed as an arbitrator for any

purpose, including for the purpose of filing the award in the Court.

Consequently, the filing of the award in this Court was not by the

arbitrator or under his instructions or authority, and it was totally

unauthorized. Consequently, the petitioner cannot claim absence of

limitation on the time available for filing of the award in this Court.

9. Moreover, the filing of the award was done at the request of

the Union of India. The present case is squarely covered by the

aforesaid two decisions in the case of Rajesh Kumar Pradeep

Kumar (supra) and the case of Vidarbha Paper Mills Ltd. (supra).

In both these cases as well, the filing of the award in the Court was

done by the arbitrator at the request of one of the parties. The Court

held that in such a situation the limitation prescribed in Article 119(a)

shall apply, and since the filing was beyond that period of limitation,

the filing of the award in the Court was held to be irregular. Article

119(a) of the Schedule to the Limitation Act, 1963 provides:

"Description of Period of Time from which application Limitation period begins to run

119. Under the Arbitration Act, 1940 (10 of 1940), -

               (a) for the filing in Thirty days       The date of service of
               court of an award.                      the notice of the
                                                       making of the award"

10. Consequently, the filing of the award in this Court, even if the

same is assumed to have been done by the arbitrator and not by a

stranger (as is in fact the case), the same was clearly beyond the

period of limitation of 30 days from the date of issuance of the notice

of the making of the award.

11. The decisions relied upon by learned counsel for petitioner, in

my view, are not of much assistance. The decision in M/s Chowdhury

and Gulzar Singh (supra) does not squarely deals with the issue as to

whether Article 119(a) of the Limitation Act would apply to a case

where the filing of the award by the arbitrator is at the instance of one

of the parties. No doubt paragraph 5 of the said decision records the

fact that at the request of the petitioners in that case the arbitrators

had filed the award dated 19.05.1972 in the Court on 07.08.1972.

Subsequently, the award was re-filed in this Court on 11.07.1975. One

of the issues considered by this Court in M/s Chowdhury and Gulzar

Singh (supra) was whether there was any limitation period for filing

the award in Court by the arbitrator. However, no argument was urged