Jammu & Kashmir High Court
Union Of India vs M/S Mohinder Brother on 20 May, 2025
Author: Rajnesh Oswal
Bench: Rajnesh Oswal
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Reserved on : 05.03.2025
Pronounced on : 20.05.2025
AA No. 19/2021
1. Union of India
Through Chief Engineer,
Udhampur Zone, J&K.
2. Garrison Engineer (I) 873 EWS
PIN - 913873
C/O 56 APO.
.....Appellant(s)/Petitioner(s)
Through: Mr. Vishal Sharma, DSGI
Vs
M/S Mohinder Brother
Engineers, Builders & Contractors
'A,' Friends Colony, Sunder Nagar
Pathankot - 145 001
Through Partner Sh. Mohinder Saini
S/o Sh. Buta Ram R/o 'A,' Friends Colony.
Sunder Nagar Pathankot - 145 001.
.....Respondent(s)
Through: Mr. Anil Mahajan, Advocate
Coram: HON'BLE MR. JUSTICE RAJNESH OSWAL, JUDGE
(THROUGH VIRTUAL MODE FROM SRINAGAR WING)
HON'BLE MR. JUSTICE RAHUL BHARTI, JUDGE
JUDGEMENT
Per: Rahul Bharti-J
01. For the contract work of "Provision of OTM for
Headquarter Mountain Brigade including Signal Company
Provost and Helipad" at Bhaderwah, a contract No. CEUZ-
20/2003-04 came to be executed between the petitioner No. 1
through the Chief Engineer, Udhampur Zone, J&K and the
respondent concern.
02. The contract work value was of Rs.14,60,37,461.23.
03. The commencement of the contract work was with effect
from 10.09.2003 and was scheduled to be completed by
09.06.2004 and 09.09.2005 in two phases, but actually came
to be rescinded from the respondent's end on 27.07.2011 and
whereas the contract came to be cancelled from the appellants'
end on 15.12.2012.
04. The disputes/differences having arisen in relation to
and out of the said contract work execution and termination led
to the appointment of an arbitrator in terms of an order dated
12.09.2017 passed in arbitration case AA No. 22 of 2017 with
appointment of Mr. Neeraj Parashar, Brigadier, Chief Engineer as
a sole arbitrator.
05. In the arbitration proceedings, the respondent came
forward with the following claims:-
CLAIM No. 1 of Rs. 2,04,60,865.00 REVISED TO Rs.
2,06,59,826.94 FOR PAYMENT FOR BALANCE AMOUNT
OF WORK DONE AND MATERIALS AT SITE.
Claim No. 2 of Rs. 48,87,500.00 FOR RELEASE OF FIXED
DEPOSIT RECEIPTS OF Rs. 33,87,500.00 AND RELEASE
OF BANK GUARANTEE OF Rs. 15,OO,OOO.OO.
CLAIM No. 3 of Rs. 2,60,000.00 FOR PAYMENT FOR
CEMENT STORE, SITE OFFICE, WATER TANK. MIXING
PLATFORMS TAKEN OVER BY DEPTT.
CLAIM No.4 of Rs.5,06,03,395.00 FOR REIMBURSEMENT
OF LOSS CAUSED BY DEPTT, DUE TO DELAYS AND
REFUSAL TO MAKE PAYMENTS.
CLAIM No. 5 of Rs.14,97,136.94 FOR REFUND OF
RECOVERY WRONGLY MADE FOR STONE FOR
R.R.MASONARY (AMMENDED TO Rs. 14,75,565.00).
CLAIM No.6 of Rs.52,21,364.53 FOR PAYMENT FOR
PROVISION OF R.C.C. BEAM IN LIEU OF SIESMIC BAND.
CLAIM No. 7 of Rs.2,41,149.00 FOR REFUND OF
RECOVERY FOR USE OF TMT BARS IN LIEU OF CTD
BARS IN REINFORCEMENT.
CLAIM No. 8 of Rs.99,150.00 FOR REFUND OF
UNCONTRACTUAL RECOVERY MADE FOR USE OF
PORTLAND PUZZOLANA CEMENT.
CLAIM No. 9 of Rs. 7,00,000.00 FOR REIMBURSEMENT
OF LOSS CAUSED DUE TO DAMAGE TO WORK DONE
DUE TO HEAVY SNOWFALL.
CLAIM No. 10 of Rs. 90,000.00 FOR USE of 400 KG
CEMENT IN LIEU OF 376 KG PER CUBIC METER OF M-25
CONCRETE.
CLAIM No. 11 of Rs. 36,26,303.00 FOR LOSS OF PROFIT
ON BALANCE WORK.
CLAIM No. 12 of Rs. 5,86,99,275.00 FOR INCREASE IN
PRICES OF MATERIALS, FUEL AND MINIMUM WAGES OF
LABOUR AFTER ORIGINAL PERIOD OF CONTRACT.
CLAIM No. 13 of Rs. 3,13,857.00 FOR WRONG PRICING
OF FLY PROOF STEEL WINDOW FRAME BY WEIGHT
INSTEAD OF IN SQUARE METER UNDER SSR ITEM No.
1245.
CLAIM No. 14 of Rs. 61,41,814.00 FOR UNDER PRICING
OF BUILDINGS UNDER SCHEDULE A SECTION I OF
CONTRACT AGREEMENT.
CLAIM No.15 of Rs.7,29,91,390.00 FOR
REIMBURSEMENT OF DAMAGES AND LOSS ON
ACCOUNT OF BREACH OF CONTRACT BY THE
DEPARTMENT INCLUDING NON-HANDING OVER OF
OVER 70% OF SITES FOR MORE THAN 5 YEARS,
CHANGES IN SITES, DELAY IN GIVING DECISIONS,
DELAY IN SHIFTING OVERHEAD ELECTRIC LINES, DELAY
IN APPROVAL OF SAMPLES, REFUSAL TO PAY RAR's ETC,
RESULTING IN PROLONGATION OF CONTRACT PERIOD.
CLAIM No. 16 FOR INTEREST @ 18% P.A.
CLAIM No. 17 of Rs. 10,00,000.00 FOR COST OF
REFERENCE TO ARBITRATION.
06. As against the aforesaid 17 claims of the respondent,
the appellants came forward with four claims:-
CLAIM No. 1 of Rs. 824 LAKHS FOR EXTRA
EXPENDITURE INCURRED TO GET THE WORK
COMPLETED THROUGH OTHER AGENCY.
CLAIM No. 2 of Rs. 25 LAKHS FOR COMPENSATION FOR
DELAY.
CLAIM No. 3 of Rs.1.5 LAKHS FOR COST OF
ARBITRATION.
CLAIM No. 4 FOR INTEREST @ 18% P.A.
07. The aggregated amount of the respondent's seventeen
(17) claims was Rs. 22,70,10,590.00 and whereas that of the
appellants was Rs. 8,49,00,000.00.
08. Vide an award dated 31.05.2018, the arbitral dispute
came to be adjudicated upon.
09. The arbitral tribunal came forward with award of
claims in favour of the respondent and the appellants in the
following manner:-
Claims of Claimant:
Amount of Amount
Claim
Details Claim in Awarded in Rs.
No.
Rs.
1. Payment for 2,06,59,827.00 40,48,170.00
balance amount of
work done and
materials at site.
2. For release of FD 48,87,500.00 48,87,500.00
and BGB.
3. For payment for 2,60,000.00 1,50,000.00
cement store, site
office, water tank,
mixing platforms
taken over by deptt.
4. Reimbursement of 5,06,03,395.00 26,08,902.00
loss caused by
Deptt. due to delays
and refusal to make
payments.
5. Refund of recovery 14,75,565.00 14,75,565.00
wrongly made for
stone for RR
Masonary
6. Payment for 52,21,364.53 52,21,364.00
provision of RCC,
beam in lieu of
Seismic band.
7. Refund of recovery 2,41,149.00 2,41,149.00
for use of TMT bars
in lieu of CTD bars
in reinforcement.
8. Refund of un- 99,150.00 Nil
contractual
recovery made for
use of Portland
Puzzolana cement.
9. Reimbursement of 7,00,000.00 Nil
loss caused due to
damage to work
done due to heavy
snowfall.
10. Use of 400 kg 90,000.00 Nil
cement in lieu of
376 kg per cubic
meter of m-25
concrete
11. Loss of profit on 36,26,303.00 Nil
balance work.
12. Increase in prices of 5,86,99,275.00 Nil
materials, fuel, and
minimum wages of
labour after original
period of contract.
13. Wrong pricing of fly 3,13,857.00 3,13,857.00
proof steel window
frame by weight
instead of in sq m
SSR item No. 1245
14. Under pricing of 61,41,814.00 Nil
buildings
15. Reimbursement of 7,29,91,390.00 Nil
damages and loss
on account of
breach of contract
by the deptt.
resulting in
prolongation of
contract period.
16. Interest @ 18% P.A. @18% @6%
17. Cost of reference to 10,00,000.00 Nil
Arbitration
TOTAL 22,70,10,590.00 1,89,46,507.00
Claims of Respondent UOI:
Claim Amount of Amount
Details
No. Claim in Rs. Awarded in Rs.
1. Extra expenditure 8,24,00,000 Nil
incurred to get the
work completed
through other
agency.
2. Compensation for 25,00,000 Nil
delay
3. Cost of Arbitration 1,50,000 Nil
4. Interest @ 18% p.a. @18% Nil
All the claims of the appellants resulted in being held
nil.
10. Thus, the respondent came to be awarded an amount
of Rs. 1,89,46,507.00 with recurring interest as granted.
11. The appellants came to lay a petition under section 34
of J&K Arbitration & Conciliation Act, 1997 (in short to be
referred as "J&K A&C Act, 1997") thereby challenging said
arbitral award dated 31.05.2018, filed before the High Court
of Jammu & Kashmir as it used to be then on file AP No.
22/2018 on 01.09.2018.
12. With respect to the petition AP No. 22/2018 so filed
under section 34 of the J&K A&C Act, 1997 the appellants,
acting at their own call, came forward with an intervening
application for seeking permission to withdraw said pending
section 34 petition AP No. 22/2018 bearing a self-drawn
assumption that because of preliminary objection being raised
by the respondent in its reply to the appellants' said section 34
petition AP No. 22/2018 objecting that as a petition under
section 9 of the J&K A&C Act, 1997 was filed in the matter
first before the Principal District Judge, Udhampur, so the
appellants' petition AP No. 22/2018 filed under section 34 of
J&K A&C Act, 1997 was to be maintainable, instead of this
Court, only before the court of Principal District Judge,
Udhampur which had so dealt with section 9 petition involving
the parties to the contract in terms of an order dated
15.04.2013.
13. In the application seeking withdrawal of said section
34 petition AP No. 22/2018, the appellants came to aver that
finding its said petition locked in a preliminary objection with
respect to its maintainability it would not be making much
difference if section 34 petition is decided either by the
Principal District Judge, Udhampur or by the High Court of
Jammu & Kashmir and, therefore, in order to save the time of
the High Court in arguing the points as mentioned in their
said section 34 petition, the withdrawal of said section 34
petition is being solicited.
14. It is, thus, clear that in their application for seeking
withdrawal of section 34 petition AP No.22/2018, the
appellants self invited an awkward situation to land
themselves in and later to suffer adverse outcome.
15. By virtue of an order dated 10.05.2019, the
appellants were allowed withdrawal of their said pending
section 34 petition AP No.22/2018 from this court with a
liberty to file afresh before the Principal District Judge,
Udhampur.
16. It is pertinent to mention here that the liberty sought
was to file a fresh petition under section 34 of the J&K A&C
Act, 1997 to challenge the arbitral award dated 31.05.2018
before the court of Principal District Judge, Udhampur and
not for transferring of so pending section 34 petition AP No.
22/2018 to the court of Principal District Judge, Udhampur
for adjudication.
17. Acting at their own leisure and unmindful of the fact
that time was running against them, the appellants came to
prefer fresh section 34 petition before the Principal District
Judge, Udhampur on its file No.77/Arbitration instituted on
24.07.2019 i.e. after 74 days w.e.f. withdrawal order dated
10.05.2019.
18. In the said fresh section 34 petition, the respondent,
upon its appearance, came to object to the very entertainment
of said petition so filed by the appellants for the purpose of
questioning the arbitral award, by raising and agitating the
plea of the appellants' fresh section 34 petition being time
barred in terms of its institution and no scope for any
extension of time available at the disposal of the appellants
under the scheme of J&K A&C Act, 1997.
19. The petitioners' said fresh petition under section 34 of
the J&K A&C Act, 1997 so filed before the court of Principal
District Judge, Udhampur failed to cross the hurdle of
limitation so put up by the respondent which came to weigh
with the court of Principal District Judge, Udhampur. Vide its
order dated 14.09.2021, the Principal District Judge,
Udhampur came to hold that even if the benefit of section 14
of the J&K Limitation Act, Svt. 1995 (1938 AD) (akin to section
14 of Central Limitation Act, 1963) were to be extended in
favour of the appellants with respect to filing of their fresh
petition under section 34 of the J&K A&C Act, 1997 by
discounting the time spent in the pendency of the first section
34 petition AA No.22/2018 filed before and withdrawn from
the High Court of Jammu & Kashmir and Ladakh but still by
the time the appellants came to approach the court of
Principal District Judge, Udhampur, they had lost precious
time rendering their section 34 petition simply time barred.
20. The court of Principal District Judge, Udhampur
reckoned the period of limitation of three (3) months for filing a
petition under section 34 of J&K A&C Act, 1997 by referring
itself to the text of section 34(3) of J&K A&C Act, 1997 which
is reproduced as under:-
"34. Application for setting aside arbitral award.--
(1) Recourse to a Court against on 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) An arbitral award may be set aside by the Court only-
(a) the party making the application furnishes proof
that-
(i) a party was under some incapacity ; or
(ii) the arbitration agreement is not valid under
the law to which the parties have subjected it or,
failing any indication thereon under the law for the
time being in force ; or
(iii) the party making the application was not given
proper notice of the appointment of an arbitrator or
of the arbitral proceeding or was otherwise unable
to present his case; or
(iv) the arbitral award deals with a dispute not
contemplated by or not falling within the terms of
the submission to arbitration or it contains
decisions on matters beyond the scope of the
submission to arbitration:
Provided that if the decision on matters submitted to
arbitration can be separated from those not so submitted,
only that part of the arbitral award which contains decisions
on matters not submitted to arbitration may be set aside ; or
(v) the composition of the arbitral tribunal or the
arbitral procedure was not in accordance with the
agreement of the parties, unless such agreement
was in conflict with a provision of this part from
which the parties cannot derogate, or, failing such
agreement was not in accordance with this Part ; or
(b) the Court finds that-
(i) the subject-matter of the dispute is not
capable of settlement by arbitration under the law
for the time being in force ; or
(ii) the arbitral award is in conflict with the public
policy of the State.
Explanation:-Without prejudice to the generality of sub-
clause (ii) of clause (b), it is hereby declared for the avoidance
of any doubt, that an award is in conflict with the public
policy of the State if the making of the award was induced or
affected by fraud or corruption or was in violation of section
58 or section 64.
(3) An application for setting aside may not be made
after three months have elapsed 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) On receipt of an application under sub-section (1), the
Court may, where it is appropriate and it is so requested by a
party, adjourn the proceedings for a period of time
determined by it in order to give the arbitral tribunal an
opportunity to resume the arbitral proceedings or to take
such other action as in the opinion of arbitral tribunal will
eliminate the grounds for setting aside the arbitral award."
21. Consequently, the appellants lost their challenge
intended to be posed to the arbitral award in reference through
the medium of their section 34 fresh petition.
22. Aggrieved of said outcome, the petitioners came to
prefer the present appeal under section 37 of the J&K A&C
Act, 1997 assailing the order, inter-alia, on the grounds that
the order suffers from patent illegality besides being contrary
to law and facts which is one of the admissible grounds on
which an outcome of challenge under section 34 of Arbitration
& Conciliation Act, 1996 is amenable to challenge in an appeal
under section 37 of the Arbitration & Conciliation Act, 1996.
23. The appellants urge the grounds taken in the memo of
appeal that the learned Principal District Judge, Udhampur
failed to notice that limitation for filing a petition under section
34 J&K A&C Act, 1997 was six (6) months as on the date of
filing of section 34 fresh petition before the court of Principal
District Judge, Udhampur, as the originally prescribed three
(3) months period stood extended by six (6) months in terms of
J&K Arbitration & Conciliation (Amendment) Act, 2018 and,
therefore six months' period was still standing in credit of the
appellants at the time of filing of fresh section 34 petition
before the court of Principal District Judge, Udhampur by
being admitted to the benefit of section 14 of the J&K
Limitation Act, Svt. 1995 (1938 AD).
24. In addition, it is further pleaded in the grounds of
challenge that the loss of time suffered in the pendency of first
section 34 petition AP No. 22/2018 before the High Court of
Jammu & Kashmir and Ladakh ought to have been
accommodated in favour of the appellants in order to salvage
their petition under section 34 of the J&K A&C Act, 1997 so
filed before the court of Principal District Judge, Udhampur.
25. Mr. Vishal Sharma, learned DSGI from his end has
made vehement efforts to plead that on a technical issue the
appellants have been rendered non-suited in their cause of
first challenge under section 34 of J&K A&C Act, 1997.
26. Mr. Anil Mahajan, learned counsel for the respondent
very vehemently defends the impugned order dated
14.09.2021 passed by the Principal District Judge,
Udhampur in terms whereof section 34 petition filed by the
appellants to impugn the award dated 31.05.2018 came to be
held time barred not entitled for any time relaxation. Mr. Anil
Mahajan, learned counsel submits that the learned Principal
District Judge, Udhampur has called the bluff of the
appellants by exposing them that in filing a fresh section 34
petition after expiry of two and half months with effect from
10.05.2019 of withdrawal of first section 34 petition AP No.
22/2018 itself ruled out any scope for accommodation getting
in favour of the appellants in entertaining their said section 34
petition so filed before Principal District Judge, Udhampur. It
is submitted that the impugned order needs no interference at
the asking of the appellants who have been found to be
indolent by the learned Principal District Judge, Udhampur.
27. Before we proceed further, for the sake of convenience
we recapitulate some essential dates bearing which in mind
our adjudication has to proceed further in the matter:-
Date of arbitral award is 31.05.2018;
Filing of petition AP No.22/2018 under
section 34 of the J&K A&C Act, 1997 by the
appellants before this Court is 01.09.2018;
Withdrawal of said section 34 petition AP No.
22/2018 on 10.05.2019;
Filing of fresh section 34 petition before the
Principal District Judge, Udhampur on
24.07.2019.
Dismissal of fresh section 34 petition by the
Principal District Judge, Udhampur on
14.09.2021.
28. When we go through the memo of appeal, we are left
to wonder that how the appellants can be heard to say that the
running of time in the matter of filing of section 34 petition
under J&K A&C Act, 1997, or for that matter now under
Arbitration & Conciliation Act, 1996, in terms of the period of
limitation prescribed could come to suffer pause extending the
appellants a leisure of taking their own time and going afresh
to the court of Principal District Judge, Udhampur with a
petition under section 34 of the J&K A&C Act, 1997.
29. The arbitral award, which was intended to be
impugned by the appellants under section 34 of the J&K A&C
Act, 1997, is dated 31.05.2018. Time had started running
against the appellants in terms of filing of a challenge petition
under section 34 of J&K A&C Act, 1997 with effect from
31.05.2018.
30. The appellants in their said section 34 petition AP No.
22/2018 filed before this Court did not make any averment
therein that from which date onward time for filing of said
section 34 petition for challenging the award had set running
in their favour whereas, on the other hand, the Examination
Report in the case made by the Examiner of this Court had
spelled out that from the date of passing of the award i.e.
31.05.2018 to the filing of the petition AP No. 22/2018 on
01.09.2018, the intervening days counted to be 92 days, as
against 90 days (three months period) for maintaining a
petition under section 34 but giving the benefit of two copying
days, first section 34 petition AP No. 22/2018 was held to be
within time by point of view of limitation period under section
34(3) of J&K A&C Act, 1997 then being three (3) months.
31. The appellants, in their fresh petition under section 34
of the J&K A&C Act, 1997 before the Principal District Judge,
Udhampur, did not spell out as to from which date the time
was counting its running in terms of section 9 of the J&K
Limitation Act, Svt. 1995 (1938 AD) with respect to filing of
section 34 petition before the court of Principal District Judge,
Udhampur.
32. Instead, the appellants in their said fresh section 34
petition meant to say that since they had filed their first
petition AP No. 22/2018 under section 34 of J&K A&C Act,
1997 before the High Court of J&K, as it used to be then,
within limitation period of six (6) months, as such, they had,
at their disposal pending installment of three months from the
date of passing of order dated 10.05.2019 of this Court
allowing them withdrawal of first section 34 petition, so as to
make their fresh petition under section 34 before the court of
Principal District Judge, Udhampur filed on 24.07.2019
within six months' period of limitation.
33. For the sake of reference, we reproduce hereunder
section 9 of the Limitation Act, 1963, which is pari materia
with section 9 of the J&K Limitation Act, Svt. 1995 (1938 AD):-
"9. Continuous running of time:-
Where once time has begun to run, no subsequent
disability or inability to institute a suit or make an
application stop it:
Provided that, where letters of administration to the
estate or a creditor have been granted to his debtor,
the running of the period of limitation for a suit to
recover the debt shall be suspended while the
administration continues."
34. Section 9 of the J&K Limitation Act, Svt. 1995 ( 1938
AD) was not meant to afford any such switch on and switch off
mode and manner of run of limitation period prescribed.
35. The learned Principal District Judge, Udhampur
applied the reasoning that once the period of limitation against
the appellants in terms of filing of a challenge petition under
section 34 of J&K A&C Act, 1997 had set to run from the date
of arbitral award itself, the limitation period of three (3)
months for the appellants to file fresh section 34 petition,
otherwise actually filed on 24.07.2019, was much beyond the
prescribed period of limitation even if the period spent lasting
the pendency of first section 34 petition AP No. 22/2018
before this Court was to be taken out from the running of
time. Mandate of section 9 of the Limitation Act, 1963 being
unsparing meant no stopping of limitation period once it
started running in relation to the appellants' fresh section 34
petition.
36. When the first section 34 petition AP No. 22/2018 of
J&K A&C Act, 1997 was filed, it was already filed on the last
day of three (3) months then prescribed limitation period and
so the appellants were supposed not to loose a single day in
coming up with fresh section 34 petition which should have
been filed on 11.05.2019 very next day of passing of order
dated 10.05.2019 allowing withdrawal of first petition AP No.
22/2018 with liberty to file fresh but not 24.07.2019.
37. The appellants before the court below were meaning to
beseech that the period of limitation available at their end for
their fresh section 34 petition is six (6) months by which
reckoning there was at their disposal period of remainder three
(3) months with effect from 10.05.2019, being the date of
withdrawal of their first section 34 petition AP No. 22/2018, in
terms of J&K Arbitration & Conciliation (Amendment) Act,
2018 which came to provide for revised period of six (6)
months for filing a petition under section 34 of the J&K A&C
Act, 1997.
38. Mr. Vishal Sharma, learned DSGI arguing for the
appellants submits that the appellants' first section 34 petition
AP No. 22/2018 before this Court was filed on the last day of
limitation period of three (3) months period ending on
01.09.2018 and remained pending for a period upto
10.05.2019 when it came to be withdrawn with liberty to file
fresh section 34 petition which came to be filed on
24.07.2019.
39. Mr. Vishal Sharma, learned DSGI submits that if the
period of pendency of first section 34 petition AP No. 22/2018
before this Court from 01.09.2018 to 10.05.2019 is given
discount by operation of section 14 of the Limitation Act,
1963, then six (6) months' limitation period available under
the J&K Arbitration & Conciliation (Amendment) Act, 2018
was still in running & available and, therefore, the learned
Principal District Judge, Udhampur ought to have made a
correct understanding of the J&K Arbitration & Conciliation
(Amendment) Act, 2018 and computation of time in terms of
prescribed period of limitation being six (6) months.
40. This plea of Mr. Vishal Sharma, learned DSGI arguing
for the appellants requires a very close scrutiny and that is
from two aspects.
41. First aspect is, as pleaded by Mr. Vishal Sharma,
learned DSGI that under the J&K Arbitration & Conciliation
(Amendment) Act, 2018 period of limitation for section 34
petition came to be revised to six (6) months and by that
reckoning the appellants' fresh section 34 petition before the
Principal District Judge, Udhampur was within time. Second
aspect is whether section 14 of the Limitation Act, 1963 was
available in service of the appellants.
42. In terms of section 7 of J&K Arbitration & Conciliation
(Amendment) Act, 2018, section 34 of the J&K A&C Act, 1997
came to be amended in which connection the limitation period
of three (3) months provided in section 34(3) came to be
substituted by six (6) months.
43. Thus, by force of amendment of section 34 of J&K
A&C Act, 1997, as made by Amendment Act of 2018, the
period of limitation for filing a petition under section 34 of J&K
A&C Act, 1997 stood revised from three (3) months to six (6)
months and, therefore, at the point of time when the
amendment of section 34(3) had come to take place in 2018,
the petitioner's first section 34 petition AP No. 22/2018 was
already pending disposal before this Court rendering the
appellants entitled to have to their credit three (3) months
more period in terms of filing of section 34 petition.
44. This Governor's Act No. XVIII of 2018 meant that for
any section 34 petition under the J&K A&C Act, 1997, the
limitation period of three (3) months originally provided if were
to expire upon the commencement or during currency of the
J&K Arbitration & Conciliation (Amendment) Act, 2018 or in
case original period of three (3) months limitation had already
expired just before the commencement of the Amendment Act
of 2018, then with a credit of three (3) months more period, a
section 34 petition would come to be filed within available
extended period of three (3) months or less than that
reckoning from the expiry of three (3) months' limitation
period, then such a section 34 petition filed would be counted
as filed within time.
45. To put in simple perspective, the original three (3)
months period pre-amendment stage, for the appellants to file
their first section 34 petition was expiring on 01.09.2018
whereas the Amendment Act of 2018 came into force in
October, 2018 and that meant three (3) months period got
added on to be at the disposal of the appellants in case if the
appellants would have not even filed their first section 34
petition or upon withdrawal of their first section 34 petition
from this Court to be followed by a filing of fresh section 34
petition before Principal District Judge, Udhampur within next
three (3) months.
46. Now, since the appellants first section 34 petition AP
No. 22/2018 filed within limitation period of three months
came to be withdrawn on 10.05.2019 by which time
additional three (3) months limitation period had come to
expire, and by the time fresh section 34 petition came to be
filed by the appellants on 24.07.2019 additional loss of time
had taken place, so the appellants' filing of fresh petition on
24.07.2019 ex-facie was beyond six (6) months period.
47. It is at this situation that Mr. Vishal Sharma, learned
DSGI arguing for the appellants submits that additional three
(3) months of extended period of limitation for filing section 34
petition envisaged under Amendment Act of 2018 was to be
reckoned available at the disposal of the appellants with effect
from 10.05.2019 when their first section 34 petition AP No.
22/2018 was withdrawn with liberty earned from this Court.
48. On the face of it, the plea of Mr. Vishal Sharma,
learned DSGI is very much tempting to be accepted readily but
the plea needs to be closely examined by us whether the
appellants were entitled to benefit of section 14(2) of the
Limitation Act, 1963. Section 14 of the Limitation Act, 1963
reads as under:-
"14. Exclusion of time of proceeding bona fide in court without
jurisdiction.--
(1) In computing the period of limitation for any suit the time
during which the plaintiff has been prosecuting with due
diligence another civil proceeding, whether in a court of first
instance or of appeal or revision, against the defendant shall
be excluded, where the proceeding relates to the same matter
in issue and is prosecuted in good faith in a court which, from
defect of jurisdiction or other cause of a like nature, is unable
to entertain it.
(2) In computing the period of limitation for any application,
the time during which the applicant has been prosecuting with
due diligence another civil proceeding, whether in a court of
first instance or of appeal or revision, against the same party
for the same relief shall be excluded, where such proceeding is
prosecuted in good faith in a court which, from defect of
jurisdiction or other cause of a like nature, is unable to
entertain it.
(3) Notwithstanding anything contained in rule 2 of Order
XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the
provisions of sub-section (1) shall apply in relation to a fresh
suit instituted on permission granted by the court under rule
1 of that Order, where such permission is granted on the
ground that the first suit must fail by reason of a defect in the
jurisdiction of the court or other cause of a like nature.
Explanation -- For the purposes of this section,--
(a) in excluding the time during which a former civil
proceeding was pending, the day on which that
proceeding was instituted and the day on which it
ended shall both be counted;
(b) a plaintiff or an applicant resisting an appeal shall be
deemed to be prosecuting a proceeding;
(c) misjoinder of parties or of causes of action shall be
deemed to be a cause of a like nature with defect of
jurisdiction."
49. For accepting plea that the appellants can be heard to
plead that the mandate of section 14(2) of the Limitation Act,
1963 was available at their disposal, then this Court is to
examine and hold first that the institution of first section 34
petition AP No. 22/2018 before this Court and its pendency
lasting upto 10.05.2019 was a matter of proceeding
maintained by the appellants in a good faith notwithstanding
the defect of jurisdiction or other cause of a like nature
attending thereto.
50. There is no doubt that the appellants in terms of their
first section 34 petition AP No. 22/2018 were pursuing their
said petition before this Court in a bona fide manner
notwithstanding the objection raised by the respondent in its
reply that said section 34 petition AP No. 22/2018 was not
maintainable before this Court on account of lack of
jurisdiction because of the reason that a section 9 petition
under J&K Arbitration & Conciliation Act had first been filed
before the Principal District Judge, Udhampur disposed of vide
an order dated 15.04.2013 and, therefore, rest of the
proceedings related to arbitration between the parties were
meant to be instituted before the same very court of Principal
District Judge, Udhampur to the exclusion of any other court
including the High Court.
51. The tone and tenor of the application filed by the
appellants seeking withdrawal of section 34 petition AP No.
22/2018 would show that the appellants did not mean to say
that the High Court was lacking jurisdiction in entertaining
and agitating their said section 34 petition AP No. 22/2018 but
given the option available of approaching the Principal District
Judge, Udhampur also having the jurisdiction to deal with the
matter, so in order to save the time of this Court in arguing on
the point of objection with respect to the maintainability of the
petition it was better in terms of prudence for the appellants to
approach the court of Principal District Judge, Udhampur with
section 34 petition.
52. The import of this plea is an exhibit of the bona fide
on the part of the appellants that they were pursuing their
section 34 petition AP No. 22/2018 with due concern and
indulgence.
53. Next point to be considered in the matter of applying
the benefit of section 14(2) of the Limitation Act, 1963 is to see
as to whether this Court was suffering any defect of
jurisdiction in dealing with section 34 petition AP No. 22/2018
of the appellants.
54. In this regard, Mr. Vishal Sharma, learned DSGI
arguing for the appellants refers to the fact that in order dated
13.11.2018 of section 34 petition AP No. 22/2018 a reference
came to be made to a case of "Ramesh Chand Kathuria Vs M/s
Trikuta Chemicals Pvt. Ltd.," 2016 SLJ 1 being a Full Bench
judgment of the High Court of Jammu & Kashmir as it was
then, wherein it came be held that in the event of a section 9
petition under the J&K A&C Act, 1997 if having been filed and
decided first before a District Court, then a follow up section
34 petition and/or proceedings of other nature, is to be
maintained before the said very court and not to the High
Court even though competent to adjudicate section 34 petition.
55. By reference to this aspect, Mr. Vishal Sharma,
learned DSGI argues that even though there was no defect of
jurisdiction, per se, with respect to the High Court of Jammu
& Kashmir in terms of section 14(2) of the Limitation Act, 1963
in dealing with section 34 petition AP No. 22/2018 but there
was a cause of like nature as envisaged under section 14(2) of
Limitation Act, 1963 so as to afford to the appellants a plea
that they were entitled to credit of period of pendency of their
section 34 petition AP No. 22/2018 before the High Court of
Jammu & Kashmir as it was then and that required to be
excluded in reckoning continuing running of time in terms of
section 9 of the Limitation Act, 1963 which clearly meant that
on 24.07.2019 when the fresh section 34 petition came to be
filed by the appellants before Principal District Judge,
Udhampur six (6) months' revised period limitation under
section 34(3) of J&K A&C Act, 1997 was still available so as to
make their fresh petition under section 34 filed within the
time.
56. The argument of Mr. Vishal Sharma, learned DSGI is
very sound and there is no scope for us to find any gap in it
particularly by bearing in mind the fact that the law of
limitation being a procedural law and bears the nature of being
retrospective in effect.
57. In this regard, paras 19 & 20 in the case of
"Thirumalai Chemicals Limited Vs Union of India and
others," 2011 AIR SC 1725 are reproduced hereunder:-
"19. Law of limitation is generally regarded as procedural
and its object is not to create any right but to prescribe periods
within which legal proceedings be instituted for enforcement of
rights which exist under substantive law. On expiry of the
period of limitation, the right to sue comes to an end and if
a particular right of action had become time barred under
the earlier statute of limitation the right is not revived by
the provision of the latest statute. Statutes of limitation are
thus retrospective insofar as they apply to all legal
proceedings brought after their operation for enforcing
cause of action accrued earlier, but they are prospective in
the sense that neither have the effect of reviving the right
of action which is already barred on the date of their
coming into operation, nor do they have effect of
extinguishing a right of action subsisting on that date.
Bennion on Statutory Interpretation 5th Edn.(2008) Page 321
while dealing with retrospective operation of procedural
provisions has stated that provisions laying down limitation
periods fall into a special category and opined that although
prima facie procedural, they are capable of effectively depriving
persons of accrued rights and therefore they need be
approached with caution.
20. Learned author in order to establish the above
proposition referred to the decision of the Court of Appeal in
The Ydun case [THE YDUN (1899) Probate Division at page 236
(The Court of Appeal) where the Court held that the amending
legislation dealt with procedure only and therefore applied to all
actions whether commenced before or after the passing of the
Act and even in respect of previously accrued rights. The
principle laid down in `The Ydun' was applied in The King v.
Chandra Dharma (1905) 2 KB 335 and it was held that if a
statute shortening the time within which proceedings can be
taken is retrospective then it is impossible to give good reason,
why a statute extending the time within which proceedings be
taken, should not be held to be retrospective. The Judicial
Committee of Privy Council in Yew Bon Tew v. Kenderaan Bas
Mara (1982) 3 All E.R. 833, opined that whether statute has
retrospective effect, cannot in all cases safely be applied by
classifying statute as procedural or substantive and pointed out
in certain situation the Court would rule against a retrospective
operation. Limitation provisions therefore can be procedural in
the context of one set of facts but substantive in the context of
different set of facts because rights can accrue to both the
parties. In such a situation, test is to see whether the statute, if
applied retrospectively to a particular type of case, would
impair existing rights and obligations. An accrued right to plead
a time bar, which is acquired after the lapse of the statutory
period, is nevertheless a right, even though it arises under an
Act which is procedural and a right which is not to be taken
away pleading retrospective operation unless a contrary
intention is discernible from the statute Therefore, unless the
language clearly manifests in express terms or by necessary
implication, a contrary intention a statute divesting vested
rights is to be construed as prospective. A statute, merely
procedural is to be construed as retrospective and a statute
while procedural in nature affects vested rights adversely is to
be construed as prospective. The manner of filing an appeal,
under sub section (2) of Section 19 of FEMA and the time
within which such an appeal has to be preferred and the power
conferred on the Tribunal to condone delay under the proviso
to sub-section (2) of Section 19 are matters of procedure and
act retrospectively, so as to cover causes of action which arose
under FERA. Since the appeal was filed under FEMA with an
application for condonation of delay such an appeal has to be
considered by the Tribunal under the proviso to sub-section(2)
of Section 19 FEMA and if the Company shows sufficient cause
for not filing the appeal in time then the Tribunal can condone
the delay and entertain the appeal, especially when there is no
accrued right to the respondent to plead a time bar. The legal
position is summarized thus by Justice G.P. Singh in Principles
of Statutory Interpretation (12th Edition-Page 541) thus:-
"Statutes of Limitation are thus retrospective in so far as
they apply to all legal proceedings brought after their
operations for enforcing causes of action accrued
earlier...."
58. In "Roshanlal Kuthalia Vs. R. B. Mohan Singh
Oberoi," 1975 AIR(SC) 824 section 14 of Limitation Act, 1963
has been appreciated in the following manner:
"27. Certainly, Sec. 14 is wide enough to cover periods
covered by execution proceedings (See 1959 SCR 811 : 1958
Legal Eagle (SC) 71 at 818 = ( AIR 1958 SC 827 : 1958 Legal
Eagle (SC) 71 at p. 831). After all Section 47 itself contemplates
transmigration of souls as it were of execution petitions and
suits. The substantial identity of the subject matter of the lis is
a pragmatic test. Moreover, the defects that will attract the
provision are not merely jurisdictional strictly so called but
others more or less neighbours to such deficiencies. Any
circumstance legal or factual, which inhibits entertainment or
consideration by the Court of the dispute on the merits comes
within the scope of the section and a liberal touch must inform
the interpretation of the Limitation Act which deprives the
remedy of one who has a right (See (1971) 2 SCR 397 : 1970
Legal Eagle (SC) 376 at 401 -( AIR 1971 SC 2313 : 1970 Legal
Eagle (SC) 376 at p 2316). In the Associated Hotels case (i e.
the very lis in its earlier round on the execution side) this Court
pointed out ((l961) 1 SCR 259 at 272 = ( AIR 1961 SC 156 :
1960 Legal Eagle (SC) 177 at p. 163) ) that the question was
one of initial jurisdiction of the Court to entertain the
proceedings. Thus in this very matter, the obstacle was
jurisdictional and the exclusionary operation of Section 14 of
the Limitation Act was attracted."
59. By reference to the aforesaid citation, when we see
that the appellants' first section 34 petition AP No. 22/2018
was filed within time by reckoning to the then period of
limitation being three (3) months prescribed under section 34
of J&K A&C Act, 1997 before amendment of 2018 and then
later the period of three (3) months getting revised to six (6)
months under the Amendment Act of 2018, the appellants'
right of action under section 34 was very much initiated one
and has not become barred and, therefore, fully entitled them
to retrospect benefit of enlargement of period of limitation of
six (6) months.
60. Viewed thus, we hold that the learned Principal
District Jude, Udhampur erred in making correct appreciation
of facts and law of the case rendering the impugned order
14.09.2021 seriously flawed and deserving to be set aside,
which is, accordingly, set aside. We hold the appellants'
section 34 petition filed before the Principal District Judge,
Udhampur to be filed within a period of limitation by reference
to six (6) months period of limitation under the Amendment
Act of 2018. We, therefore, direct the Principal District Judge,
Udhampur to restore the section 34 petition of the appellants
for adjudication and dispose of the same on merits.
61. Disposed of.
(Rahul Bharti) (Rajnesh Oswal)
Judge Judge
Jammu
20.05.2025
Muneesh
Whether the judgment is speaking : Yes
Whether the judgment is reportable : Yes
