The State Of Jharkhand Through The ... vs Maya Devi
2021 Latest Caselaw 4874 Jhar

                               1                          Arb.Appeal No.13 of 2007



  IN THE HIGH COURT OF JHARKHAND AT RANCHI
            Arbitration Appeal No. 13 of 2007

   [Against the Order dated 18.05.2007, passed by the Sub Judge -I,
   Hazaribagh, in Misc. Case No. 08 of 2006]


1. The State of Jharkhand through the Deputy Commissioner,
   Hazaribagh, P.O., P.S. & District -Hazaribagh.
2. The Executive Engineer, N.H. Division, Barhi, P.O. & P.S. -Barhi,
   District -Hazaribagh, now N.H. Division, Hazaribagh, at P.O., P.S. &
   District -Hazaribagh.
3. The Superintending Engineer, N.H. Circle, Dhanbad, P.O., P.S. &
   District -Dhanbad.
                                                  .....               Appellants
                                      Versus
1. Maya Devi, wife of late Hari Lal
2. Manoj Kumar
3. Mahesh Kumar
4. Vijay Kumar, (2 to 4) all sons of Late Hari Lal
5. Mamta Khemani, Daughter of Late Hari Lal, (1 to 5) all residents of
   60, Sadori Devi, Gurnani Colony, Gandhi Nagar, Matwari,
   Hazaribagh, P.O. and P.S. -Hazaribagh, District -Hazaribagh.
                                                  .....                 Respondents


                                   .....

For the Appellants : Mr. Sachin Kumar, A.A.G -II For the Respondents : None .....

                            PRESENT
   HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY


          By the Court: -    Heard the parties.

2. No one turns up on behalf of the respondents in- spite of repeated calls. The hearing of this appeal is taken up ex- parte.

3. This appeal, under Section 37 of the Arbitration and Conciliation Act, 1996, has been preferred by the appellants against the order dated 18.05.2007, passed in Misc.

Case No. 08 of 2006 by the Sub-Judge -I, Hazaribagh whereby and where under, the learned Sub-Judge -I, Hazaribagh has dismissed the petition under Section 34 of the Arbitration and Conciliation Act, 1996 filed by the appellants as the same was barred by limitation.

4. The brief facts of the case is that an agreement was entered into on 15.07.1988 between the appellant no.2 and the original sole respondent who has since been substituted by his legal representatives being the respondent no. 1 to 5 during the pendency of this appeal; for construction of a bridge by 14th July, 1990. The construction activity at the site was taken up in a very slow pace and by the end of 1991, the work was done up to deck slab level. The respondent completed the work besides some extra work which was beyond the agreement. In Title Suit No. 36 of 1999, Sri B.B. Sinha, Superintending Engineer, Road Construction Department, N.H. Circle, Dhanbad was appointed as an Arbitrator. The sole Arbitrator Sri B.B. Sinha submitted his award on 06.11.2003 but did not supply a signed copy of the award to the appellants. The appellants filed a petition inter-alia under Section 34 of the Arbitration and Conciliation Act, 1996 along with the petition under Section 5 of the Limitation Act read with Proviso to Sub-Section 3 of Section 34(1) of the Act on 28.04.2006. As mentioned in the impugned order, the Arbitrator submitted his Award in the court on 06.11.2003 and on 29.11.2003, the Arbitrator filed a petition to direct the defendant -Executive Engineer, N.H., Barhi who is the appellant no.2 herein to pay Rs.14,775/- and ultimately, the learned court below made the Award, the decree of that court vide order dated 07.06.2006. The learned court below rejected the petition under Section 34 of the Arbitration and Conciliation Act, 1996 being barred by limitation.

5. It is submitted by Mr. Sachin Kumar, the learned Additional Advocate General -II that a signed copy of the

Arbitral Award having not been served upon the person directly involved in the proceeding before the arbitrator on behalf of the Government being appellant no.2, mere knowledge of the Government Pleader appearing on behalf of the State of the said Award cannot be construed as amounting to delivering the signed copy of the Award to the appellant no.2 to constitute a sufficient compliance of Section 31(5) of the Arbitration and Conciliation Act, 1996 and in the absence of such service of the signed copy of the award upon the appellants, the period of limitation for filing the petition under section 34 of the Arbitration and Conciliation Act of 1996 has not even started and the learned court below erred in holding that the petitioner under section 34 of the Arbitration and Conciliation Act of 1996 filed by the appellant in the learned court below, is barred by limitation. In support of his contention Mr. Sachin Kumar, relied upon the Judgment of Hon'ble Supreme Court of India, in the case of Union of India v. Tecco Trichy Engineers & Contractors reported in (2005) 4 SCC 239, paragraph nos.7 of which reads as under:-

7. It is well known that the Ministry of Railways has a very large area of operation covering several divisions, having different divisional heads and various departments within the division, having their own departmental heads. The General Manager of the Railways is at the very apex of the division with the responsibility of taking strategic decisions, laying down policies of the organisation, giving administrative instructions and issuing guidelines in the organisation. He is from elite managerial cadre which runs the entire organisation of his division with different departments, having different departmental heads. The day-

to-day management and operations of different departments rests with different departmental heads. The departmental head is directly connected and concerned with the departmental functioning and is alone expected to know the progress of the matter pending before the Arbitral Tribunal concerning his department. He is the person who knows

exactly where the shoe pinches, whether the arbitral award is adverse to the department's interest. The departmental head would naturally be in a position to know whether the arbitrator has committed a mistake in understanding the department's line of submissions and the grounds available to challenge the award. He is aware of the factual aspect of the case and also the factual and legal aspects of the questions involved in the arbitration proceedings. It is also a known fact and the Court can take judicial notice of it that there are several arbitration proceedings pending consideration concerning affairs of the Railways before arbitration. The General Manager, with executive workload of the entire division cannot be expected to know all the niceties of the case pending before the Arbitral Tribunal or for that matter the arbitral award itself and to take a decision as to whether the arbitral award deserves challenge, without proper assistance of the departmental head. The General Manager, being the head of the division, at best is only expected to take final decision whether the arbitral award is to be challenged or not on the basis of the advice and the material placed before him by the person concerned with arbitration proceedings. Taking a final decision would be possible only if the subject-matter of challenge, namely, the arbitral award is known to the departmental head, who is directly concerned with the subject-matter as well as arbitral proceedings. In large organisations like the Railways, "party" as referred to in Section 2(h) read with Section 34(3) of the Act has to be construed to be a person directly connected with and involved in the proceedings and who is in control of the proceedings before the arbitrator. (Emphasis supplied)

And submits that in the absence of any material to suggest that the appellants have received signed copy of the Arbitral Award, the petition under Section 34 of the Arbitration and Conciliation Act, 1996 was within time and the learned court below having erroneously held that the knowledge of the State about the Award in a proceeding to

make the Award, the rule of the court, is sufficient to start the period of limitation as envisaged under Section 34(3) of the Arbitration and Conciliation Act which reads as under:- "34. Application for setting aside arbitral award - (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." (Emphasis supplied) is erroneous, hence the same be set aside and the matter be remanded to the learned court below to hear and decide the petition under Section 34(1) filed on behalf of the appellants in accordance with law on merits.

6. After carefully going through the record, this Court has no hesitation in holding that the finding of the learned trial court that knowledge of the representative of the State being the Government Pleader who was appearing before the trial court in which the Award was submitted by the Arbitrator for making it rule of the court in terms of the provision of Arbitration Act, 1940 amounts to give rise to the starting of the period of limitation in terms of Section 34(3) of the Arbitration and Conciliation Act, 1996 is erroneous and is not sustainable in law as the requirement of law as has been settled by the Hon'ble Supreme Court of India in the case of Union of India v. Tecco Trichy Engineers & Contractors (supra) is that the signed copy of the award is to be served upon the person involved in the proceedings of arbitration before the arbitrator in large organisations like the state government which in this case is none other than the appellant no. 2. It is also pertinent to mention here that the proceeding under the provisions of the Arbitration Act 1940 before the

Learned Court below is itself taken up under a mistaken notion as the provisions of the Arbitration and Conciliation Act, 1996 was applicable to the Award and not the provisions of Arbitration Act 1940; as the Arbitrator was appointed vide order dated 10.10.2002;

7. Accordingly, the impugned order of the learned Sub-Judge -I, Hazaribagh, in Misc. Case No. 08 of 2006, dated 18.05.2007 being not sustainable in law is set aside.

8. This appeal is allowed ex-parte.

9. The application under Section 34(1) filed on behalf of the appellants shall stand restored in the court of Sub-Judge

-I, Hazaribagh or its successor court to be heard and decided in accordance with law by the court concerned.

10. No order as to costs.

(Anil Kumar Choudhary, J.) High Court of Jharkhand, Ranchi Dated the 16th of December, 2021 AFR/ Sonu-Gunjan/-