Karnataka High Court

M/S Serve And Valley Outdoor ... vs Bruhat Bengaluru Mahanagara ... on 8 January, 2021

Author: B.V.Nagarathna And Gowda

                         -: 1 :-                    R
     IN THE HIGH COURT OF KARNATAKA, BENGALURU

         DATED THIS THE 08TH DAY OF JANUARY, 2021

                         PRESENT

        THE HON'BLE MRS. JUSTICE B.V.NAGARATHNA

                           AND

        THE HON'BLE MR. JUSTICE N.S.SANJAY GOWDA

                M.F.A. No.4502/2020 (AA)

BETWEEN:

M/S. SERVE AND VOLLEY OUTDOOR
ADVERTISING PVT. LTD.,
HAVING ITS REGISTERED OFFICE AT
NO.110, ANDREWS BUILDING,
M.G. ROAD, BANGALORE - 560 001,
REPRESENTED BY ITS VICE PRESIDENT
HEAD-LEGAL RAJASHEKAR N.M.                  ... APPELLANT

(BY SMT. JAYNA KOTHARI, SENIOR COUNSEL FOR SRI ROHAN
KOTHARI, ADVOCATE)

AND:

1.     BRUHAT BENGALURU MAHANAGARA PALIKE
       THROUGH ITS COMMISSIONER,
       N.R. SQUARE,
       BANGALORE - 560 002.

2.     SRI V.N. RAVINDRA,
       DISTRICT JUDGE (RETD.,)
       ARBITRATION CENTRE-KARNATAKA
       (DOMESTIC AND INTERNATIONAL),
       BANGALORE - 560 001.              ... RESPONDENTS

                          *****

       THIS MFA IS FILED UNDER SECTION 37(1)(C) OF THE
ARBITRATION AND CONCILIATION ACT, 1996 READ WITH RULE
11 OF THE HIGH COURT OF KARNATAKA (PROCEEDINGS
BEFORE THE COURTS) RULES, 2001 PRAYING THIS HON'BLE
COURT TO: a) CALL FOR THE ENTIRE RECORDS PERTAINING TO
A.S.No.25/2014 DECIDED BY THE LD. VI ADDITIONAL         CITY
                                -: 2 :-

CIVIL AND SESSIONS JUDGE, BANGALORE (CCH-11) VIDE
FINAL ORDER AND JUDGMENT DATED 10.06.2020 (ANNEXURE-
A); b) SET ASIDE THE IMPUGNED FINAL JUDGMENT AND
ORDER DATED 10.06.2020 PASSED BY LD. VI ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE, BANGALORE (CCCH-11) IN
A.S.NO.25/2014 (ANNEXURE-A), DISMISSING THE SUIT FILED
BY THE PLAINTIFF UNDER SECTION 34 OF THE ARBITRATION
AND CONCILIATION ACT, 1996.


      THIS    APPEAL    BEING         HEARD       AND      RESERVED       ON
09/12/2020    AND COMING         ON FOR           PRONOUNCEMENT OF
JUDGMENT THIS DAY, NAGARATHNA J., THROUGH VIDEO
CONFERENCE PRONOUNCED THE FOLLOWING:


                        JUDGMENT

The appellant herein was the plaintiff in

A.S.No.25/2014. The said suit was filed under Section 34

of the Arbitration and Conciliation Act, 1996 (hereinafter

referred to as "the Arbitration Act, 1996" for the sake of

brevity), seeking setting aside of the arbitral award dated

26/12/2013, passed by sole Arbitrator/respondent No.2

herein. By the impugned judgment and decree dated

10/06/2020, passed by the VI Additional City Civil and

Sessions Judge at Bengaluru City, the suit for setting aside

the award dated 26/12/2013 was dismissed. Hence, this

appeal.

2. Briefly stated the facts are that, the

appellant/plaintiff being in the business of outdoor

advertisement, responded to a tender, inviting potential

bidders to develop and maintain the road medians and also

to earn revenue from the same. Plaintiff entered into

three agreements with defendant No.1/respondent No.1

herein as the successful bidder. The details of the

agreements are as under:

(a) Agreement dated 13/04/2004 for Road Median from Windsor Manor to Mekhri Circle;

(b) Agreement dated 13/04/2004 for Road Median from Domlur Girls High School to Airport Exit Gate and

(c) Agreement dated 30/12/2004 for Road Median from Hebbal Flyover to Mekhri Circle.

The plaintiff was permitted and licenced to beautify

the road medians at the specified locations under the

agreement and was allowed to install translite boxes in the

road medians for displaying commercial advertisements of

its clients. The plaintiff undertook to pay advertisement

tax, cess and other statutory dues to respondent

No.1/Bruhat Bengaluru Mahanagara Palike, which is a

Municipal Corporation for the City of Bengaluru

(hereinafter referred to as "BBMP", for short) at the rates

prescribed from time to time. There were various terms

and conditions under the agreement with regard to

payment of licence fee, advertisement tax, service tax,

etc.

3. It is the case of respondent No.1/BBMP that

the appellant fell into arrears in the payment of licence fee

and other dues. Hence, demand notice dated 15/12/2009

was issued. Notices dated 15/12/2009, 14/09/2010 and

21/10/2010 were issued claiming arrears of licence fee,

advertisement tax, etc. The said notices were issued

under Rules 27 and 28 of Taxation Rules of Karnataka

Municipal Corporation Act, 1976 (hereinafter referred to as

"the KMC Act" for the sake of convenience).

4. The appellant also preferred a claim for

Rs.1,90,00,000/- (Rupees one crore and ninety lakh only)

as compensation against respondent No.1/BBMP and

pursuant to an order passed in CMP.Nos.34-36/2006 an

Arbitrator was appointed. However, the claim of the

appellant was dismissed by award dated 10/06/2011. The

appellant preferred A.S.Nos.67, 68 and 69/2011 before the

City Civil Court, Bengaluru, under Section 34 of the

Arbitration Act, 1996. The same are still pending.

5. However, with regard to the agreement made

by respondent No.1/BBMP, notice dated 16/03/2012 was

issued stating that the plaintiff's denial of its liability on the

demand notices referred to above had given rise to a

dispute. In the circumstances, CMP.No.44/2012 was filed

before this Court seeking appointment of a sole Arbitrator.

The said petition was allowed and the sole Arbitrator was

appointed to decide the dispute under the provisions of the

Arbitration Act, 1996. The claim statement was filed

before the Arbitrator. The appellant herein filed the

defence statement, inter alia, contending that the claim is

untenable, baseless and barred by time.

6. On the basis of the rival pleadings, the

Arbitrator framed as many as eight issues, the first of

them being, whether the claims made by the claimant are

barred by time. The aforesaid issue was considered along

with issue Nos.2 and 5 and on the basis of Section 474 of

the KMC Act read with Section 21 of the Arbitration Act,

1996, learned Arbitrator held that it was open to the

claimant/respondent No.1 herein to undertake arbitration

within six years from the date of cause of action having

arisen and consequently, held that the claim was not

barred by time. The learned Arbitrator specifically held

that the claim for arrears of licence fee and other tax dues

till the date of expiration of licence period was not barred

by time. Consequently, learned Arbitrator decided the

dispute and directed the appellant herein to pay the

outstanding licence fee and tax arrears in respect of the

three claimants till the expiration of the licence period, in

all amounting to Rs.74,22,268/- with costs of the

proceeding amounting to Rs.2,19,000/-.

7. Being aggrieved by the aforesaid award passed

by the learned Arbitrator on 26/12/2013, the appellant

herein preferred A.S.No.25/2014 under Section 34 of the

Arbitration Act, 1996. The said suit was contested by

respondent No.1/BBMP. By judgment dated 10/06/2020,

the suit filed under Section 34 of the Arbitration Act, 1996

for setting aside of the award dated 26/12/2013 in

A.S.No.25/2014 was dismissed. Hence, this appeal.

8. We have heard learned senior counsel

Smt.Jayna Kothari appearing for the appellant and perused

the material on record.

9. She contended that the trial Court has failed to

appreciate the contention of the appellant to the effect that

the claim made by respondent No.1/BBMP was time barred

and therefore, the Arbitrator could not have passed any

award against the appellant. She submitted that the trial

Court was not right in placing reliance on Section 474 of

the KMC Act to hold that the period of limitation for making

a claim by respondent No.1/BBMP was six years from the

date of the cause of action had arisen. Learned senior

counsel drew our attention to Sections 21 and 43 of the

Arbitration Act, 1996 to contend that the said Sections

deal with commencement of arbitral proceedings. She

submitted, unless otherwise agreed to by the parties, the

arbitral proceedings in respect of a particular dispute

commences on the date on which a request for the dispute

to be referred to arbitration is received by the respondent.

The said date has to be regarded as the date on which

notice was served to the other party requesting

appointment of an arbitrator. That, in the present case,

the notice was served on the appellant on 16/03/2012 for

the purpose of appointment of an Arbitrator. The said

notice was duly replied to by the appellant on 22/03/2012

stating that the claims made by the claimant were time

barred. Therefore, appointment of an Arbitrator as per

Clause 21 of the agreements did not arise.

10. In support of her contentions, learned senior

counsel drew our attention to Section 43 of the Arbitration

Act, 1996 and contended that the said Section refers to

the Limitation Act, 1963 (hereinafter referred to as "the

Limitation Act"). Under the said Act, the period of

limitation is three years from the date when the cause of

action arises as per Article 137. Learned senior counsel

contended that in the instant case, instead of adhering to

the said period of limitation, the learned Arbitrator relied

upon Section 474 of the KMC Act to hold that the period of

limitation was six years and therefore, the claim made by

respondent No.1 was within time and thereby held that the

claim was not time barred. According to learned senior

counsel, Section 474 of the KMC Act applies to a distraint

order or suit or prosecution, however the said provision

would not apply to an arbitration proceeding. She

submitted that the Arbitration Act, 1996 is a special

enactment and the same would prevail over any other law

when it comes to an arbitration proceeding. That the

expression "arbitration" is not found under Section 474 of

the KMC Act; the said provision prescribes the period of

limitation only in the case of a suit or prosecution, but it

would not apply to an arbitration. Hence, learned

arbitrator as well as the trial Court were not correct in

entertaining the claim made by respondent No.1 and

passing of award against the appellant herein was the

submission.

11. Learned senior counsel, Smt.Jayna Kothari also

drew our attention to the latest judgment of the Hon'ble

Supreme Court in the case of Geo Miller & Co. Pvt. Ltd.

Vs. Rajasthan Vidyut Utpadan Nigam Ltd. [2019 SCC

Online 1137] (Geo Miller & Co. Pvt. Ltd.). Learned senior

counsel submitted that the claim made by respondent No.1

herein had to be rejected as being time barred in law and

on the provisions of the Limitation Act and therefore, the

award as well as the judgment passed by the trial Court

may be set aside.

12. Having heard learned senior counsel in detail,

we do not think it necessary to reiterate all the facts and

contentions except highlighting the fact that appellant had

entered into three agreements with defendant

No.1/respondent No.1 herein as the successful bidder. The

agreements were dated 13/04/2004 (two agreements) and

30/12/2004 for the purpose of beautifying the road

medians at the specified locations in Bengaluru City and

displaying commercial advertisements of its clients.

According to respondent No.1/BBMP, appellant herein fell

into arrears of licence fee and other dues. Hence, demand

notice dated 15/12/2009 and on subsequent dates were

issued for payment of arrears of licence fee, development

tax etc. Thereafter, notice dated 16/03/2012 was issued

stating that the plaintiff's denial of its liability on the

demand notices referred to above had given rise to a

dispute. CMP.No.44/2012 was filed before this Court

seeking appointment of a sole Arbitrator. On his

appointment, the claim statement was filed and the

appellant herein filed its defence statement, inter alia,

contending that the claim was time barred. However, the

learned Arbitrator held that the claim was not time barred

having regard to Section 474 of the KMC Act read with

Sections 21 and 43 of the Arbitration Act, 1996. Similarly,

the trial Court dismissed the suit /application filed under

Section 34 of the Arbitration Act, 1996 by holding that the

claim was not time barred.

13. We have perused the copies of the

agreements, which are collectively produced as Annexure

- D, dated 13/04/2004 (two agreements) and 30/12/2004.

The arbitration clause is in Clause 21 in all the agreements

and the same being identical, is extracted as under:

"21. All disputes between the parties shall be referred to the sole arbitrator (at Bangalore) to be mutually agreed upon between the parties. If such an appointment is not possible, then each party shall suggest one arbitrator and the third arbitrator shall be selected by these two arbitrators by mutual agreement and if is not possible, then the third arbitrator shall be selected by lot from among the two names suggested by these two arbitrators.

While recourse is to be had to this arbitration by the licensee, he shall inform his intention only to the Commissioner, BMP through a letter personally handed over to him under acknowledgement and no other mode of communication shall be treated as valid and binding on the licensor."

14. In order to consider the contentions raised by

learned senior counsel for the appellant, it would be useful

to refer to the following provisions of law:

Sections 21 and 43 of the Arbitration Act, 1996:

"21. Commencement of arbitral proceedings.- Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.

x x x

43. Limitations.- (1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in Court.

(2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be deemed to have commenced on the date referred in section 21.

              (3)     Where    an     arbitration        agreement        to
     submit       future    disputes       to    arbitration provides

that any claim to which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement, and a dispute arises to which the agreement applies, the court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper.

(4) Where the court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed by the Limitation Act, 1963 (36 of 1963), for the commencement of the proceedings (including arbitration) with respect to the dispute so submitted."

As per Section 21 read with Section 43(2) of the

Arbitration Act, an arbitration shall be deemed to have

commenced on the date on which a request for reference

to arbitration is received by the respondent. However, if

the parties agree under the agreement to some other event

for commencement of arbitration that would have effect.

Notice under Section 21 has to be served and received by the

respondent. If no notice is received by the respondent, then

there is no commencement of arbitral proceedings under

Section 21. Thus, the date of commencement of the

arbitration would be relevant for determining whether any

claim is barred by limitation. A time-barred claim in

arbitration is to be dealt with in the same manner as a time-

barred prayer in a suit, covered by Section 3 of the Limitation

Act. Thus, in the absence of an agreement, Section 21 of the

Arbitration Act states that arbitral proceedings commence on

the date on which a request for reference to arbitration is

received by the respondent. [Source: Commentary on the Law of

Arbitration, Fourth Edition by Justice Indu Malhotra]

While considering Section 43 of the Arbitration Act,

particularly sub-section (1), it is necessary to refer to the

Limitation Act. In that regard, we must refer to sub-section

(2) of Section 29 of the Limitation Act in the first instance.

The same reads as under:

"29. Savings.--

x x x

(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."

Section 3 of the Limitation Act reads as under:

"3. Bar of limitation.--(1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence.

(2) For the purposes of this Act--

(a) a suit is instituted--

(i) in an ordinary case, when the plaint is presented to the proper officer;

(ii) in the case of a pauper, when his application for leave to sue as a pauper is made; and

(iii) in the case of a claim against a company which is being wound up by the court, when the claimant first sends in his claim to the official liquidator;

(b) any claim by way of a set off or a counter claim, shall be treated as a separate suit and shall be deemed to have been instituted--

(i) in the case of a set off, on the same date as the suit in which the set off is pleaded;

(ii) in the case of a counter claim, on the date on which the counter claim is made in court;

(c) an application by notice of motion in a High Court is made when the application is presented to the proper officer of that court."

Sub-section (2) of Section 29 of the Limitation Act

states that where for any special or local law for any suit,

appeal or application a period of limitation different from

the period prescribed by the Schedule (to the Limitation

Act), the provisions of Section 3 of the Limitation Act 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) of the Limitation Act shall

apply only in so far as, and to the extent to which, they

are "not expressly excluded by such special or local law".

What is significant in sub-section (2) of Section 29 of the

Limitation Act are: (i) prescription of a period of limitation

under any special law or local law different from the period

prescribed by the Schedule under the Limitation Act and

(ii) in such a case, the period of limitation prescribed under

the special or local law shall be deemed to be the period

prescribed for the purpose of Section 3 of the Limitation

Act and (iii) Section 3 of the Limitation Act shall apply

accordingly.

Sub-section (1) of Section 3 of the Limitation Act

states that every suit instituted, appeal preferred, and

application made after the prescribed period shall be

dismissed, although limitation has not been set up as a

defence. Clause (a) to sub-section (2) of Section 3 of the

Limitation Act deals as to when a suit is instituted. Clause

(b) to sub-section (2) of Section 3 states as to when a

claim by way of set off or a counter claim is deemed to

have been instituted and Clause (c) to sub-section (2) of

Section 3 states that an application by notice of motion in

a High Court is made when the application is presented to

the proper officer of that Court. Section 3 of the Limitation

Act has been adverted to in the case of State of Orissa

vs. Mamata Mohanti, [(2011) 3 SCC 436] (Mamata

Mohanti), wherein it has been observed that by virtue of

Section 3 of the Limitation Act, it is obligatory on the part

of the Court to dismiss a suit or appeal, if filed after the

prescribed period even though the limitation is not set up

as a defence or there is no defence raised on the issue of

limitation, even at the appellate stage, because in some of

the cases, it may go to the root of the matter.

15. However, Section 3 is subjected to Sections 4

to 24 (inclusive) of the Limitation Act. Sections 4 to 24

(inclusive) of the Limitation Act essentially deal with

computation of period of limitation under certain

circumstances and in substance, excludes time from the

prescribed period of limitation. It is not necessary to go

into the details of those sections at this stage, except to

highlight the fact that Sections 4 to 24 (inclusive) shall

apply only insofar as and to the extent to which they are

not expressly excluded by such special or local law and in

the instant case to arbitration proceeding.

Hence, the question in the instant case is, whether

Section 474 of the KMC Act, which is a special law

prescribes a different period of limitation than as

prescribed under the schedule to the Limitation Act, in

terms of Section 3 of the Limitation Act?

In other words, whether on a reading and

interpretation of Section 474 of the KMC Act, it is to be

held that under that Section, the application filed by the

respondent seeking arbitration of the dispute is to be held

to be maintainable, having regard to the period of

limitation mentioned therein, which is applicable even in

the case of an arbitration.

Before answering the said question, it would be

useful to refer to certain judicial precedent, which are

apposite.

16. With regard to filing of a suit or an appeal

within the prescribed period of limitation, in

N.Balakrishnan v. M. Krishnamurthy, [(1998) 7 SCC

123] (N.Balakrishnan), the Hon'ble Supreme Court has

held as under:

"21. Sub-section (2) of Section 29 of the Limitation Act states that where any special or local law for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule (to the Limitation Act), 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".

What is significant in sub-section (2) of Section 29 of the Limitation Act are: (i) prescription of a period of limitation under any special law or local law different from the period prescribed by the Schedule under the Limitation Act and (ii) in such a case, the period of limitation prescribed under the special or local law shall be deemed to be the period prescribed for the purpose of Section 3 of the Limitation Act and (iii) Section 3 of the Limitation Act shall apply accordingly.

22. Sub-section (1) of Section 3 of the Limitation Act states that every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence. Clause

(a) to sub-section (2) of Section 3 of the Limitation Act deals as to when a suit is instituted. Clause (b) to sub-section (2) of Section 3 states as to when a claim by way of set off or a counter claim is deemed to have been instituted and Clause (c) to sub-section (2) of Section 3 states that an application by notice of motion in a High Court is made when the application is presented to the proper officer of that Court. Section 3 of the Limitation Act has been adverted to in the case of State of Orissa vs. Mamata Mohanti, [(2011) 3 SCC 436] (Mamata Mohanti), wherein it has been observed that by virtue of Section 3 of the Limitation Act, it is obligatory on the part of the

Court to dismiss a suit or appeal, if filed after the prescribed period even though the limitation is not set up as a defence or there is no defence raised on the issue of limitation, even at the appellate stage, because in some of the cases, it may go to the root of the matter. However, Section 3 is subjected to Sections 4 to 24 (inclusive) of the Limitation Act. Sections 4 to 24 (inclusive) of the Limitation Act essentially deal with computation of period of limitation under certain circumstances and in substance excludes time from the prescribed period of limitation. It is not necessary to go into the details of those sections at this stage, except to highlight the fact that Sections 4 to 24 (inclusive) shall apply only insofar as and to the extent to which they are not expressly excluded by such special or local law and in the instant case to appeals."

17. Hukumdev Narain Yadav vs. Lalit Narian

Mishra, [(1974) 2 SCC 133], (Hukumdev Narain Yadav),

is a matter which arose under the Representation of People

Act, 1951. Under Section 81 of the said Act, a period of 45

days from the date of the election of a returned candidate

is the limitation time prescribed within which an election

petition calling in question any election on one or more

grounds specified in sub-section (1) of Section 100 and

Section 101 has to be presented to the High Court. In the

said case, the election petition had been presented beyond

the period of 45 days and had been dismissed. One of the

questions considered was, by virtue of Section 29(2) of the

Limitation Act, whether the provisions of Sections 4 to 24

of the said Act were applicable to election petitions and if

so, whether Section 5 of the Limitation Act was applicable.

Also, whether the facts of the case therein warranted

condonation of delay. Thus, unless Section 5 of the

Limitation Act was made applicable, the discretion of the

Court to extend the time would not be available.

18. In the said case, a comparison of Section 29(2)

of the Limitation Act, 1908 with Section 29(2) of the

Limitation Act, 1963 was made and the question was

whether Section 5 of the Limitation Act was applicable. It

was observed that even if the Limitation Act was applicable

to election petitions under the Representation of the

People Act, 1951, whether Section 5 thereof particularly

was excluded from application in the case of an election

petition. It was contended in the said case that the words

'expressly excluded' would mean that there must be an

"express reference" made in a special or local law to the

specific provision of the Limitation Act of which the

operation is to be excluded. But, the Hon'ble Supreme

Court observed that what has to be seen is whether the

scheme of the special law and the nature of 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. If, on an examination

of the relevant provisions, it is clear that the provisions of

the Limitation Act and particularly Section 5 thereof, are

necessarily excluded, then the benefits conferred therein

cannot be called in aid to supplement the provisions of the

special law. That 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 extent the

nature of those provisions or the nature of the subject-

matter and scheme of the special law would exclude their

operation. It was contended that only those provisions of

the Limitation Act which are applicable to the nature of the

proceedings under the Act, unless expressly excluded,

would be attracted. But, the same was not accepted by the

Hon'ble Supreme Court as it observed that the intent of

Section 29(2) of the Limitation Act must be noted. That

Section 29(2) of the Limitation Act provides that Sections 4

to 24 (inclusive) shall apply only insofar as and to the

extent to which, they are not expressly excluded by such

special or local law. If none of them are excluded, all of

them would become applicable. Whether those Sections

are applicable is not determined by the terms of those

Sections, but by their applicability or inapplicability to the

proceedings under the special or local law. Ultimately, it

was held on a consideration of the scheme of the

provisions concerning the filing of election petition under

the Representation of the People Act, 1951, that Section 5

of the Limitation act did not govern the filing of the

election petition or their trial and hence, the application

filed for condonation of delay did not warrant any

consideration.

19. Consolidated Engineering Enterprises vs.

Prl. Secretary, Irrigation Department, [(2008) 7 SCC

169], (Consolidated Engineering Enterprises), is a

judgment of a three Judge Bench of the Hon'ble Supreme

Court on the proviso to Section 34(3) of the Arbitration

Act, which has considered the Arbitration Act to be a

special law as compared to Limitation Act. In the said

case, after referring to Section 34 of the Arbitration Act,

and considering the same in light of Section 29(2) of the

Limitation Act, it was observed that when any special

statute prescribes certain period of limitation as well as

provision for extension up to specified time limit on

sufficient cause being shown, the period of limitation

prescribed under the special law shall prevail and to that

extent, the provisions of Limitation Act shall stand

excluded. This is because of the intention of the

Parliament in enacting sub-section (3) of Section 34 of the

Act of 1996. That an application for setting aside the

award must be made within three months and the period

can be further extended on sufficient cause being shown

by another period of thirty days, but not thereafter.

Hence, Section 5 of the Limitation Act is inapplicable as it

stands excluded under Section 29(2) of the Limitation Act.

Further, it was also observed that even though Section 5

of the Limitation Act is not applicable to an application filed

under Section 34 of the Act of 1996 for setting aside the

award, one need not conclude that Section 14 of the

Limitation Act would also be inapplicable to an application

filed under Section 34 of the Act of 1996.

(a) In the said case, His Lordship, Raveendran J.

gave a separate but concurring opinion. His Lordship

referred to Section 43 of the Arbitration Act to hold that

Section 43 makes an express reference to the Limitation

Act both in the Court and in arbitration. That there is also

no express exclusion by an application of the provision of

the Limitation Act to the proceedings under the Arbitration

Act. But, there are some specific departures from the

general provisions of Limitation Act, such as, the proviso to

Section 34(3) and sub-sections (2) to (4) of Section 43 of

the Act of 1996. His Lordship observed that where the

schedule to the Limitation Act prescribes a period of

limitation for appeals or applications to any Court, and the

special or local law provides for filing of appeals and

applications to the Court, but does not prescribe any

period of limitation in regard to such appeals or

applications, the period of limitation prescribed in the

Schedule to the Limitation Act will apply to such appeals or

applications and consequently, the provisions of Sections 4

to 24 will also apply. But, where the special or local law

prescribes for any appeal or application, a period of

limitation different from the period prescribed by the

Schedule to the Limitation Act, then the provisions of

Section 29(2) of the Limitation Act would be attracted. In

that event, the provisions of Section 3 of Limitation Act will

apply, as if the period of limitation prescribed under the

special law was the period prescribed by the Schedule to

Limitation Act, and for the purpose of determining any

period of limitation prescribed for the appeal or application

by the special law, the provisions contained in Sections 4

to 24 of the Limitation Act will apply to the extent to which

they are not expressly excluded by such special law. That

the object of Section 29(2) of the Limitation Act is to

ensure that the principles contained in Sections 4 to 24 of

Limitation Act apply to suits, appeals and applications filed

in a court under special or local laws also, even if it

prescribes a period of limitation different from what is

prescribed in the Limitation Act, except to the extent of

express exclusion of the application of any or all of those

provisions.

(b) In this context, it was clarified that the

provisions of the Limitation Act would not apply to appeals

or applications before Tribunals, unless expressly provided.

This is because, the Schedule to the Limitation Act

prescribes the period of limitation only to proceedings in

Courts and not to any proceedings before any Tribunal or

quasi-judicial authority. Therefore, it was held that the

provisions of the Limitation Act could apply to all

proceedings under the Arbitration Act both in Court and in

arbitration except to the extent expressly excluded by the

provisions of the Arbitration Act. This was because of the

express reference to applicability of the Limitation Act to

the proceedings in Court and Arbitral Tribunal under

Section 43 of the Arbitration Act.

In the said case reference was made to the

judgment in State of Goa vs. Western Builders

[(2006) 6 SCC 239], (Western Builders). In Western

Builders, after referring to the scheme of the provisions

under the Arbitration Act, the Hon'ble Supreme Court held

that wherever the Parliament wanted to give power to the

Court, it has been incorporated in the provisions of the

Arbitration Act. That by virtue of Section 43 of the

Arbitration Act, the Limitation Act applies to the

proceedings under the former Act and the provisions of the

Limitation Act can only stand excluded to the extent

wherever different period has been prescribed under the

Arbitration Act or as in the instant case KMC Act.

20. Therefore, it is necessary to refer to the local

law, which is the KMC Act in the instant case, Section 474

of the KMC Act reads as under:

"474. Limitation for recovery of dues. - No distraint shall be made, no suit shall be instituted and no prosecution shall be commenced in respect of any sum due to the corporation under this Act

after the expiration of a period of six years from the date on which distraint might first have been made, a suit might first have been instituted or prosecution might first have been commenced, as the case may be, in respect of such sum."

Thus, the limitation period for filing a suit to recover

dues to the corporation (BBMP) is six years from when a

suit might first have been instituted. The expression used

in Section 474 of KMC Act is "suit". Learned senior counsel

for the appellant submitted that the said Section would not

apply to an arbitration proceeding. However, we do not

think, the said submission is right inasmuch as the Hon'ble

Supreme Court in the case of Geo Miller & Co. Pvt. Ltd.

(supra) has referred to Panchu Gopal Bose vs. Board of

Trustees for Port of Calcutta [(1993) 4 SCC 338]

(Panchu Gopal Bose) and extracted paragraph No.11 in the

latter case as under:

"11. Therefore, the period of limitation for the commencement of arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued. Just as in the case of civil actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration

of the specified number of years from the date when the claim accrued."

On a reading of the same, it is clear that the period

of limitation, whether for a suit or an arbitration is the

same under Section 474 of the KMC Act even though the

word "arbitration" is not found in the said provision. The

reason being, the judgment in Panchu Gopal Bose clearly

states that the period of limitation for the commencement

of arbitration runs from the date on which, had there been

no arbitration clause, the cause of action would have

accrued. Therefore, the period of limitation as prescribed

for a suit in Section 474 of the KMC Act, i.e., to commence

a civil action, would also be the same for commencement

of an arbitration. Hence, the expression "suit" in Section