M/s Contimeters Electricals Pvt. Ltd v. State of Haryana & Ors.

entered into between the parties on 21.11.2002 and one R.S.Malik was appointed as Arbitrator. The Arbitrator retired without passing any award. Consequent upon his retirement, Mrs.Chanda Saini entered into the reference without her appointment and has rendered the award in favour of the respondents. The petitioner had impugned the appointment of Mrs.Chanda Saini as Arbitrator by filing a Civil Writ Petition before this court. The same, however, was disposed of by this court on 30.8.2005. This was on the basis of preliminary objection raised by the respondents to the effect that the petitioner has an efficacious statutory remedy under Section 34 of the Act and so he cannot be permitted to invoke jurisdiction of the Court under Section 226 of the Constitution of India. Having regard to the respective submissions, this court held as under:- “We are of the considered view that having regard to the issues raised in the petition, which primarily pertain to the factual aspects of the award, it is not a fit case for intervention under Article 226 of the Constitution. If so advised, the petitioner may seek redressal of its grievance by way of a petition under Section 34 of the Act, on the grounds enumerated therein. The ratio of the decision in Harbans Lal Sahnia's case (supra) is of no avail to the petitioner, as none of the contingencies, indicated therein, prima facie, exists in the instant case. Civil Revision No.4908 of 2007 : 3 : We say no more lest any prejudice is caused to either of the parties.” It is the case of the petitioner that he was, thus, relegated to his remedy to challenge the arbitration award under Section 34 of the Act. Since the petitioner has been perusing his remedy before this court, he also moved an application under Section 14 read with Section 5 of the Limitation Act seeking condonation of delay in filing his objection petition under Section 34 of the Act against the ex-parte award rendered by the Arbitrator. Addl.District Judge, Panchkula declined to condone the delay in filing the petition, which is now impugned by the petitioner before this court. While declining the prayer of the petitioner, the court has noticed that the award was rendered on 5.11.2003 and was challenged by the petitioner before this court through Civil Writ Petition No.20350 of 2003. This writ petition was dismissed on

30.8.2005 for the petitioner to exercise his alternative remedy under Section 34 of the Act. The petitioner accordingly filed an objection petition on 17.12.2005. Thus, this application was filed with a delay of 108 days from the date the writ petition was dismissed. If the delay is to be counted from the date of award, then the application is filed with a delay of 773 days. Mr.Puneet Bali, appearing for the petitioner, would say that the court has ignored the proviso contained under Section 34(3) of the Act, which otherwise makes a provision to file the application for setting aside an award within 90 days. His first contention is that according to the proviso, this time can be extended for further period of thirty days on showing that the applicant was prevented by Civil Revision No.4908 of 2007 : 4 : sufficient cause from making this application in time. Accordingly, the counsel would contend that the court was not justified in holding that the petition was filed with a delay of 108 days after the expiry of three months from the decision passed by this court. According to the counsel, the court failed to notice the proviso, whereby the petitioner could have filed this application within 120 days. To substantiate his plea that delay even if is to be counted from the date of the award could be condoned on the ground that the petitioner was pursuing his remedy before the High Court and the fact that the High Court had relegated him to the alternative remedy available to him under Section 34 of the Act. On this, Mr.Hooda, representing the respondents would join issue with the counsel for the petitioner. He would say that a special provision has been made under the Arbitration Act and as such the general provisions of Section 5 of the Limitation Act would have no applicability. He would further say that the words “but not thereafter” in the proviso that application can be entertained with a further period of 30 days upon showing of cause for making this application after period of three months would surely restrict the powers of the court to condone delay of period more than as prescribed under the provisions of Section 34(3) of the Act. In support of his submission that delay can be condoned in filing application under Section 34 of the Act, Mr.Bali has placed strong reliance on State of Goa Versus Western Builders, 2006(3) Arb.LR 1 (SC). The Hon'ble Supreme Court in this case has held that there is no prohibition incorporated for curtailing the discretion of the court under Section 14 of the Limitation Act if the party has bona Civil Revision No.4908 of 2007 : 5 : fidely prosecuting his remedy before the court which has no jurisdiction. It is also held that by virtue of Section 43 of the Act of 1996, the Limitation Act applies to the proceedings under the Act of 1996 and the provisions of Limitation Act can only stand excluded to the extent wherever different period has been prescribed under the Act. The court has further viewed that there is no two opinion in the matter that the Arbitration and Conciliation Act, does not expressly exclude the applicability of Section 14 of the Limitation Act. It is a settled proposition of law that the prohibitory provision has to be construed strictly. The Limitation Act would apply to the arbitration proceedings because of Section 43 of the Arbitration Act, 1996. Section 14 of the Limitation Act deals with the exclusion of time spent in prosecuting the remedy before a wrong forum bona fide 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 Civil Revision No.4908 of 2007 : 6 : 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.” Noticing these two provisions, the Hon'ble Supreme Court went on to see if Section 14 of the Limitation Act has been excluded by this special enactment, i.e. Arbitration and Conciliation Act, 1996. It is observed that Section 43 of the Act clearly says that the Limitation Act shall apply to the arbitration as it applies to the proceedings in the court. It is held that there is no provision made in the Arbitration and Conciliation Act that if any party has bona fidely prosecuted his remedy before other forum which has no jurisdiction, then in that case the period spent in prosecuting remedy can be excluded or not. The relevant observations of the Hon'ble Supreme Court in this regard may be noted, which are as under:- “There is no provision in whole of the Act which prohibits discretion of the court. Under Section 14 of the Limitation Civil Revision No.4908 of 2007 : 7 : Act if the party has been bona fidely prosecuting his remedy before the court which has no jurisdiction whether the period spent in that proceedings shall be excluded or not. Learned counsel for the respondent has taken us to the provisions of the Act of 1996; like Section 5, Section 8 (1), Section 9, Section 11, sub-sections (4), (6), (9) and sub-section (3) of Section 14, Section 27, Sections 34, 36, 37, 39(2), (4), Section 41, sub-section (2), Sections 42 and 43 and tried to emphasize with reference to the aforesaid sections that the legislature wherever wanted to give power to the court that has been incorporated in the provisions, therefore, no further power should lie in the hands of the court so as to enable to exclude the period spent in prosecuting remedy before other forum. It is true but at the same time there is no prohibition incorporated in statute for curtailing the power of the court under Section 14 of the Limitation Act. Much depends upon the words used in statute and not general principles applicable. By virtue of Section 43 of the Act of 1996, the Limitation Act applies to the proceedings under the Act of 1996 and the provisions of Limitation Act can only stand excluded to the extent wherever different period has been prescribed under the Act of 1996. Since there is no prohibition provided under Section 34, there is no reason why Section 14 of Limitation Act be not read in Act of 1996, which will advance the cause of justice. If statute is silent and there is no specific prohibition then statute Civil Revision No.4908 of 2007 : 8 : should be interpreted which advances the cause of justice. Our attention was invited to various decisions of this court but we shall refer to a few of them which has some relevance.” Somewhat similar situation, as is in the present case, appears to be emerging from the ratio of law laid down in National Aluminium Co. Ltd. Vs. Pressteel & Fabrications (P) Ltd. And another, (2004) 1 SCC 540. In this case, unilateral appointment of an Arbitrator under the Arbitration Act, 1940 was challenged. The Hon'ble Supreme Court, in appeal, after hearing the parties, appointed a sole arbitrator. Before the sole arbitrator, both the parties agreed to be governed by the provisions of Arbitration and Conciliation Act, 1996. The Arbitrator gave his final award which was challenged. The question which arose was whether the proceedings are to be governed by 1940 Act or 1996 Act and which would be the appropriate court. The dispute prolonged for nearly 16 years. Hon'ble Supreme Court dismissed the appeal and held that the proceedings in that case should go on under the provisions of 1996 Act. The appropriate forum to challenge the award under Section 34 was the principal civil court of original jurisdiction. The question then arose in regard to the delay in filing the objection before the principal civil court of original jurisdiction. The Hon'ble Supreme Court directed the petitioner to file objections for setting aside the award before the court concerned within 30 days from the date of the order and it was further directed that delay in filing the petition under Section 34 of the Act shall be condoned by the said court since the time consumed Civil Revision No.4908 of 2007 : 9 : was bona fide in prosecution of its remedy. The relevant observations in this regard are as under:- “This application fails and the same is dismissed with a direction to the applicant to file its objections to the award before the court concerned and if the same are filed within 30 days from this date, the delay in regard to the filing of the objections as contemplated under Section 34 of the 1996 Act shall be condoned by the said court since the time consumed was bona fide in prosecution of the application in a wrong forum.” Even in Western Builders's case (supra), the Hon'ble Supreme Court has ultimately held as under:- “Therefore, in the present context also it is very clear to us that there is no two opinion in the matter that the Arbitration and Conciliation Act, 1996 does not expressly exclude the applicability of Section 14 of the Limitation Act. The prohibitory provision has to be construed strictly. It is true that the Arbitration and Conciliation Act, 1996 intended to expedite the commercial issue expeditiously. It is also clear in the statement of objects and reasons that in order to recognize economic reforms the settlement of both domestic and international commercial disputes should be disposed of quickly so that country's economic progress be expedited. The statement of objects and reasons also nowhere indicate that Section 14 of the Limitation Act shall be excluded. But on the contrary intendment of legislature is apparent in the Civil Revision No.4908 of 2007 : 10 : present case as Section 43 of the Arbitration and Conciliation Act, 1996 applies the Limitation Act, 1963 as a whole. It is only by virtue of sub-section (2) of Section 29 of the Limitation Act, its operation is excluded to that extent of the area which is covered under the Arbitration and Conciliation Act, 1996. Our attention was also invited to the various decisions of this court interpreting sub- section (2) of Section 29 of Limitation Act with reference to other Acts like the Representation of the People Act or the provisions of Criminal Procedure Code where separate period of limitation has been prescribed. We need not overburden the judgment with reference to those cases because it is very clear to us by virtue of sub- section (2) of Section 29 of the Limitation Act that the provisions of Limitation Act shall stand excluded in Act of 1996 to the extent area which is covered by the Act of

1996. In the present case under Section 34 by virtue of sub-section (3) only the application for filing and setting aside the award, a period has been prescribed as 3 months and delay can be condoned to the extent of 30 days. To this extent the applicability of Section 5 of Limitation Act will stand excluded but there is no provision in the Act of 1996 which excludes operation of Section 14 of the Limitation Act. If two Acts can be read harmoniously without doing violation to the words used therein, then there is no prohibition in doing so.” In view of the ratio of law laid down in the above-noted Civil Revision No.4908 of 2007 : 11 : case, it would be futile to pursue the argument as advanced by Mr.Hooda that the application can be filed only within 30 days from the date of award, even after conceding that the petitioner was prosecuting his remedy before this court through a writ petition. The petitioner had bona fidely pursued the writ petition which was dismissed on 30.8.2005 relegating him to his alternative remedy under Section 34 of the Act. The petitioner had applied for certified copy of the order which was supplied to him only on 20.9.2005. If the limitation is to be counted from this date, then ofcourse the application would be well within limitation as prescribed under Section 5 of the Limitation Act. Mr.Bali is also justified in urging that the court could not have ignored this fact while deciding his application for condonation of delay. He would refer to the impugned order to say that otherwise it was considered by the court that the limitation may be seen from the date the writ petition was dismissed. That approach appears to be proper and just in view of the ratio of law laid down in Western Builders's case (supra). If that be so, it cannot be said that the application filed by the petitioner was beyond the period of limitation as prescribed under Section 34(3) of the Act. The petitioner could file this application within 90 days which was extendable by another 30 days in terms of the proviso under the said sub-section. The application filed by the petitioner is well within the period of 120 days as it was filed after 108 days. Even otherwise, the petitioner, who is aggrieved against the appointment of an Arbitrator who allegedly was unilaterally appointed and has given an ex-parte award to the tune of Rs.85 lacs cannot be left without a remedy. He must get at least one chance to contest this ex-parte award. Civil Revision No.4908 of 2007 : 12 : Accordingly, the impugned order cannot be sustained. The same is set-aside. The case would now go back to the court of Additional District Judge, Panchkula for deciding the application of the petitioner filed under Section 34 of the Arbitration Act, 1996 on merits. April 03, 2008 ramesh ( RANJIT SINGH ) JUDGE