Government of Karnataka vs K. Lakshminarayana Reddy

A.V. Chandrashekara, J.—This is an appeal filed u/s 37(1)(b) of Arbitration and Conciliation Act, 1996, challenging the order dated 23.06.2012 passed by the learned I Addl. District & Sessions Judge, Tumkur, in case bearing A.C. No. 2/2006.

The appellant herein was the petitioner in the said arbitration case filed u/s 34(3) of Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ''Arbitration Act'' for short). Respondents herein were the respondents in the said case. The petitioner had challenged the award passed by the learned Arbitrator Sri V. Lingarajaiah, Chief Engineer. Sri V. Lingarajaiah, being the Chief Engineer was the sole arbitrator in the said case. He chose to pass an award dated 28.10.2005 and sent a copy of the award to the appellant herein through registered post.

Being aggrieved by the award, the appellant herein chose to file a petition u/s 34 of the Arbitration Act before the Prl. District Court at Tumkur on 27.02.2006. Along with the said appeal, an application had been filed u/s 5 of the Limitation Act, supported by an affidavit seeking to condone the delay. The said application had been contested by filing objections.

In regard to the condonation of delay, the appellant herein did not choose to lead evidence and therefore, the learned District Judge chose to hear the arguments on delay condonation application filed u/s 5 of Limitation Act read with Section 34(3) of the Arbitration Act. The said application has been dismissed as time barred vide order dated 23.06.2012. It is this order which is called in question on various grounds as set out in the appeal memo.

We have heard the learned counsel appearing for the parties. After going through the records and hearing the arguments the only point that arises for our consideration is:

"Whether the learned District Judge is justified in dismissing the main petition as also dismissing the application filed u/s 5 of Limitation Act ?"

Whoever is aggrieved by an award passed under the provisions of Arbitration Act, he/she can choose to file a petition before the jurisdictional District Court u/s 34 sub-clause (1) of Arbitration Act. Such an award can be challenged only as per the grounds enumerated in sub-section 2 of Section 34 and not otherwise. Sub-section (3) of Section 34 of the Arbitration Act, speaks about the period within which an award has to be challenged before the jurisdictional Court. Normally, a petition u/s 34(1) will have to be filed within the expiry of three months from the date of the receipt of arbitral award.

Proviso to sub-section (3) mandates that,

"if the Court is satisfied that the applicant was prevented by sufficient cause from making an application within the said period of three months it may entertain the application within a further period of 30 days, but not thereafter".

In the case of Union of India Vs. M/s Popular Construction Co., , the Hon''ble Supreme Court has specifically held that Section 5 of Limitation Act is not applicable to condone the delay beyond 30 days as found in the proviso to sub-section (3).

If a petition is filed after three months but before the expiry of 30 days thereafter, the Court may condone the delay. It is in this regard an application had been filed u/s 5 of Limitation Act, condoning the delay.

In the present case, award is dated 28.10.2005. A copy of the award is made available by the learned counsel for the appellant and the same is produced along with the main appeal. It bears the signature of the sole arbitrator and the date of passing of the award is dated 28.10.2005. The first page of the award specifically discloses that a copy of the award was sent to the appellant as well as the respondents through registered post on the same day. It is not the case of the respondents that the award was served on the same day. If a copy of the award is sent through RPAD, it cannot reach the addressee on the same day. Even if it is accepted that it was served by the postman on 29.10.2005, three months will have to be reckoned from 29.10.2005. If three months as contemplated in sub-section (3) of Section 34 of the Arbitration Act, is reckoned from 29.10.2005 it would be 29.01.2006. Two days remained in the month of January and petition was filed on 27.02.2006. That is, the petition u/s 34(1) was filed on the 29th day before the jurisdictional District Court and this was well within the expiry of 30 days as contemplated under proviso to subsection (3) of Section 34 of the Arbitration Act.

Anyhow, as per General Clauses Act, 1897, the day on which the award was actually served by the postman will have to be excluded for the purpose of computing limitation. If that is taken into consideration, the petition u/s 34(1) was filed on the 28th day after the expiry of three months stipulated under sub-section (3) of Section 34 of the Arbitration Act.

The inhibition found in the Act is to entertain a petition after lapse of 30 days contemplated in proviso to sub-section 3 of Section 34 of the Arbitration Act.

As per the decision of the Hon''ble Apex Court in the case of Union of India Vs. Popular Constructions Co., District Court dealing with Section 34(1) has no power to condone the delay beyond 30 days found in the proviso. Insofar as condonation of delay of 30 days after the expiry of three months as per sub-Section (3) of Section 34 of the Arbitration Act, the same will have to be considered liberally. In the light of the legal inhibition to condone delay beyond 30 days found in proviso to sub-section (3) of Section 34 and the said inhibition being a total inhibition, Courts dealing with condonation of delay of 30 days after the expiry of three months will have to be liberal and the decision in the case of G. Ramegowda, Major and Ors Vs. Special Land Acquisition Officer, Bangalore, , is the answer in the present case. In regard to the condonation of delay insofar as it relates to the cases filed by the Government, Hon''ble Supreme Court in the case of G. Ramegowda, has held that if appeals brought by Government are lost for the defaults of the officials, no person is individually affected; but the public interest suffers, as the decisions of the Government are collective and institutional decisions.

The appellant herein is aggrieved by the award passed by the sole arbitrator, who is respondent No. 2 in the present case and the said petition came to be filed within 30 days after expiry of three months as contemplated in Sub-section (3) of Section 34 of Arbitration Act.

The learned Judge has come to the conclusion that the delay of 34 days was beyond 30 days as contemplated in the proviso to Sub-section (3) of Section 34 of the Arbitration Act. The learned District Judge has adopted wrong approach to the real state of affairs and the award itself is of 28.10.2005 and was sent to the appellant through registered post on the same day. Even if it is accepted that it was received on the very next day i.e., on 29.10.2005 two days had remained in the month of October and three months would come to an end on 29.01.2006. Petition was filed on 27.02.2006 and therefore it was within 30 days after expiry of three months.

Hence, the approach adopted by the District Judge is on an erroneous assumption. The learned Judge has not properly calculated the exact number of days after the award was actually received by the appellant from the arbitrator.

If a petition filed under Sections 34(1) and (2) of the Arbitration Act is time barred, the District Court is not expected to speak anything about the merits. It has to dismiss the petition filed on the question of delay. Question of considering on merits would arise only if the appeal is found to be in time. Therefore, learned District Judge is not justified in looking to the merits of the case and dismissing the case on merits also.

Suffice to state that the ground urged by the appellant for condonation of delay as per proviso to sub-section (3) of Section 34 of the Arbitration Act, are valid and bonafide and hence the delay needs to be condoned and the matter is to be remitted to the District Court, Tumkur, for consideration of matter afresh on merits. Hence, the point formulated in this appeal is answered in the negative.

ORDER

Order passed by the learned I Addl. District & Sessions Judge, Tumkur, in A.C. No. 2/2006 on 23.06.2012 is set aside holding that the petition so filed is in time, as the delay of 29 days in filing the petition is condoned. The matter is remitted to the I Addl. District Court, Tumkur, to deal with the award on merits and the same shall be disposed of within six months from the date of appearance of the parties.

The parties shall appear before the I Addl. District Court, Tumkur on 14th October 2014. Parties and Advocates shall co-operate with the learned Judge in disposing the matter within the time stipulated by the Court.

There is no order as to costs.