AI Structured Summary
Not yet generated for this judgment
Judgment
Lakshmanan, J.—Application No. 5161/90: This petition is for setting aside the ex parte decree dated 5-9-90 passed by me in O.P. No.
216/90. Application No. 5162/90: This petition is to stay all further proceedings in pursuance of the order dated 5-9-90 in O.P. No. 216/90.
The facts are fairly clear and simple. But certain important questions arise for consideration in this case. The applicants had entered into a
contract with the respondent under which the respondent had agreed to provide accommodation to the applicants on a ownership basis on the
terms and conditions set out in the agreement. There were disputes between the applicants and the respondent. The disputes were eventually
referred to the arbitration. The sole arbitrator (Mr. Justice M.R.A. Ansari (retired) made an award in favour of the respondent Gautham
Constructions & Fisheries Private Ltd., on 24th day of May 1980. He made the award and sent a copy of the award and enclosing the same to
both the parties and authorised them to file the signed copy of the award on his behalf in this court and inform him so that he shall send the original
award and the records of the proceedings to this court. The respondents herein on receipt of the signed copy of the award from the arbitrator filed
O.P. No. 216/90 under Sec. 14(2) of the Arbitration Act 1940 praying
(a) to direct the arbitrator to file the original award dated 24-5-1990 together with deposition and documents in this court.
(b) to pass a decree in accordance with the award directing the first respondent to pay the petitioner a sum of Rs. 78,02,247.15 which includes an
amount of award, interest awarded by the arbitrator till date and cost awarded by the arbitrators and
(c) Direct the first respondent to pay interest till date of payment on the decree at such rate as the court deems reasonable under the provisions of
the Interest Act, 1978 as applicable to arbitration proceedings under Sec. 29 of the Arbitration Act.
(d) The costs of the proceedings under Sec. 38(3) of the Arbitration Act including the Advocate''s fee and pass such other orders as may be
necessary in the circumstances of the case.
It is seen from the receiving seal of the original side of this court that the O.P. 216/90 was filed by the respondent herein on 21-6-1990. On 30-7-
1990 I passed the following order,
Award filed. Receive the award, Notice returnable by three weeks. Private notice is also permitted.
On 31-7-1990 Mr. J. Krishnamachari counsel for the respondent herein and petitioner in O.P. 216/90 sent a private notice to the petitioner herein
by registered post acknowledgment due. The counsel, in the said notice informed the petitioner that the notice was sent as directed by this court
returnable on 20-8-1990 and requested the petitioner to enter appearance on that date. The counsel for the respondent has also filed an affidavit
of service stating that the notice sent by registered post acknowledgment due to the petitioner has been received and in token of such service the
acknowledgment received by him has been filed in this court. It is seen from the acknowledgment card produced along with the affidavit of service
that the notice was served on the petitioner on 4-8-90 itself. On 20th Mr. J. Krishnamachari counsel for the respondent mentioned before me that
the notice ordered by this court has been served on the petitioner on 4-8-90 and hence he may be permitted to move the O.P. 216/90 on 21-8-
On 21-8-90, the said counsel appeared before me and invited my attention to the affidavit of service filed. Further the matter was adjourned
by me on 21-8-90 by one week for appearance of the respondent. When the matter was listed before me on 28-8-1990 I again adjourned the
matter on 4-9-90 and the matter was again listed before me on 5-9-90 and after hearing Mr. J. Krishnamachari learned counsel for the petitioner
in O.P. 216/90 I passed the following order,
This O.P is filed u/s 14(2) of the Arbitration Act, 1940 by M/s. Gautham Constructions and Fisheries Pvt. Ltd., T. Nagar, Madras. The second
respondent was appointed as sole arbitrator to decide the dispute between the petitioner and the first respondent. The petitioner thereafter has filed
this petition (a) to direct the second respondent (Arbitrator) to file the original Award dt. 24-5-90 together with the depositions and documents,
etc., in this court (b) to pass a decree in accordance with the Award directing the first respondent herein to pay to the petitioner a sum of Rs.
78,02,247.15 which includes the amount of award, interest awarded by the arbitrator till to day and cost awarded by the Arbitrator, (c) direct the
first respondent to pay interest tilt date of payment on the decree amount at such rate as the court deemed reasonable under the provisions of the
Interest Act, 1978 as applicable to Arbitration Proceedings, under S.29 of the Arbitration Act; and (d) the costs of the proceedings under S.38(3)
of the Arbitration Act, including the advocate''s fee.
On 30-7-1990, I passed the following order:
Award filed. Receive the award. Notice returnable by three weeks. Private notice also permitted.
Accordingly, the counsel for the petitioner sent a notice by registered post acknowledgment due to the first respondent on 31-7-1990. It is seen
from the acknowledgment now produced by the learned counsel for the petitioner that the notice has already been served on the first respondent
on 4-8-90 itself. The counsel for the petitioner has also filed an affidavit of service along with the copy of the notice and the acknowledgments.
Inspite of service of notice on the first respondent as early as on 4-8-1990, the first respondent did not choose to appear before this court. In the
result, there will be a decree in terms of the Award passed by the Arbitrator in favour of the petitioner. The Arbitrator has himself awarded interest
from the date of final bill i.e., 21-12-1987 till the date of payment of the decree of the Court whichever is earlier. Considering the award and the
stake involved in these proceedings, I order payment of a sum of Rs. 5,000/- as the petitioner''s Advocate''s fee payable by the petitioner directly
to the counsel.
To set aside the decree dated 5-9-90 passed by me in O.P. 216/90 and dispose of the said O.P. 216/90 on merits application No. 5161/90
has been filed. According to the applicant, the counsel appearing for the first respondent had sent a letter dated 31-7-1990 to the applicant at
Bombay informing them that the award had been filed into court and that they received the above letter from the counsel for the first respondent on
6-8-90 (Actually received on 4-8-90 as per the acknowledgment card) and that the said fact of receipt of the notice was immediately
communicated to the Regional Office at Madras to take steps to set aside the award by filing an application under S.30 of the Act within 30 days
from 6-8-90. It is the further case of the applicant that the necessary arrangement to file an application under S.30 of the Arbitration Act to set
aside the award and filed the same into court on 28-8- 90 (Diary No. 16822) now numbered as O.P. 483/90. It is also seen from the office
endorsements that the O.P. diary No. 16822 was presented in this court on the original side on 28-8-90. The same was returned on for
compliance of certain directions. It was represented on 18-10-90 and admitted by this court on 30-10-90. As stated above the notice sent by the
counsel for the first respondent Under S.14(2) of the Arbitration Act in regard to the filing of the award was served on 4-8-90 itself and that
original petition now numbered as O.P. 483/90 was presented in this court under S.30 of the Arbitration Act, for setting aside the aware on 28-8-
90 itself well within the prescribed time.
It is also alleged by the applicant that the notice in the original petition 216/90 had not been served on them through the court and that the letter
dated 31-7-1990 sent by the counsel for the first respondent did not also state that either this court had ordered private notice or that the said
notice was sent as a private notice permitted by the court. The applicants have further stated that they were also not served with the copies of the
petition filed by the first respondent in O.P. 216/90 to pass a decree in terms of the award and they were awaiting the same to be served through
court along with summons or notice from this court. They further contended that since the applicant had filed an application under S.30 of the Act,
to set aside the award within 30 days from the date of the filing of the award, they were under the impression that the O.P. 216/90 filed to pass a
decree would have to await the disposal of their application filed for setting aside the award. Further to the shock and surprise of the applicants
they received a letter from the counsel for the first respondent dated 22-9-90 along with the copy of the order passed by this court dated 5-9-90
granting ex parte decree in terms of the award in favour of the first respondent, and that the applicants have come to know from the said
communication that this court had construed a letter sent by the counsel for the first respondent on 31-7-90 as a notice in the said O.P. No.
216/90, in terms of the order passed by this court on 30-7-1990. The applicants were therefore in the bona fide impression that notice in O.P.
216/90 would be served through the court along with the petition. It is also stated that the applicants were also not served with the copy of the
petition along with the letter dated 31-7-90 even though in the said letter a reference is made to an enclosure. In paragraphs 8 and 9 of the affidavit
filed in support of the application 5162/90, the applicants have stated thus.
It is in the above circumstances, that the applicants were under the bonafide impression that the above O.P. would neither be posted not disposed
of. It may be stated that whatever is required to be stated by the applicants in defence, to the O.P. filed by the first respondent have been fully set
out in the application filed by the applicants in support of the application to set aside the award, it is in these circumstances that the applicants had
bonafidely omitted to take steps in the above O.P, as a consequence of which the same had been disposed ex-parte.
The applicants submit that they have got valid points to set aside the award which would also constitute valid defence in the O.P. Interest of
justice, therefore, requires that the ex-parte order passed in the above O.P. on 5-9-90 be set aside and the matter disposed on merits. If the
above O.P is not disposed on merits, the applicant which is a public body would be considerably prejudiced. In the circumstances, it is prayed that
this Hon''ble Court may be pleased to set aside the ex-parte order dated 5-9-1990 made in O.P. 216/90 and dispose of the said O.P on merits
and render justice.
The applications 5161/90 and 5162/90 were resisted by the first respondent/petitioner in O.P. 216/90 stating that the applicants though
received the notice from the counsel on 4-8-90 at Bombay had neglected to respond to the same and that the case was posted in the list dated 21-
9-90 as item No. 15 together with the applicant''s name printed, no one appeared on their behalf and on 5-9-90 i.e., after the expiry of 30 clear
days the case was posted in the list again as item No. 21 together with the name of the applicant in order to give final opportunity to the applicant.
By the applicant failed to make arrangements to appear in the court on 5-9-90, and on their failure to appear in the court on 5-9-90 this court had
to decree the petition as prayed for after setting the respondent ex parte . It is also stated in the counter that the respondent''s counsel had enclosed
a copy of the petition along with the registered letter dated 31-7-90 as evidenced by the Postal receipt. In answering the allegations made by the
applicants in their affidavit regard to the filing of the O.P. to set aside the award under S.30 of the Act, the respondent has only stated in para 6 of
the counter thus,
Hence this respondent does not admit any petition filed under S.30 by the applicant., in the absence of the Diary Number and the respondent is yet
to be served with the said petition. Hence the applicant has not explained their negligence to appear before the Court on 21-8-1990 as well as on
5-9-90., when their names appeared in the cause list, especially when they had claimed that they have filed a petition under S.30 on 24-8-1990.
Further the fact remains the petitioners have already filed a O.P. under S.30 of the Arbitration Act to set aside the award on 28-8-90 and the
same was admitted by this court on 30-10-90. It is also pertinent to note that when the applications 5161/90 and 5162/90 were posted before me
for orders on 16-10-901 passed an order of stay in favour of the applicants as prayed for and directed the respondent herein to file their counter
by 22-10-1990 and posted both the applications for enquiry on 22-10-90. On 24-10-90 a common counter affidavit in these two applications
have been filed in O.P. 216/90, I directed the office to number the O.P. diary No. 16822/90 (now numbered as O.P. 483/90) and post the same
on 31-10-1990 alongwith the application No. 5161/90, 5162/90 for enquiry. It is also to be noted that the first respondent has also filed its
counter affidavit in O.P. 483/90 which is a petition filed by the applicants under S.30 to set aside the award. The counter affidavit was sworn to on
5-11-90 and the signature of the first respondent has also been attested by an advocate and identified by the counsel for the first respondent.
According to the first respondent, there is no justification for the applicant to approach this court belatedly when they have been actually served
with the notice alongwith a copy of the petition as early as 14-8-90 and hence prayed this court to dismiss the applicant as time barred and not
maintainable.
The first respondent have raised three contentions with regard to the maintainability of the present applications. The first one is the respondent
does not admit the filing of petition under S.30 of the Act by the applicants in the absence of the diary number and the respondent is yet to be
served with the said petition and the second one is the applicants have not explained the reasons for absenting before the court on 21-1-90 as well
as on 5-9-90 when the names printed in the cause-list, especially when they had claimed that they filed petition under S.30 of the Act on 28-8-
1990. Thirdly it is contended by the first respondent that there is no justification for the applicants to approach this court belatedly when they have
been actually served with the notice as early as on 4-8-90 and hence the applications have to be dismissed as time barred and not maintainable.
I have heard the elaborate arguments of Mr. R. Krishnamoorthy, the learned senior advocate on behalf of M/s. R. Muthukumarasamy and K.
Sundareswaran, advocates for the applicants and Mr. Vedantham Srinivasan, the learned Senior Advocate appearing on behalf of Mr. J.
Krishnamachari, the learned counsel for the first respondent. The learned counsel for the petitioner have reiterated the contentions raised by the
applicant in application No. 5161/90 and 5162/90 and argued that this court should recall the judgement and decree passed on 5-9-90 in O.P.
216/90 by exercising its inherent jurisdiction. The learned counsel Mr. R. Krishnamoorthy further submits that this court has its inherent jurisdiction
and power to recall the order or decree passed under S.17 of the Arbitration Act if it was passed irregularly without complying with the
requirements of S.17 of the Arbitration Act. The learned counsel next contended that in order to be effective both for the purpose of obtaining
judgement in terms of the award and for setting aside the award there must be (a) the filing of the award in the proper court and (b) service of
notice by the court. According to the learned counsel though I ordered notice to the applicants on 30-7-1990, in regard to the filing of the award
through court and also privately, no notice was served on the applicants through court which is a mandatory requirement. Elaborating the said
contention Mr. R. Krishnamoorthy submitted that there must be service of notice or intimation or communication of the filing of the award by court
to the parties (italics is mine) and that the intimation thereof by the registry of the court to the parties is essential. In support of his contention Mr. R.
Krishnamoorthy has cited the following judgements:
1 Madan Lal Vs. Sunderlal and Another,
Ganeshmal Bhawarlal Vs. Kesoram Cotton Mills Ltd.,
AIR. 1951 Mad 658
Soorajmull Nagarmal Vs. Golden Fibre and Products,
ILR 2 Mad 144
Indian Rayon Corporation Ltd. Vs. Raunaq and Company Pvt. Ltd.,
Madan Lal Vs. Sunderlal and Another, In the above case the Supreme Court has held as follows:
It is clear, therefore, from S.17 that an application to set aside the award is contemplated therein and it is only when no such application has been
made within the time allowed or if such an application has been filed and has been rejected that the Court proceeds to pronounce judgement in
terms of the award. The Act, therefore, contemplates the making of an application to set aside an award and the grounds on which such an
application can be made are to be found in S.30.
and
It is clear, therefore, from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must
apply within 30 days of the date of service of notice of filing of the award as provided in Art, 158 of the Limitation Act. If no such application is
made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form
prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an
application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated as
an application to set aside the award, for if it is so treated it will be barred by limitation.
Ganeshmal Bhawarlal Vs. Kesoram Cotton Mills Ltd., :
In this case it has been held by the Calcutta High Court as follows:
Under S.14 of the Arbitration Act, on the award being filed, the court shall give notice to the parties of such filing. S.17 then provides as follows:
Where the court sets no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the
Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it,
proceed to pronounce judgement according to the award, and upon the judgement so pronounced a decree shall follow, and no appeal shall lie
from such decree except on the ground that it is in excess of, or not otherwise in accordance with, the award.
The following conditions must be complied with before the court may pronounce judgment upon award and before the decree can follow:
(a) The court has given notice to the parties of the filing of the award.
(b) The time for making an application to set aside the award has expired or if such application has been made, it has been refused.
(c) Where the court sees no cause to remit or set aside the award.
All these conditions are cumulative and must be strictly fulfilled. If not, the court may and ought to set aside the judgement and decree which
follows.
While dealing with the service of summons and notices of the filing of the award under S.14 of the Arbitration Act, the learned Judge of the
Calcutta High Court was of the view that the notice of the filing of the award must be made by the court and that the notice received by a party
aliunde and not through court is not sufficient. The learned Judge further held that as service must be in the manner provided for in the Act for
service of summons we must look at the relevant provisions which are contained in Or.V of the CPC which has provided for the methods of
service of summons on a defendant. Or.V provides the services of summons shall be made by delivering or tendering a copy of the summons and
Rule 16 provides that the serving officer shall require the signature of the person to whom the copy is tendered or delivered.
In my opinion, the service of summons must be effected strictly in the manner prescribed by law if any party is to be charged with its receipt. In
the instant case though I had ordered notice to the applicants herein through court and also privately, the notice through court has not been served
till date on the applicants. The notice sent by the counsel for the first respondent herein by the registered post acknowledgment due alone have
been served on 4-8-90. As stated above notice through court and also privately has been ordered by me. When that is the order, the service of
summons must have been made on the applicants and must also be complied with as per the provisions prescribed for service of summons in suits
and also the rules framed for service of summons for the proceedings initiated under the Arbitration Act. In exercise of the powers conferred under
S.44 of the Act, Our High Court framed Rules consistent with the Arbitration Act regarding the filing of the awards and all proceedings consequent
thereto or incidental thereto. The Rules framed by our High Court for the proceedings under the Arbitration Act provide for service of notice on
the filing of the award on the parties concerned. Rule 4(1) provides that the Registrar shall as soon as the petition is admitted and the award is filed
issue notice to the parties interested in the award informing them that the court will pronounce judgment thereon on a date to be fixed in the said
notice. Such notice shall be served by the party by whose instance the award was filed into court in the manner provided for service of summons in
a suit within such time as the Registrar may fix.
In the instant case there is no record to show that notice of the filing of the award has been served on the applicants herein through court and
as provided under the Rules framed for the proceedings under the Arbitration Act or as provided under the procedure prescribed for service of
summons in a suit. The only document that has been produced by the learned counsel for the first respondent is the acknowledgment for service of
notice on the applicant on 4-8-90 pursuance to my order dated 30-7-90 ordering private notice also be served on the applicants. As stated supra
I ordered notice to the applicants on 30th July 1990 returnable by three weeks through court and also directed private notice which will go to
show that the notice/summons shall be served on the applicants through court primarily as provided under the rules framed by this court for
proceedings enunciated under the Arbitration Act and also under the procedure prescribed for services of summons in suits, on the original side.
Private notice was ordered to be served on the applicants only with a view to complete service of notice on the parties concerned by quicker
methods and not with a view to overlook the statutory requirement prescribed under the Arbitration Act and also service of summons in suits, as
per the provisions prescribed under the Code of Civil Procedure. The purport of my order dated 30-7-90 should be construed as an order
ordering notice through court which was also a mandatory requirement. As stated above the mandatory requirement of service of summons on the
applicants has not been complied with. Hence I am unable to construe the service of notice on the applicants privately as sufficient service. Even
assuming that the said service by private notice on the applicants on 4-8-90 is sufficient, the applicants have filed O.P. diary No. 16822/90 (O.P.
418/90 on 28-8-90) well within the prescribed time. It is a fact that on 5-9-90 when I passed the judgement and decree in terms of the award in
O.P. 216/90, O.P. diary No. 16822/90 was already filed and pending on 28-8-90 in this court to set aside the award passed by the arbitrator. I
was not aware of the filing of the O.P. 16822/90 which was taken on file on 28-8-90 long before the passing of the impugned order dated 5-9-90.
Hence, in my opinion the order passed by me on 5-9-90 without hearing the objections raised by the applicants herein under S.30 of the
Arbitration Act is irregular and hence I feel just and proper to set aside the order of mine dated 5-9-90 which I have no hesitation in doing so in
the interest of justice and fairplay, since the decree in O.P. 216/90 was passed by me without complying with the mandatory provisions of S.17 of
the Arbitration Act, I am also of the view that I have inherent powers to recall the previous order or decree if it is passed without jurisdiction and
hence I hold that I have power to set aside my earlier order.
Sheikh Esuf Rowther alias A.S. Mohammed Yusuf and Others Vs. Sheikh Davad Rowther and Another,
In this case Mr. Justice Chandra Reddi has held as follows:
It is clear from the provisions of S.17 of the Arbitration. Act that a Court can pass a decree on an award only after the expiry of time to file
objections to the award. Whether the parties applied for time or not, it is the duty cast upon the Court to allow thirty days time to elapse between
the filing of the award and the passing of the decree on the basis of the award. Accordingly a decree passed by a District Munsif on an award
without allowing the requisite time to elapse as required under the provisions of S.17 of the Arbitration Act read with Article 158 of the Limitation
Act is illegal and unsustainable.
Soorajmull Nagarmal Vs. Golden Fibre and Products,
The learned single Judge of the Calcutta High court held as follows:
The Court in its inherent jurisdiction has power to recall order or decree passed under S.17 of the Arbitration Act if it was passed irregularly, i.e.,
if it was passed without complying with the requirement of S.17 of the Arbitration Act, as for example, without serving notice under S.14(2) of the
Arbitration Act or before the time to make an application for setting aside the award had expired or before an application made for setting aside
the award had been dismissed.
In the instant case, I passed a decree in terms of S.17 of the Arbitration Act without complying with the requirements of S.17 of the Act, namely
without disposing of or dismissing of an application made by the applicants herein for setting aside the award under S.30 of the Act, which in my
opinion is an irregularity.
Rangasamy v. Muthusamy ILR 2 (1988) Mad 144. The division bench of our High Court consisting of Justice Muthusamy Iyer and Justice
Parker held as follows:
We are of opinion that the decree made by the District Munsif in this case must be set aside, and that he must be directed to hear the objections
which the petitioners may urge against the award and then proceed to pass a fresh decree in accordance with law. By S.516 of the Code of Civil
Procedure, he was bound to give the petitioners notice of the filing of the award, and this he has failed to do. In our judgment this omission is a
material irregularity. He should not have proceeded to pass a decree in conformity to the award without first hearing the petitioner''s objections.
The decree, as it stands, is one made without hearing the petitioners, who were entitled to be heard, and which it was not competent to the District
Munsif to do. We direct him to restore the suit to the file, to give the petitioners ten day''s time for filing the objections, and, after considering them
pass such orders as appear to him to be just in the circumstances of the case.
It is seen from the above decision, passing a decree in terms of the award without hearing the objections of the concerned parties is a material
irregularity.
Indian Rayon Corporation Ltd. Vs. Raunaq and Company Pvt. Ltd.,
In this case the Supreme court has held as follows:
In order to be effective both for the purpose of obtaining the judgment in terms of the award must be filed in the Court. There must be service of
notice or intimation or communication of the filing of the said award by the Court to the parties. If all these factors are established or are present,
the mode of service of the notice would be irrelevant. If the substance is clear, the form of the notice is irrelevant but the notice of the award having
been filed in he Court, is necessary. The filing in the Court is necessary and the intimation thereof by the Registry of the Court to the parties
concerned, is essential. Beyond this there is no statutory requirement of any technical nature under S. 14(2) of the Act.
and
It was however, submitted on behalf of the appellant that there cannot be any concession on a question of law. We are of the opinion that this
concession does not, as such, held the parties very much. The fact that the parties have notice of the filing of the award, is not enough. The notice
must be served by the Court. We reiterate again that there must be (a) filing of the award in the proper court, (b) service of the notice by the court
or its office to the parties concerned and (c) such notice need not necessarily be in writing. It is upon the date of service of such notice that the
period of limitation begins and as at present under Cl. (b) of Art. 119 of the Act, the limitation expires on the expiry of the thirty days of the service
of that notice for an application for setting aside of the award. The importance of the matter, which need be emphasised, is the service of the notice
by the Court.
The learned counsel Mr. R. Krishnamoorthy has also placed reliance on certain passages in the Handbook of Arbitration by Justice Mr.
Mallick, particularly Para-7 at page 71 and para-18 at page 73. Inviting my attention to the above passages, the learned counsel has submitted
that, ""Where the decrees has been passed contravening the provisions of S.14(2) of the Arbitration Act, the principles laid down in Or. 9, Rule 13
CPC are attracted and court must exercise its inherent jurisdiction to set aside the ex-parte decree."" Further placing reliance on Soorajmull
Nagarmal Vs. Golden Fibre and Products, the learned counsel has submitted that even though the party has no power to apply under Or. 9 Rule
13 CPC for setting aside the ex-parte decree on award passed under S.17, yet this court can recall its judgment and decree on the award if it was
passed without complying with the requirements of S.17 of the Arbitration Act by exercising its inherent jurisdiction. I see much force in the
contentions of the learned counsel for the applicants.
Per contra, Mr. Vedantham Srinivasan, the learned senior advocate while reiterating the contentions raised by the first respondent in his
counter affidavit has invited my attention to the rulings in AIR 1978 Mad 215 = 91 LW 279. The learned counsel has contended that the present
applications to recall the order are not maintainable and are to be dismissed as the award had already became the rule of the court and ripened into
a decree. According to the learned counsel Ss. 14 to 17 and S. 30 deal with the period before a decree is passed and that the objections are filed
to set aside the award in the Arbitration Act and not the decree. According to the learned counsel once the award has become a rule of court and
therefore become a decree, S.30 will not operate because it is only to set aside the award and hence the proper course is to file an appeal under
S.39 of the Act. The learned counsel further contended that the applicants have knowledge about the passing of the award by the arbitrator himself
and produced a xerox copy of the letter sent by the applicants herein dated 1st June 1990 addressed to Mr. Justice M.R.A. Ansari, Sole
Arbitrator, wherein the applicants have stated that they are in receipt of the copy of the award passed by the arbitrator and that the same was
received by them on 30th May 1990. According to the learned counsel for the first respondent, the applicants had knowledge about the passing of
the award as early as 30th May 1990 and should have taken steps to set aside the award early. I am unable to accept the contention of the learned
counsel for the first respondent for this reason. The fact that parties have received knowledge of the passing of an award by the arbitrator or of the
filing of the award in court does not relieve the court of its obligation of service of notice and the time has to be reckoned only from the date of
service of notice and in fact as stated above immediately after service of notice provided the applicants have taken prompt action in filing the O.P.
under S.30 of the Act to set aside the award as early as on 28-8-90 well within the time prescribed under the Act. In my opinion it is incumbent on
the court to give a notice to the parties under the provisions of the Arbitration Act, as held by the Supreme Court in the judgment referred to above
in Indian Rayon Corporation Ltd. Vs. Raunaq and Company Pvt. Ltd., . Service of summons and notice by the registry of the court to the parties
concerned is essential which has not been complied with in this case even though notice was ordered through court on 30-7-1990. 19. Mr.
Vedantham Srinivasin, the learned counsel placed strong reliance on the decision of the Division bench of our High Court consisting of Mr. Justice
Ram Prasad Rao and Mr. Justice Surya Moorthi, as they then were in support of his contention. In my opinion the said decision is not applicable
to the facts of this case and is distinguishable. The above decision is a case in which the respondent therein had lost its right to seek to set aside the
award as under the Limitation Act, the period had expired and that it was only in November 1972 the respondent therein had knowledge of the
passing of the award and the same have been brought into the court at the instance of the arbitrator. The learned judges of the Division bench
therefore felt that there is no scope for the contention that is a case in which an ex parte decree ought to be set aside. The learned Judges as a fact
held that the service on the respondent should be deemed to be a valid service and that the person who received the notice had implied authority to
act for the respondent firm and that the person who received the notice had failed to convey the information of such service to the respondent firm.
In the circumstances stated, the Division bench held the respondent company had lost its right and entitlement to have the award set aside in a
manner known to law and as prescribed under the Limitation Act. The appellant in the above case after having been satisfied that no application
was filed by the other party either for modification or cancellation of the award within the meaning of S.15 for remittance of the award, within the
meaning of S.16 of the Arbitration Act, filed the application for passing the decree in terms of the award, which was ordered by this court and a
decree in terms of the award was passed. The learned Judges of the Division Bench nave rejected the case of the respondent before them mainly
on the ground that the respondent had lost its rights to seek for setting aside the award as under the Limitation Act, the period had expired. But, in
the instant case, as mentioned above, the applicants have already filed an O.P. under S.30 for setting aside the award for the grounds more fully
mentioned therein within the prescribed time of 30 days. Hence I am unable to accept the argument of the learned counsel for the first respondent
and accept the above ruling as applicable to the facts and circumstances of this case.
In the instant case, the applicants herein have filed O.P. Diary No. 16822/90 on 28.8.90 itself. They having been served with the notice of
filing the award on 4-8-90 and filed the O.P. under S.30 of the Act within 30 days from the service of even the private notice. Thus, the petition
filed under S.30 of the Act by the applicants was pending on the file of this court, but was not posted alongwith the other O.P. 216/90 which was
filed under S.14(2) of the Act. Things would have been entirely different had there not been the O.P. diary No. 16822/90 filed under S.30 and
was pending in this court. In my opinion unless the provisions of S.17 of the Act are complied with the judgment and decree passed by me on 5-9-
90 in terms of the award is without jurisdiction. S.17 provides for judgment in terms of award in cases where the court sees no cause;
(a) to remit the award or any of the matters referred to arbitration for reconsideration, or
(b) to set aside the award.
If both these conditions are fulfilled, the Court (a) after the time for making an application to set aside the award has expired, or (b) such
application having been made, after refusing it, proceed to pronounce judgment according to the award. If the Court so pronounces judgment, a
decree must follow, and no appeal can lie from such decree except on the ground (a) that it is in excess of, or (b) not otherwise in accordance with
the award. When these two stages have been passed the court has no option but to pronounce the judgment according to the award. It is a fact
even before the time for making an application to set aside the application had expired, the applicant has filed O.P. to set aside the award under
S.30 of the Act. Hence it is not open to this court to pass a decree in terms of the S.17 of the Act provided to pronounce the judgment according
to the award without refusing the original petition filed under S.30 of the Act. In my opinion all these conditions mentioned above are cumulative
and must be strictly fulfilled. If any of these conditions are not complied with, the court should not pronounce judgment and if it does thus, it is open
to this court to recall the judgment and the order passed on 5-9-90 and the decree which followed thereupon. I have also not given an opportunity
to the applicants /objector to prove his objections and I had no occasion to deal with the objections judicially.
In my opinion, even in a case where judgment upon an award has been passed under S.17 of the Act if the judgment debtor can satisfy the
court that such decree should be set aside on grounds appearing sufficient to the court, the court has jurisdiction to set aside such decree in its
inherent jurisdiction to meet the ends of justice. In the instant case, in my view, the applicants have made out a prima facie case for seeking the aid
of this court in invoking its inherent jurisdiction to meet the ends of justice.
It is well known that no party can suffer because of the mistake committed by the court. In this case, the mistake committed by the original side
of this court in not numbering the O.P. Diary No. 16822/90 though it was presented on 28-8-90 which was numbered and filed only on 30-10-
1990 and in the meanwhile the impugned order had been passed. Though the counsel for the petitioner in O.P. 483/90 could have acted in a more
deligent manner in numbering the O.P. It is not in any way affect the case of the applicants in regard to its bonafide in presenting the matter, having
presented O.P. Diary No. 16822/90 well within the prescribed time of limitation. The maxim act of court should do no harm to a litigant has been
more elaborately dealt with by the Highest Court of the land in Jang Singh Vs. Brijlal and Others,
The decree in this case was passed by me without serving a notice under Sec. 14 of the Arbitration Act duly and in accordance with the CPC
and the Rules framed by our High Court for the proceedings under the Arbitration Act. In my judgment the decree in accordance with the award
was passed without complying with the mandatory provisions of S.17 of the Arbitration Act. Under that section no decree can the passed unless
the time to set aside the award has expired or if such application has been made it has been refused. Under the Limitation Act, such time is 30 days
from the service of the notice of the filing of the award through court. In the absence of lawful service by court, mere knowledge of the passing of
the award by the arbitrator or filing of the award in this court as contended by the learned counsel for the first respondent is not sufficient and I am
unable to countenance the same as there is no service in the manner prescribed by law, and there is no service as contemplated by the provisions
of the Limitation Act. The limitation for applying to set aside the award therefore never started to fun and the decree was passed before the expiry
of the time for applying to set aside the award and without complying with the mandatory provisions of S.17 of the Arbitration Act. Even assuming
for the sake of argument that the service is completed by private notice as ordered by this court the applicants have already filed O.P. Diary No.
16822/90 well within the prescribed time under the Limitation Act and that the order passed by this court without passing any order on the O.P.
filed under S.30 of the Act is irregular and without complying with the mandatory requirements of S.17 of the Act. As mentioned above this court
has inherent power to recall the order or decree passed under S.17 of the Act. This order was passed irregularly. Hence exercising my inherent
jurisdictions, I set aside the judgment and decree passed by me on 5-9-90 in O.P. 216/90. It has also been conceded by the first respondent that
there is no service of notice on the applicants through court, even though necessary process fee has been paid and steps taken. Now that the
petitioner has filed O.P. 483/90 under S.30 of the Act for setting aside the award, the same will have to be disposed of in accordance with the law
alongwith O.P. 216/90.
There is nothing wrong in becoming wiser when demonstrably the conscience of the Judge dictates that what ought not to have been done has
been done. Innumerable are instances where a Judge in confrontation with a difficult position ruminates and ultimately comes to a conclusion that
when originally he thought it ought to be in insupportable. In such circumstances it is fair and just that the Judge should make amends for a wrong
he never intended to commit. Human process of thinking is a complicated one and should not be permitted to be hijacked by strange notions of
propriety which may ultimately lead to injustice.
Hence, I feel in this case, I shall resile from my original stand in order to do complete justice in this case, which I should not fail under any
circumstances. In the result, the Application Nos. 5161/90, and 5162/1990 are ordered as prayed for. Consequently, I recall the order and
decree passed on 5-9-1990 in O.P. No. 216/1990 and restore the same to file to be heard alongwith O.P. No. 483/90. Both the O.P. 216/1990
and O.P. 483/1990 shall be disposed of on merits and in accordance with law. No costs.