Rameshwar vs Union of India (UOI)

N.K. Jain, J.—This revision is directed against the order dated 2.3.98, passed by Ist Addl. District Judge, Ratlam. in Misc. Civil Case No. 13/96, allowing Respondents'' application under Order IX Rule 13 r/w. Section 151 of CPC and setting aside the Order dated 23.12.93, passed by the aforesaid Court in Civil Misc. Case No. 24/94.

Respondent-Rameshvvar Agrawal is a Railway Contractor. The Petitioner Western Railways and the Respondent had entered into some work contract which provided for an arbitration clause for adjudication of dispute, if any. arising between the parties in relation to the contract. Since some dispute arose between them, the same was referred for arbitration to Shri R. Chaturvedi. Joint Director. S.T.D.S. (M.P.) R.D.S.O. Manak Nagar. Lucknow. The Arbitrator made his award on 10.3.93 and the same was filed in the Court (Ist A.D.J. Ratlam, on 29.10.93. The Court''s proceedings dated 22.11.93 reveal that both the parties were present in the Court through their counsel Shri Dhanik Ram Sumnani and Shri P.K. Medhe, Advocates. The Court caused notices of the award served on the counsel in terms of Sub-section (2) of Section 14 of the Arbitration Act, 1940 (for short, ''the Act of 1940''). On 30.11.93. Rameshwar Agrawal. the Petitioner herein, made application u/s 17 of the Act of 1940 for making the said award the Rule of the Court. The Court observed that since notices of the award have already been given to the parties, no fresh notices of the application need to be given to the other side. The case was fixed for 23.12.93 i.e. after the expiry of the period of 30 days prescribed for making application to set-aside the award u/s 30 of the Act of 1940. Since no application for setting aside the award was made by any party, the Court on 23.12.93 passed judgment in terms of award making the same Rule of the Court.

The Respondents herein, i.e. The Union of India and Western Railways, on 18.1.94 made an application under Order IX Rule 13 r/w. Section 151 of CPC for selling aside the said judgment dated 23.12.93 on the ground that no notice of the award was ever served on the Petitioner who did not also otherwise had any knowledge of the filing of the award and could not, therefore, make application for setting aside the same. The application was resisted by the Petitioner who inter-alia, contended that no application under Order IX Rule 13 lies in the matter. It was further submitted that the Railways had been given notice of the filing of the award and since no application for setting-aside the award was made by them within the prescribed period of limitation, the Court was justified in-passing judgment u/s 17 and the same has now become final.

The learned A.D.J., on consideration of the averments made by the parties and the affidavits submitted by them, came to the conclusion that the judgment dated 23.12.93 has been passed ex-parte without giving any opportunity to the Railways. On this finding the judgment was re-called and the Misc. Case No. 24/93 was directed to be restored for decision along with Misc. Case No. 14/96. registered on the basis of an application filed on 18. 1.94 by the Railways for selling aside of the award.

I have heard Shri CM. Chaphekar, learned Sr. Counsel appearing with Mr. S.S. Samvatsar for the Petitioner and Shri Y.I. Mehta, learned Counsel for the Respondents-Railways.

The main contention of Shri Chaphekar was that no ex-parte proceedings of hearing was at all held in the instant case. As both the parties to the arbitration agreement were given due notice of the filing of the award on 22.11.93, on which date both the parties had appeared in the Court through their counsel and were duly noticed in terms of Section 14(2) of the Act. He further submitted that since no application was filed by any party within the prescribed time limit for selling aside of the award u/s 30 of the Act, the Court was justified in making the award Rule of the Court, as provided u/s 17. The application under Order IX Rule 13, he contended, did not lie in the instant case.

As against it. Shri Mehta. learned Counsel for the Respondents has strenuously argued that notice of the application made u/s 17 of the Act of 1940 ought to be given to his clients and that in any case the said application made under Order IX Rule 13 r/w. Section 151 of CPC could be treated as an application for condonation of delay.

Having considered the arguments as advanced by the parties and gone through the record of the lower Court, his revision in my judgment must fail.

Section 14 of the Act of 1940 provides for signing of the award and its filing in the Court by the Arbilrator(s) or Umpire. Sub-section (2) further provides that the Court shall on filing of the award, give notice thereof to the parties. Sections 15 and 16 provide for the power of the Court to modify the award or to remit it to the Arbitrator (s) or Umpire for reconsideration. Section 30 provides for the grounds for setting aside the award. The Act, therefore, contemplates the making of an application to set-aside an award on any of the grounds as found in Section 30. Period of 30 days is prescribed for making any such application under Article 119 of the Limitation Act, 1963 (Article 158 of the old Act). It is, therefore, clear from the Scheme of the Act that if a party wants an award to be set-aside on any of the grounds mentioned in Section 30, it must apply within 30 days of the date of service of notice of filing of the award. If no such application is made the Court, subject to the provision of Sections 15 and 16, Shall proceed to pronounce the judgment according to the award and a decree shall follow upon the said judgment. As held in Nilkantha Shidramappa Ningashetti Vs. Kashinath Somanna Ningashetti and Others, , no application for setting aside the award or the judgment passed thereon can be made after expiry of the said period of limitation. Similar view is taken in Madan Lal Vs. Sunderlal and Another, .

In the instant case, as already pointed out, after filing of the award the parties had appeared before the Court through their counsel on 22.11.93 and they were clearly noticed of the filing of the award in terms of Section 14(2) of the Act of 1940. Under the circumstance, it was wholly incorrect on the part of the Respondents to say that they had no notice of the filing of the award in the Court. In Nil Kantha (supra), the Apex Court has even gone to the extent of saying that the notice which the Court is to give u/s 14(2) to the parties of the filing of the award need not be a notice in writing. The notice can be given orally. No formal notice was. therefore, required to be given to the parties and the Court''s proceeding dated 22.11.93 was a sufficient notice to them of the filing of the award in the Court.

The Court in its final judgment dated 23.12.93 has clearly observed that it sees no cause to modify or remit the award and mat it does not suffer with any illegality or infirmity. It is further stated that no application has been filed by any party to set-aside the award within the prescribed period of limitation. Under these circumstances, the Court was fully justified in passing judgment u/s 17. in terms of the award. This judgment cannot be termed as an ex-parte judgment and the provisions of Order IX Rule 13 of CPC or even Section 151 of the Code cannot be invoked to set-aside the said judgment which has become final the two judgments Shrichand Prasad Vs. Mohan Singh, and M/s. Avis International Ltd. Vs. M/s. Avi Footwear Industries and another, . relied upon by the Court below were of no avail to the Respondents in the facts and circumstances of the present case. In Shrichand, Patna High Court has clearly held that provisions of Order IX Rule 13 CPC were not applicable to the proceedings under the Arbitration Act. In M/s. Bhagwandas, the Delhi High Court in a case where provisions of Sections 14 and 17 of the Arbitration Act were not complied with and where good grounds existed for either setting aside the award or remitting it, the High Court held that the principles of natural justice required that the parties should be given an opportunity of hearing. In that case the objection to the award had been filed within the prescribed period of limitation. In the instant case, however, as already pointed out, no such application/objection was filed within the prescribed period of limitation. As per Respondents'' own showing the objection was taken for the first time on 23.12.93 and that too in the Court of District Judge while the proceedings in question were cognizable and pending in the Court of Ist Addl. District Judge. The period of limitation which commenced on 22.11.93 had already expired on 21.12.93. The application filed u/s 30 was, therefore, clearly barred by limitation and since the judgment in terms of Section 17 had already been passed by the Court of competent jurisdiction, no objection could be taken to the award at that distance of time.

For the reasons stated hereinbefore, this revision succeeds and is allowed. The Order dated 2.3.98 passed by the Court below in M.J.C. No. 13/96. is set-aside and the application filed by the Respondents under Order IX Rule 13 r/w. Section 151 of CPC is dismissed as not maintainable.

There shall be however no order as to costs.