State of Kerala vs P. Mudhusoodanan Pillai

John Mathew, J.—Respondents. 1 and 2 in O. P. (Arbitration) No. 110/88 before the Sub Court Kollam are the appellants... Certain disputes between the appellants and the respondent were referred for arbitration by the Chief Engineer (Arbitration). The arbitrator after consideration of the case, passed an award on 1-6-1988. The award was filed before the lower court, the respondent therein filed an application u/s 17 of the Arbitration Act praying to accept the award and to grant a decree in terms of the award That application was filed on 6-9-1988. Asseen from the B diary it was registered on 7-9-1988 and numbered as O. P. 110/88. Notice was ordered on 9-9-1988- Notice was made returnable on 18-11-1988. The 1st respondent (1st appellant herein) received notice on 21-10-1958 and the 2nd respondent (2nd appellant herein) received notice on 4-11-1988. Respondents entered appearance on 18-11-1988 They prayed for time to file objections and the petition was posted to 13-1-1989. On 6-12-1988 the appellants filed I.A.2559/88 under. Section 30 of the-Arbitration Act praying to set aside the award. On 13-1-1989 the appellants filed objections. Thereafter the petition was adjourned about 29 times. Ultimately by order dated 9-12-1991 the lower court dismissed I. A. 2559/88 and a decree in terms of the award was passed by the order now challenged in this appeal. The only ground stated in the order of the lower court was that the objection, by way of I.A. 2559/88 was dismissed as barred by limitation and there is no petition to condone the delay. In the order on I.A.2559/88 the lower court has given the same reason that it was time barred.

Therefore, the only question is whether the court has power to grant time to file a petition for setting aside an award or for remitting the award for reconsideration.

Under Article 119(b) of the Schedule to the Limitation Act, 1963 the period of. limitation for setting aside an award or getting an award remitted for reconsideration is thirty days from the date of service of the notice of the filing of the award.

Section 37 (I) of the Arbitration Act, 1940 is as follows :

Limitations-(1) All the provisions of the Indian Limitation Act, 1908 (9 of 1908), shall apply to arbitrations as they apply to proceedings in Court.

It has to be observed that Section 37requires amendment in view of the enactment of the Limitation Act, 1963 (Act 36 of 1963). Amendment is required for the added reason that there is difference between Section 5of the 1908 Limitation Act and Section 5 of the 1963 Limitation Act. Section 5 of the Limitation Act, 1908 Is as follows:

Extension of period in certain cases. Any appeal or application for a review of judgment or for leave to appeal or any other application to which this section may be made applicable (by or under any enactment) for the time being in force may be admitted after the period of limitation prescribed therefor, when the appellant or applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within such period.

Under the Limitation Act of 1908, Section 5 cannot be invoked to condone the delay in respect of an application seeking to set aside an award presented beyond time. However Section 5of the Limitation Act, 1963 would apply to such cases also as the section is applicable to all applications other than those under Order XXIC. P. C. (see Ram Piyari v. Budh Sen - AIR 1977 Alla 390 and Union of India (UOI) Vs. Builders Union, ).

Section 5 of the 1963 Limitation Act is as follows,

''Extension of prescribed period in certain cases- Any appeal or ''any application other than an application under any of the provisions of Order XXIof the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within such period, (Explanation omitted)

By Section 3 of the Limitation Act, 1963, Sections 4 to 24are made applicable to every suit, appeal and application. Therefore, since Section 5of the Limitation Act is applicable, if the applicant satisfies the court that he bad sufficient cause for not preferring the application within the prescribed period the application may be admitted after the prescribed period it is well settled that the. period of limitation for an application to set aside an award starts from the date of the filing of the award in court, (see Food Corporation of India v. Kuttappan 1993 (2) KLT 541.

As observed above, the lower court accepted the prayer of the appellants for granting time to file objections and adjourned the case to 13-1-1989 which was a date beyond 30 days of service of the notice of filing of the award. Under these circumstances it would appear that there is some force in the contention of the learned Senior Govt. Pleader appearing for the appellants that the appellants believed that time for filing the objections for setting aside the award was extended till that date. It is a well settled principle that no order or court shall prejudice any of the parties (see V. K. lttobp v. State of Kerala 1987 (2) KLT 616 Under the circumstances of this case it is clear that the court as wall as the parties proceeded as if there was a valid objection and a valid petition to set aside the award, till the date of final hearing. Therefore, it was up to the court to grant to the appellants an opportunity to file a petition to condone the delay in filing the petition to set aside the award. It is not necessary to. consider the contention of the learned Senior Govt. Pleader that it was not essential to file a petition u/s 5 and that an Oral request was sufficient in the nature of the order we are passing in this case. We hold that the Court has power to grant time to file petition for setting aside an award or for remitting the award for reconsideration. Court has also the power to condone the, delay in filing such a petition in this case we hold that the Court granted time to file such a petition and therefore it is implied that the delay is condoned.

It is not necessary to examine the contention of the learned counsel for the respondent relying on the Official Liquidator v. Kundremukh Iron Ore Company Ltd, 1991 (l) K.L J. 84 that notice u/s 14 (2) can be given orally or in any Other manner since admittedly notice in the 0. P. filed by the respondent was received by the appellants on 21-10-88 and 4-11-88 respectively. On a consideration of the facts and circumstances of this case we are of the view that the matter requires reconsideration. Accordingly the orders on O. P 110/88, I. A. 1728/88 and I. A, 2559/88 ace set aside. These petition and application are remanded to the lower court for fresh considerations on the merits and disposal in accordance with law and In the light of the observations in this judgment. However, we direct that the remand shall be on condition that the appellants deposit in the lower court the award amount within two months of receipt of records by the lower court. The respondent will be entitled to withdraw the same on furnishing security to the satisfaction of the lower court. The parties are directed to appear before the lower court on 1-2-1994.

Registrar will forward a copy of this judgment to the Chief Secretary, Government of Kerala drawing his attention to the observations in paragraphs 5 & 6 of this judgment.