The Food Corporation of India and Others vs E. Kuttappan

Radhakrishna Menon, J.—The common issue arising for consideration in these revision petitions is whether the application of the Respondent u/s 16(1) of the Arbitration Act (for short the Act) is barred by limitation.

The learned Counsel for the Petitioner presents his case thus: On 25th October 1988 the Respondents Counsel, to whom the Arbitrator had forwarded the award and the connected files, filed the award in Court and gave the Petitioners herein the notice of filing on 26th October 1988. The Respondent in the circumstances must be held to have receivedthe notice u/s 14(2) of the Arbitration Act on 25th October 1988 itself. Since the application u/s 16 of the Act was filed after 30 days of the said date, the same is barred by limitation.

On the other hand, the learned Counsel for the Respondent argues that the notice contemplated u/s 14(2) of the Act was served on the Respondent only on 7th November 1988. Since the application u/s 16(1) was filed on 6th December 1988 the same must be held to be filed in time.

According to Article 119 of the Limitation Act, the period of limitation for an application u/s 16(1) of the Arbitration Act to remit the award begins to run from the date of service of notice of the filing of the award. Article 119 of the Limitation Act (leaving out - unnecessary parts thereof) reads:

Description of suits Period of limitation Time from which period begins to run

(1) (2) (3)

119 Under the Arbitration Act, 1940-

(a) ... - -

(b)for the setting aside an award or getting an award remitted for reconsideration Thirty days The date of service of the notice of the filing of the award

In order to appreciate the content of this provision it is necessary to understand the meaning of the words ''date of service of notice''. Construing these words, the Supreme Court has observed that there is no need to have a notice in writing served in a formal manner. When the Legislature used the word ''notice'' it must be presumed to have borne in mind that it means not only a formal intimation but also an informal one. See Nilkantha v. Kashinath AIR 1962 S.G. 666 Alongside we should keep in mind the importance of the content of Section 14(2) of the Act also. The learned Counsel for the Petitioners in this regard argues that in a case where a party, who is already aware of the filing of the award, appears in the case and applies to the Court for leave to file objection, a service of notice of the filing of the award within the meaning of Section 14(2) of the Act becomes unnecessary. In such a case, it is further contended that even if the Court fails to give notice to him, the date when he enters appearance in the proceedings will be treated as the date of the service of notice of the filing of the award. An application filed beyond 30 days from such date will be barred under Article 119 of the Limitation Act. The above argument of the learned Counsel is well founded in the light of the decision of the Calcutta High Court in Bhola Math v. Mahadev AIR 1952 Gal. 226 The decision of the Patna High Court in The State of Bihar and Others Vs. Liason and Contracts and Another, also has taken a similar view. The ratio of this decision no more to my mind, reflects the correct law in view of the recent decision of the Supreme Court in Indian Rayon Corporation Ltd. Vs. Raunaq and Company Pvt. Ltd., The Supreme Court after a review of the case law on the subject has stated thus:

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 Clause (b) of Article 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. It is not the method of the service that is important or relevant...

(Emphasis supplied)

The ruling of the Supreme Court in Nilkantha''s case AIR 1962 S.G. 666 relied on by the learned Counsel for the Petitioners to sustain his argument, in my view, has not struck a different note. It is clear from the said decision that the notice contemplated under Sub-section (2) of Section 14, though not necessary to be in writing, shall be served on the party by the Registry, and within thirty days from the date of such service the petition to set aside the award or remitting the award shall be filed. The Supreme Court there has stated that the communication of the information to the Pleader of the party by the Court that an award has been filed is sufficient compliance with the requirements of Sub-section (2) of Section 14 with respect to the giving of the notice to the parties concerned about the filing of the award. That means, the party who wants to sustain the plea of bar of limitation shall establish that the application u/s 16 of the Act or an application u/s 30 to set aside the award was filed more than 30 days from the date of receipt of the communication to the party from the Court.

Considered in the light of the above principles, the application of the Respondent u/s 16(1) of the Act cannot be said to be barred by limitation. It is relevant in this context to take note of the admitted fact discernible from the statements of facts contained in the memorandum of revision petition namely:

It may be noted that the Respondent herein had no case that a notice was issued from Court and that he had received it.

The C.R.Ps., for the reasons stated above, are liable to be dismissed. Accordingly they are dismissed. But in the circumstances no order as to costs.