The State of Bihar vs Shri C.P. Singh and another

Hari Lal Agrawal, J.—The defendant has filed this application against the order of the 3rd Additional Subordinate Judge, Munger, refusing to accept its written statement challenging the validity of an award, on the ground that it was barred by limitation as well as not maintainable in his court.The relevant facts, briefly stated, are as follows. The plaintiff opposite party had taken up a contract work for construction of an additional Spillway at Kharagpur Lake in the district of Munger under an agreement in the year 1966, Some difference arose regarding payments giving rise to a dispute which was ultimately referred to the arbitration of the Superintending Engineer, R.E.O., opposite party no. 2. On 14.8.1978 an award in favour of the plaintiff was given by the said Arbitrator for Rs 1,06,101/., besides interest. On 9.9.1978 an application was accordingly filed by the plaintiff in the court of the First Subordinate Judge a Munger fur calling upon the Arbitrator to file the award in court and thereafter to make the same a rule of the court. On the basis of this application a title suit was registered.

The petitioner appeared in the said case on 19.12.1978 through the Government Pleader and Prayed for time to file written statement. The Arbitrator, however, filed the award on 12.1.1979 in a sealed cover, but no written statement was filed for a considerable time and adjustments were sought for by the petitioner on the pretext that unless the award was allowed to be inspected no written statement could be filed. The sealed cover containing the award was ultimately opened on 4.9.1980 in presence of both the parties and the same was impounded as it was not on a properly stamped paper. The requisite stamps were supplied on 19.9.80. The written statement was filed on 1.10.1980 in the court below where the suit had in the meantime been transferred from the file of the First Subordinate Judge.

The main grounds in challenge of the award, taken by the petitioner in its written statement were:

(1) The appointment of the Arbitrator itself was not according to law inasmuch as the agreement for his appointment was not in accordance with Article 299 of the Constitution of India.

(2) The petitioner was not properly represented in the arbitration proceeding.

An objection was taken on behalf of the plaintiff to the acceptance of the written statement, and the trial court, as already stated above, has refused to accept the written statement on the grouped that it was barred under, Article 119 of the Limitation Act, having been filed beyond 30 days So far as the objections for setting aside the award on the grounds falling u/s 3 : of the Arbitration Act -are concerned, the trial court held that the same should have been raised separately in the court of the First Subordinate Judge and not before it.

Mr. Rameshwar Prasad, learned Government Pleader no. 6, challenged the order of the court below on the ground that the rejection of the written -statement on the ground of limitation was entirely erroneous inasmuch as the award must be deemed to have been filed in court only on 19.9.80 when the requisite stamp duty was paid up and if this could be taken as the starting point for computing the period of limitation, then the written statement filed on 1.10.1980 must be deemed to be in time. An argument was also advanced by him That the issue once of a notice u/s 14(2) of the Arbitration Act in any event was a mandatory provision and any amount of knowledge of the filing of the award, in the absence of notice of that fact by the court, would not be sufficient to (sic) the question of limitation He further challenged the finding of the court below that the objections falling within the purview of section 33 of the Arbitration Act could not be entertained by that court, it being a transfered court.

5 Before however, proceeding to discuss the points canvassed before me, I would like to state a few facts mentioned in the counter-affidavit filed by opposite party no. 1 in this Court. It has beer stated that a copy of the original award was served upon the petitioner by the Arbitrator himself along with his lelter and its copy was also annexed with the plaint and, therefore, the plea of late filing of the written statement was idle. It has further been stated that the Arbitrator was appointed by the petitioner itself and that no formal notice of the filing of the award need be served since its filing by the Arbitrator in court was duly known to the petitioner who had since already appeared.

I will first dispose of the question as to whether on the facts mentioned above the court was bound to issue notice of the award to the petitioner. Although section 14 (2) of the Arbitration Act enjoins upon the court a duty to give notice to the parties of the filing of the award and the terminus a quo under clause (b) of Article 119 of the Limitation Act is the date of service of notice of the filing of the award, the Courts have taken the view that notice may be given even orally and a format communication will suffiee (see District Cooperative v. Ram Samuj Tiwary; AIR 1973 Allahabad 476 F.B.). The Supreme Court in the case of Nilkantha Shidramappa Ningashetti Vs. Kashinath Somanna Ningashetti and Others, has put the matter beyond any dispute or doubt by clearly laying down that the notice which the court is to give u/s 14(2) of the Arbitration Act to the parties of the filing of the award need not be notice in writing. The notice can be given orally. The communication of the information to the pleader of the party that an award has been filed is sufficient compliance with the requirement of section 14(2). On the same point there is also a Bench decision of our own Court in Bahadur Singh v. Fuleshwar Singh and others (A.I.R. 1969 Patna 114).

The other question that has also to be answered in this regard is as to what would be the date of the filing of the award, i.e., when it was actually filed or when the defects in its filing was removed on supplying the requisite stamp duty. No direct authority was cited before me on this question at the Bar, but it is obvious that to fix the starting point for limitation, the filing of the award within the meaning of section 14 of the Arbitration Act or Article 119 of the Limitation Act, must imply that the award must be capable of being placed on the record, it not already placed on the record, because sub-section (1) of section 14 of the Act itself contemplates that after the making of the award it has got to be signed and the parties intimated of the amount of fee and charges payable in respect thereof. There are authorities that if an award is not stamped or is insufficiently stamped, an application u/s 14 for filing the award cannot be thrown out under Order 7 Rule 11 of the CPC on that account and the award can be impounded and the stamp duty be realised. It was observed by the Supreme Court in Hindustan Steel Ltd. v. M/s Dilip Construction Co. (A.I.R. 1969 S.C. 1238) that the Stamp Act being a fiscal measure it was only to secure revenue for the State and it did not arm the litigant with weapon of technicality to meet the case of its opponent. In that view of the matter, when the award is filed before a court of competent jurisdiction, the fact that it was defective in the sense that fees and other connected charges were not known, or were not made up at that time or that it was compulsorily registerable but was filed without registration, in my view could not make the filing of the award incomplete. These defects could be removed later on, whether any objection was taken by the defendant or otherwise, under the different provisions of the Code of Civil Procedure, but so far as its filing is concerned, it must be deemed to-be legal and valid.

I, therefore, do not find any substance in this argument of the learned Government Pleader no. 6 as well. It, therefore, clearly follows that the grounds for setting aside the award which are covered exclusively u/s 30 of the Arbitration Act, could not be entertained by the court below. The learned Additional Subordinate Judge has, therefore, committed no error of law so far as the first point is concerned.

The only question that now remains for consideration is as to whether the objections which fell within the purview of section 33 of the Arbitration Act could be entertained by the court below, as it is now well settled that no period of limitation has been prescribed for filing an application u/s 33 of the said Act. When the objection does not fall u/s 30, Article 119 of the Limitation Act has no application and where a ground for challenging the validity of the award is that the reference itself was illegal, it must be treated and dealt with as on coming u/s 33 and could be entertained without any bar of limitation. This matter requires consideration of two points, namely :

(i) As to whether any of the pleas taken in the written statement could be said to fall u/s 33 of the Arbitration Act, and

(ii) If the answer could be given in affirmative, then whether it could entertained by the court where the award is'' pending for consideration or it should have been raised by a separate application before a proper court having the initial jurisdiction.

I have already indicated the point of objection raised in the written statement of the petitioner. The argument that was placed by Mr. Kameshwar Prasad was that since the appointment of the Arbitrator itself was challenged by the petitioner, the examination of this question was outside the scope of section 14 as it went to the root of the reference.

In reply Mr. Bindeshwari Choudhary, appearing (or the plaintiff-opposite party, contended that the Chief Engineer of Irrigation himself had made a request to the State Government to nominate an Arbitrator and it was the State of Bihar which had appointed opposite party no. 2 at the Arbitrator on 26.8.76.

The arbitration clause in Government contracts is well known and any step taken in pursuance of the said arbitration clause in the contract, in my opinion, did not call for any further formality of recording a separate agreement for appointing an Arbitrator in accordance with Article 299 of the Constitution of India. The written statement has failed to make out a clear case of bringing it under the mischief of section 33 of the Arbitration Act as the existence or validity of the arbitration agreement, which obviously was a part of the contract, has not been Bade out, although if that was done then the view of the lower court that it could be entertained only by the court of initial jurisdiction and not where the arbitration proceeding was pending, would perhaps have been wrong. Reference in this connection may be made to section 31(4) of the Arbitration Act which deals with the question of jurisdiction. The question was discussed by the Supreme Court in the case of M/s Guru Nanak Foundation v. M/s Rattan Singh and Sona (1982 B.B.C.J. 59), but for the view that I have taken of the matter that the objection of the petitioner did not attract the provisions of section 33 of the Arbitration Act, I need not discuss this question any further and suffice it may to refer to the case of Union of India v. Narinder Singh Kanwar (A.I.R. 1982 Patna 238) where it has been held that invalidity of reference itself may be a ground for challenging the award within the meaning of section 30 of the Arbitration Act, being covered under the expression or is otherwise invalid" in clause (c) thereof.The result of the above discussions is that this application has no merit and it is accordingly dismissed, but in the circumstances 1 shall make no order as to costs.