IMPORTANT POINT
An application to set aside an award which is rejected on the ground that it is delayed and that no sufficient cause has been made out under Section 5 of the Limitation Act would be an appealable order.

Headnote:(i) Arbitration Act, 1940-Section 30 r/w Sections 39(1)(vi) and 17-Limitation Act, 1963-Section 5-Appealable order-Rejection of an application to set aside an award on ground application was delayed and sufficient cause not made out to condone delay-It is an appealable order because by dismissing application albeit u/s 5 of Limitation Act, assailability of award is concluded as far as Court rejecting application is concerned.
       Limitation, like the question of jurisdiction may be provided for in a separate statute but it is a defence available in the suit, appeal or application. When the defence is upheld it is the suit or the appeal or the application itself which is dismissed. Of course, the question as far as appeals are concerned may be debatable having regard to the provisions of Order 41 of the Code of Civil Procedure relating to admission of appeals as an appeal may not be admitted at all because it is barred by limitation. We express no final view in the matter. But there is no corresponding requirement for admission of applications or suits after overcoming the barriers of limitation. A suit which is dismissed on the ground of limitation may be appealed against as a decree. By the same token an application under Section 30 which is dismissed on the ground of limitation is a refusal to set aside the award. (Para 20)
       Section 39(1)(vi) of the Arbitration Act, 1940 does not indicate the grounds on which the court may refuse to set aside the award. There is nothing in its language to exclude a refusal to set aside the award because the application to set aside the award is barred by limitation. By dismissing the application albeit under Section 5, the assailability of the award is concluded as far as the Court rejecting the application is concerned. Ultimately therefore, it is an order passed under Section 30 of the Arbitration Act though by applying the provisions of the Limitation Act. (Para 21)
       The Court can pronounce judgment according to the award (1) if the time for making an application to set aside the award has expired or (2) such application having been made, after refusing it. Because of the applicability of Section 5 of the Limitation Act, 1963, if the Court has not pronounced judgment for whatever reason, although the time prescribed for making the application has expired and an application for setting aside the award is made with a prayer for condonation of delay, the Court cannot pronounce judgment until the application is rejected. Even after a decree is passed under Section 17 an application under Section 30 can be entertained provided sufficient cause is established. In either case the rejection of the application would be a refusal to set aside the award. It is to be emphasized that under Section 17 the grounds of refusal are not specified nor is there any limitation on the word refusal to mean only a refusal on merits. Reading Section 39(1)(vi) and Section 17 together, it would therefore follow that an application to set aside an award which is rejected on the ground that it is delayed and that no sufficient cause has been made out under Section 5 of the Limitation Act would be an appealable order. (Paras 23 to 25)
       (ii) Constitution of India-Article 142-Order of Supreme Court-Power to pass any order for doing complete justice-Lower Court rejecting application for condonation of delay in filing application u/s 30, Arbitration Act-High Court entertaining revision u/s 115 C.P.C., condoning delay and remanding matter to lower Court-Appeal thereagainst-Issue, whether High Court could have reappreciated evidence in revision-Held, appeal against lower Court s order maintainable and not revision-In appeal High Court could have reappreciated evidence-Issue as to maintainability of revision not raised before High Court-Fit case to decide case on merit without remanding case on technical point-High Court justified in condoning delay. (Paras 31 to 35)

JUDGMENT

Ruma Pal, J.-Leave granted.

2. The litigants, in this case, have traversed unknown procedural paths crossing legal barriers to present us with a case which has no simple solution.

3. The cause for complaint before us is an order passed by the High Court of Andhra Pradesh under Section 115 of the Code of Civil Procedure condoning the delay in filing an application under Section 30 of the Arbitration Act, 1940 and remanding the matter to the Trial Court for a decision on merits. According to the petitioners the High Court had wrongly interfered with the order dated 28th April, 1999 by which the Principal Senior Civil Judge Kakinada had dismissed the respondent s application under Section 5 of the Limitation Act, 1963 on the ground that the cause shown for the delay was insufficiently explained.

4. Had the issue been so straightforward, unquestionably the High Courts order would have had to be set aside, because it had re-appraised the cause shown by the respondent and condoned the delay under Section 5 of the 1963 Act. There is ample authority to hold that this could not be done under Section 115 of the Code [See : D.L.F. Housing & Construction Company Private Ltd., New Delhi v. Sarup Singh & Others1, Mahindra Land and Building Corporation Ltd. v. Bhutnath Banerjee and Others2 and Pandurang Dhoni Chougule v. Maruti Hari Jadhav3.

5. But was the Civil Judge s order dismissing the respondent s application under Section 5 at all revisable under Section 115 of the Code or did an appeal lie from it under Section 39 of the Arbitration Act, 1940? The answer is of moment as the powers of an appellate Court are wider than those available under Section 115. Section 39(1)(vi) of the Arbitration Act, 1940 says that an appeal shall lie inter alia from an order "refusing to set aside an award".

6. To arrive at a conclusion as to whether the order passed by the Senior Civil Judge, Kakinada was an order "refusing to set aside the award", we have to consider the facts.

7. Disputes between the parties were referred to three arbitrators in terms of an arbitration agreement. There was no unanimity among the Arbitrators. Two arbitrators passed an award in favour of the appellant before us and the third decided in favour of the respondent.

8. The respondent made an abortive attempt to set aside the award and to have the minority award made a rule of Court before the award was filed. The award was filed on 27.8.97. Notice under Section 14(2) of the Act was issued to the respondent on the same date. According to the respondent, it never received the notice.

9. The appellant filed a suit to make the majority award a rule of Court under Section 17 of the Act. The respondent has filed a written statement in the suit. In addition, the respondent filed two suits - one for making the minority award a rule of Court and another for setting aside the majority award. Along with the second suit (OSSR 3098/98), the respondent filed an application under Section 5 of the Limitation Act (I.A. No. 1394/98). A few days later, the respondent filed a second application (I.A. No. 1395/98) in which it was contended that the second suit was not a suit at all but an application which had been wrongly numbered as a suit. It was, therefore, prayed that the Court should "convert the said application i.e. petition to set aside the Award as OP".

10. The Principal Senior Civil Judge by his order dated 28th April 1999 disposed of the application under Section 5 treating OSS 3098/98 as an application for setting aside the award. This is what he said :

"13. Now coming to the explanation of petitioner for condonation of delay of 331 days in filing application to set aside Award, the petitioner states that as notice was sent by Court to Bombay Port Trust even though it is addressed to Kakinada Port under Dis. No. 8994, Dt. 30.8.1997 and actually the said notice was despatched by Court on 1.9.1997, therefore the petitioner states that after excluding 30 days time from 1.9.1997 t

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2000 Supreme(SC) 949

IMPORTANT POINTAn application to set aside an award which is rejected on the ground that it is delayed and that no sufficient cause has been made out under Section 5 of the Limitation Act would be an appealable order.

Cases Referred (8)

IMPORTANT POINT
An application to set aside an award which is rejected on the ground that it is delayed and that no sufficient cause has been made out under Section 5 of the Limitation Act would be an appealable order.