VERY IMPORTANT POINT
Provisions of Order IX Rule 13 C.P.C. relating to setting aside ex-parte decree or order or the principles thereof are applicable in a case where objections under Sections 30/33 of Arbitration Act, 1940 are not filed within time prescribed and ex-parte decree is passed on the basis of the award filed before the Court by making the award rule of the Court.

Headnote:Arbitration Act, 1940-Sections 17, 30/33-Award filed for making Rule of Court-Objections filed late-Award made rule of the Court-Application made to set it aside under Order IX Rule 13 C.P.C.-Rejected as not applicable-Whether correct? No-Can delay be condoned on sufficient cause being shown? (Yes) (Cross Ref.) Limitation Act, 1963-Section 5-C.P.C. Sections 41, 141 and Order VIII Rules 5 and 10-Arbitration Act, 1940 Sections 39 and 41)-Case law discussed-Appeal allowed.
       Held : Question involved in this appeal is - whether provisions of Order IX Rule 13 of the Code of Civil Procedure (for short referred to as "the CPC") or the principles thereof are applicable in a case where objections under Section 33 of the Arbitration Act, 1940 (for short referred to as "the Act") are not filed and ex-parte decree is passed on the basis of the award filed before the Court by making the award rule of the Court. The High Court has arrived at the conclusion that Order IX Rule 13 CPC is not applicable in such cases. (Para 2)
       In our view, as discussed above, the provisions of CPC are specifically made applicable and there is no reason to hold that Order IX Rule 13 would not be applicable in case where judgment is pronounced under Section 17 of the Act in absence of objection application tendered by the party objecting to the award. For all purposes such decree is ex-parte for the party objecting to the award. Under C.P.C. ex-parte decree has no technical meaning. Order IX Rule 6 CPC provides that where the plaintiff appears and the defendant does not appear when the suit is called for hearing, then if it is proved that summons was duly served, the Court may make an order that suit be heard ex-parte. After passing such order if a decree is passed ex-parte against the defendant, under Rule 13, the Court has power to set it aside if it is satisfied that summons was not duly served or that defendant was prevented by any sufficient cause from appearing when the suit was called on for hearing. Similarly, if party objecting to the award satisfies to the Court that for sufficient reasons objection application was not tendered within prescribed time, Court has power to set aside such decree. Therefore, if application for setting aside the award is filed beyond the prescribed time and sufficient cause for condoning the delay in filing objection application is established, the Court has power to set aside such decree by following the procedure prescribed under Order IX Rule 13 CPC. (Para 16)
       Further, large part of the controversy involved in this appeal is covered by the decision rendered by this Court in Essar Constructions v. N.P. Rama Krishna Reddy [(2000) 6 SCC 94]. The Court observed that 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. The Court also observed that 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. In case where such application is rejected on the ground that it is delayed and no sufficient cause has been made out under Section 5 of the Limitation Act, it would be an appealable order under Section 39(1)(vi) of the Act. (Para 17)
       From the aforementioned facts, it is apparent that within period of limitation, the Executive Engineer of the Department contacted the counsel on 17th April and gave him necessary instructions for filing objection application against the award. There was delay in preparing the same by the learned counsel. It appears that the same counsel requested the Court, unfortunately orally, that objection application was under preparation and thereafter tendered it before the Court on 5th May. From the said averments, it is apparent that delay in preparing and tendering the application before the Court was on the part of the concerned advocate. This would be sufficient cause for condoning, approximately 12 to 13 days delay in filing objections. In Essar Constructions, (2000) 6 SCC 94, this Court held-"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." This decision would be applicable to the facts of the present case and as there was sufficient cause for condoning the delay, the Court ought to have set aside the ex parte decree passed on the basis of the award. (Para 19)
       In the result, the appeal is allowed. Delay in filing the objection application under Section 30/33 of the Act is condoned. The impugned judgment and order dated 7.10.1999 passed by the High Court in APOT No.858 of 1998 is set aside and consequently the judgment and decree dated 28.4.1997 passed by the learned Single Judge in Award Case No.22 of 1997 is also quashed and set aside. There shall be no order as to costs. (Para 21)

JUDGMENTS

Shah, J.-Leave granted.

2. Question involved in this appeal is - whether provisions of Order IX Rule 13 of the Code of Civil Procedure ( for short referred to as "the CPC") or the principles thereof are applicable in a case where objections under Section 33 of the Arbitration Act, 1940 (for short referred to as "the Act") are not filed and ex-parte decree is passed on the basis of the award filed before the Court by making the award rule of the Court. The High Court has arrived at the conclusion that Order IX Rule 13 CPC is not applicable in such cases.

3. Before appreciating the contentions, we would refer to few dates pertaining to the question involved. Both the parties to the present appeal were having disputes regarding the work of design and construction of two lane road bridge (both sub-structure and super structure) across Feeder Canal at R.D.16.5 (Balance Work). In a Special Suit No.31 of 1993 filed by the present respondent, the High Court of Calcutta vide its order dated 25.6.1993 directed appointment of Arbitrator to settle their disputes. The Arbitrator passed an award on dated 28.12.1996 against the appellants herein which was filed before the High Court on 6.3.1997. Notice for filing objections was received by the appellants on 21.3.1997. Time of 30 days for filing the objections expired on 20.4.1997, which was a Sunday and, therefore, the date stood extended to 21.4.1997. The matter was placed before the Court on 28.4.1997 and on that day the Court rejected the oral prayer of the learned counsel for the appellants that since objection application under Sections 30 and 33 of the Act was under preparation, time to file such application be granted. The award was made rule of the Court on the same day. On 5.5.1997, appellants filed an application for setting aside the ex-parte decree and also submitted that application under Section 30 was ready. In the said application, grounds for setting aside the award and for condoning delay in filing application were mentioned. Thereafter, another application under Section 33 of the Act raising objections against the award was also filed on 16.5.1997. The learned Judge by order dated 25.9.1998 dismissed the said application.

4. Being aggrieved, the appellant moved the Division Bench by filing an appeal. The Division Bench in view of conflicting judgments referred the question-whether the decree passed in terms of Arbitration Award, where no objection has been filed within 30 days from the date of filing of the award in terms of the Act, would be an ex-parte decree within the meaning of Order IX Rule 13 CPC-to the Full Bench? The Full Bench by judgment and order dated 7.10.1999 dismissed the appeal by holding that:-

"... We are of the opinion that (1) the decree passed in terms of Section 17 of the Act where no objection is filed cannot be said to be an ex-parte decree; (2) an application for condonation of delay in terms of Section 5 of the Limitation Act may be applicable for filing an objection either under Section 30 or 33 of the Act or both; (3) as in the instant case no such application has been filed, the question of setting aside the decree does not arise; (4) an application for setting aside the decree passed in terms of Section 17 of the Act is maintainable only in a case where a decree has been passed in ignorance of the conditions precedent laid down therein."

5. In the result, the High Court rejected the application for setting aside the decree solely on the ground that judgment and decree passed in terms of Section 17 of the Act where no objections are filed before pronouncing judgment and passing the decree cannot be said to be an ex-parte decree. That judgment and order is under challenge in this appeal.

6. The aforesaid question is required to be decided on the basis of Section 41 of the Act, which provides that provisions of CPC are applicable to all the proceedings before the Court under the Act. It reads thus: -

"41. Procedure and powers of Court.-Sub

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2001 Supreme(SC) 212

Cases Referred (4)