2004 Supreme(SC) 463

2004(6) Supreme 12
SUPREME COURT OF INDIA
(From Patna High Court)
S. Rajendra Babu & Ashok Bhan, JJ.
Bharat Coking Coal Ltd. -Appellant
versus
L.K. Ahuja -Respondent
Civil Appeal Nos. 5489-5490 of 1995
Decided on 12-4-2004
Counsel for the Parties :
For the Appellant : Mukul Rohtagi, Additional Solicitor General Ajit Kumar Sinha, Advocate.
For the Respondent : V.A. Mohta, Sr. Advocate, S.B. Upadhyay, Advocate.

IMPORTANT POINT
When the arbitrator has applied his mind to the pleadings, the evidence adduced before him and the terms of the contract, there is no scope for the Court to reappraise the matter as if this were an appeal and if two views are possible, the view taken by the arbitrator would prevail.

Headnote:(i) Limitation Act, 1963-Article 119(b)-Arbitration Act, 1940-Sections 17, 15 r/ws 30-Arbitration Award-Limitation for filing application for setting aside the award-Period of 30 days from the date of filing of the award into the Court-Effect of non service of notice-Office report was prepared on 18.2.2002-Matter was listed before the Supreme Court on 11.3.2002 when this Court ordered that call after four weeks -On 2.4.2002, respondents filed a separate application u/s 17 of the Arbitration Act-On 11.4.2002 appellant filed an application u/s 15 rw/s 30 of the Arbitration Act raising objections to the passing of decree in terms of the award-Whether objections raised by the appellant are barred by limitation-(No).

       Held : Article 119(b) of the Limitation Act has been enacted to fix a definite time limit within which the validity of the award can be challenged after the award is filed in the court. The said provision prescribes a period of limitation of 30 days for making an application after the required notice regarding filing of the award in the court is given to the parties. If there is no material to show that a notice of filing of the award has ever been given to the parties, any period of limitation as prescribed in Article 119(b) loses its significance. The law is clearly to the effect that mere knowledge of passing of an award is not enough. The period of limitation will commence as provided in Article 119(b) of the Limitation Act only upon notice as to filing of the award in the court has been given to the parties concerned. In the present case the situation has arisen in very special features. This Court made an order appointing a new arbitrator who was directed to file an award in the Court and he submitted the award in the Court after publishing the same to the parties. Though on 18.02.2002 the Registry notified the submission of the award in the Court by way of an office report, but the same cannot be treated to be in the nature of a notice. The noting made by the Registry in the office report merely brought to the notice of the Court as to what had transpired and as the matter was being listed before the Court, a copy was served upon the parties concerned. It is only thereafter it can be said that the Court directed issue of notice to the parties regarding filing of the award which has been sent by the Registry. The Registry on its own could not have issued a notice without a direction from the Court in this regard. In that view of the matter, we do not think, there is any notice of filing of the award in the Court to the parties as contemplated in Article 119(b) of the Limitation Act. Further, on 11.03.2002 when the matter was listed before the Court, the parties concerned took notice of the same and thereafter, objections have been filed by the parties. In these circumstances, we think that the first contention urged on behalf of the respondents that the objections raised by the appellant are barred by limitation is incorrect and the same stands rejected. (Paras 4 and 5)

       (ii) Arbitration Act, 1940-Section 15 rw/s 30 and 17-Limitations upon the scope of interference in awards passed by an arbitrator-When arbitrator has applied his mind to pleadings-Even if two views are possible, the view taken by the arbitrator would prevail-Where arbitrator exceeds terms of the agreement, the same may be set aside.

       Held : There are limitations upon the scope of interference in awards passed by an arbitrator. When the arbitrator has applied his mind to the pleadings, the evidence adduced before him and the terms of the contract, there is no scope for the court to reappraise the matter as if this were an appeal and even if two views are possible, the view taken by the arbitrator would prevail. So long as an award made by an arbitrator can be said to be one by a reasonable person no interference is called for. However, in cases where an arbitrator exceeds the terms of the agreement or passes an award in the absence of any evidence, which is apparent on the face of the award, the same could be set aside. (Para 11)