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2004 Supreme(SC) 1445
2004(8) Supreme 193
SUPREME COURT OF INDIA
(From Calcutta High Court)
Shivaraj V. Patil & B.N. Srikrishna, JJ.
I.T.C. Ltd. -Appellant
versus
George Joseph Fernandes & Anr. -Respondents
I.A.No. 2
In
Civil Appeal No. 1795 of 1982
Decided on 19-11-2004
Counsel for the Parties :
For the Appellant : Anil B. Divan, Sr. Advocate, Anay Aggarwal, Ms. Nupur Singh and Rajan Narain, Advocates.
For the Respondents : U.U. Lalit, Sr. Advocate, Ms. Pooja Dhar, Joseph Pookkatt, Advocate for Prashant Kumar, Advocates.
Headnote:Arbitration Act, 1940-Section 14(2)-Appellant filed civil suit for Rs. 39.64 lakhs and applicant filed petition u/s 34 of the Act for stay of suit in view of Arbitration clause-High Court allowed petition and matter was taken in appeal before Supreme Court-Appointment of arbitrator, a retired Judge of Supreme Court and Arbitrator made award on 25-2-96, gave its notice to advocate for applicant-Appellant paid amount to applicant as determined in award-Applicant filed application u/s 14(2) of the Act before Principal Senior Civil Court at Vishakhapatnam and delay of 25 days in filing said application condoned by Court-Application for transmitting award to Civil Court at Vishakhapatnam-Pending application before Civil Judge at Vishakhapatnam, arbitrator had passed away-It was appropriate to transmit award to Civil Court with liberty to parties to raise all contentions before said Court.
Held : In our view, it is not necessary for us to decide even this contention. It would be appropriate if the Award is transmitted to the Court in Vishakhapatnam and the parties are left at liberty to raise all contentions, including the aforesaid contention before the said court. In the result, the application is disposed of by the following order:
1. The Registry is directed to transmit the Award filed by late Justice A.C. Gupta, in the matter of Arbitration between ITC Ltd. V. George Joseph Fernandes & Anr. under cover of its letter dated 27.2.1996 to the Court of Principal Senior Civil Judge at Vishakhapatnam for being dealt with in accordance with law.
2. Both the parties are at liberty to raise all their contentions before the said Court. The transmission of the Award to the said court shall be without prejudice to the contentions of the appellant that the application/objections for setting aside the Award is barred by limitation as it was not filed before this Court within 30 days as provided in Article 119B of the Limitation Act, 1963 read with section 14(2) of the Arbitration Act, 1940. It shall also be without prejudice to the contentions of the applicant to the contrary. (Paras 18 and 19)
ORDER
By this application the applicant has prayed that the Registry of this Court be directed to transfer the arbitral award dated 25.6.1996 made by the learned Arbitrator late Justice A.C. Gupta, filed in this Court to the Principal Senior Civil Judge at Vishakhapatnam, Andhra Pradesh.
2. The circumstances under which the application has been made are as under:
The applicant and the respondent entered into an agreement with regard to the hiring of applicant s trawlers Ave Maria I and Ave Maria II. The agreement contains an arbitration clause. Certain disputes arose between the parties pertaining to the subject matter of the agreement. The appellant (ITC Limited) terminated the agreement by notice and followed it up with a suit CS No. 736 of 1978 on the original side of the Calcutta High Court seeking a declaration that the agreements dated 21.3.1977 and 2.2.1978 were illegal and for a decree for the sum of Rs. 39.64 lakhs.
3. On 24.4.1979 the applicant filed a petition under section 34 of the Arbitration Act, 1940 praying for stay of the aforesaid suit in view of the Arbitration clause contained in the agreement. The High Court allowed the petition and ordered stay of the suit. An appeal carried before the Division Bench of the Calcutta High Court failed. The applicant carried the matter to this Court by Civil Appeal No. 1795 of 1982. The said appeal was disposed of by a judgment dated 6.2.1989 (Reported in [1989] 2 SCC 1). By this judgment this Court upheld the view of the courts below that the reliefs claimed in the suit other than the question of ab initio illegality of the contract would be arbitrable, since the parties agreed to have disputes arbitrated. This Court disposed of the appeal by the following observation:-
"Mr. C.S. Vaidyanathan for the respondents states that the respondent shall have no objection to a retired Judge of the Supreme Court being appointed as arbitrator and the respondents shall not raise the question of limitation as indicated by Mr. Shanti Bhushan learned counsel for the appellant. We have no doubt that the arbitrator so appointed shall proceed in accordance with law to decide the questions including that of jurisdiction, if raised.
In the result, we find no merit in this appeal and hence it is dismissed leaving the parties to bear their own costs."
4. The parties thereafter agreed upon the name of late Justice A.C. Gupta, a retired Judge of this Court, as Arbitrator. The Arbitrator commenced proceedings and made his Award on 25.2.96. On 27.2.96 the learned Arbitrator gave notice of making the Award to the advocate for the applicant forwarding a copy of the Award. He also informed the applicant s advocate that the original Award and other papers had been filed in this Court.
5. On 22.3.1996 the appellant forwarded to the applicant a sum of Rs. 6,67,385/- towards the amount payable under the Award, one month s interest thereon at the rate of 18%, and the costs of reference. This amount was received by the applicant who acknowledged it by a letter dated 6.4.1996. By this letter, the applicants declared his intention to challenge the Award insofar as it negatives his claim in excess of Rs. 667385/- and stated he had received the demand draft sent by the appellant "without prejudice to our right to challenge the Award before the competent Court of law".
6. On 22.4.96 the applicant filed an application under section 14(2) of the Arbitration Act, 1940 before the Court of Principal Senior Civil Judge at Vishakhapatnam. In this application he prayed for a direction to the learned Arbitrator to take back the Award from this Court and to file it in the Court at Vishakhapatnam. He also filed an application for condoning the delay of 25 days in filing the said application.
7. On 27.1.1998 the applicant filed IA No. 1 of 1998 in Civil Appeal No. 1795 of 1982 in this Court. The substantive prayer made in this I.A. was as under:
"...a) direct the Registry of this Hon ble Court to transfer the Arbitral Award dated 25.2
