IMPORTANT POINT
Section 14 of Limitation Act is applicable in Arbitration and Conciliation Act, 1996.

Headnote:Limitation Act, 1963—Section 14 —Arbitration and Conciliation Act, 1996—Sections 34 and 43—Exclusion of time spent in prosecuting remedy before wrong forum—Section 14 of Limitation Act was applicable in the Arbitration and Conciliation Act—Arbitration award in an insurance policy claim—Appellant filed petition u/s 34 of the Act in High Court which was dismissed for want of jurisdiction—Appellant filed a fresh petition before Dist. Court with application for delay condonation u/s 14 of Limitation Act—Dist. Court dismissed delay condonation application—High Court dismissed writ following its earlier judgment in H.M.P. Engineers Ltd. case—Impugned judgment of High Court was liable to be set aside and matter remitted to Dist. Court to decide objections raised by appellant.
Held : In the result, this Court was of the opinion that the view taken by the court below excluding the applicability of Section 14 in the said proceeding was not correct. This Court held that Section 14 of the Limitation Act, 1963 was applicable in the Arbitration and Conciliation Act, 1996 and accordingly this Court set aside the judgments and order and remanded the matters back to the District Court for deciding the application under Section 14 of the Limitation Act on merit. In view of the Judgment in State of Goa vs. M/s.Western Builders (supra), the counsel for the respondent has not seriously opposed to the applicability of Section 14 of the Limitation Act which deals with exclusion of time spent in prosecuting the remedy before the wrong forum bona fide. Therefore, we set aside the order passed by the High Court and remit the matter back to the District Court, Nagpur to decide the objections raised by the appellant-Insurance Company under Section 34(3) of the Arbitration and Conciliation Act, 1996 and decide the same on merit after affording opportunity to the respondent herein.(Para 8)

JUDGMENT

Dr. AR. Lakshmanan, J.—Leave granted.

2. Heard learned counsel appearing on behalf of both sides.

3. This appeal is directed against the final judgment and order dt. 21.12.2005 passed by the High Court of Judicature at Bombay, Nagpur Bench in Writ Petition No.5454 of 2005. The respondent is the insured. The respondent invoked arbitration as per Condition No.7 of the Policy. The respondent appointed one Shri V.P. Shah as Arbitrator. The appellant-Insurance Company appointed Shri A. Sankaran as Arbitrator. Both the Arbitrators appointed Shri B.R. Mehta as Presiding Arbitrator. On 10.10.2003, the Majority Award was passed by the Presiding Arbitrator, Shri B.R. Mehta and Co-Arbitrator Shri V.P. Shah awarding Rs.2,12,49,336.00 (Rupees two crore twelve lakh forty nine thousand three hundred thirty six only) with future interest @ 18%. The Minority Award was passed by Co-Arbitrator Shri A. Sankaran who awarded a sum of Rs.1,23,08,104/- and interest of Rs.43,57,066/- upto 10.10.2003 and cost of arbitration of Rs.4 lacs and further interest on the aggregate of all these amounts @ 15% from the date of Award till the date of payment of decree whichever is earlier.

4. Aggrieved by both the Awards, the appellant filed Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996 (for short the Act) in the High Court of Judicature at Bombay. The petition was listed before a learned Single Judge of the High Court who after hearing the parties dismissed the petition for want of jurisdiction. The appellant-Insurance Company thereafter filed a fresh petition under Section 34 of the Act before the District Court, Nagpur along with application under Section 14 of the Limitation Act on 17.01.2005. The District Court, Nagpur dismissed the application filed by the appellant-Insurance Company under Section 14 of the Limitation Act and consequently, the application filed under Section 34 of the Act also stood dismissed. Aggrieved against the order passed by the District Court, the appellant filed again a Writ Petition before the High Court of Bombay at Nagpur Bench which was also dismissed on 21.12.2005. Aggrieved by the said Judgment dt. 21.12.2005, the appellant preferred the above appeal.

5. The High Court by the impugned judgment dismissed the Writ Petition No.5454 of 2005 following the earlier judgment of the Bombay High Court in H.M.P.Engineers Ltd. and Ors. vs. Ralies India Ltd. and Ors., reported in 2003(4) MH.L.J. 931. Learned counsel for the appellant submitted that in view of the recent judgment of this Court in State of Goa vs. M/s.Western Builders, reported in JT 2006 (6) SC 125, the view taken by the Bombay High Court in H.M.P. Engineers Ltd. and Ors. vs. Ralies India Ltd. and Ors. (supra) and followed by the High Court in the impugned judgment is not correct.

6. This Court in the Judgment in State of Goa vs. M/s.Western Builders (supra) was considering the question as to what extent Section 14 of the Limitation Act, 1963 which deals with exclusion of time spent in prosecuting the remedy before wrong forum is applicable to the Arbitration and Conciliation Act, 1996 or not. Section 14 of the Limitation Act reads thus:-

"14. Exclusion of time of proceeding bona fide in court without jurisdiction—(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligences another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall

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2006 Supreme(SC) 797

IMPORTANT POINTSection 14 of Limitation Act is applicable in Arbitration and Conciliation Act, 1996.

Cases Referred (2)

IMPORTANT POINT
Section 14 of Limitation Act is applicable in Arbitration and Conciliation Act, 1996.