2010 Supreme(SC) 221
2010 (2) Supreme 256
SUPREME COURT OF INDIA
Altamas Kabir and Cyriac Joseph, JJ.
Union of India & Ors. — Appellants
versus
M/s Neelam Engineering & Construction Company — Respondent
Civil Appeal No.2283 of 2010
(@ Special Leave Petition (C) No.23262 of 2007)
Decided on : 10-03-2010
IMPORTANT POINT
In view of Section 19 of the Limitation Act,1963, the period of limitation for filing an application commences only after the date of service of the notice of the making of the Award. Filing an objection against something which did not exist on the date when the objection was filed is unacceptable and must be rejected.
Headnote:Arbitration Act, 1940- Sections 30 and 33 - Limitation Act- Article 119 - Award passed by sole arbitrator-Objection petition filed by appellant against award -Civil Court rejected said objection by holding that since objection had been filed prior to filing of Award, same was premature and could not be taken note of and further that the objection had been filed beyond the period of limitation as prescribed under Article 119 of the Limitation Act- Civil Court allowed respondents application under Sections 14(2), 17 and 29 of Act, 1940, and ordered that Award be made a Rule of Court-Appeal- In view of Section 19 of the Limitation Act,1963, the period of limitation for filing an application commences only after the date of service of the notice of the making of the Award- Filing an objection against something which did not exist on the date when the objection was filed is unacceptable and must be rejected- The objections filed by Appellants hence, had been rightly held to be pre-mature and could not be treated to be an objection filed after the filing of Award- While the original Award was filed in Court on 27.05.1998, the objections filed under Sections 30 and 33 of Act, 1940,for setting aside the Award was filed on 3.01.1998- There was, hence, no occasion for such an objection to be filed in terms of Article 119 of the Limitation Act, 1963-It was unfortunate that although the Appellants filed their objection under Sections 30 and 33 of Act, 1940, the same was done prematurely even before the filing of the Award and such objection could not be treated as a valid objection under Sections 30 and 33 of the Act in view of the provisions of Article 119 of Limitation Act, 1963-Appeal dismissed. (Paras 16 to 19)
Facts of the Case :
An Award was passed by sole arbitrator herein in the instant case when disputes between parties was referred to arbitration. Objection petition was filed by appellant. against award .Civil Court rejected said objection by holding that since objection had been filed prior to filing of Award, same was premature and could not be taken note of and further that the objection had been filed beyond the period of limitation as prescribed under Article 119 of the Limitation Act. Civil Court allowed respondents application under Sections 14(2), 17 and 29 of Act, 1940, and ordered that Award be made a Rule of Court.
2. Present appeal has been filed against said order of Civil Court.
Findings of the Court :
In view of Section 19 of the Limitation Act,1963, the period of limitation for filing an application commences only after the date of service of the notice of the making of the Award. Filing an objection against something which did not exist on the date when the objection was filed is unacceptable and must be rejected. The objections filed by Appellants hence, had been rightly held to be pre-mature and could not be treated to be an objection filed after the filing of Award. While the original Award was filed in Court on 27.05.1998, the objections filed under Sections 30 and 33 of Act, 1940,for setting aside the Award was filed on 3.01.1998. There was, hence, no occasion for such an objection to be filed in terms of Article 119 of the Limitation Act, 1963.It was unfortunate that although the Appellants filed their objection under Sections 30 and 33 of Act, 1940, the same was done prematurely even before the filing of the Award and such objection could not be treated as a valid objection under Sections 30 and 33 of the Act in view of the provisions of Article 119 of Limitation Act, 1963.Appeal was dismissed.
Result : Appeal dismissed.
JUDGMENT
Altamas Kabir, J. —
1. Leave granted.
2. An Agreement No.GE/CHD-61/88-89 was entered into between the Appellant, Union of India, and the Respondent, M/s Neelam Engineering & Construction Company, for providing additional security lighting arrangement in various zones at TBRL Range, Ramgarh, near Chandigarh. Certain disputes arose between the Appellants and the Respondent which were referred to the arbitration of Col. T.S. Plaha, appointed as the sole Arbitrator for adjudication of the said disputes between the parties. The sole Arbitrator made his Award on 27th January, 1996, for a sum of Rs.1,70,020/-, together with interest at the rate of 18% per annum from 31st December, 1991, till the date of decree or payment, whichever was earlier, in favour of the Respondent. On 27th February, 1996, the Respondent filed a petition in the Civil Court under Sections 14(2), 17 and 29 of the Arbitration Act, 1940, for making the Award dated 27th January, 1996, a Rule of Court.
3. After an interval of about two years, on 3rd January, 1998, the Appellants filed an objection petition under Sections 30 and 33 of the Arbitration Act, 1940, for setting aside the Award published by the sole Arbitrator, on the ground that the Arbitrator had misconducted himself while giving his finding on the claims of the parties.
4. On 18th February, 1998, the Court directed the Arbitrator to file the Award in Court. When the matter was listed for hearing on 27th May, 1998, the Court recorded that reply had been received to the objection petition which had been filed and that the original arbitration file had been received from the Arbitrator. The case was, therefore, adjourned till 27th July, 1998, for filing rejoinder. After considering the application made by the Respondent under Sections 14(2), 17 and 29 of the Arbitration Act, 1940, and the objection filed by the Appellant, the Civil Court rejected the said objection by holding that since the objection had been filed prior to filing of the Award, the same was premature and could not be taken note of and further that the objection had been filed beyond the period of limitation as prescribed under Article 119 of the Limitation Act. The Civil Court accordingly allowed the Appellants’ application under Sections 14(2), 17 and 29 of the Arbitration Act, 1940, and ordered that the Award dated 27th January, 1996, be made a Rule of Court, and granted interest at the rate of 18% per annum thereupon from the date of order till realization.
5. Aggrieved by the said order of the learned Civil Judge, Junior Division, Chandigarh, the Appellants herein filed an appeal against the same before the learned Additional District Judge, Chandigarh, being C.R. No.52 dated 8th August, 2003, under Section 39 of the aforesaid Act.
6. The submissions which had been made before the learned Civil Judge, Junior Division, Chandigarh, were reiterated in the Appeal. It was contended that while the Award was passed by the Arbitrator on 22nd January, 1996, the petition under Sections 14(2), 17 and 29 of the Arbitration Act, 1940, was filed by the Respondent Company on 27th February, 1996. Directions were, thereafter, given by the Trial Court to the Arbitrator to produce the Award in Court and the same appears to have been sent by the learned Arbitrator by post and was received by the Trial Court on 18th February, 1998. It also appears that notice was issued to both the parties, but ultimately on account of inadvertence, on subsequent dates it was recorded that the Award had not been received. Ultimately, on 27th May, 1998, the Trial Court recorded that the original arbitration file had been received and the case was adjourned till 27th July, 1998, for filing rejoinder. The Appeal Court, therefore, held that legally and technically both the parties came to know about the filing of the Award in Court for the first time on 27th May, 1998, although, the Award had been received through the post in the Court on 18th February, 1998. Having