2010 Supreme(Kar) 697

High Court of Karnataka
THE HONOURABLE MRS. JUSTICE MANJULA CHELLUR & THE HONOURABLE MR. JUSTICE B.S. PATIL
M/s. Kotak Securities Ltd., Bangalore
Versus
Chethan Bhandary & Others
Writ appeal No.772 of 2010 (GM-RES)
Decided on : 02-07-2010

Headnote:CODE OF CIVIL PROCEDURE, 1908 - Order 7, Rules 10 & 10-A: [Manjula Chellur & B.S.Patil, JJ] Return of Plaint - Re-presentation - Petition under Section 34 (3)of Arbitration Act, 1996 - Limitation - Extended period of limitation - Petition filed before High Court of Judicature ob Bombay on 25.11.2008 - Ordered to be returned for presentation to proper forum - Order passed on 25.11.2008 - Petition was retuned on 24.02.2009 -However appellant filed another petition containing verbatim reproduction of the petition filed by it before High Court of Judicature at Bombay before City Civil Court at Bangalore only with necessary changes required as per Civil Rules of practice - Fresh petition as aforesaid was filed on 20.03.2009 - On 17.6.2009, appellant sought permission to file original papers returned by Bombay High Court objection that it is barred under Section 34 of Arbitration Act - Trial Court held that it is not barred by limitation - Single Judge reversing it - Writ Appeal - Held, As per Section 34(3) of the Arbitration Act, the period of limitation prescribed for filing an application seeking to set aside the arbitral award is three months, The Court can permit the person concerned to file the petition by condoning the delay by a maximum period of 30 days thereafter, It is thus clear that the period of limitation is only three months and a party is entitled to seek condonation by making necessary application showing sufficient cause for another period of 30 days, Beyond the period of 120 days, no such petition can be entertained. In fact this is the position of law well established. The appellant is entitled for exclusion of time spent in prosecuting the petition before a wrong forum as per Section 14. As stated above, the period between 17.12.2007, the date on which petition under Section 34 was filed before the Bombay High Court till 24.02.2009, the date on which the petition was actually returned to the appellant can be excluded as per Section 14. For the purpose of exclusion of this period, the simple method that could have been adopted is to re-present the returned petition, As Section 14 (1) and (2) require due diligence and good faith, the Court is also required to be satisfied about the same. Order 7, Rule 10 deals with return of plaint and mentions the procedure to be followed on returning the plaint, Rule 10-A of Order VII provides for power in the Court returning the plaint to fix a date of appearance in the Court where the plaint is to be filed after it is returned, Section 14(1) & (2) of the Limitation Act provide for exclusion of time taken during which the applicant was prosecuting with due diligence another proceeding in good faith in Court which could not have entertained it due to defect of jurisdiction or other causes of like nature, Sub-Clause (3) of Section 14 and Explanation-C to sub-clause (3) of Section 14 make it clear that even where a fresh suit is instituted on permission granted by the Court as per Order 23, Rule 1 of CPC on the ground that the suit must fail by reasons of a defect in the jurisdiction of the Court or other cause of a like nature, which may include misjoinder of parties or of causes of action exclusion of time as per Section 14(1) and (2)is permissible, Therefore, the exclusion of time ten in prosecuting a matter before another Court may arise not only when the plaint is returned under Order 7, Rule 10, but also under other circumstances such as where a suit is dismissed as withdrawn with permission of the Court to file afresh suit correcting the mistake made in approaching the wrong Court or due to mistake committed in joining wrong parties or causes of action or for causes of similar nature, In the circumstances mentioned in Section 14(3) and Explanation-C to Section 14(3), the party will not be required to represent the very petition or the plaint which he had filed earlier, but that will not absolve him from satisfying the Court about his prosecuting the matter with due diligence and good faith in a Court which did not have jurisdiction or that his suit would have failed due to other causes of like nature.

        In the instant case, the appellant while filing the fresh petition has not explained the circumstances regarding prosecution of the petition at Bombay let alone its prosecution in good faith with due diligence before the Bombay High Court, Even in the body of the fresh petition filed, there is no explanation offered, It has also not stated anywhere as to under what circumstance was it could not file the papers that were returned by the Bombay High Court, It has styled its petition as afresh one under Section 34 of the Arbitration and Conciliation Act, 1996, Only on 17.06.2009, it has filed an application under Section 151 CPC seeking permission to file the original documents returned by the Bombay High Court along with the Memorandum of Facts sworn to by the Advocate for the appellant, wherein it is stated that on 24.02.2009, the entire file was returned to the appellant to be presented before the appropriate Court, it is further stated therein that by oversight a fresh petition was filed before the City Civil Court, Bangalore and only typed copy of the original documents were produced and that the non-filing of the original documents was neither intentional nor deliberate, This application was objected to by respondent No.1 contending that since fresh petition is filed under Section 34 before the City Civil Court after a gap of 17 months 24 days from the date of receipt of the award on 24.09.2007 till the date of filing of the petition at Bangalore on 20.03.2009 the petition filed was barred by time and that the original papers returned by the Bombay High Court cannot be considered, He has also contended that as per Section 34 of the Arbitration and Conciliation Act, the proceedings were barred by time.

        In the facts and circumstances as narrated herein above, it cannot be said that where the appellant has, without any acceptable cause or reason failed to file the papers returned by the Bombay High Court, but has taken the risk of filing a fresh petition without even making any averments in the body of the petition regarding prosecution of similar petition before the Bombay High Court, let alone filing an application seeking exclusion of time taken in that regard, the contention of the Counsel for the appellant that even in the absence of the same, the appellant is entitled for exclusion of time spent in prosecuting the arbitration petition before the Bombay High Court, can be accepted.

        Even assuming that in certain circumstances, the filing of the same petition which was returned with an endorsement stating that the said Court had no jurisdiction is not mandatory in all cases and that a fresh petition could be presented before the Court having jurisdiction, ultimately it is for the Court which is to be satisfied about the cause shown. Therefore, it has to be stated that in the facts and circumstances of this case, where the appellant has not chosen to re-present the original papers, it was incumbent upon him to explain the circumstances under which it could not re-present the papers and chose to file a fresh petition, Therefore, we hold that in appropriate cases, appellant whose petition is returned due to want of jurisdiction can seek exemption from re-presenting the very papers on the Court being satisfied of the loss or destruction of papers for reasons beyond the control of the appellant and that the exclusion of time under Section 14 is not conditional on the appellant re-presenting the very papers in all cases, but if the appellant chooses to file a fresh petition, it is incumbent upon him to explain to the satisfaction of the Court the reasons for his omission in not re-presenting the papers and to satisfy the requirements mentioned under Section 14(1) & (2) of the Limitation Act, as the case may be to avail the benefit of exclusion of time taken in prosecuting the previous petition, In the instant case, there is no such explanation, Therefore, the appellant cannot avail the benefit of Section 14(1) or 14(2) of the Limitation Act.

        Yet another aspect of the matter that deserves to be noticed in this case is that even assuming that despite the appellant not re-presenting the returned papers on 20.03.2009, they were entitled for exclusion of time taken for prosecuting the case before the wrong forum till it was actually returned on 24.02.2009, the fresh petition filed on 20.03.2009 will not be within the period of three months as prescribed under Section 34(3) of the Arbitration and Conciliation Act, 1996. Admittedly, the award was served on respondent No.1 on 24.09.2007 and the petition is filed before the Bombay High Court on19.12.2007, Thus, there is a gap of 85 days, The Bombay High Court returned the plaint on 24.11.2008, but actually the papers were allegedly furnished to the appellant on 24.02.2009, Even if the appellant is held entitled for exclusion of this period till 24.02.2009, the petition filed on 20.03.2009 will not be within three months from the date of receipt of the award as required under section 34(3) of the Arbitration Act, After actual return of papers on 24.02.2009, the appellant has file the fresh petition before the City Civil Court at Bangalore on 20.03.2009 i.e., after a period of 24 days, Thus, the total period taken is 111 days, Whereas, as per Section 34(3), the limitation prescribed is 90 days, Admittedly, no application is filed for condoning the delay seeking the help of the proviso to Section 34(3). In that view of the matter, even assuming that afresh petition has been filed on 20.03.2009 and the appellant is entitled for exclusion of time from 24.09.2009 till 24.02.2009, the petition filed is not within time.