An application to set aside an award under Section 33 of the Arbitration Act is barred by limitation under Article 158 of the Limitation Act.

Headnote:
ARBITRATION - LIMITATION - APPLICATION TO SET ASIDE AWARD - WHETHER APPLICATION UNDER SECTION 33 OF THE ARBITRATION ACT OR ARTICLE 158 OF THE LIMITATION ACT - INTERPRETATION OF SECTION 33 - WHETHER INCLUDES APPLICATION FOR DECLARATION THAT AWARD IS INVALID - WHETHER EXPRESSION "OTHERWISE INVALID" IN SECTION 30 IS EJUSDEM GENERIS - WHETHER APPLICATION TO SET ASIDE AWARD UNDER SECTION 33 IS BARRED BY LIMITATION.
Fact of the Case:

The appellant engaged the respondents to effect certain transactions on the stock exchange. The respondents made a claim upon the appellant for certain transactions. The appellant failed to pay, and the matter was referred to arbitration at the instance of the respondents. The appellant challenged the right of the arbitrators to go into matters in dispute, contending that the contract was a forward contract and not a ready contract for purchase and sale of shares, making the contract void and the agreement to refer the disputes to arbitration invalid and not binding. Despite the appellant's objection, the arbitrators proceeded with the arbitration and made an award on 21st June, 1952. The award was filed in Court, and the notice of filing was served on the appellant on 6th October, 1952. The appellant filed a petition on 9th January, 1953, for a declaration that the award was null and void and not binding on him. The petition was dismissed by the trial court as it was filed more than 30 days after the notice of filing of the award was served on the appellant.
Finding of the Court:

The court held that the application to set aside the award was barred by limitation under Article 158 of the Limitation Act, as it was filed more than 30 days after the notice of filing of the award was served on the appellant.
Issues: 1. Whether the application to set aside the award was an application under Section 33 of the Arbitration Act or Article 158 of the Limitation Act? 2. Whether Section 33 of the Arbitration Act includes an application for a declaration that the award is invalid? 3. Whether the expression "otherwise invalid" in Section 30 of the Arbitration Act is ejusdem generis? 4. Whether an application to set aside an award under Section 33 of the Arbitration Act is barred by limitation?
Ratio Decidendi: 1. The court held that the application to set aside the award was an application under Section 33 of the Arbitration Act, as Section 33 is the procedural section that lays down the procedure to be followed in making an application to set aside an award or an arbitration agreement. 2. The court held that Section 33 of the Arbitration Act includes an application for a declaration that the award is invalid, as the challenge to an award cannot stop short of asking the Court to set aside the award, and the Court cannot merely give a declaration that the award is invalid without proceeding to set aside the award. 3. The court held that the expression "otherwise invalid" in Section 30 of the Arbitration Act is not ejusdem generis, as the Legislature had knowledge of the view taken by the High Courts that the expression was not to be construed ejusdem generis and used the same expression in Section 30, giving it the same connotation. 4. The court held that an application to set aside an award under Section 33 of the Arbitration Act is barred by limitation under Article 158 of the Limitation Act, as Section 17 of the Arbitration Act makes it incumbent upon the Court to pronounce judgment according to the award if an application to set aside the award is not made within the period of limitation.
Final Decision: The court dismissed the appeal, holding that the application to set aside the award was barred by limitation.

JUDGMENT - Chagla, C.J.

1. A very interesting question under the Arbitration Act arises in this appeal. The appellant engaged the respondents to effect certain transactions on the stock exchange. The respondents are brokers and members of the Bombay Native Share and Stock Brokers Association. In respect of certain transactions the respondents made a claim upon the appellant. The appellant having failed to pay, at the instance of the respondents the matter was referred to arbitration. The appellant challenged the right of the arbitrators to go into matters which were in dispute between him and the respondents, and his contention was that the contract being a forward contract and not a ready contract for purchase and sale of shares, the contract was void, and therefore the agreement to refer the disputes to arbitration was also invalid and not binding.

2. Notwithstanding the objection of the appellant, the arbitrators proceeded with the arbitration and made and published their award on 21st June, 1952. The award was then filed in Court and the notice of the filing of the award was served on the appellant on 6th October, 1952. The appellant then filed a petition on 9th January, 1953, for a declaration that the award dated 21st June, 1952, was null and void and was not binding on the appellant. Mr. Justice Desai held that the petition having been made more than 30 days after the notice of the filing of the award having been served on the appellant it was beyond time and therefore dismissed the petition. It is from that order that this appeal is preferred.

3. Turning to the Arbitration Act, what is relied upon is Section 33 and that section provides:

"Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits:

"Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit."

The contention is that Article 158, Limitation Act deals with an application to set aside an award and the application of the appellant was not to set aside an award but for a declaration that the award was invalid under Section 33, and therefore the proper article which applied was not Article 158 but the residuary Article 181. In other words, according to the appellant the period of limitation was not 30 days, but three years. It is rather significant to note that apart from Section 33 the Arbitration Act does not provide for the making of any application to set aside an award.

The only other relevant section is Section 30 which does not deal with an application to set aside an award but which deals with the grounds on which an award can be set aside. It is couched in the negative form and it provides that "an award shall not be set aside except on one or more of the following grounds." Therefore, it precludes the Court from setting aside an award except on the grounds specifically mentioned in that section. In our opinion it is clear that whereas Section 30 deals, with the grounds on which an award can be set aside, Section 33 is the procedural section which lays down the procedure to be followed in making an application either for the purpose of setting aside an award or for the purpose of setting aside an arbitration agreement. It is futile to attach importance to the fact that Section 33 does not in terms refer to an application to set aside an award, taut when a party makes an application challenging an award, the result of the challenge if successful must be the setting aside of that award.

The challenge cannot stop short of asking the Court to set aside an award, nor can the Court merely give a declaration to the effect that the award is invalid and not proceed to set aside the award. In this connect

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