High Court Of Calcutta
S. C. Deb, Dipak Kumar Sen
THE STATE OF WEST BENGAL - Appellant
Versus
L.M.DAS - Respondent
A. F. O. O. 336 Of 1970
Decided On : 02/24/1976
ARBITRATION ACT, 1940 - SECTION 119 - LIMITATION - NOTICE - SERVICE - AWARD - SETTING ASIDE - GROUNDS - ERROR ON THE FACE OF THE AWARD - LEGAL MISCONDUCT - BIAS.
Fact of the Case:
The appellant challenged an arbitration award, claiming it was barred by limitation, contained errors on its face, and was tainted by legal misconduct and bias. The award granted the respondent Rs. 1,63,000/- as damages without specifying the rate and Rs. 5,000/- for extra costs incurred due to working during the rainy season.
Finding of the Court:
The court held that the application to set aside the award was barred by limitation under Section 119 of the Limitation Act, 1963, as the appellant was orally informed about the filing of the award on June 16, 1969, and the application was filed on August 12, 1969, more than 30 days later. The court also found no merit in the appellant's contentions regarding errors on the face of the award, legal misconduct, or bias.
Issues: 1. Whether the application to set aside the award was barred by limitation? 2. Whether there were errors on the face of the award? 3. Whether the arbitrator was guilty of legal misconduct or bias?
Ratio Decidendi: 1. The court held that the service of a formal notice under Section 14(2) of the Arbitration Act, 1940, as prescribed by the rules of the court, is not essential for the purpose of making an application to set aside the award. The application will be time-barred if it is made after 30 days from the date the petitioner is orally informed about the filing of the award in court. 2. The court found no errors on the face of the award, as the arbitrator is not bound to specify the rate at which damages are awarded or to give reasons for the award. The arbitrator is also entitled to make a lump sum award. 3. The court found no merit in the appellant's allegations of legal misconduct or bias, as there was no evidence to support these claims.
Final Decision: The appeal was dismissed, and the interim orders were vacated. Each party was ordered to pay and bear its own costs.
( 1 ) THIS appeal is directed against the judgment and order dated June 5, 1970 dismissing the application made by the appellant under Section 30 of the Arbitration Act, 1940 for setting aside of the award dated December 24, 1968, mentioned in the petition.
( 2 ) THE respondent executed certain constructional work for the appellant under and in relation to the contract between them. Thereafter, disputes and differences arose between them regarding payment. Those disputes and differences were referred to the arbitrator in terms of the arbitration clause contained in the said agreement.
( 3 ) THE application was dismissed by the learned trial Judge on three fold grounds: (i), the application was barred by limitation; (ii), there was no error on the face of the award; and (iii), there was no merits in the charge of bias and legal misconduct levelled against the arbitrator.
( 4 ) THE argument before us was solely confined to Rs. 1,63,000/- and Rs. 5,000/- awarded in favour of the respondent, apart from the question of limitation. The facts relating to limitation are as follows: On June 16, 1969, the appellant received a copy of a letter dated June 5, 1969, written by the Registrar, Original Side of this Court, informing the parties that the award had been filed in court on June 5, 1969; thereafter, on July 14, 1969, the notice under Section 14 (2) of the Act was served on the appellant; and on August 12, 1969, the appellant took out the notice of motion for setting aside the award.
( 5 ) ON limitation, Mr. Gopal Chakraborty, the learned counsel for the appellant, has argued before us that the application was not barred under Section 119 of the Limitation Act, 1963, inasmuch as the letter dated June 5, 1969, was not a notice at all, for it was not in accordance with the form, of notice prescribed by this court under the Arbitration Act and therefore the time did not begin to run from June 16, 1969, on which date the said letter was received by the appellant He also argued that since the notice under Section 14 (2) of the Act was served on the appellant on July 14, 1969, and the notice of motion was taken out on August 12, 1969, the application was not time barred.
( 6 ) ON merits, Mr. Chakrabortty contended as follows: The award was bad on its face inasmuch as the arbitrator has awarded Rs. 1,63,000/- as damages without specifying the rate; the award for Rs. 5,000/- was also bad on its face because, according to Mr. Chakrabartty, the arbitrator has rejected the respondents case on it; the arbitrator has imputed personal knowledge in awarding Rs. 1,63,000/- and therefore he was guilty of legal misconduct; and the arbitrator was also biased inasmuch as he has made a lump sum award of Rs. 1,63,000/-without specifying the rate.
( 7 ) WE are, however, not impressed by his contentions. The question of limitation is fully covered by the decision of the Supreme Court in the case of Nilkantha Sidramappa Ningashetti v. Kashinath Somanna Nigashetti, and followed by late Mr. Justice Arun Kumar Mukherjea in his judgment dated February 11, 1965, in Award Case No. 263 of 1962 intituled Jamunalal Janakilal v. Budge Budge Jute Mills Limited, of this Court. It is a settled law that the service of a notice under Section 14 (2) of the Arbitration Act as prescribed by the rules of this Court is not essential for the purpose of making an application for setting aside of the Award and that the application will be time-barred if it is made after 30 days from the date the petitioner is orally informed about the filing of the award in court, for there is no distinction between a formal and informal notice in this behalf under the Limitation Act as laid down by the Supreme Court in the above case.
( 8 ) IT has also been contended by Mr. Chakraborty that in that case the Supreme Court did not consider the rules of this court framed under the Arbitration Act regarding the form and service of notice under Section 14 (2) of the Act and therefore t
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