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High Court Of Delhi
NARULA AND COMPANY - Appellant
Versus
UNION OF INDIA - Respondent
Interim Application 583 of 1976
Decided On : 05/25/1976
ARBITRATION - LIMITATION - SECTION 5 OF THE LIMITATION ACT, 1963 - APPLICABILITY TO OBJECTIONS FILED UNDER SECTION 30 OF THE ARBITRATION ACT, 1940 - COURT HELD THAT SECTION 5 OF THE LIMITATION ACT, 1963 APPLIES TO APPLICATIONS MADE UNDER THE ARBITRATION ACT, 1940 FOR SETTING ASIDE AN AWARD.
Fact of the Case:
An application was filed under Section 5 of the Limitation Act, 1963 for condonation of delay in filing objections under Section 30 of the Arbitration Act, 1940 against an arbitral award. The issue was whether Section 5 of the Limitation Act, 1963 applied to applications made under the Arbitration Act, 1940.
Finding of the Court:
The court held that Section 5 of the Limitation Act, 1963 now applies by virtue of its own force to the application under the Arbitration Act, 1940 for setting aside an award. The court analyzed the relevant provisions of the Arbitration Act, 1940 and concluded that an application to set aside an award is clearly contemplated by Section 17 of the Act and it is only when no such application has been made within the time allowed or if such an application has been made and has been refused that the Court proceeds to pronounce judgment according to the award.
Issues: Whether Section 5 of the Limitation Act, 1963 applies to applications made under the Arbitration Act, 1940 for setting aside an award.
Ratio Decidendi: The court held that Section 5 of the Limitation Act, 1963 applies to applications made under the Arbitration Act, 1940 for setting aside an award because: * Section 5 of the Limitation Act, 1963 now automatically applies to all applications except those under Order 21 of the Code of Civil Procedure and may be admitted after the prescribed period if the applicant satisfies the Court that he had sufficient cause for not making the application within such period. * The words "after the prescribed period" suggest that it applies only to those applications for which limitation is prescribed by the Limitation Act, 1963. * Under Section 2 (5) of the Limitation Act, 1963, the "period of limitation" means the period of limitation prescribed for any suit, appeal or application by the Schedule and "prescribed period" means the period of limitation computed in accordance with the provisions of the Limitation Act 1963. * The schedule attached with the 1963 Act, third Division details the applications. Article 119 provides that applications under the Arbitration Act, 1940 for filing in court of an award or for setting aside an award or getting an award remitted for reconsideration may be filed within a period of thirty days. * In the latter case the limitation commences from the date of service of the notice of the filing of the award.
Final Decision: The court held that the application to set aside the award was filed within time and entertained the objections contained in the application.
( 1 ) THIS is an application under Section 5 of the Limitation Act, 1963 for condonation of delay in filing objections under Section 30 of the Arbitration Act, 1940 (hereinafter referred to as the Act) against the award dated 31-10-1975.
( 2 ). Certain disputes arose pertaining to contract No. CEDZ-3/ 65-66 for provision of Married Accommodation for Officers, Airmen and Amenity Buildings etc. around Delhi at Site No. 1. The said contract contained an arbitration agreement between the parties and thus in pursuance thereof a request was made to Brig. Harish Chandra, Director Designs, Engineer-in-Chief s Branch, Army HQ, New Delhi to act as an arbitrator in the matter. The said arbitrator took upon himself the task of settling the disputes and made and published his award on 31-10-1975. The original award alongwith the arbitration proceedings was received in this Court. Notice of the filing of the award in the Court was served on the counsel for the plaintiff on 4-12-1975. Notice of the filing of the award in the Court was directed to issue to the Union of India. The notice of the filing of the award was served on the Union of India represented by the Chief Engineer, Delhi Zone, Delhi Cantt. on 27-1-1976. The case was listed before the Deputy Registrar on 27-2-1976 for awaiting Service. Till that date none of the parties had filed any objections against the award. The statutory period of 30 days for filing the objections to the award had expired by then. Counsel for the Union of India wanted to file objections to the award and, in fact, filed IA 584 of 1976 on 27-2-1976. The present application for condonation of delay in filing the objections to the award was, however, filed on 1-3-1976.
( 3 ). The learned counsel for the plaintiff (respondent to this I. A.) raises an interesting question of law that section 5 of the Limitation Act, 1963 does not apply to objections filed under Section 30 of the Act for setting aside an award. It is urged that no application within the meaning of the Act or the rules framed by the High Court as contained in Chapter 4-B of the High Court Rules and Orders, Volume I, has been filed to which the provisions of Section 5 of the Limitation Act, 1963 can be attracted. According to the counsel Section 33 is the only section under which an application can be made challenging the existence or validity of the arbitration agreement or the award. Section 30 does not. expressly or impliedly speak of any application being made under it, but it only lays down the grounds on which an award can be set aside. The objections under section 30 of the Act filed in IA 584 of 1976 is thus not an application within the meaning of Section 5 of the Limitation Act, 1963. Reliance is placed on Saha and Co. v. Ishar Singh Kripal Singh and Co. , A. I. R. 1956 Calcutta 321 (1) wherein it was held that the Act docs not distinguish between an application tor setting aside an award and an application for the adjudgment of an award to be a nullity and does not contemplate that an application of the former kind should be made under Section 30 of the Act and an application of the latter kind under Section 33. The Act contemplates that all applications challenging an award must be made under Section 33 irrespective of the ground of the challenge and that they must be applications for setting aside the award except in cases where the existence of an award in fact is challenged. Reliance is also placed on Basant Lal v. Surendera Prasad and others A,1. R. 1957 Patna 417 (2), wherein it was held that proper construction of Sections 30 and 33 would be that all applications challenging an award, irrespective of the ground of the challenge, must be made under Section 33. The counsel urges that Section 33 is the only section under which an application can be made challenging the award and as no such application has been made. the provisions of Section 5 of the Limitation Act, 1963 are not attracted. It was also brought to my not
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