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2023 Supreme(Del) 1044

IN THE HIGH COURT OF DELHI AT NEW DELHI
Prateek Jalan, J.
Mahavir Prasad Gupta – Appellant
Versus
Union of India Through The General Manager & Anr. – Respondents
CS(OS) 354 of 2017
Decided On : 01-03-2023

Advocates appeared:
Mr. Vivekanand & Mr. Abhishek Semwal, Advocates, for the Plaintiff.
Mr. Siddhartha Sinha, Mr. Prashant Rawat, Mr. Niring Chamwibo Zeliang, Ms. Anu Priya Nisha Minz, Advocates, for the Defendants.

The main legal point established is that knowledge of filing of the award is sufficient for commencement of the period of limitation for filing objections, and the court has the jurisdiction to award interest based on the interpretation of contractual clauses.

Headnote:

Arbitration Act - Filing of Arbitral Award - Section 14, 15, 16, 30, 33 of the Arbitration Act, 1940 - Limitation Act, 1963, Article 119(b) - Knowledge of filing of the award - Interpretation of Clause 16(2) of the General Conditions of Contract [GCC] - Award of pendente lite interest - Jurisdiction of the Court to award interest

Fact of the Case:

The case involves the filing of an arbitral award under Section 14 of the Arbitration Act, 1940, and challenges to the award under Section 15, 16, 30, and 33 of the Act. The court considered the condonation of delay in filing objections to the award and the award of pendente lite interest.

Finding of the Court:

The court found that the objections filed by Northern Railways were time-barred as they had knowledge of the filing of the award and entered appearance in the suit. The court also awarded pendente lite interest at the rate of 6% per annum from the date of invocation of the arbitration clause until the date of the award.

Issues: The issues involved the condonation of delay in filing objections to the award and the interpretation of Clause 16(2) of the General Conditions of Contract [GCC] regarding the award of pendente lite interest.

Ratio Decidendi: The court held that knowledge of filing of the award is sufficient for commencement of the period of limitation for filing objections. The court also interpreted Clause 16(2) of the GCC and awarded pendente lite interest based on the interpretation.

Final Decision: I.A. 2302/2022 for condonation of delay was dismissed, and consequently, I.A. 16979/2019 was rejected on the ground of limitation. The court awarded pendente lite interest at the rate of 6% per annum from the date of invocation of the arbitration clause until the date of the award.

JUDGMENT

Prateek Jalan, J. (Oral)

I.A. 2302/2020 (for condonation of delay) & I.A. 16979/2019 (objections on behalf of respondents)

1. CS (OS) 354/2017 has been filed under Section 14 of the Arbitration Act, 1940 [hereinafter, "the Act"], for making an arbitral award dated 15.07.2017 a Rule of the Court.

2. The plaintiff- Mr. Mahavir Prasad Gupta [hereinafter, "MPG"] has filed I.A. 366/2018 under Section 15, 16, 30 and 33 of the Act, challenging an award dated 15.07.2017, to the extent that the learned sole Arbitrator has denied pendente lite and future interest. The defendant-Northern Railways has, during the course of these proceedings, filed I.A. No. 16979/2019, to place its objections to the award in respect of the claims granted to MPG, and I.A. No. 2302/2020 for condonation of delay in filing these objections.

3. I have heard Mr. Siddharth Sinha, learned counsel for Northern Railways and Mr. Vivekananda, learned counsel for the plaintiff.

4. The first question to be determined is whether Northern Railways is entitled to condonation of delay in filing its objections to the award.

5. By virtue of Article 119(b) of the Limitation Act, 1963, an application for setting aside an award under the Act is required to be made within 30 days from the date of service of notice of filing of the award. I.A. No. 16979/2019 was filed by Northern Railways on 03.09.2019, and I.A. 2302/2020 was filed on 28.01.2020.

6. The averment in I.A. No. 16979/2019 with regard to the delay is as follows:

    "That no notice under old Arbitration Act 1940 of filing of award has been received by the Respondents. Only notice of filing objection filed by the petitioner to award was received by the respondents at Jodhpur. The objections are being filed as an abundant precaution, without even receiving any requisite notice, from this Hon'ble in the facts and circumstances of the case. The objections are therefore with in time."

7. In I.A. 2302/2020 also, the contention of Northern Railways is that "no summons of filing of the award appears to have been received in the office of the defendants herein", and that the objections are, therefore, within time. The specific contention of Northern Railways is that summons to it were served only in respect of the objections filed by MPG, and no notice of filing of the award was served upon it.

8. Having regard to this contention, the Court, vide order dated 01.12.2022, directed the Registry to produce the physical file of the suit before the Court. It is apparent thereupon that, by an order dated 11.01.2018, the Court directed that notice of filing of the arbitral awards be issued upon Northern Railways, and notice in I.A. 366/2018 was also issued to the Northern Railways. The record further demonstrates that notice of filing of the award was duly served upon Northern Railways on 12.01.2018, and a rubber stamp was affixed, acknowledging receipt thereof at the Headquarters of Northern Railways, Baroda House at New Delhi on 24.01.2018. A separate notice was issued in I.A. 366/2018, which was also received in the Headquarters of Northern Railways on 24.01.2018.

9. Both notices were also served upon the General Manager, NWR-JP, through the Deputy Chief Engineer, Jodhpur. Service was effected on 24.01.2018, through the District Judge, Jodhpur. The record also contains proof of service by Registered Post at the Jodhpur address, which was received on 22.02.2018.

10. In these circumstances, the contention of Northern Railways that it was not served with the notice of filing of the award, in terms of the Act, is contrary to the record.

11. In any event, it is evident from the record that Northern Railways entered appearance in the present suit on 16.03.2018. It thus had knowledge of the filing of the award in this Court. Mr. Vivekanand relies upon the judgment of the Supreme Court in Bharat Coking Coal Ltd vs. C.K. Ahuja and Another, 1995 Supp (1) SCC 744 (refer paragraphs 4 & 6) to submit that the knowledge of a party as

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