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1991 Supreme(Ker) 278

Judges : RADHAKRISHNA MENON,RAMAKRISHNAN
State of Kerala - Appellant
Versus
Rajan - Respondent
Case No : M.F.A.No.1 of 1987
Decided On : 09/02/1991
Advocates Appeared :
Government Pleader (M.C. John) or Appellant M.P. Abraham & Aji George For Respondent

The main legal point established in the judgment is that the proceeding initiated under S.20 of the Arbitration Act was barred by limitation, as it was filed beyond the prescribed period.

Headnote:

Limitation - Arbitration - S.20 of the Arbitration Act - Art.137 of the Limitation Act - The court held that the proceeding initiated under S.20 is barred by limitation.

Fact of the Case:

The appellants terminated an agreement with the respondent for alleged breach of contract. The respondent sought to recover losses through arbitration proceedings under S.20 of the Arbitration Act, 17 years after the contract termination. The appellants contended that the suit was barred by limitation.

Finding of the Court:

The court allowed the appellants to raise the limitation issue, as it was a pure question of law. It held that the proceeding initiated under S.20 was time-barred, as it was filed beyond the prescribed period of limitation.

Issues: The main issue was whether the suit under S.20 was barred by limitation, and whether the court could entertain the limitation issue raised by the appellants at the hearing of the appeal.

Ratio Decidendi: The court concluded that the proceeding under S.20 was governed by Art.137 of the Limitation Act, and the cause of action for the proceedings arose within a specific timeframe, making the suit time-barred.

Final Decision: The court set aside the judgment and allowed the appeal with costs, holding that the proceeding initiated under S.20 was an abuse of the process of law and was liable to be dismissed.

Judgment :-

Radhakrishna Menon, J.

The defendants in O.S. (Arb.) No. 14/1985 in the court of the Subordinate Judge, Thiruvananthapuram, are the appellants.

2. he appeal is directed against the judgment disposing of the suit. The operative portion of the judgment reads:-

"In the result the disputes and differences made mention of in para. 10 of the plaint are hereby ordered to be referred to an arbitrator for arbitration....".

3. Relevant facts: The agreement date 19-2-1966 entered into between the appellants and the respondent to execute the work of "Anti-sea Erosion Work at Poonthura-Constructing 488 sea wall between Singarathope and Muthalapozhy bar" was terminated on 19-12-1968 by the appellants for the alleged breach of contract. The loss sustained by the Government on account of the reassignment of the work was sought to be recovered by initiating proceedings under the Revenue Recovery Act. Those proceedings however were resisted by the respondent by commencing proceedings made mention of in paragraph 16 of the written statement. They did not bring results and consequently the arbitration suit under S.20 was instituted on 19-1-1985 by the respondent; but after 17 years of the termination of the contract.

4. The appellants in the written statement inter alia contended that the suit was barred by limitation. If this contention is accepted it is unnecessary to go into the other question namely whether there exists any dispute that requires to be referred for arbitration. The question arising for consideration therefore is, whether the suit under S.20 is barred by limitation.

5. Before we find an answer to the question it has become necessary to dispose of some hyper technical contentions raised by the counsel for the respondent in the course of his argument. According to the learned counsel this issue in fact does not arise for consideration because the appellants-defendants have not raised it either before the trial court or before this court by raising specific grounds in that regard. The appellants therefore are not entitled to raise this contention at the hearing of the appeal. It is all the more so because such questions cannot be decided without taking evidence. Yet another argument advanced by the counsel can be stated thus: The non-raising of the contention before the trial court has resulted in the respondent not getting an opportunity^ to meet the same effectively. We are not impressed by these

arguments. The question as to whether a proceeding before the court is barred by limitation, in certain circumstances at least, is a pure question of law; in that, if the facts available on record are Incapable of being disputed and on the basis of such facts the question of law can be considered and decided, then the appellate court can allow the said question to be raised for the first time at the hearing of the appeal. From the facts available on record it could beheld without fear of contradiction that the above question is a pure question of law and therefore it should be allowed to be raised even in the course of the argument of the appeal. A reference to Order 41 Rule 2 C.P.C. is relevant in the context. We shall reproduce the provision for easy reference:

"2. Grounds which may be taken in appeal.-The appellant shall not, except by leave of the Court, urge or be heard in support of any ground of objection not set forth in the memorandum of appeal; but the appellate. Court, in deciding the appeal, shall not be confined to the grounds of objection set forth in the memorandum of appeal or taken by leave of the Court under this rule:

Provided that the Court shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of contesting the case on that ground."

It can be seen from this provision that a ground not raised in the memorandum of appeal, an appellant is not entitled to raise as of right at the hearing of the appeal though he can do so with the permission of th

























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