Himachal Pradesh High Court
Himachal Pradesh Housing Board And ... vs Ranjit Singh Rana on 28 February, 2015
Bench: Chief Justice, Tarlok Singh Chauhan
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
.
Arb. Appeal No. 1 of 2009
Judgment reserved on: 23.2.2015
Date of Decision : February 28, 2015.
Himachal Pradesh Housing Board and another ...Appellants
Versus
Ranjit Singh Rana ...Respondent
Coram
The Hon'ble Mr. Justice Mansoor Ahmad Mir, Chief Justice.
The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge.
Whether approved for reporting ? Yes For the Appellants : Mr. Dinesh Thakur, Advocate.
For the respondent : Mr. Karan Singh Kanwar, Advocate.
Tarlok Singh Chauhan, Judge This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short 'Act') is directed against the judgment passed by learned Single Judge on 26.2.2008 in OMP (M) No. 38 of 2001 whereby the application preferred by the appellants for setting aside the arbitral award was dismissed as not being maintainable as this application was not accompanied by a signed copy of the award.
2. The appellants had preferred application under Section 34 (3) of the Act against the award made by the Arbitrator on 11.8.1998 and additional award made on 14.2.2001. However, while preferring the application only a photocopy of the award was annexed, though admittedly a signed copy of the award was available with the ______________________ 1 Whether reporters of Local Papers may be allowed to see the Judgment ? yes ::: Downloaded on - 15/04/2017 17:41:12 :::HCHP 2 appellants. Lateron, the appellants having realised their mistake, .
moved an application being OMP No. 345/2004 with a prayer to take on record a signed copy of the award. This application came to be allowed by the learned Single Judge on 20.8.2004 when the following order was passed:
"OMP No. 345/2004.
Reply filed. Heard. The application is allowed and the signed copy of the award is ordered to be taken on record subject to all just exceptions. The application stands disposed of."
3. During the course of hearing before the learned Single Judge, the respondent herein raised preliminary objection regarding maintainability of the application itself. The learned Single Judge vide order dated 26.2.2008 upheld the objection and dismissed the application as not being maintainable as the same was not accompanied by the signed copy of the award.
4. The appellants have taken exception to the order passed by the learned Single Judge and have preferred this appeal on the ground that the impugned order suffers from material illegality and irregularity inasmuch as the findings regarding maintainability of the application for setting aside the arbitral award is concerned, the certified copy of the award had already been placed on record vide OMP No. 345/2004 and the defect, if any, in filing of the application stood removed.
5. We have heard learned counsel for the parties and have gone through the records of the case carefully and meticulously.
6. At the outset, certain relevant provisions of the Act need to be noticed. Section 31 of the Act provides as under:
::: Downloaded on - 15/04/2017 17:41:12 :::HCHP 3"31. Form and contents of arbitral award.-
(1) An arbitral award shall be made in writing and shall be signed .
by the members of the arbitral tribunal.
(2) For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.
(3) The arbitral award shall state the reasons upon which it is based, unless ---
(a) the parties have agreed that no reasons are to be given, or
(b) the award is an arbitral award on agreed terms under section 30.
(4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and r the award shall be deemed to have been made at that place.
(5) After the arbitral award is made, a signed copy shall be delivered to each party.
(6) The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award.
(7) (a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.
(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen percentum per annum from the date of the award to the date of payment.
(8) Unless otherwise agreed by the parties,----
(a) the costs of an arbitration shall be fixed by the arbitral tribunal;
(b) the arbitral tribunal shall specify----
(i) the party entitled to costs,
(ii) the party who shall pay the costs,
(iii) the amount of costs or method of determining
that amount, and
(iv) the manner in which the costs shall be paid.
Explanation.---For the purpose of clause (a), "costs" means reasonable costs relating to----
(i) the fees and expenses of the arbitrators and
witnesses,
(ii) legal fees and expenses,
(iii) any administration fees of the institution supervising
the arbitration, and
(iv) any other expenses incurred in connection with the
arbitral proceedings and the arbitral award."
7. Section 32 of the Act reads thus:
::: Downloaded on - 15/04/2017 17:41:12 :::HCHP 4"32.Termination of proceedings.-
(1) The arbitral proceedings shall be terminated by the final .
arbitral award or by an order of the arbitral tribunal under sub-
section (2).
(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where----
(a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute,
(b) the parties agree on the termination of the proceedings, or
(c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become r unnecessary or impossible.
(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings."
8. Section 34 of the Act reads thus:
"34.Application for setting aside arbitral award.-
(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if---
(a) the party making the application furnishes proof that-----
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to
which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Past; or ::: Downloaded on - 15/04/2017 17:41:12 :::HCHP 5
(b) the Court finds that------
(i) the subject-matter of the dispute is not capable of .
settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation.---Without prejudice to the generality of sub-clause (ii), it is hereby declared , for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced of affected by fraud or corruption or was in violation of section 75 or section 81.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award, or, if a request had been made under section 33, from the date on which that r request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award."
9. As per the provisions of Section 34(3) of the Act, a party aggrieved by the award has a right to make an application for setting aside the award on the grounds as mentioned therein within three months of the date of receipt of the award and the said prescribed period of three months can be extended by the Court by a further period of thirty days if sufficient cause is shown and not thereafter. But then the moot question is that from what date the aforesaid period is to be computed. For this purpose one is essentially required to fall back to the provisions of Section 31 (5) which provides that after the arbitral award is made, a signed copy shall be delivered to each of the party. Both the aforesaid sections have to be read together for determination of limitation period prescribed under Section 34 (3) of the Act. The delivery of an arbitral award under sub section (5) of Section ::: Downloaded on - 15/04/2017 17:41:12 :::HCHP 6 31 is not a matter of mere formality prescribed by the statute but is a .
matter of substance. It is only after the stage under Section 31 has passed that the stage of determination of arbitral proceedings within the meaning of Section 32 of the Act arises. The delivery of the copy of award has the effect of conferring certain rights on the party as also bringing to an end the right to exercise those rights on expiry of the prescribed period of limitation which would be calculated from that date, i.e. from the date of receipt of a signed copy by the party.
10. In taking this view, we are supported by the decision of the Hon'ble Supreme Court in Union of India vs. Tecco Trichy Engineers & Contractors (2005) 4 SCC 239 wherein the Hon'ble Supreme Court held as follows:
"8. The delivery of an arbitral award under sub-section (5) of Section 31 is not a matter of mere formality. It is a matter of substance. It is only after the stage under Section 31 has passed that the stage of termination of arbitral proceedings within the meaning of Section 32 of the Act arises. The delivery of arbitral award to the party, to be effective, has to be "received" by the party. This delivery by the Arbitral Tribunal and receipt by the party of the award sets in motion several periods of limitation such as an application for correction and interpretation of an award within 30 days under Section 33(1), an application for making an additional award under Section 33(4) and an application for setting aside an award under Section 34(3) and so on. As this delivery of the copy of award has the effect of conferring certain rights on the party as also bringing to an end the right to exercise those rights on expiry of the prescribed period of limitation which would be calculated from that date, the delivery of the copy of award by the Tribunal and the receipt thereof by each party constitutes an important stage in the arbitral proceedings."
11. The aforesaid view was reiterated in State of Maharashtra and others vs. Ark Builders Private Limited (2011) 4 ::: Downloaded on - 15/04/2017 17:41:12 :::HCHP 7 SCC 616 wherein after relying upon the aforesaid paragraph from .
Tecco Trichy Engineers case, it was held:
"15. The highlighted portion of the judgment extracted above, leaves no room for doubt that the period of limitation prescribed under section 34(3) of the Act would start running only from the date a signed copy of the award is delivered to/received by the party making the application for setting it aside under section 34(1) of the Act. The legal position on the issue may be stated thus. If the law prescribes that a copy of the order/award is to be communicated, delivered, dispatched, forwarded, rendered or sent to the parties concerned in a particular way and in case the law also sets a period of limitation for challenging the order/award in question by the aggrieved party, then the period of limitation can only commence from the date on which the order/award was received by the party concerned in the manner prescribed by the law."
12. It is, therefore, absolutely clear that the period of limitation prescribed under Section 34 (3) of the Act would start running only from the date a signed copy of the award is delivered to/received by the party making the application for setting it aside under Section 34 (1) of the Act. This period in the case in hand had already commenced when the application for setting aside the award had been preferred by the appellants alongwith which only a photocopy of the award had been annexed, though a signed copy of the award was admittedly available with the appellants. Insofar as filing of OMP No. 345/2004 is concerned, this application came to be filed only on 2.8.2004 which is much beyond the period of limitation. Needless to observe that this period of limitation is not extendable nor the delay condonable even by invoking the provisions of Section 5 of the Limitation Act as the same is not applicable to the proceedings under Section 34 of the Act (Refer:
Union of India vs. Popular Construction Co. (2001) 8 SCC 470).::: Downloaded on - 15/04/2017 17:41:12 :::HCHP 8
13. In view of the aforesaid discussion, we find no merit in this .
appeal and the same is accordingly dismissed, leaving the parties to bear their own costs.
( Mansoor Ahmad Mir)
Chief Justice
February 28 , 2015 (Tarlok Singh Chauhan),
(GR) Judge.
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