Rajasthan High Court - Jodhpur
M/S Pearl Mechanical Engineering vs Rajasthan Cooperative Spinning Mills on 13 December, 2016
Author: Vijay Bishnoi
Bench: Vijay Bishnoi
IN THE HIGH COURT OF JUDICATURE FOR
RAJASTHAN AT JODHPUR
S.B.CIVIL MISC. APPEAL NO. 157 / 2000
M/s Pearl Mechanical Engineering and Foundary Works (P) Ltd.
Peal Building, 427, Industrial Area 'A' Ludhiana.
----Appellant
Versus
1. Rajasthan Cooperative Spinning Mills Ltd. Gulabpura,
District Bhilwara. Now known as Rajasthan State
Cooperative Spinning and Ginning Mills Federation Ltd.
Unit Gulabpura.
2. The Registrar, Rajasthan Cooperative Societies, Jaipur.
----Respondent
__________________________________________
For Appellant : Ms. Rekha Borana
For Respondents : Mr Rajesh Joshi Sr. Advocate assisted by
Mr Vinit R.Dave
__________________________________________
HON'BLE MR. JUSTICE VIJAY BISHNOI
Judgment / Order 13/12/2016 This Civil Misc. Appeal has been preferred on behalf of the appellant being aggrieved with the judgment dated 07.12.1999 passed by District Judge, Bhilwara, whereby it decided the application filed by the respondents under section 14 of the Arbitration Act, 1940 (for short 'the Act of 1940' hereinafter) as well as the objections filed by the appellant-firm under sections 30 and 33 of the Act of 1940 against the award dated (2 of 9 ) [CMA-157/2000] 18.01.1995 passed by the Arbitrator, Registrar Cooperative Societies, Jaipur.
Brief facts of the case are that respondent-mills and the appellant-firm entered into an agreement and as per that agreement, the appellant-firm would supply 4 doubling machines to respondent-mills. The agreement executed between parties contains arbitration clause and as per the same, in case of any dispute, the Registrar, Cooperative Societies, Rajasthan, Jaipur would be appointed as arbitrator and dispute would be referred to it. Some disputes arose between the parties and as per the terms of agreement, the matter was referred to the arbitrator on 24.01.1980. Later on, the arbitrator failed to deliver the award within the prescribed limit and an application was moved before the District Judge, Bhilwara for extension of time in the year 1993 and the said application was allowed on 16.07.1993 and time for making an award was extended by one year, however, in the said one year, the award could not be passed and again an application was filed before the District Judge, Bhilwara, who vide order dated 19.07.1994 further extended the time for passing the award by six months. Ultimately, the arbitrator passed the award on 18.01.1995.
The respondent mills moved an application under section 14 of the Act of 1940 for making the award rule (3 of 9 ) [CMA-157/2000] of the court and the appellant-firm had filed the objection under sections 30 and 33 of the Act of 1940 against the award dated 18.01.1995 before the District Judge, Bhilwara, who vide order dated 07.12.1999 rejected most of the objections filed by the appellant-firm, however, modified the award up to the extent of awarding interest on the amount of Rs.91,176.83 at the rate of 15% per annum and directed that the appellant-firm is liable to pay the interest at the rate of 6% from the date of passing of the order dated 07.12.1999 till the date of actual payment. Being aggrieved with the order dated 07.12.1999, the appellant has preferred this miscellaneous appeal.
Learned counsel for the appellant has argued that as a matter of fact the award passed by the arbitrator was beyond the limitation as prescribed under the provision of the Act of 1940, therefore, the entire arbitration proceedings are vitiated and are liable to be set aside. It is argued that the dispute was referred to the arbitrator on 24.01.1980, however, he passed the award almost after 15 years. It is contended that in the meantime, the District Judge, Bhilwara extended the time for passing of the award in the year 1993 and thereafter in 1994, however, the appellant was not given any notice before extending time for passing the award and, therefore, the said extension of time was wholly (4 of 9 ) [CMA-157/2000] unauthorized and without jurisdiction and the entire arbitration proceedings are rendered invalid on this count alone.
Learned counsel for the appellant has further argued that the application for making the award as a rule of the court was also filed by the respondent with delay. It is contended that the award was passed in the presence of the respondents on 18.01.1995, however, the respondents filed the application under section 14 of the Act of 1940 for making the award rule of the court only on 15.03.1995 i.e. after 30 days of prescribed limitation, however, the District Judge without taking into consideration this aspect of the matter rejected the said objections of the appellant while holding that the certified copy of the award was received by the respondents on 20.02.1995 and after that the respondent filed an application under section 14 of the Act of 1940 within 30 days and, therefore, the application cannot be dismissed while treating it as time barred. It is also contended that the said finding of the District Judge, Bhilwara is illegal and is liable to be set aside.
Learned counsel for the appellant has further argued that the District Judge has failed to take into consideration that the award purported to grant various damages to the respondents and further various claims on account of penalty etc. are beyond the agreement of (5 of 9 ) [CMA-157/2000] the parties. It is also contended that the District Judge, Bhilwara has not taken into consideration the fact that the arbitrator has illegally fastened the liability of paying additional excise duty upon the appellant because excise duty upon the items supplied by the appellant was enhanced prior to the delivery of the machines. It is further contended that the District Judge has not taken into consideration the fact that the appellant-firm is not liable for any penalty on account of delay in erecting the machines because the condition of penalty has already been revoked by the mutual agreement of the parties.
Per contra, learned counsel for the respondent - Cooperative Societies has argued that a challenge to an award passed under the Act of 1940 can be made only on the grounds referred to in section 30 of the Act of 1940. It is contended that an award passed by the arbitrator under the Act of 1940 is liable to be set aside only on the ground, which mentioned in section 30 of the Act of 1940, however, the appellant-firm has failed to raise any of the grounds as mentioned in section 30 before the District Judge for setting the award and, therefore, the District Judge has rightly rejected the objections filed by the appellant-firm except the part of interest awarded by the arbitrator.
Learned counsel for the respondent has further argued that the arbitrator has passed the award after (6 of 9 ) [CMA-157/2000] seeking extension of time from the District Judge and, therefore, it cannot be said that the award passed by him is beyond limitation.
It is also argued that the respondents received the certified copy of the award on 20.02.1995 and thereafter they filed the application under section 14 of the Act of 1940 on 15.03.1995. i.e. within limitation of 30 days and, therefore, District Judge has rightly treated the application filed by the respondent under section 14 within the prescribed limit of 30 days. Learned counsel for the respondents has further argued that there is no illegality in the action of the arbitration of awarding compensation to the respondents under various heads and therefore, no case for interference is made out. In support of the above contentions, learned counsel for the respondents has placed reliance on decisions of Hon'ble Supreme Court in Raipur Development Authority vs. Chokhamal Contractors, [1990] 0 AIR (SC) 1426 and Indian Rare Earths Ltd. vs. Unique Builders Ltd., [2015] 0 AIR (SC) 3137. Learned counsel for the respondents has also placed reliance on decision of this Court in Chhoga Lal vs. Legal Representatives of deceased Keshav Lal & Anr., 1992 (2) WLN 232.
Heard learned counsel for the rival parties, perused the impugned order and gone through the records of the District Judge as well as of the arbitrator.
(7 of 9 ) [CMA-157/2000] It is an admitted fact that the dispute was referred to the arbitrator on 24.01.1980 and he passed the award on 18.01.1995, however, on 16.03.1993, the District Judge, Bhilwara extended time for passing of the award by one year and in the order dated 16.07.1993, it is mentioned that despite service of notice upon the appellant, none has appeared to oppose the extension of time. Later on, the District Judge, Bhilwara further extended the time for passing of the award by six months on 19.07.1994 while considering an application filed by the arbitrator with a prayer to extend the time for passing award.
It appears that before extending the time by six months on 19.07.1994, notice was not given to the appellant, however, it is also clear from the record that on 11.07.1994, the arbitrator passed an order while observing that the District Judge, Bhilwara be approached for extension of time of passing of award. On that day, none was present on behalf of the appellant-firm, however, after extension of time by the District Judge, Bhilwara on 19.07.1994, counsel for the appellant appeared before the arbitrator on 30.08.1994, 12.09.1994 and 14.11.1994 but did not object that the District Judge has extended time without giving notice to the appellant. From the above, it can be gathered that the appellant was in knowledge of extension of time by (8 of 9 ) [CMA-157/2000] the District Judge and it continued to participate in the arbitration proceeding without any objection. Hence, the contention of the appellant to the effect that the arbitrator has passed the award beyond period of limitation is not acceptable and the District Judge, Bhilwara has rightly rejected the same.
The another objection of the counsel for the appellant to the effect that the application filed by the respondents under section 14 of the Act of 1940 was barred by limitation has also been rightly rejected by the District Judge, Bhilwara because the certified copy of the award was served upon the respondent mills for the first time on 20.02.1995 and the application under section 14 of the Act of 1940 was filed by it on 15.03.1995, which is within 30 days.
The another argument of the counsel for the appellant regarding the award of compensation by the arbitrator is bereft of any merit and the same does not come within any of the grounds mentioned in section 30 of the Act of 1940. It is settled position of law that an award passed under the Act of 1940 can only be set aside on the grounds mentioned in section 30 of the Act of 1940. However, in the present case, after going through the objections filed by the appellant before the District Judge, I do not find that those objections contain any of the grounds mentioned in section 30 of the Act of 1940.
(9 of 9 ) [CMA-157/2000] In view of the above discussions, I do not find any merit in this appeal and the same is hereby dismissed.
(VIJAY BISHNOI),J.
m.asif/PS