Karnataka High Court
Sri.Prahaladas Goyal vs Sri.Anand S/O Laxman Anegundi on 30 September, 2020
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 30TH DAY OF SEPTEMBER, 2020
BEFORE
THE HON'BLE MR.JUSTICE SURAJ GOVINDARAJ
CRP NO.100014/2019
Between:
Sri. Prahaladas Goyal,
Since deceased by his legal heir
Sri. Prashant Goyal, Age 32 years,
Occ:Business, Goyal Industrial,
No.11, Mangal Udyog Nagar, Indore,
State Madya Pradesh-452001.
..Petitioner
(Sri. Vitthal S. Teli, Advocate)
And:
Sri. Anand S/o. Laxman Anegundi,
Age about 52 years, Occ: Business,
R/o. H.No.50, Saptagiri Sadan, 1st Cross,
Kumar Park, Gokul Road, Hubli,
And having business at Laxmi Venkatesh Agro
Foods, Gadag Road, Navalgund,
Dharwad District, Dharwad - 580001.
...Respondent
(Sri. M.V.V.Ramana, Advocate)
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This CRP is filed under Section 115 of CPC, against
the order dated 20.12.2018 passed in Arbitration Suit
No.5/2014 on the file of the Principal District and
Sessions Judge, Dharwad, rejecting the I.A.No.21 filed
under Section 34(3) of Arbitration and Conciliation Act,
1996.
This petition coming on for Admission, this day, the
Court made the following:
ORDER
1. The Petitioner is before this Court seeking for setting aside the order on I.A.No.21 dated 20.12.2018 passed in Arbitration Suit No.5/2014 by the Principal District and Sessions Judge, Dharwad.
2. The facts leading up to the matter are that;
2.1. On account of certain disputes between the Petitioner and the Respondent, the matter was referred to the Arbitration of a sole Arbitrator which resulted in an award dated 12.06.2014. By way of the said award, the claims lodged by the claimant was allowed to 3 the extent of damages, interest and costs as indicated in the said award and the counter claim of the Respondent was rejected in full. 2.2. Aggrieved by the same, the Respondent is stated to have filed an application under Section 33(4) of the Arbitration and Conciliation Act, 1996 (for short 'A & C Act'), in the said application the Respondent had contended that the counterclaim made by the Respondent had been dismissed on the ground that there were criminal proceedings pending and it was contended on behalf of the Respondent that such dismissal was not proper and correct, in the said application there were also grounds taken that the evidence of Mr. Govind Raju could not have been rejected. The letters evidencing the supplies made to MTR foods was required to 4 be considered, that the rejection of the evidence of Mr..Govind Raju being related to the Respondent and the non consideration of the evidence of Mr. Tarun Agrawal amounted to unequal treatment of the parties since the evidence of Mr. Sudhir Habbu, on behalf of the claimant was accepted.
2.3. It is in that background that the Respondent had requested the Tribunal to reconsider his claims and pass suitable award in favour of the Respondent by passing an additional award in the interest of justice and equity. 2.4. The said application came to be opposed by the claimant/petitioner herein contending that there was no error committed by the Arbitrator while passing the award, the entire counterclaim of the Respondent had been 5 rejected in full after consideration of the entire evidenceoral and documentary by the Tribunal. The application being one to reconsider the claim and pass suitable award was not maintainable under Section 33(A) of the A & C Act. An application under Section 33 is only permissible to seek for correction and interpretation of the award with prior notice to the other party and can be only be restricted to any computational errors, clerical and typographical errors or errors of similar nature, none of those conditions being satisfied, the application under Section 33 was not maintainable and as such the claimant therein and the Petitioner herein sought for dismissal of the application. 2.5. The learned Arbitrator vide his order dated 16.08.2014 was pleased to dismiss the 6 application by holding that after passing of the award, the Arbitrator would only have restricted powers in terms of Section 33 of the Act and in terms of sub-section 4 of the said Section, it is only when an Arbitral Tribunal omits to consider any claim, an additional award on such claim could be passed, the entire counterclaim of the Respondent had already been dismissed after framing of specific issues on the counterclaim. In view of the same, as per the applicable legal provisions, the Tribunal has held that there were no grounds made out in the application under Section 33(4) and as such the application came to be rejected. 2.6. It is subsequently on 13.11.2014 that an Arbitration suit has been filed under Section 34 of the A & C Act by the Respondent herein 7 challenging the award dated 12.06.2014 and while doing so, the Respondent herein had contended that the limitation period for filing of the said suit would arise only on the date of rejection of the application filed by the Respondent under Section 33(4) of the A & C Act, which was passed on 16.08.2014 and therefore, any suit could have been filed within a period of 90 days with a further grace period of 30 days from that day. 2.7. Adverting to the aspect relating to the cause of action and limitation it is stated in para No.9 of the said suit as under:
"9. Therefore, applicant herein has challenging the said award and dismissal order of the review application passed by the sole Arbitrator on 12.06.2014 and 16.08.2014 passed in Arbitration Case 8 No.2/2010 on the following amongst other grounds."
2.8. On the filing of the said suit, the petitioner claimant had filed an application on 15.03.2018 in I.A.No.21 contending that the Arbitration Suit was barred by limitation in as much as the application under Section 33(4) of the A & C Act, not being maintainable not being in accordance with the requirement of the mandate of Section 33(4), the said application had been filed only to protract the proceedings and therefore, the respondent/plaintiff in the said suit could not be permitted to take undue advantage of the wrong filing of the said application in order to extend the period of limitation.
2.9. The Trial Court vide its order dated 20.12.2018 was pleased to reject I.A.No.21 9 holding that in terms of Section 33(4) of A &C Act, the period of three months would have to be calculated from the date of the award and if a request has been under Section 33 from the date on which the said request was disposed by the Tribunal. Thus, the Trial Court held that the request under Section 33 having been made within time on 08.07.2014 i.e. within 30 days of the award and the said application having been disposed of on 16.08.2014. The filing of the suit on 13.11.2014 was within a period of 90 days thereof and therefore, the claim of the Respondent not being in accordance with Section 34, I.A.No.21 came to be rejected. 2.10. It is aggrieved by the above, that the Respondent in the said suit has filed the above civil revision petition seeking for 10 interference by this Court in the order passed by the Trial Court on I.A.No.21.
3. Sri. Vitthal Teli, learned counsel for the Petitioner would submit that 3.1. The extension of period of limitation under Section 33 would only arise in the event of an application under Section 33 being maintainable. In that the application had to fall within the four corners of the statutory requirement under Section 33. Section 33 of the A & C Act does not contemplate an application for review being filed nor an application for reconsideration contemplated, 3.2. an application could only be filed for the purpose of correction of errors and/or for passing of an additional award only in the event of the Tribunal having passed such an 11 award. He relies on the word 'additional' to contend that there was to be an award which had to be passed in favour of the the person filing the application and it is only for passing of an award in addition to the award already passed, that an application under Section 33 (4) can be filed.
3.3. In this regard, he also relies on the decision of the Apex Court in State of Arunachal Pradesh Vs. Damani Construction Co., reported in (2007) 10 SCC 742, wherein the Hon'ble Apex Court has upheld the decision of the High Court holding that the application for request under Section 34(3) was not maintainable, the application being totally misconceived, there is no fresh cause of action which could be available to the said applicant in order to file a suit under Section 12 34 basing it on the date on which the said application came to be rejected.
4. Per contra, Sri. M.V.V.Ramana, learned counsel appearing for the Respondent herein would submit that, 4.1. the question of whether the application is proper or not could not be a ground for curtailing or extending the period of limitation as contemplated under Section 34 of the A & C Act, 4.2. he relies on the decision of the High Court of Delhi in Union of India and another Vs. Saboo Minerals Pvt. Ltd., reported in 2003 (71) 166 more particularly para 4 thereof, which is extracted herein below:
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"To exclude the time taken in pursuing the application under Section 33 of the Act, the application filed under Section 33 has to be within the period prescribed in the Act. In a case where an application under Section 33 of the Act has been filed say after a period of six months from the date of receipt of the award by the party, it cannot be said that the time for filing objections under Section 34 of the Act would start from the date of rejection of such an application. If this contention is accepted, any party with a view to circumvent the limitation provided in Section 34 of the Act would make an application before the Arbitrator under Section 33 of the Act and wait for his decision and file objections after disposal of such an application, which was not even maintainable because of the same having been filed beyond the time prescribed in Section 33 of the Act. I am, therefore, not impressed with the arguments advanced by learned counsel for the appellant that the limitation would start from the date of rejection of the application under Section 33 by the Arbitrator. If the application under Section 33 had been filed within time, no doubt, the appellant would have been entitled to the exclusion of time taken in pursuing the said application but as the application under Section 33 of the Act itself was barred by time, in my opinion, the appellant cannot take advantage of Section 34(3) of the Act so as to start limitation from the date of rejection of such an application."
4.3. He also relies on the decision of the Apex Court in Ved Prakash Mithal and Sons Vs. Union of India, reported in 2018 SCC online SC 3181 more particularly paragraph 14 Nos.7 & 8 thereof which are reproduced hereunder:
"7. We are of the view that the judgment of the Bombay High Court does not reflect the correct position in law. Section 34(3) specifically speaks of the date on which a request under Section 33 has been 'disposal' by the Arbitral Tribunal.
8. We are also of the view that a 'disposal' of the application can be either by allowing it or dismissing it. On this short ground, in our opinion, the learned Single Judge of the Delhi High Court is correct in law"
4.4. Relying on the aforesaid decisions Sri. M.V.V.Ramana, learned counsel would submit that there is a vested right in a party to an Arbitration to file an application under Section 33 of the A & C Act and it is exercising this right that the application was in fact filed by the Respondent on 08.07.2014 within the prescribed period of 30 days from the date of award.
154.5. The said application could have been either allowed or dismissed, but what is contemplated under Section 34 is the word 'disposed' and as such even though the application filed by the Respondent was rejected, the date for the purpose of calculation of limitation of three months could be the date on which the said application was dismissed/disposed.
4.6. The present suit having been filed within a period of 90 days from the date of such disposal 16.08.2014, the suit was well within time and therefore, he submits that the order passed by the Trial Court dated 20.12.2018 is just and proper, in accordance with law and 16 does not require any correction at the hands of this Court.
5. In view of the submissions made by the both the counsels, the points which arise for determination of this Court are;
(i) Whether by merely filing an application under Section 33 could limitation prescribed under Section 34 of the A &C Act be extended or as a corollary to it is it required that the application filed under Section 33 to be maintainable for the purpose of extension of limitation?
(ii) Whether an application for reconsideration or review maintainable under Section 33 of the A & C Act?
(iii) Whether the order passed by the Trial Court on 20.12.2018 on I.A.No.21 is proper and correct?
(iv) What order?
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6. Point Nos.1 & 2 being connected and considered together:
1. Whether by merely filing an application under Section 33 could limitation prescribed under Section 34 of the A &C Act be extended or as a corollary to it is it required that the application filed under Section 33 to be maintainable for the purpose of extension of limitation?
2. Whether an application for reconsideration or review maintainable under Section 33 of the A & C Act?
Sri. M.V.V.Ramana, learned counsel for the Respondent has contended that there is no requirement or qualification under Section 33 for the filing of an application, in this case the Respondent had filed an application for reconsideration of the award passed and has also passed an additional award in view of the rejection by the Arbitrator of the counter claim filed by the 18 Respondent. Thus, he submits being a vested right in the Respondent, the Respondent has exercised the same filed an application and the said application having been disposed on 16.08.2014, the Respondent has challenged both the award and the dismissal of the application under Section 33(4) in the suit filed on 13.11.2014 in Arbitration Suit No.5/2014.
7. The Apex Court in the case of Damini Constructions Co., (supra) has categorically held that for the purpose of extension of limitation, the application as filed was required to be maintainable inasmuch as the Apex Court in that case upheld the decision of the High Court holding that the application for review is not one maintainable under Section 33 of the A & C Act, therefore, when the application was not even maintainable the 19 question of extension of limitation would not at all arise.
8. Though Mr. M.V.V.Ramana learned counsel has relied upon the decision of the Apex Court in Ved Prakash Mittal (supra) as also of the Delhi High Court in Saboo Minerals Pvt. Ltd., (supra), both those decisions do not speak of maintainability or non maintainability of the application under Section 33(4) and they do not depart from the decision of the Apex Court in the case of Damini Constructions Co., (supra).
9. Thus what is to be ascertained in this particular matter is whether the application as filed under Section 33 (4) was within the four corners of the said provision.
10. Admittedly the counter claim filed by the Respondent had been completely rejected, the 20 application under Section 33(4) had been filed by the Respondent to reconsider the case of the Respondent and to pass an additional award. The usage of the word 'reconsideration' in the application filed by the Respondent is not found place in section 33 of the A & C Act. The usage of the word 'reconsideration' would also lead to a conclusion that the said application had been filed to review the award already passed, such an application is not contemplated under Section 33. An application under Section 33 as extracted herein above is permissible only to correct clerical errors, typographical errors, calculation errors and or passing of an additional award.
11. Thus as held by the Apex Court in the case of Damini Constructions Co., (supra) if an application filed under Section 33 (4) is not maintainable under the said provision, merely 21 because such an application is filed, the same would not lead to extension of period of limitation. In view thereof, I am of the considered opinion that the order passed by the Trial Court on 20.12.2018 in respect of I.A.No.21 does not take into consideration the facts in a proper perspective, the Trial Court ought to have taken in to consideration the decision of the Apex Court in the case of Damini Constructions Co., (supra) in a proper perspective.
12. Answer to Point No.3: Whether the order passed by the Trial Court on 20.12.2018 on I.A.No.21 is proper and correct?
In view of the above discussion, the order dated 20.12.2018 passed by the Trial Court on I.A.No.21 is set aside, the Arbitration suit filed by the Respondent herein on 13.11.2014 having been filed beyond the period of 90 days from the date of the award, as also being beyond the period of 30 days from the date of grace period, the same is held to 22 be barred by limitation, more so on account of the fact that an Arbitration is supposed to be a fast and effective remedy and the same could not be delayed by any of the parties resorting to any dilatory tactics and or by filing of the applications not maintainable seek for extension of period of limitation.
13. Accordingly, the civil revision petition is allowed, order dated 20.12.2018 passed by the Trial Court on I.A.No.21 is set aside, IA No. 21 is allowed, and the Arbitration suit is dismissed on account of the fact that the said Suit was filed beyond the period of limitation provided.
Sd/-
JUDGE *Svh/-