Gauhati High Court
Lilawati Gupta And Ors. vs Union Of India (Uoi) And Anr. on 31 January, 2004
Equivalent citations: 2004(2)ARBLR649(GAU)
Author: I.A. Ansari
Bench: I.A. Ansari
JUDGMENT I.A. Ansari, J.
1. Is there any difference in the law governing substitution of a deceased plaintiff/defendant in a civil suit and/or appellant/respondent in a civil appeal, on the one hand, and an applicant/opposite party or petitioner/ opposite party, on the other hand, in a Civil Miscellaneous Proceeding ? This is the core question, this revision which has been filed against the order, dated 16.08.2002, passed by the learned Civil Judge, (Senior Division) No. 1, Kamrup, Guwahati, in Misc (J) (Arb) No. 199/2002, arising out of T.S. (Arb.) No. 51 / 1994, has raised.
2. Let me, first, put, in brief, hereinbelow the facts giving rise to this revision :
The Award arising out of a contract agreement, entered into between the parties, was filed by the Arbitrator in the Court of Civil Judge (Senior Division) No. 1, Kamrup, Guwahati, in Title Suit (Arb) No. 51/1994, Sri K.L. Gupta (since deceased) who was one of the parties affected by the Award, filed an application in the Court below for setting aside the said Award. This application was registered as Misc. (J) Case No. 199/2002. While this misc. application was pending for disposal, the applicant died on 02.04.2002. The present revision petitioners, namely, the widow of the said deceased as well as their sons and daughters, filed an application in the Court below seeking to get themselves substituted in place of the said deceased. No valid objection was, admittedly, filed by the opposite party to the prayer for substitution so made ; but upon hearing learned counsel for the parties, the learned Court below passed the order, dated 16.08.2002, aforementioned dismissing the application for* substitution on the ground that since no application for substitution had been made within the period of 90 days, which was the period of limitation for making an application for substitution, the miscellaneous application aforementioned stood abated. Aggrieved by this order, the applicants have, now, approached this Court with the help of this revision petition.
3. I have perused the materials on record including the impugned order. I have heard Mr. R.D. Lall, learned counsel for the petitioner, and Mr. S. Sharma, learned standing counsel for the respondents.
4. It has been submitted, on behalf of the petitioners, that Order XXII of the Code of Civil Procedure (hereinafter referred to as "the Code") embodies provisions for substitution of legal representatives in civil suits and appeals and period of limitation for making such application is 90 days from the date of death of the party concerned, but so far as civil miscellaneous applications are concerned, such as, the one, which the learned Court below had considered, the limitation of 90 days cannot be applied inasmuch as the Limitation Act does not prescribe any period of limitation for substitution in a civil miscellaneous proceeding. Support for this submission is sought to be derived by Mr. Lall from the case of Smt. Sayeeda Begam and Anr. v. Ashraf Hussain and Ors. reported in AIR 1980 MP 12 (DB). As no period of limitation, contends Mr. Lall, is prescribed for an application seeking substitution in an Arbitration proceeding, the learned Court below fell into error in holding that the application for setting aside the Award filed by deceased K.L. Gupta stood abated by efflux of time. The order, so passed, according to Mr. Lall, is wholly without jurisdiction and the impugned order amounts to non-exercise of jurisdiction validity vested in the learned Court below and deserves to be interfered with.
5. Controverting the above submissions made on behalf of the petitioners, Mr. Sharma has contended that with the help of Section 141 of the Code, provisions of the Code apply to miscellaneous proceedings as well ; and, hence, the provisions of Order XXII, which govern substitution of the legal representatives in the suits and appeals, shall, according to Mr. Sharma, also be applicable with equal vigour to miscellaneous proceedings and in this view of the matter, the learned Court below was, points out Mr. Sharma, wholly justified in dismissing the application for substitution on the ground that the same was not maintainable on account of the fact that the original application made for setting aside the Award, in question, already stood abated by efflux of time. To strengthen his submissions, so made, Mr. Sharma relies on Union of India v. Jain & Associates reported in (2001) 3 SCC 277-2001(1) Arb. LR 494 (SC).
6. While considering the correctness or otherwise of the rival submissions made before me on behalf of the parties, the predominant fact, which one has to bear in mind, is that a proceeding of civil nature, on the death of a party, does not automatically end and those to whom the right to sue survives have to be impleaded as parties to such proceedings in order to ensure that the ends of justice are secured. It is, no doubt, true that Order XXII provides for substitution of the legal representatives of deceased parties in suits as well as appeals. Order XXII, Rule 1 makes it clear that on the death of a plaintiff or a defendant, the suit shall not abate if the right to sue survives. Order XXII, Rule 3(1) provides for bringing the legal representatives of deceased plaintiff on the record, when the right to sue does not survive to the surviving plaintiff or plaintiffs alone, and Sub-rule (2) thereof imposes penalty for not bringing the heirs of the deceased plaintiff on record within the prescribed period of limitation by providing that if an application is not made within the time limit prescribed by law, the suit shall abate so far as the deceased plaintiff is concerned. Similarly, Order XXII, Rule 4 provides for substitution of a deceased defendant, where the right to sue does not survive against the surviving defendant or defendants alone and Sub-rule (3) thereof imposes penalty for not bringing the heirs of the deceased defendant on record within the time prescribed by law by laying down that if the application for substitution is not made within the period of limitation, the suit shall abate as against such deceased defendant.
7. Obviously, Rules 3 and 4 of Order XXII relate to substitution of plaintiffs and defendants in a suit. But by virtue of Rule 11 or Order XXII, the provisions of Order XXII, Rules 3 and 4 have been made applicable to the appellants and respondents in appeals as well in as much as Rule 11 read, "In the application of this order to appeals, so far as may be, the word 'plaintiff' shall be held to include an appellant, the word 'defendant' a respondent and the word 'suit' an appeal. In other words, it is Rule 11 of the Order XXII, which makes the provisions of Order XXII applicable to appeals. Instead of repeating the entire provisions of Order XXII (relating to substitution of parties in the suits) in the case of appeals too, Rule 11 simplifies the matter by laying down that while applying the provisions of Order XXII to appeals the word 'plaintiff', used in Order XXII, shall be held to include appellant, the word 'defendant', a respondent and the word 'suit' an appeal.
8. Coupled with the above, it is also worth noticing that Order XXII contains, broadly speaking, two prominent aspects, namely, procedural and penal inasmuch as it not only lays down the procedure for substitution, but also penalises parties for not making application for substitution within the prescribed period.
9. What is also pertinent to note, while considering the provisions of Order XXII, is that Order XXII speaks of suits and appeals, but, admittedly, not of any miscellaneous proceeding. In other words, unlike making the provisions of Order XXII applicable to appeals by specifically making it clear by the contents of Rule 11, as already indicated hereinabove, Order XXII makes no reference to miscellaneous proceedings. Hence, unless it can be shown that a miscellaneous proceeding, in question, is covered by the provisions of the Code, it cannot be said that Order XXII will apply to such proceedings.
10. The questions, therefore, which emerge for consideration are as to whether miscellaneous applications are governed by the provisions of the Code and if so, to what extent such an application will be governed by the provisions contained in Order XXII ?
11. A search for an answer to the above questions brings me, first, to Section 141 of the Code, which reads as under :
"Misc. Proceeding--The procedure provided in this Code in regard to suit shall be followed, as far as it can be made applicable, in all proceedings, in any Court of civil jurisdiction."
12. As to what the expression "as far as it can be made applicable" means has been settled by the Apex Court in Babubhai Muljibhai Patel v. Nand Lal Khodidas Barot, AIR 1974 SC 215, wherein the Apex Court has held thus :
"Section 141 of the Code, to which reference has been made, makes it clear that the provisions of the Code in regard to suits shall be followed in all proceedings in any Court of civil jurisdiction as far as it can be made applicable. The words "as far as it can be made applicable" make it clear that, in applying the various provisions of the Code to proceedings other than those of suit, the Court must take into account the nature of those proceedings and the relief sought."
13. What the Apex Court has laid down in Babubhai Muljibhai Patel (supra), is that the provisions of the Code relating to suits shall be applicable to miscellaneous proceedings too, but the extent of application of the Code to such miscellaneous proceedings would depend upon the nature of the proceeding and the reliefs sought for.
14. The question, which, now, emerges for consideration is this : Is the proceeding, which commences with the filing of an Award in a Court under the Arbitration Act, 1940, a suit or a proceeding ? This question, in turn, gives rise to the question as to what really a suit is ? While answering this crucial question, one has to bear in mind that the Code nowhere defines 'suit'. But what the word 'suit', ordinarily, means is a civil proceeding instituted by the presentation of a plaint. Reference may be made, in this regard, to Hansraj Gupta v. Official Liquidator, Dehradun Mussoorie Electric Tramway Co., AIR 1933 PC 68, wherein the word 'suit', in the context of Indian Limitation Act, 1908, was interpreted thus : "The word 'suit' ordinarily means, and apart from some context must be taken to mean, a civil proceeding instituted by the presentation of a plaint".
15. While construing the scope of Section 86 of the Code, which relates to institution of suits against foreign rules, etc., the Apex Court made it clear in Bhagwat Singh v. State of Rajasthan, AIR 1964 SC 444, that a proceeding, which does not commence with the presentation of a plaint or on the basis of a petition, which is in the nature of a plaint, or where claim is not in respect of dispute ordinarily triable in a Court of civil jurisdiction, is not a 'suit' within the meaning of Section 86. In other words, to be regarded as a suit, the proceeding must commence with the filing of a plaint or with the filing of a petition, which is in the nature of a plaint.
16. On applying the tests laid down, in Hansraj Gupta (supra) and Bhagwat Singh (supra), for determination of the question whether a proceeding is a suit or not to a proceeding under the Arbitration Act, 1940, it becomes abundantly clear that since the proceeding under the Arbitration Act, 1940, does not commence on presentation of a plaint or on the basis of a petition, which is in the nature of a plaint, it logically follows that such an Arbitration proceeding is not a suit. I am guided to adopt this view from the case of Nawab Usmanali Khan v. Sagar Mal, AIR 1965 SC 1798, wherein the Apex Court laid down thus, "Now, a proceeding under Section 14 read with Section 17 of the Indian Arbitration Act, 1940, for the passing of a judgment and decree on an Award does not commence with a plaint or a petition in the nature of a plaint and cannot be regarded as a suit".
17. Situated thus, the question, which falls for consideration is this : Is there any difference between an application for substitution of a deceased party made in a suit and an application for substitution made in a proceeding, which commences with the filing of the Award in the Court under the Arbitration Act, 1940. While considering this aspect of the matter, one has to bear in mind the fact that in this revision, we are concerned with the provisions of the old Arbitration Act, i.e., Arbitration Act, 1940. In this regard, it is of immense importance to note that Section 41 of the Arbitration Act, 1940, makes it clear that the provisions of the Code shall apply to all proceedings before the Court. The word 'Court', occurring in the Arbitration Act, means, according to Section 2(c), a Civil Court having jurisdiction to decide the question forming the subject matter of the reference and does not include a Small Cause Court. In other words, the word 'Court'; under the Arbitration Act, 1940, will mean a Court of civil jurisdiction.
18. Coupled with the above, Section 6 of the Arbitration Act 1940, makes it clear that an Arbitration agreement shall not stand discharged by death of a party thereto nor shall the authority of an Arbitrator be revoked by the death of a party by whom he was appointed. Section 17 of the Arbitration Act 1940, lays down, inter alia, that where the Award is not remitted to the Arbitrator or Award is not set aside, the Court shall pronounce a judgment according to Award and upon judgment, so pronounced, a decree shall follow. Thus, when the provisions contained in Section 17 is read along with Sections 2(c) and 41 of the Arbitration Act 1940, there remains no room for doubt that the Arbitration Act, 1940, makes the provisions of the Code applicable to the proceedings before the Court under the Arbitration Act, 1940. What is the extent of such application is, however, another matter ; but the proceedings under Arbitration Act are, undoubtedly, proceedings of civil nature covered by Section 141 of the Code. This conclusion is reinforced from the observations made in M/s. Jain & Associates (supra), which run thus, "..........in Arbitration proceedings, even if the suit is not filed, procedure provided in CPC is applicable". In fact, in M/s. Jain & Associates (supra), the Apex Court has laid down to the effect that by virtue of Section 41 of the Arbitration Act coupled with the provisions of Section 141 of the Code, the Arbitration proceedings are miscellaneous proceedings under Section 141 and the provisions of the Code, shall, as far as it can be made applicable, be applied to such proceedings.
19. It clearly emerges from what has been discussed above that according to Section 6, Arbitration agreement shall not stand discharged by the death of any of the parties thereto, but shall be enforceable by or against the legal representatives of the deceased. What is, now, of great significance to note is that the Arbitration Act, 1940, does not lay down the procedure for substitution of the legal representatives of a party to the Award. Merely because the Arbitration Act, 1940, does not lay down the procedure for substitution of legal representatives of a deceased party to the Award, it will be highly unjust to allow an Award to die and become inexecutable by simply showing that there is no provision in the Arbitration Act 1940, laying down the procedure for substitution. Such a course will be denial of justice. Viewed from this angle, when an application for substitution is made in a proceeding, which is pending for setting aside an Award, the logical conclusion will be that the recourse be taken to Order XXII to make appropriate order for substitution. Moreover, an application for substitution made in a proceeding pending for setting aside an Award is procedurally not very different from an application made for substitution in a suit or appeal. Hence, in the light of the words occurring in Section 141 of the Code, namely, "as far as it can be made applicable", there can be, in the light of what has been laid down in Babubhai Muljibhai Patel (supra), no escape from the conclusion that even in the present case, the application for substitution is really a miscellaneous application within the meaning of Section 141 of the Code and the procedure for substitution embodied in Order XXII shall be applicable to all such miscellaneous applications. However, the question, which still remains unanswered is as to how far or to what extent the provisions of Order XXII can be applied to such miscellaneous applications.
20. It is also exceedingly important to bear in mind that Order XXII makes it clear, in no uncertain words, that if the application for substitution is not made within the time limit prescribed by law for making such an application for substitution, the suit or the appeal, as the case may be, shall abate. What is, however, of paramount importance to note is that Order XXII does not prescribe as to what shall be the period of limitation in the case of a suit or appeal. It is, in fact, not in dispute that Order XXII, which embodies the procedure for substitution of the legal representatives of a deceased party to a suit and provides for consequences of not making of an application for substitution within a prescribed time frame, does not however, prescribe any period of limitation.
21. Since the Code does not prescribe any period of limitation for miscellaneous applications, the Limitation Act has to be examined to find out as to which Article will govern the law of limitation so far as miscellaneous applications are concerned. If none of the Articles applies to a miscellaneous application, then, the conclusion will be that there is no period of limitation for making an application in miscellaneous proceedings.
22. The question, now, is as to which Article of the Limitation Act prescribes the period of limitation for making an application for substitution in a suit or appeal ? My quest for an answer to this momentous question brings me to Article 120 of the Limitation Act, which reads as under :
_____________________________________________________________________ Description of Suits Period of limitation Time from which period begin to run _____________________________________________________________________ Article 120. Under the Ninety days The date of death Civil P.C., 1908 to have the plaintiff, appe-
the legal representative lant, defendant or of a deceased plaintiff or respondent, as the appellant or of a deceased case may be. defendant or respondent made a party
_____________________________________________________________________
23. A careful reading of Article 120 shows that in a suit, when, the plaintiff or the defendant dies, the application to bring on record the legal representatives of the deceased plaintiff or defendant has to be made within 90 days from the date of death of the deceased plaintiff or defendant, as the case may be. A bare reading of Article 120 further shows that this Article also governs applications made, in an appeal for substitution, when an appellant or a respondent dies. The question, therefore, which, now, arises for consideration is as to whether, by an analogy or otherwise, the provisions of Article 120 can be extended to a civil miscellaneous proceedings too ?
24. A close reading of Article 120 clearly shows, as already indicated hereinabove, that this Article speaks of plaintiff-appellant or defendant-respondent. The use of the words "plaintiff-appellant" or "defendant-respondent" clearly imply that Article 120 refers to suits and appeals. Since Article 120 does not speak of 'applicant' or 'opposite party', this, in turn, clearly indicates that Article 120 does not include miscellaneous applications or miscellaneous proceedings. One can, therefore, have no hesitation in concluding, and I do conclude, that Article 120 does not apply and cannot be applied to miscellaneous applications or proceedings.
25. In other words, since Article 120 speaks of "plaintiff or appellant", on the one hand, and "defendant or respondent", on the other, it logically follows that by analogy, provisions contained in Article 120 of the Limitation Act cannot be extended to 'applicant' or 'opposite party' in a miscellaneous proceeding. Hence, the question of invoking of the provisions of Article 120 of the Limitation Act in a civil miscellaneous proceeding does not arise at all. This does not mean, I must hasten to add, that the provisions of the Limitation Act will not apply at all to a miscellaneous proceedings. A careful reading of the Limitation Act shows that Article 137, contained in Part II, is the residuary Article, which reads as follows :
____________________________________________________________________ Description of Suits Period of limitation Time from which period begin to run _____________________________________________________________________
137. Any other appli- Three years When the right to cation for which no apply accrues.
period of limiation is provided else-
where in this division.
_____________________________________________________________________
26. A careful reading of the above shows that Part II of the Limitation Act deals with "other applications" and Article 137 contained therein lays down that application for which no period of limitation has been provided elsewhere, the period of limitation shall be three years from the date, when the right to apply accrues.
27. It has been the consistent view of the Courts that in a proceeding governed by the Code, if the exercise of any right to institute a proceeding is not covered by any specific Article of the Limitation Act, then, the same shall be governed by residuary Article, namely, Article 137.
28. What is, now, of great importance to note is that there is no specific Article in the Limitation Act, which prescribes the period of limitation for making of miscellaneous applications. Hence, such an application will obviously fall within the ambit of Article 137 if the application is governed by the Code. Since an application for substitution is a civil proceeding, such as, the one at hand, that we have at hand, the same is governed by the provisions of the Code. It is, therefore, logical to hold, and I do hold, that it is Article 137, which shall be applied to such a proceeding.
29. What follows from the above discussion is that while for a suit or an appeal, the limitation period for making an application for substitution is three months from the date, when the right to make such application accrues, the period of limitation for making an application for substitution in a civil miscellaneous proceeding shall be, in terms of Article 137, three years from the date, when the right to apply for substitution accrues.
30. Contrary to the conclusion reached above and what I have observed, Mr. Lall contends that to an application for substitution in a civil miscellaneous proceeding, provisions of the Limitation Act do not apply at all and reliance for this purpose is placed by Mr. Lall on Smt. Sayeeda Begam (supra). This contention is, in my firm view, not correct.
31. It is, no doubt, true that in Smt. Sayeeda Begam (supra), a Division, Bench of Madhya Pradesh High Court has laid down that while the procedure contained for substitution under Order XXII may be made applicable to a miscellaneous proceeding, the limitation to make an application for substitution within fixed period does not apply to such miscellaneous proceedings.
32. With due respect to the Madhya Pradesh High Court, I have not been able to persuade myself to hold that the provisions of the Limitation Act, 1963, will not apply at all to a civil miscellenous proceedings to which Order XXII applies. However, while in the case of suit or appeal, the period of limitation for making an application for substitution is 90 days as per Article 120, the period of limitation for other civil miscellaneous proceedings, which are covered by Section 141 of the Code, shall be three years in terms of Article 137.
33. While coming to the conclusion, as indicated hereinabove, Madhya Pradesh High Court has taken into account three decisions, namely, Mohd. Sadaat Ali Khan v. Administrator Corporation of City of Lahore, AIR 1949 Lahore 186 (FB), Babulal v. Mannilal, AIR 1953 Rajasthan 169 (FB) and Chandradeo Pandey v. Sukhdeo Rai, AIR 1972 Allahabad 504 (FB), wherein according to the Division Bench of Madhya Pradesh High Court, it has been held that the provisions of Order XXII do not apply to revision and relying upon such proposition, the conclusion in Smt. Sayeeda Begam (supra), appears to have been reached that since Article 120 does not apply to a revision, it does not apply to an application for restoration either. With due deference to Madhya Pradesh High Court, I must mention that a revision does not, undoubtedly, stand on the same footing as an appeal inasmuch as an appeal is nothing, but an extension of suit. The provisions of Order XXII have been made applicable to suits as well as appeals and there can be no doubt about this. Similarly, a proceeding envisaged under Section 141 is an original proceedings. Since revision is not an original proceeding, the application of Order XXII cannot be extended to revision ; but that does not mean, I must hasten to add and reiterate, the provisions of Order XXII will not apply at all to civil miscellaneous proceedings as conceived and envisaged by Section 141.
34. It is, no doubt, true that in Mohd. Sadaat Ali Khan (supra), Babulal (supra), the Full Bench of Lahore and Rajasthan High Court respectively have held that Order XXII will not apply to civil revision.
35. However, in Chandradeo Pandey (supra), relied upon in Smt. Sayeeda Begam (supra), the Full Bench of Allahabad High Court has not stated anywhere that the provisions of Limitation Act will not apply to miscellaneous applications. Since civil revision is not a miscellaneous application under Section 1/1 of the Code, it may not be treated to be covered by Article 120 and/or the residuary Article, namely, Article 137. But a civil miscellaneous application is, after all, an application under the Code and to an application to which the provisions of Code apply, Article 137 must be held to be applicable.
36. Thus, under the Arbitration Act of 1940, the Court in which an Arbitration proceeding takes place is a Court of civil jurisdiction and in the proceedings before such a Court, provisions of the Code of Civil Procedure shall apply. None of the authorities relied upon in Smt. Sayeeda Begam (supra), has laid down that the provisions of the Limitation Act will not apply to a civil miscellaneous proceeding. Far from this, in Chandradeo Pandey (supra), the Full Bench of Allahabad High Court has held that consensus of opinion of the various High Courts has been that Article 181 of the old Limitation Act applies to applications under the Code and that Article 137 of the present Limitation Act should also be given similar meaning. This Full Bench has also expressed the view that Article 137, being a residuary Article, must be construed ejusdem generis with other Articles dealing with the applications and that since most of the other Articles deal with applications under the Code, Article 137 should also be resorted to in respect of other applications made under the Code. Considered from this angle, the Full Bench held that the application for substitution of heirs in a revision is really an application under Section 151 of the Code and the period of limitation shall be three years under Article 137of the new Limitation Act. For coming to such a conclusion, the Full Bench of the Allahabad High Court relied on Sha Mulchand & Co. v. Jawahar Mills Ltd., AIR 1953 SC 98, wherein the Apex Court, while dealing with Article 181 of the Limitation Act of 1908, observed thus, "That Article has, in a long series of decisions of most, if not all, of the High Courts, been held to govern only application under the Code of Civil Procedure. It may be that there may be divergence of opinion within the same High Court, but the preponderating view undoubtedly is that Article applies only to applications under the Code".
37. Referring to, and relying upon, the decision in Union of India and Ors. v. Manager, Jain and Associates (supra), Mr. Sharma has pointed out that in this decision, the Apex Court, has held that by virtue of Section 41 of the Arbitration Act, the provisions of the Code are applicable to Arbitration proceedings and since Section 141 of the Code contemplates civil miscellaneous proceedings, other than suits, such as, Arbitration proceedings, it follows that though in such a proceeding, there may not be practice of describing parties as plaintiff or defendant, the fact remains that the party, who seeks decree in terms of the Award, can be treated as plaintiff and the party, who objects to the Award, can be regarded as defendant. It is contended by Mr. Sharma that while interpreting, in the context of an Arbitration proceeding, the words "plaintiff-defendant, appellant and respondent". Occurring in Article 120 of the Limitation Act, which governs substitution of legal representatives of the deceased plaintiff or defendant in a suit, the word "plaintiff" should mean the person, who seeks decree in terms of the Award, and the word "defendant" should be treated to mean the person, who objects to the Award. Applying this principle, contends Mr. Sharma, it can be safely held that by virtue of Article 120 of the Limitation Act, the application for substitution in an Arbitration proceeding must be made within a period of 90 days from the date of the death of the party concerned and if the application is not made within the period of limitation so prescribed, the proceeding shall abate so far as the deceased party, in question, is concerned. Let me, now, test the merit of this submission.
38. While considering the decision of the Apex Court in M/s. Jain & Associates (supra), what is of paramount importance to note is that this is not a decision in which the Apex Court has decided as to what would be the period of limitation for substitution of a deceased party in an Arbitration proceeding. It is trite that a decision is an authority for what it has actually decided and not what can be deduced from it. Though even obiter dictum of the Supreme Court is binding on all the Courts, the fact remains that to be a binding authority on any specific issue, the issue must be, at least, raised and answered indirectly or by implication. Reference may be made to Haryana Financial Corporation v. Jagadamba Oil Mills reported in (2002) 3 SCC 496, wherein the Apex Court has observed, "Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are not to be read as Euclid's theorems nor as provisions of the statute. These observations must be read in the context in which they appear". Reference may also be made to Padma Sundara Rao v. State of Tamil Nadu reported in (2002) 3 SCC 533, wherein the Court has laid down, "Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed". The Apex Court has explained the doctrine of precedent in Krishena Kumar v. Union of India reported in (1990) 4 SCC 207, thus, "The doctrine of judicial precedent, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it". Clarifying the doctrine of stare decisis, the Apex Court in Commissioner of Income Tax v. Sun Engineering Works (P) Ltd. reported in AIR 1993 SC 43, held, "It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete 'Law' declared by this Court". The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the Courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings. In Madhav Rao Jiwaji Rao Scindia Bahadur v. Union of India, (1971) 3 SCR 9=AIR 1971 SC 530 at p. 578, this Court cautioned :
"It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment."
39. Keeping in view the above fundamental principles of interpretation of the doctrine of judicial precedents, when I revert to the case of M/s. Jain & Associates (supra), I notice that no question was raised in M/s. Jain and Associates (supra), for determination by the Court as to what the period of limitation for substitution of a deceased party to an Arbitration proceeding shall be. Consequently, no specific answer to this question has been given in this decision by the Apex Court. This decision cannot, therefore, be treated as an authority laying down a proposition that an application for substitution of a deceased party in an Arbitration proceeding is governed by Article 120 of the Limitation Act and/or that the period for limitation for such substitution is 90 days.
40. Despite the fact that the decision in M/s. Jain and Associates (supra), merely lays down the law that the provisions of the Code are applicable to an Arbitration proceeding, this decision can, indeed, guide this Court in correctly answering the question, which this revision petition has raised, namely, as to whether there is any period of limitation for making an application for substitution of a deceased party in an Arbitration proceeding and if so, what is the period of limitation for such substitution ?
41. While answering the above question, it is imperative to note that the Code of Civil Procedure is a procedural law and the Code envisages the procedure for giving reliefs in terms of the substantive rights of the parties. The procedural law cannot override the substantive rights of the parties ; it can only help the parties in obtaining reliefs in terms of their substantive rights.
42. What is also equally important to note and bear in mind, if I may so reiterate, is that Order XXII does not prescribe the period of limitation. What it lays down is that if there is a period of limitation prescribed by any law for , substitution and if the application for substitution is not made within such a period of limitation, then, the suit or appeal, as the case may be, shall abate. Hence, while considering as to what the period of limitation in a given case will be, one has to also bear in mind that the Limitation Act embodies certain rights and liberties of the parties and the rights and liberties, so given by the Limitation Act, cannot be curtailed or abridged by taking resort to the provisions of the Code.
43. Order XXII, as already indicated hereinabove, involves, broadly speaking, two aspects - one is procedural i.e. the procedure for substituting the legal representatives of a deceased party in a suit or appeal and other aspect is penal, i.e., as to when the Court shall consider the suit or appeal as having abated. With regard to the procedural aspect of Order XXII, I have already held hereinabove that the procedure prescribed under Order XXII, will apply for substitution so far as Arbitration proceedings are concerned. Hence, while interpreting the word 'plaintiff' or 'defendant', appearing in Order XXII, in the context of an Arbitration proceeding, the plaintiff will mean, as held in M/s. Jain and Associates (supra), the party, who seeks decree in terms of the Award, in question, and the party, who objects to such an Award, shall be treated as the defendant. While so construing the words 'plaintiff' and 'defendant' occurring in Order XXII, the same logic cannot be applied to interpret the Limitation Act, for the Limitation Act embodies certain liberties for the parties concerned and the same cannot be curtailed and/or abridged and/or denied by taking resort to the provisions of the Code.
44. The Limitation Act has, broadly speaking, three aspects. Besides procedural aspect, the Limitation Act gives the parties the options or liberty to exercise their rights within the prescribed period. This Act is penal too inasmuch as it clarifies that if a right is not exercised within a prescribed period, the right will become non-exercisable subject to the powers of the Court, as envisaged under Section 5, to condone the delay. The Limitation Act, thus, grants certain liberties for exercise of substantive rights of the parties and imposes penalty for non-exercise of such rights within the prescribed period. In short, the Limitation Act extinguishes rights and creates rights. Reference may be made to Collector of Central Excise, Jaipur v. Raghuvar (India) Ltd. reported in (2000) 5 SCC 299, wherein the Apex Court observed and held thus, "Any law or stipulation prescribing a period of limitation to do or not to do a thing after the expiry of period so stipulated has the consequence of creation and destruction of rights...... therefor".
45. It is, now, of immense importance to note that in M/s. Jain and Associates (supra), the Apex Court has, nowhere, held that an Arbitration proceeding is a suit. What the Court has held is that by virtue of Section 141 of the Code of Civil Procedure, an Arbitration proceeding stands on the footing of a suit and whereas the party seeking decree in terms of the Award stands on the footing of a plaintiff, the party objecting to the Award stands on the same footing as a defendant is. Far from the contention of Mr. Sharma that Arbitration proceeding is also to be treated as a suit, I have already indicated hereinabove that the Apex Court in Nawab Usmanali Khan (supra), has held that an Arbitration proceeding is not a suit. Keeping in view this fundamental aspect of the Arbitration proceedings, let me, once again, turn to the Limitation Act.
46. On reverting to Article 120, it is not difficult to note that this is an Article, which relates to substitution of the deceased party in suits and appeals. An appeal is also essentially a suit inasmuch as an appeal is nothing, but extension of a suit. Thus, Article 120 relates to substitution of the deceased party in a suit or appeal and definitely not to miscellaneous proceedings and that is why, this Article speaks of plaintiff-appellant, defendant-respondent.
47. Since Article 120, as indicated hereinabove, relates to suits and appeals, it cannot be stretched to miscellaneous proceedings by taking resort to Section 141 of the Code. Since Article 120, as held hereinabove, relates to suits and appeals, it further logically follows that as there is no specific Article in the Limitation Act prescribing the period of Limitation for substitution of the legal representative of a deceased party in a miscellaneous proceeding, it is Article 137, which will apply to such miscellaneous proceedings including Arbitration proceedings.
48. At any rate, there is room for contending and there is a scope for interpretation that it is not Article 120, but it is Article 137, which will apply to miscellaneous proceedings, such as, proceedings under the Arbitration Act. Thus, when two views are possible on the interpretation of Article 120 vis-a-vis Article 137, the rules of interpretation of statutes requires the Courts to interpret the statute, if it is penal, strictly and when it relates to rights of a party, then, the interpretation shall be liberal. This revision involves both these aspects. Since the Limitation Act is penal in nature, its interpretation has to be very strict and when such strict interpretation is attributed to Article 120, it becomes transparent that this Article will not cover Arbitration proceedings, but that such proceedings will be covered by Article 137. At the same time, since the Limitation Act also gives rights to the parties to obtain reliefs within a specified period, the right so vested in a party has to be liberally construed ; when so construed, it follows that since there is a possibility of construing Article 137 as the Article relating to substitution in miscellaneous proceedings, such as, Arbitration proceeding, it will be in the fitness of the things to hold that it is Article 137, which will apply to such cases. Even if, for a moment, it is assumed that both these views are possible, then too, since it relates to substantive rights of a party, it must be liberally construed and since it relates to, at the same time, penal aspect, the penal provisions should be so construed that it does not adversely affect the substantive rights. Either way, therefore, it is Article 137, which must be held to govern the cases of substitution of deceased parties in miscellaneous proceedings including proceedings under the Arbitration Act.
49. What crystallizes from the above discussion is that the Court, which appoints Arbitrator and/or the Court in which an Award is filed by the Arbitrator, is a Court of civil jurisdiction and the proceeding conducted in such a Court is a civil miscellaneous proceedings. To such a proceeding, the provisions of the Code shall, as far as it can be made applicable, be followed. Since Arbitration Act, 1940, makes it clear that with the death of the party to an Award, the Award shall not become infructuous, it is clear that when a party to an Award dies, his legal representatives are to be brought on record. Since Arbitration Act, 1940, does not prescribe the procedure for bringing on record such legal representatives, the provisions contained in Order XXII are to be resorted to and applied. Since Order XXII speaks of suits and appeals, the limitation for bringing on record the legal representatives of a deceased party in a suit or appeal, in terms of Article 120 of the Limitation Act, is 90 days from the date of death of the party concerned ; but in the case of other civil miscellaneous applications, the period of limitation shall be, in terms of Article 137, three years from the date of death of the party concerned.
50. In the case at hand, the application for substitution made in the learned Court below was a miscellaneous application. While the procedure for substitution contained in Order XXII are to be applied to such an application, the period of limitation for making such an application must be treated to be three years from the date of death of the party concerned.
51. In the case at hand, since KL Gupta died on 02.04.2002 and the application for substitution was made in the instant case, admittedly, in less than 1 1/2 years from the date of death of the said deceased, the application could not have been rejected on the ground that the very application for setting aside the Award stands abated. Considered thus, the impugned order is nothing, but refusal to exercise the jurisdiction, which stood vested in the learned Court below, and such an order will, if allowed to stand good on record, cause serious miscarriage of justice.
52. In the result and for the reasons discussed above, this revision succeeds and the impugned order is set aside. The learned Court below is hereby directed to pass appropriate orders in the matter in accordance with law and keeping in view the observations made hereinabove.
53. No order as to costs.
54. Let the LCR be sent back.