Allahabad High Court
Smt. Prem Lata Tewari & 2 Ors. vs Sushil Kumar & Anr. on 21 April, 2017
Author: Sudhir Agarwal
Bench: Sudhir Agarwal
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH AFR Reserved on- 20.03.2017 Delivered on- 21.04.2017 Court No. - 3 Case :- FIRST APPEAL No. - 82 of 2005 Appellant :- Smt. Prem Lata Tewari & 2 Ors. Respondent :- Sushil Kumar & Anr. Counsel for Appellant :- Brijesh Kr. Saxena Counsel for Respondent :- P.C. Agrawal,A.K.Rajvanshi,Hari Shanker Jain,S.H.S.Abidi,Sameer Kumar Hon'ble Sudhir Agarwal,J.
Hon'ble Ravindra Nath Mishra-II,J.
1. Heard Shri Brijesh Kumar Saxena, learned counsel for appellants and Shri P.C.Agarwal, learned counsel for respondents.
2. This is an appeal under Section 37 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as the, Act 1996) arising from the judgment and order dated 24.08.2005, passed by District Judge, Lucknow in Arbitration (Misc.) Case No. 225/2005 whereby appellant's petition under Section 34 of Act 1996, praying for setting aside Arbitral award dated 29.03.2000, has been dismissed on the ground that said petition/objection was filed on 18.08.2005, that is beyond the period of limitation and beyond even maximum extendable period of limitation and, therefore, barred by limitation.
3. Assailing aforesaid order substantial ground raised by appellants is that copy of award was not supplied to appellants or their successor Shri Shyam Kishore Tiwari though it was mandatory in view of Section 31 (5) of Act, 1996. Unless a copy is supplied by arbitrator, it could not have been said that period of limitation commenced and, therefore, there was no question of dismissing appellant's petition filed under Section 34, as barred by limitation.
4. Brief facts are that an agreement said to have taken place between respondent-1, Sushil Kumar, (now deceased and substituted by his legal heir) and Shri Shyam Kishore Tiwari (now deceased and matter is being pursued by his legal representatives who are appellants) on 16.03.2000, for resolution of dispute with regard to certain amount by an Arbitrator. Shri D.C. Singh, Advocate, respondent-2 was appointed Arbitrator. With the consent of both the parties namely Shri Shyam Kishore Tiwari and Shri Sushil Kumar, Arbitrator made following award/settlement:-
" lqygukek] ;g fd n~forh; i{k us izFke i{k ls fon~;ky; fuekZ.k o tehu B/1-315 lsDVj-&G tkudhiqje fudV dqlhZ jksM y[kum dh dqy dher izFke i{k ls : 12]92]612 fy;k Fkk] ijarq mDr tehu fookfnr gksus ds dkj.k nksuks i{kksa ds chp enHksn mRiUu gks x;kA ;g fd izFke i{k o n~forh; i{k dks Hkyh Hkakfr lquus ds mijkUr gkse iap n~okjk ;g fu.kZ; fy;k x;k fd mDr Hkwfe B/1-315 lsDVj-&G tkudhiqje fookfnr gSA vkSj bl ij izFke i{k ls izkIr : 12]92]612 n~forh; i{k dks psd n~okjk ianzg fnuks ds Hkhrj izFke i{k dks Hkqxrku djsxkA ;fn n~forh; i{k Hkqxrku djus esa ghyk gokyh djsxk rks mls Hkqxrku jk'kh ij ns; frfFk rd cktkj Hkko ls ns;jk'kh ij C;kt Hkh vnk djuk iMsxk ;g iapkV izFke o n~forh; i{k ds okfjlkuksa ij leku :i ls ykxw gksxk rFkk mu in Hkh ckf/kr gksxkA ;g fd i{kdkjksa dks ;g vf/kdkj gksxk fd ;fn dksbZ i{k mDr Qslys dk fu"iknu l{ke U;k;ky; n~okjk djk ldrk gSA mDr QSlyk vkt fnukad 29-03-2000 dks i{kksa ds le{k mn~?kksf"kr o gLrk{kj fd;k x;k'' S.D DC Singh " Compromise, That the second party had received total amount of Rs. 12,92,612/- from first party for the construction of the school and land B/1-315, Sector-G Jankipuram near Kursi Road, Lucknow, but because of said land being in dispute, differences arose between both the parties. That after carefully hearing first and second party, the decision was taken by the Home Arbitrator that the said land B/1-315, Sector-G, Jankipuram is disputed. And for this, the second party shall pay Rs. 12,92,612/- by a cheque, received from the first party, to the first party within 15 days. If the second party tries to linger on the payment then he shall also have to pay interest on the payable amount at the market rate. This award shall be equally applicable on the heirs of the first and the second party and shall also be binding on them. That the parties shall have thr right that if any party doesn`t comply with the said judgment then the other party can get the aforesaid Arbitral Award executed by the competent Court. Said decision has been signed and delivered today on 29.03.2009 before the parties".
(English Translation by Court)
5. A copy of agreement dated 16.03.2000 is on record which shows that a sum of Rs. 12,92,612/- was paid by Shri Sushil Kumar to Shyam Kishore Tiwari in respect of certain land, situate at B-1/315, Sector-G, Jankipuram near Kurshi Road, Lucknow, for construction of school thereupon. Subsequently, Shri Sushil Kumar came to know that land was disputed and hence he asked for refund of money.
6. Both the parties decided to have a decision by arbitration and for that purpose, Shri D.C. Singh, Advocate was appointed as Arbitrator. This document is witnessed by Sudeep Narayan Mehrotra and Firoz Parvez.
7. Arbitral award was pronounced and signed by Arbitrator in presence of both the parties. In compliance and satisfaction of terms of award Shri Shyam Kishore Tiwari handed over to Sushil Kumar two cheques as detailed below:-
(i) Cheque No. 414572 dated 29.03.2000 for Rs. 10,00,000/- drawn on State Bank of India, Ashok Marg, Lucknow.
(ii) Cheque No. 414573 dated 30.03.2000 for Rs. 2,92,612/- drawn on State Bank of India, Ashok Marg, Lucknow.
8. Both the cheques were presented for collection with the bank but dishonored due to "want of arrangement" that is "insufficient funds". Shri Sushil Kumar through counsel served notice upon Shri Shyam Kishore Tiwari demanding amount of cheques which were dishonored.
9. Shri Shyam Kishor Tiwari, however, died on 02.02.2000. Shri Sushil Kumar then filed application for enforcement of award under Section 36 of Act, 1996 in the Court of District Judge, Lucknow on 23.10.2000 which was registered as Execution case no. 17/2000.
10. Notice of Execution case was served upon appellants on 19.11.2000. They also appeared before Execution Court on 24.11.2000. Appellants filed objection under Section 47 C.P.C on 19.05.2001. The said objections were rejected by District Judge vide order dated 08.08.2005. Thereafter, appellants moved petition under Section 34 on 16.08.2005 praying for setting aside arbitral award dated 29.03.2000 which has been dismissed by District Judge, Lucknow vide order dated 24.08.2005 as barred by limitation.
11. There is one more set of litigation between the parties. Appellants filed regular suit 348/2001 in the Court of Civil Judge, Malihabad (Senior Devision), Lucknow impleading Sushil Kumar as a sole defendant. Appellants sought a decree declaring arbitral award dated 29.03.2000 made on the basis of forged agreement dated 16.03.2000, as null and void and not enforceable through process of law. It is stated therein that Shyam Kishore Tiwari never received any amount from Sushil Kumar nor entered into agreement for arbitration nor any arbitration proceedings actually took place. The entire story has been cooked up by Sushil Kumar and agreement and arbitral award have been prepared making forged signature of Shyam Kumar Tiwari. However, nothing has been said with regard to two cheques of Rs. 10,00,000/- and Rs. 2,92,612/- which were dishonored by State Bank of India, Ashok Marg, Lucknow as to how those cheques got to be possessed by Sushil Kumar and that bank did not find cheques, forged or ingenuine or not signed by account holder but cheques were dishonored for want of funds.
12. An objection was filed by respondent-1, Shushil Kumar in the aforesaid suit that there is no cause of action and plaint is liable to be rejected under Order 7 Rule 11 C.P.C. Shri Anumati Ram Yadav, Additional Civil Judge, Senior Division, Court No.22 vide judgment dated 17.02.2004 rejected plaint. The said order has become final as it was not challenged in appeal.
13. It is in this backdrop, we have to examine submissions advanced by learned counsel for appellants that petition under Section 34 was not barred by limitation.
14. Section 31 of Act, 1996 provides for form and contents of arbitral award and reads as under:-
" 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 ommitted 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 the award shall be deemed to have been made at the 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 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 per centum per annum from the date of the award to the date of payment.
(8) Unless otherise 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 witness,
(ii) legal fees and expenses,
(iii) any administration fees of the institutions supervising an arbitration,
(iv) any other expenses incurred in connection with the arbitral proceedings and the arbitral award.
15. Learned counsel for appellant, in support of submission that delivery of copy of award to parties is a matter of substance and not mere formality, relied on the judgment in State of Maharastra and Ors Vs Ark Builders Pvt, Ltd (2011) 4SCC 616. Court therein observed that period of limitation under Section 34 (3) of Act, 1996 would start running only from the date a signed copy of award is delivered/ received by party for making application for setting it aside under Section 34 (1) of Act, 1996. With regard to importance of delivery/receipt of award by parties, Court relied on an earlier decision in Union of India Vs Tecco Trichy Engineers and Contractors (2005) 4SCC 239 wherein it has held as under:-
" 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 conferrng 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 the 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".
(Emphasis added)
16. The case set up by respondents throughout has been that award was pronounced in presence of the parties and copy thereof was given to both of them on 29.03.2000 itself by Arbitrator.
17. The question, therefore, which would immediately arise, whether there is any corroborative evidence or material to support the stand of respondent-1 that award was pronounced and copy thereof was given to the parties on 29.03.2000 by Arbitrator.
18. In this regard, we find two cheques issued by Shyam Kishor Tiwari for Rs. 10,00,000/- and Rs. 2,92,612/- which was the exact amount awarded by Arbitrator, vide arbitral award dated 29.03.2000. The first cheque of Rs. 10,00,000/- is dated 29.03.2000 and second cheque of Rs. 2,92,612/- is dated 30.03.2000 which shows that the cheques were issued and handed over to the respondent no.1 on the same date when the award was pronounced by Arbitrator.
19. Though, learned counsel for appellant sought to argue that these cheques were forged and fictitious but when enquired, could not explain, how cheques of the account of Shri Shyam Kishor Tiwari came to be possessed by respondent-1 and further that bank did not reject those cheques on the ground that signature were forged or cheques are forged but same were dishonored on the ground of "want of funds".
20. With regard to the aforesaid two cheques, appellants were aware when filed Regular Suit no. 348/2001 inasmuch as it has been stated in para-7 of the plaint dated 09.10.2001 that respondent Sushil Kumar filed complaint under Section 420, 406, 504, 506, 120 (B) I.P.C read with Section 138 of Negotiable Instrument Act on 29.06.2000 but since Shyam Kishor Tiwari had already died on 02.05.2000, said complaint did not proceed.
21. In the entire plaint which was filed on 09.10.2001, though appellants have mentioned that arbitration agreement was not signed by Shyam Kishor Tiwari and he had not received any amount but there is no averment with regard to two cheques received by respondent-1 from Shyam Kishor Tiwari which were dishonored and in respect whereto, aforesaid complaint dated 29.06.2000, mentioned in para-7 of the plaint was filed. It is thus very clear that as long back as on 09.10.2001, appellants were well aware that two cheques were issued by Shyam Kishore Tiwari to Sushil Kumar which were dishonored and in respect thereto Sushil Kumar attempted to file a criminal complaint but due to unfortunate death of Shyam Kishor Tiwari, could not proceed with the matter. If those cheques were forged and fictitious and was not issued to Shri Shyam Kishore Tiwari, it is beyond our comprehension that nothing would have been said by appellant in suit filed by them. In the aforesaid suit they have taken care of mentioning factum of criminal complaint filed by respondent-1 under various provisions of I.P.C read with Section 138 of Negotiable Instrument Act which obviously relates to an issue of dishonoring of cheques for "want of fund", but nothing was said about cheques.
22. Learned counsel for appellants argued that petition has been rejected without issuing notice to respondent, therefore, all these facts were not before Court below, hence, rejection of petition as barred by time is illegal.
23. We find from record that, the Court below has noted from the averments contained in the petition filed under Section 34 that a reference was made about execution case no.17/2000, filed by Sushil Kumar against appellants but other details were not given and on account of this ambiguity, he drew an inference that award was pronounced in presence of parties.
24. Even otherwise limitation is an issue which costs an obligation upon Court not to entertain a matter , if it is barred by limitation. When facts have come before this Court that arbitral award was received by parties on the date when it was pronounced and in fact it was given effect to by Shyam Kishor Tiwari and two cheques of requisite amount were handed over to respondent-1, there remains nothing to be done further and for the purpose of limitation, it will commence from that date itself. Apparently, petition is barred by limitation having been filed in 2005, we find no error in the order of District Judge, dismissing petition as barred by limitation .
25. Appeal is accordingly, dismissed with cost throughout.
Order Date :- 21.04.2017 Pachhere & Arvind/-