Andhra HC (Pre-Telangana)
Munakala Rajanna vs Food Corporation Of India And Anr. on 10 September, 1996
Equivalent citations: 1997(3)ALT356, 1997(2)ARBLR645(AP)
JUDGMENT Krishna Saran Shrivastav, J.
1. This Civil Revision Petition is directed against the order passed by the Subordinate Judge, Bhimavaram in O.P. No. 23 of 1983 on his file whereby the learned Judge rejected the objection of the petitioner. The award has been made as a rule of the court and a decree has been passed accordingly.
2. The facts of the case in brief are that the petitioner was appointed as a contractor for handling, loading, unloading and transporting food-grains, fertizers, etc., by the 1st respondent through a written agreement. The 1st respondent appointed the 2nd respondent as an arbitrator to resolve the dispute between the petitioner and the 1st respondent on the ground that the petitioner did not fulfil his part of the contract and, therefore, the 1st respondent had been put to a loss of Rs. 1,47,383.20 ps. The petitioner resisted the claim of 1st respondent before the arbitrator. After investigating into the rival claims, the arbitrator on 18-6-1983 passed the award and noticed the 1st respondent who received it on 5-7-1983. The 1st respondent who 4-8-1983 filed an application for filing the award into the court as also for passing the decree in terms of the award.
3. The petitioner filed an objection resisting the application of the 1st respondent inter alia on the ground that the 1st petitioner (sic respondent) through its offices was present at the time of passing off the award on 18-6-1983 and, therefore, it has knowledge about the award. Because the application has been filed on 4-8-1983 much beyond the period of 30 days as provided under Article 119 of the Limitation Act, it is barred by limitation. As per Clause 29 of the impugned agreement, the Managing Director of the 1st respondent was bound to appoint another person as an arbitrator because this term says that "on the transfer of the original arbitrator, a new arbitrator shall be appointed, but, in contravention of the clause, even after the transfer of the person who was originally appointed as an arbitrator, that is to say, the 2nd respondent, the Managing Director of the 1st respondent did not appoint a new arbitrator, and, therefore, the 2nd respondent had no jurisdiction to pass the impugned award after his transfer and the award has not been filed as per Rule 24 of the Civil Rules of Practice and Circular Orders and, therefore, the court has no jurisdiction to look into the award."
4. The trial court rejected all the three aforesaid contentions and passed the decree in terms of the award.
5. Feeling aggrieved by the impugned judgment and decree, the petitioner has come up in this revision.
6. Relying on a decision reported in Nilkantha Sidramappa Ningashetti v. Kashinath Somanna Ningashetti , it is contended on behalf of the petitioner that on the day the award was passed, the 1st respondent was represented through its officers who had the knowledge that the award was made as a rule of the court. When the first respondent had knowledge about the award, 30 days should be counted from the date of knowledge for filing the application. Because the 1st respondent has got the knowledge about the award it should be presumed that he had notice of the award and, therefore, limitation had started from the date of know ledge, that is to say, from 18-6-1983 and the lower Court has erred in holding that limitation had started from the date of receipt of written notice dated 5-7-1983. It is further contended on behalf of the petitioner that Clause 29 of the impugned agreement says that "in the event of transfer of an arbitrator, the Managing Director shall appoint another person to act as an arbitrator." The Managing Director had not appointed another person to act as an arbitrator on transfer of the 2nd respondent, and, therefore, arbitration proceedings should have been stopped. On transfer of the 2nd respondent, he had no power to proceed with the arbitration proceedings and to pass the award. The award has been passed without jurisdiction and, therefore, no decree, in terms of the award could be passed. It is lastly urged that the 2nd respondent has sent the award through post which is not permissible under Rule 24 of the Civil Rulers of Practice and, therefore, the award cannot be looked into.
7. On the other hand, relying on a decision reported in Kumbha Mawji v. Dominion of India (now the Union of India , it is urged on behalf of the 1st respondent that an arbitrator is competent to send the award through post because Section 14(2) of the Arbitration Act provides that the arbitrator shall cause the award to be filed in the Court. It is further urged on behalf of the 1st respondent that mere knowledge of the award is not sufficient, because Section 14(1) of the Arbitration Act provides that the arbitrator shall send a written notice to the parties intimating about making of the award. The written notice was received by the 1st respondent on 5-7-1983 and, therefore, limitation for filing an application had started from that day. The application was filed within one month therefrom and therefore it is within the limitation. The petitioner had submitted to the jurisdiction of the 2nd respondent inspite of his transfer from Madras to New Delhi and, therefore, he cannot be heard to say that the arbitrator had no jurisdiction to make the impugned award.
8. In the case of Kumbha Mawji, (supra), it is held that Section 14(2) of the Arbitration Act, says that the award should be caused to be filed in the Court. Under Section 14(2) the actual filling of the award is not essential but it is sufficient if the Umpire causes the award to be filed. Sending the award by post is sufficient compliance with the provisions of Section 14(2) of the Arbitration Act, which only requires that on the direction of the Court the original award or the copy thereof should be caused by the Umpire to be filed in the Court.
9. Rule 20 of the Civil Rules of Practice and Circular Orders provides that all plaints, written statements, applications and other proceedings and documents may be presented to or filed in the Court by delivering the same by the party in person or by his recognised agent or by his Advocate or by a duly registered clerk of the Advocate, while Rule 24 provides that no document or proceeding required to be presented to or filed in the Court which is sent by post or telegram shall be received or filed in the Court. A bare perusal of the aforesaid rules shows that when the plaint, written statement, application or other proceedings, are to be presented or filed in the Court, then it should not be sent by post. But, it does not apply to the award that is to be filed under the orders of the court. The proviso to Rule 24 provides that the official assignee or an official receiver who does not intend to defend or contest any proceeding before a Court in which he is impleaded as a party, he may inform the Court accordingly by a statement in writing in the form appropriate to the proceeding and send it to the Court by post or personal messenger. On the same parity of reasoning, the arbitrator can also cause the award with the record to be filed in the Court through post particularly, because as noted above, the award was caused to be filed in the Court because the arbitrator was neither interested in defending nor contesting the genuineness of the award in the Court. So far as the arbitrator is concerned, the language of Rule 20 read with Rule 24 appears to be only directory and not mandatory. Because the duty of the arbitrator is only to file the award suo motu or in pursuance of the orders of the Court and he is not interested in defending nor contesting the genuineness of the award.
10. From the above discussion, I am of the opinion that the filing of the award by the arbitrator through post in pursuance of the order of the Court is not such an act on account of which the award cannot be looked into and, therefore, there appears to be no substance in the contentions of the learned Counsel for the petitioner that the lower Court has erred in considering the award merely because it was sent by post.
11. It is, not disputed before me that the 2nd respondent was transferred from Madras to New Delhi during the pendency of the proceedings before him. Clause 29 of the agreement provides that, inter alia in the event of transfer of the Arbitrator the Managing Director of the Food Corporation of India shall appoint any person to act as an arbitrator. It is also an admitted fact that inspite of the transfer of the 2nd respondent, no new arbitrator had been appointed. There appears to be no default clause in the agreement to the effect that in case of breach of this clause, the transferee-Arbitrator would have no jurisdiction to proceed further in the matter. The language of this clause is indicative of the fact that when the new Arbitrator would be appointed, the transferee-Arbitrator would lose power to proceed further in the matter. It is pertinent to note that the parties to the proceedings belong to Andhra Pradesh while the arbitrator posted in Madras was appointed as an arbitrator and the proceedings had taken place in Madras only. Under these circumstances, when a person from outside Andhra Pradesh was appointed to act as an arbitrator and who had conducted the proceedings out of the State, it matters little whether such person is stationed in Madras or New Delhi and under these circumstances, in the relevant clause, though the words 'shall appoint' appears, it does not make it obligatory on the Managing Director of the Food Corporation of India, to appoint a new arbitrator in every case and it also appears to be a directory clause and not a mandatory one.
12. In the case of Parasramka Commercial Company Limited v. Union of India , it is held that :
"What will be considered a sufficient notice in writing of the making and signing of the award is a question of fact. Reading the word 'notice' generally, it denotes merely an intimation to the party concerned of a particular fact. The words, "notice in writing" cannot be limited to only a letter. Notice may take several forms. It must, to be sufficient, be in writing and must intimate quite clearly that the award has been made and signed. Where a copy of the award signed by the arbitrator is sent to the party in whose favour award is made, there is sufficient notice that the award had been made and signed. A notice of the amount of the fees and charges payable in respect of arbitration and award is not an essential part of the notice for the purpose of limitation."
13. It is further contended that when a written notice clearly intimating the parties concerned that the award has been made and signed is served then certainly limitation starts from that date. Section 14(1) of the Indian Arbitration Act, says that when the arbitrators or Umpire have given their award, they shall sign it and shall give notice in writing to the parties of making and signing thereof and of the amount of fees and charges payable in respect of arbitration and award.
14. Relying on Parasramka Commercial Company Limited (supra) it is held in the case of Chhotu Khan v. Jeewan Khan (AIR 1984 SC Raj 110), that, "The signature of the parties on the award can, at best amount to a knowledge of the passing of the award, but mere knowledge does not amount to a notice in writing envisaged by Section 14(1) of the Act. The mere signing by the party on the award without a copy being delivered to him cannot amount to the giving of a notice in writing. The limitation period under Article 119 of the Limitation Act would not start running from the date of signing of the award but would run only from the date of service of the notice under Section 14(1) of the Act."
I am in complete agreement with the view expressed by the learned Judge in Chhotu Khan (supra).
15. The position of law that emerges from the law laid down by the Apex Courts is that written notice in whatever form under Section 14(1) of the Indian Arbitration Act to the parties is necessary. The starting point of limitation is the date on which the notice is served on the parties to the proceedings. The case of Nilkanth (supra) is of no help to the petitioner for the simple reason that in that case sub-section (1) of Section 14 of the Arbitration Act was not considered and it was a case under Section 14(2) of the Arbitration Act which speaks only of a notice and not a notice in writing. Under sub-section (14) (sic. (1) of Section 14) of the Arbitration Act, notice in writing is necessary.
16. For the foregoing reasons, it cannot be said that the application for filing the award into the Court is barred by limitation, because it has been fled within one month from the date of service of written notice dated 5-7-1983.
17. No other or further points were urged before me and the three points that were urged before me have been discussed above.
18. In the result, the City Revision Petition being devoid of substance is dismissed. However, in the circumstances of the case, I leave the parties to bear their own costs.
19. Revision petition dismissed.