Gujarat High Court
Anupam Port Cranes Corporation Limited vs Scan Shipping Pte. Limited on 9 June, 2022
Author: A. P. Thaker
Bench: A. P. Thaker
C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CIVIL APPLICATION NO. 4207 of 2019
In
F/SECOND APPEAL NO. 40080 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE DR. JUSTICE A. P. THAKER Sd/-
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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ANUPAM PORT CRANES CORPORATION LIMITED
Versus
SCAN SHIPPING PTE. LIMITED
================================================================
Appearance:
MR KAMLESH P VAIDANKAR(10135) for the Applicant(s) No. 1
NILU K VAIDANKAR(8382) for the Applicant(s) No. 1
for the Respondent(s) No. 1
MR HARSH N PAREKH(6951) for the Respondent(s) No. 1
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CORAM:HONOURABLE DR. JUSTICE A. P. THAKER
Date : 09/06/2022
CAV JUDGMENT
1. This is an application preferred by original plaintiff for condonation of delay of 508 days in preferring Second Appeal. The applicant is the original plaintiff and respondent is original defendant. For the purpose of brevity and convenience the parties are referred to as "the plaintiff" and "the defendant".
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2. Being aggrieved and dissatisfied with the judgment and decree passed by first appellate Court in Regular Civil Appeal No.8 of 2018 dated 16.4.2018, whereby the first appellate Court has rejected the appeal filed by the plaintiff against dismissal of his suit by learned Senior Civil Judge, Rajula, being Special Civil Suit No.67 of 2017. By the impugned order, the trial Court has allowed application of the defendant filed under Order 7, Rule 11 of the Civil Procedure Code and has rejected the plaint with a finding that in view of Section 5 of Arbitration and Conciliation Act, 1996 the suit filed by the plaintiff is barred by law. This finding of the trail Court came to be challenged by the plaintiff before District Court, Amreli, by filing Regular Civil Appeal No.8 of 2018, whereupon it was heard by 2nd Additional District Judge, Rajula, Amreli, and rejected the appeal filed by the plaintiff. The trial Court has observed that it has no jurisdiction to entertain the appeal and directed the appellant to avail the remedy as may be available under law.
2.1 It is contended by the plaintiff that suit was filed on the basis of a contract dated 25.11.2013 entered into between the parties for sea transportation of grains from Pipavav Port to Turkey. That since bank of the plaintiff insisted for bank guarantee for releasing 20% advance amount, the respondent- defendant suggested to enter into a Charter Party Agreement so that on the basis of Charter Party Agreement, 20% advance amount can be released to the respondent. It is contended that said Charter Party Agreement was never acted upon and the contract was concluded and the entire payment of the contracted amount was made to the respondent. The Page 2 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 respondent raised further claim for additional services allegedly provided by it and also demurrage charges incurred by it. The plaintiff has also made counter-claim against respondent for damages suffered by it. That there was an arbitration clause in the contract, as per which the arbitration proceedings were to be held in India. Charter Party Agreement was also having similar arbitration clause. According to the plaintiff, thus there were two arbitration clauses contained in two separate agreements between the parties. It is contended that since the defendant is from Singapore, it invoked arbitration clause contained in Charter Party Agreement and it invoked arbitration in its own home country at Singapore. According to the plaintiff, the main contract between the parties was containing arbitration clause, which provided for arbitration in India, hence, the arbitration is to take place in India. It is contended by the plaintiff that since the defendant has already invoked arbitration before the Arbitral Tribunal, Singapore, the plaintiff filed declaratory suit before the trial Court at Amreli, which had territorial jurisdiction over the subject matters. It is contended that, in the said suit, the defendant filed an application under Order 7, Rule 11 of CPC vide application Exh.35 for rejection of plaint on the ground that suit is barred by law as there is an arbitration clause in the agreement. This application came to be allowed by the trial Court and plaint came to be rejected. Against which the plaintiff preferred Regular Civil Appeal, which also came to be disposed of holding that Court has no jurisdiction to entertain the same.
2.2 It is contended by the plaintiff that against the order of first appellate Court, it has preferred Special Civil Application Page 3 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 No.10359 of 2018, which was registered on 6.7.2018. Said Special Civil Application was heard couple of times and draft amendment was also allowed on 20.9.2019. It is also contended that time and again the matter came to be transferred from one Court to another Court and, ultimately, the Court has rejected Special Civil Application observing that the petitioner has remedy of filing Second Appeal under Section 100 of CPC and such Special Civil Application is not maintainable. According to the plaintiff, in view of these observations of this Court in Special Civil Application, the plaintiff has preferred Second Appeal, however, there is a delay of 508 days in preferring Second Appeal as the time was consumed in prosecuting Special Civil Application and, therefore, delay may be condoned as the plaintiff was prosecuting another legal remedy before this Court.
2.3 The defendant-respondent has filed affidavit in reply to present application, wherein it has raised several questions regarding facts and law and also contended that arbitral proceedings at Singapore has already been concluded and this Court has already issued direction to the plaintiff to furnish appropriate bank guarantee, however, the plaintiff has not complied with such order. It is also contended that in view of arbitration clause in the Charter Party Agreement, arbitral proceedings at Singapore was legal and valid and opportunity of hearing was provided to the plaintiff by Tribunal at Singapore. It is also contended that since arbitration at Singapore was according to arbitral clause in Charter Party Agreement, the matter is governed by the provisions of Arbitration and Conciliation Act, 1996. The jurisdiction of Civil Court is completely barred and, therefore, the trial Court has Page 4 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 rightly rejected the plaint and first appellate Court has also rightly rejected appeal. It is also contended that since there is no jurisdiction in the Civil Court, Second Appeal itself is not maintainable and, there is no question of condonation of delay. He, accordingly, prayed to reject present application.
3. Heard Mr.K.P.Vaidankar for the applicant and learned counsel Mr.Aditya Krishnamurthy for Mr.Harsh H. Parikh for the defendant at length. Perused the material placed on record as well as decisions cited at bar.
4. Learned counsel Mr.Vaidankar for the applicant-plaintiff has vehemently submitted the same facts, which are narrated in the memo of application. He submitted that there is no dispute between the parties regarding entering into contract initially. He has submitted that, as per the contract, arbitration has to be conducted in India. He has submitted that though there was a Charter Party Agreement, earlier to that, contract was entered into between the parties wherein there was a clause of arbitration and, therefore, though there was a clause in Charter Party Agreement regarding arbitral proceeding to be conducted at Singapore, the arbitral Tribunal at Singapore has no jurisdiction, as the entire contract was entered into between the parties in India. He has also submitted that entire work has to be completed at Pipavav, District-Amreli. He has submitted that instead of preferring arbitration in Arbitral Tribunal in India, the defendant has approached Arbitral Tribunal at Singapore, which was objected by the plaintiff. He has submitted that the plaintiff filed declatary suit before the trial Court, wherein the defendant filed an application for rejection of the plaint under Order 7, Rule 11 vide Exh.35. He has Page 5 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 submitted that the trial Court has erroneously granted that application and rejected the plaint. According to him, as there was an erroneous finding of fact and law, the plaintiff has preferred first appeal before the District Court, which is also disposed of holding that it has no jurisdiction to entertain the appeal and observed that the plaintiff can avail appropriate remedy as may be available under law. Learned counsel has also submitted that, therefore, as advised, the plaintiff has preferred Special Civil Application before this Court, which was heard number of times and amendment was also permitted and interlocutory order was passed. He has submitted that ultimately this Court reached the conclusion that the plaintiff can file Second Appeal under Section 100 of CPC and Special Civil Application is not maintainable. Mr.Vaidankar, learned counsel for the plaintiff submitted that the plaintiff was prosecuting the matter before wrong forum and it is a good cause for condoning delay occurred in preferring Second Appeal. He has submitted that delay occurred in preferring present Second Appeal may be condoned only on the ground that the plaintiff was prosecuting Special Civil Application before this Court under Articles 226 and 227 of the Constitution of India. He has submitted that the point raised by the defendant can be looked into while hearing Second Appeal and, therefore, only the question of law may be considered. He has relied upon following decisions and submitted that application may be allowed and Second Appeal may be registered. He has submitted that even if any execution petition is filed by the defendant on the basis of award passed by Singapore Tribunal, it cannot be a ground to reject present application for condonation of delay. He has submitted that execution petition may be prosecuted in accordance with law, Page 6 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 however, pendency of such execution petition cannot affect the hearing of present matter. He has submitted that since there is sufficient cause for condonation of delay, this application may be allowed.
(i) M/s.Consolidated Engineering Enterprises v.
Principal Secretary, Irrigation Department and Others reported in (2008) 7 SCC 169.
"12. Section 14 of the Limitation Act deals with exclusion of time of proceeding bona fide in a court without jurisdiction. On analysis of the said Section, it becomes evident that the following conditions must be satisfied before Section 14 can be pressed into service:
(1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party; (2) The prior proceeding had been prosecuted with due diligence and in good faith;
(3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature; (4) The earlier proceeding and the latter proceeding must relate to the same matter in issue and; (5) Both the proceedings are in a court.
The policy of the Section is to afford protection to a litigant against the bar of limitation when he institutes a proceeding which by reason of some technical defect cannot be decided on merits and is dismissed. While considering the provisions of Section 14 of the Limitation Act, proper approach will have to be adopted and the provisions will have to be interpreted so as to advance the cause of justice rather than abort the proceedings. It will be well to bear in mind that an element of mistake is inherent in the invocation of Section 14. In fact, the section is intended to provide relief against the bar of Page 7 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 limitation in cases of mistaken remedy or selection of a wrong forum. On reading Section 14 of the Act it becomes clear that the legislature has enacted the said section to exempt a certain period covered by a bona fide litigious activity. Upon the words used in the section, it is not possible to sustain the interpretation that the principle underlying the said section, namely, that the bar of limitation should not affect a person honestly doing his best to get his case tried on merits but failing because the court is unable to give him such a trial, would not be applicable to an application filed under Section 34 of the Act of 1996. The principle is clearly applicable not only to a case in which a litigant brings his application in the court, that is, a court having no jurisdiction to entertain it but also where he brings the suit or the application in the wrong court in consequence of bona fide mistake or law or defect of procedure. Having regard to the intention of the legislature this Court is of the firm opinion that the equity underlying Section 14 should be applied to its fullest extent and time taken diligently pursuing a remedy, in a wrong court, should be excluded.
...........
19. To attract the provisions of Section 14 of the Limitation Act, five conditions enumerated in the earlier part of this Judgment have to co-exist. There is no manner of doubt that the section deserves to be construed liberally. Due diligence and caution are essentially pre-requisites for attracting Section 14. Due diligence cannot be measured by any absolute standards. Due diligence is a measure of prudence or activity expected from and ordinarily exercised by a reasonable and prudent person under the particular circumstances. The time during which a court holds up a case while it is discovering that it ought to have been presented in another court, must be excluded, as the delay of the court Page 8 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 cannot affect the due diligence of the party. Section 14 requires that the prior proceeding should have been prosecuted in good faith and with due diligence. The definition of good faith as found in Section 2(h) of the Limitation Act would indicate that nothing shall be deemed to be in good faith which is not done with due care and attention. It is true that Section 14 will not help a party who is guilty of negligence, lapse or inaction. However, there can be no hard and fast rule as to what amounts to good faith. It is a matter to be decided on the facts of each case. It will, in almost every case be more or less a question of degree. The mere filing of an application in wrong court would not prima facie show want of good faith. There must be no pretended mistake intentionally made with a view to delaying the proceedings or harassing the opposite party. In the light of these principles, the question will have to be considered whether the appellant had prosecuted the matter in other courts with due diligence and in good faith. As is evident from the facts of the case, initially the appellant had approached the court of learned Civil Judge, Senior Division, Chitradurga for setting aside the award made by the arbitrator. On direction dated October 29, 2002 issued by the learned Civil Judge (Senior Division), Chitradurga, the appellant had presented the application for setting aside the award before the learned District Judge, Chitradurga. Before the learned District Judge, Chitradurga an objection was raised by the respondent that the application was not maintainable before the said court and that the application was maintainable before the learned Judge, City Civil Court, Bangalore. The District Judge, Chitradurga by an order dated February 3, 2003 held that it had no jurisdiction to entertain the application submitted by the applicant and accordingly returned the application for presentation before the Page 9 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 appropriate court. The question of jurisdiction was seriously contested between the parties not only before the court of learned Civil Judge (Senior Division), Chitradurga but also before the learned District Judge, Chitradurga. The question of jurisdiction had to be considered by the courts below because of establishment of City Civil Court, Bangalore under a special enactment and in view of the definition of the word court as given in Section 2(e) of the Arbitration and Conciliation Act, 1996 which means the principal civil court of original jurisdiction in a district. The record does not indicate that there was pretended mistake intentionally made by the appellant with a view to delaying the proceeding or harassing the respondent. There was an honest doubt about the court competent to entertain the application for setting aside the award made by the arbitrator. The mere fact that the question of jurisdiction is an arguable one would not negative good faith because the appellant believed bona fide that the court in which it had instituted the proceeding had jurisdiction in the matter. By filing the application in the courts which had no jurisdiction to entertain the same, the appellant did not achieve anything more particularly when the lis was never given up. Under the circumstances this Court is of the opinion that the Division Bench of the High Court of Karnataka was not justified in concluding that the appellant had not prosecuted the matter in other courts with due diligence and in good faith. The said finding being against the weight of evidence on record, is liable to be set aside and is hereby set aside. We, therefore, hold that the appellant had prosecuted the matter in other courts with due diligence and in good faith and, therefore, is entitled to claim exclusion of time in prosecuting the matter in wrong courts. Therefore, the appeal arising from SLP(C) No.15619 of 2005 will have to be allowed."
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(ii) M.P.Steel Corporation v. Commissioner of Central Excise reported in (2015) 3 SCC 510.
"5. Shri A.K. Sanghi, learned senior advocate appearing on behalf of the Department argued that Section 128 of the Customs Act excluded the application of Section 14 of the Limitation Act in that the scheme of the Section is that only a limited period should be given to an assessee beyond which the appeal would become time barred. In the present case, Section 128 as amended post 2001 would apply to the facts of this case and on the appellant's own showing the appeal is out of time by eleven and a half years. Section 128 only gives the appellant 60 days plus another 30 days which have long gone. He also argued that Section 14 of the Limitation Act would not apply to Tribunals but only to Courts, and the Collector (Appeals) was at best a quasi-judicial Tribunal. Further, according to him, no question of any principle of section 14 would get attracted. In fact, according to him, there is no pleading qua Section 14 at all - the only pleading is for condonation of delay and not for exclusion of time. Section 14 requires that five necessary ingredients must be satisfied on facts before it can be attracted. The appellant has neither pleaded nor proved any of these ingredients. He also cited a number of authorities which we will refer to in the course of this judgment.
Ingredients of Section 14.
Section 14 of the Limitation Act reads as follows:
"14. Exclusion of time of proceeding bona fide in court without jurisdiction.--(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same Page 11 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(3) Notwithstanding anything contained in Rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under Rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.
Explanation.--For the purposes of this section,--
(a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;
(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;
(c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction."
...........
7. Technically speaking, Shri A.K. Sanghi, may be correct. However, in an application for condonation of delay the appellant pointed out that they were pursuing a remedy before another appellate forum which ought to be excluded. We deem this averment sufficient for the appellant to contend that Section 14 of the Limitation Act or principles laid down under it would be attracted to the facts of this case. We might also point out that conditions 1 to 4 mentioned in the Consolidated Engineering case have, in fact, been met by Page 12 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 the appellant. It is clear that both the prior and subsequent proceedings are civil proceedings prosecuted by the same party. The prior proceeding had been prosecuted with due diligence and in good faith, as has been explained in Consolidated Engineering itself. These phrases only mean that the party who invokes Section 14 should not be guilty of negligence, lapse or inaction. Further, there should be no pretended mistake intentionally made with a view to delaying the proceedings or harassing the opposite party. On the facts of this case, as the earlier Supreme Court order dated 12.3.2003 itself points out, there was some confusion as to whether what was appealed against was the Superintendent's order or the Collector's order. The appellant bona fide believed that it was the Collector's order which was appealed against and hence an appeal to CEGAT would be maintainable. This contention, however, ran into rough weather in this Court. Further, the time taken between 3.4.1992 and 22.6.1992 to file an appeal cannot be said to be inordinately long. Thus, neither was there any negligence, lapse or inaction on facts nor did the appellant delay proceedings to harass the Department by pretending that there was a mistake. Condition (3) was also directly met - this Court in the order dated 12.3.2003 set aside CEGAT's order on the ground that it was without jurisdiction. It is indisputable that the earlier proceeding and the later proceeding relate to the same matter in issue and thus condition 4 is also met. Condition 5, however, has not been met as both the proceedings are before a quasi- judicial Tribunal and not in a Court. This, however, is not fatal to the present proceeding as what is being held by us in this judgment is that despite the fact that Section 14 of the Limitation Act may not apply, yet the principles of Section 14 will get attracted to the facts of the present case. It is in this way that we now proceed to consider the law on the subject.
..............
"32. This is why the principles of Section 14 were applied in J. Kumaradasan Nair v. Iric Sohan, (2009) 12 SCC 175 to a revision application filed before the High Court of Kerala. The Court held:Page 13 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022
C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 "16. The provisions contained in Sections 5 and 14 of the Limitation Act are meant for grant of relief where a person has committed some mistake. The provisions of Sections 5 and 14 of the Limitation Act alike should, thus, be applied in a broad based manner. When sub-section (2) of Section 14 of the Limitation Act per se is not applicable, the same would not mean that the principles akin thereto would not be applied. Otherwise, the provisions of Section 5 of the Limitation Act would apply. There cannot be any doubt whatsoever that the same would be applicable to a case of this nature.
17. There cannot furthermore be any doubt whatsoever that having regard to the definition of "suit" as contained in Section 2(l) of the Limitation Act, a revision application will not answer the said description. But, although the provisions of Section 14 of the Limitation Act per se are not applicable, in our opinion, the principles thereof would be applicable for the purpose of condonation of delay in filing an appeal or a revision application in terms of Section 5 thereof.
18. It is also now a well-settled principle of law that mentioning of a wrong provision or non-mentioning of any provision of law would, by itself, be not sufficient to take away the jurisdiction of a court if it is otherwise vested in it in law. While exercising its power, the court will merely consider whether it has the source to exercise such power or not. The court will not apply the beneficent provisions like Sections 5 and 14 of the Limitation Act in a pedantic manner.
When the provisions are meant to apply and in fact found to be applicable to the facts and circumstances of a case, in our opinion, there is no reason as to why the court will refuse to apply the same only because a wrong provision has been mentioned. In a case of this nature, sub-section (2) of Section 14 of the Limitation Act per se may not be applicable, but, as indicated hereinbefore, the principles thereof would be applicable for the purpose of condonation of delay in terms of Section 5 thereof."
The Court further quoted from Consolidated Engineering Enterprises an instructive passage:
"21. In Consolidated Engg. Enterprises v. Irrigation Deptt. [(2008) 7 SCC 169] this Court held: (SCC p. 181, para 22) "22. The policy of the section is to afford protection to a litigant against the bar of limitation when he institutes a proceeding which by reason of some Page 14 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 technical defect cannot be decided on merits and is dismissed. While considering the provisions of Section 14 of the Limitation Act, proper approach will have to be adopted and the provisions will have to be interpreted so as to advance the cause of justice rather than abort the proceedings. It will be well to bear in mind that an element of mistake is inherent in the invocation of Section 14. In fact, the section is intended to provide relief against the bar of limitation in cases of mistaken remedy or selection of a wrong forum. On reading Section 14 of the Act it becomes clear that the legislature has enacted the said section to exempt a certain period covered by a bona fide litigious activity. Upon the words used in the section, it is not possible to sustain the interpretation that the principle underlying the said section, namely, that the bar of limitation should not affect a person honestly doing his best to get his case tried on merits but failing because the court is unable to give him such a trial, would not be applicable to an application filed under Section 34 of the Act of 1996. The principle is clearly applicable not only to a case in which a litigant brings his application in the court, that is, a court having no jurisdiction to entertain it but also where he brings the suit or the application in the wrong court in consequence of bona fide mistake or (sic of) law or defect of procedure. Having regard to the intention of the legislature this Court is of the firm opinion that the equity underlying Section 14 should be applied to its fullest extent and time taken diligently pursuing a remedy, in a wrong court, should be excluded. See Shakti Tubes Ltd. v. State of Bihar [(2009) 1 SCC 786]."
(iii) Pattherao Narsu Patil @ Rajaram Dnyanu Patil v. Sou. Gangubhai A Lad and Others reported in 2019 (3) SCC 121.
"9. It is well settled law that if the party is litigating its cause before the wrong forum under a bona fide belief as per the legal advice given by his advocate, the delay occurred in the said proceeding has to be taken into consideration for condonation of delay in preferring the appeal. This is well settled principle as 903 - SAST. 7650-18.doc recognised in Section 14 of the Limitation Act. This position was ignored by the trial judge and if the major part of the delay was on account of pendency of the review petition, and the said Page 15 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 period if deducted, there was no delay in preferring the first appeal. In the circumstances, this was a fit case for condonation of the delay. If the learned first appellate court had doubt about maintainability of the appeal, the same could have been decided at the time of hearing of the first appeal. In the result, substantial question No. (i) is answered in the affirmative. In view of these facts appeal deserves to be allowed."
5. Per contra, learned counsel Mr.Aditya Krishnamurthy appearing with Mr.Harsh Parekh learned advocate for the defendant has, while referring to the list of dates and events, submitted that filing of suit by the plaintiff itself was against arbitration clause in the contract between the parties. He has submitted that, as per the contract entered into between the parties, there was an arbitral clause to the effect that if any dispute happens then trial should be held in London, U.K. as per International Sea Transportation Laws. He has also submitted that even there was a contract in the form of Charter Party Agreement executed between APCCL and Scan Shipping Pvt. Limited executed on 31.10.2014. That in Clause 37, it was specifically agreed that for arbitration proceedings Singapore Law will be applicable. He has submitted that in view of execution of Charter Party Agreement, the arbitration was initiated at Singapore, wherein the plaintiff was given appropriate opportunity of being heard and on the basis of material placed on record, the Arbitral Tribunal, Singapore, has passed an award in favour of defendant. He has submitted that, on the basis of that award, Execution Petition has already been moved, wherein certain orders have been passed. He has submitted that since the suit filed by the plaintiff was barred Page 16 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 by provisions of Arbitration and Conciliation Act, the defendant moved an application under Order 7, Rule 11, which came to be granted by the trial Court and the trial Court has rejected the plaint accordingly.
5.1 According to Mr.Krishnamurthy, the order of the trial Court was proper as it has no territorial jurisdiction to try the suit. He has submitted that the first appellate Court has also properly disposed of the appeal. According to him, since Civil Court has no jurisdiction to entertain the matter under the provisions of the Arbitration and Conciliation Act, there is no question of filing any Second Appeal. He has also submitted that the plaintiff was directed to furnish security, however, he did not fulfill that obligation. He has submitted that the plaintiff has not complied with the order passed by this Court in furnishing the security, and considering the conduct of the plaintiff, this application may also be dismissed.
5.2 He has also submitted that foreign award is already made and in view of provisions of Section 48 of the Arbitration and Conciliation Act, the plaintiff can have recourse to take appropriate legal proceedings and this Second Appeal itself is not maintainable. He has submitted that the plaintiff has not filed any rejoinder to the reply filed by the defendant in this application. He has submitted that since foreign award has already been passed, the relief sought for in the suit has become infructuous and, therefore, there is no question of entertaining the Second Appeal. He has submitted that alternative remedy is available to the plaintiff under the Arbitration and Conciliation Act, 1956, therefore, even if delay is not condoned no prejudice is likely to be caused to the Page 17 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 plaintiff. He has prayed to dismiss present application. He has relied upon following decisions:-
(i) N.Balakrishnan v. M.Krishnamurthy reported in 1998 (7) SCC 123.
"9. It is axiomatic that condonation of delay is a matter of discretion of the court Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to want of acceptable explanation whereas in certain other cases delay of very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in reversional jurisdiction, unless the exercise of discretion was on whole untenable grounds or arbitrary or perverse. But it is a different matter when the first cut refuses to condone the dela. In such cases, the superior cut would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court."
(ii) Ramlal, Motilal and Chhotelal v. Rewa Coalfields Limited reported in AIR 1962 SC 361.
"7. In construing Section 5 it is relevant to bear in mind two important considerations. The first consideration is that the expiration of the period of limitation prescribed for making an Page 18 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 appeal gives rise to a right in favour of the decree-holder to treat the decree as binding between the parties. In other words, when the period of limitation pres- cribed has expired the decree-holder has obtained a benefit under the law of limitation to treat the decree as beyond challenge, and this legal right which has accrued to the decree-holder by lapse of time should not be lightheartedly disturbed. The other consideration which cannot be ignored is that if sufficient cause for excusing delay is shown discretion is given to the Court to condone delay and admit the appeal. This discretion has been deliberately conferred on the Court in order that judicial power and discretion in that behalf should be exercised to advance substantial justice. As has been observed by the Madras High Court in Krishna v. Chattapan (1) "s. 5 gives the Court a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words "sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fide is imputable to the appellant."
12. It is, however, necessary to emphasise that even after sufficient cause has been shown a party is not entitled to the condonation of delay in question as a matter of right. The proof of a sufficient cause is a condition precedent for the exercise of the discretionary jurisdiction vested in the Court by s. 5. If sufficient cause is not proved nothing further has to be done; the application for condoning delay has to be dismissed on that ground alone. If sufficient cause is shown then the Court has to enquire whether in its discretion it should condone the delay. This aspect of the matter naturally introduces the consideration of all relevant facts and it is at Page 19 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 this stage that diligence of the party or its bona fides may fall for consideration; but the scope of the enquiry while exercising the discretionary power after sufficient cause is shown would naturally be limited only to such facts as the Court may regard as relevant. It cannot justify an enquiry as to why the party was sitting idle during all the time available to it. In this connection we may point out that considerations of bona fides or due diligence are always material and relevant when the Court is dealing with applications made under s. 14 of the Limitation Act. In dealing with such applications the Court is called upon to consider the effect of the combined provisions of ss. 5 and 14. Therefore, in our opinion, considerations which have been expressly made material and relevant by the provisions of s. 14 cannot to the same extent and in the same manner be invoked in dealing with applications which fall to be decided only under s. 5 without reference to s. 14. In the present case there is no difficulty in holding that the discretion should be exercised in favour of the appellant be cause apart from the general criticism made against the appellant's lack or diligence during the period of limitation no. other fact had been adduced against it. Indeed, as we have already pointed out, the learned Judicial Commissioner rejected the ap- pellant's application for condonation of delay only on the ground that it was appellant's duty to file the appeal as soon as possible within the period prescribed, and, that in our opinion, is not a valid ground."
(iii) Fuerst Day Lawson Limited v. Jindal Exports Limited reported in (2001) 6 SCC 356.
"31. Prior to the enforcement of the Act, the Law of Arbitration in this country was substantially contained in three Page 20 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 enactments namely (1) The Arbitration Act, 1940, (2) The Arbitration (Protocol and Convention) Act, 1937 and (3) The Foreign Awards (Recognition and Enforcement) Act, 1961. A party holding a foreign award was required to take recourse to these enactments. Preamble of the Act makes it abundantly clear that it aims at to consolidate and amend Indian laws relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards. The object of the Act is to minimize supervisory role of court and to give speedy justice. In this view, the stage of approaching court for making award a rule of court as required in Arbitration Act, 1940 is dispensed with in the present Act. If the argument of the respondent is accepted, one of the objects of the Act will be frustrated and defeated. Under the old Act, after making award and prior to execution, there was a procedure for filing and making an award a rule of court i.e. a decree. Since the object of the act is to provide speedy and alternative solution of the dispute, the same procedure cannot be insisted under the new Act when it is advisedly eliminated. If separate proceedings are to be taken, one for deciding the enforceability of a foreign award and the other thereafter for execution, it would only contribute to protracting the litigation and adding to the sufferings of a litigant in terms of money, time and energy. Avoiding such difficulties is one of the objects of the Act as can be gathered from the scheme of the Act and particularly looking to the provisions contained in Sections 46 to 49 in relation to enforcement of foreign award. In para 40 of the Thyssen judgment already extracted above, it is stated that as a matter of fact, there is not much difference between the provisions of the 1961 Act and the Act in the matter of enforcement of foreign award. The only difference as found is that while under the Foreign Award Act a decree follows, Page 21 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 under the new Act the foreign award is already stamped as the decree. Thus, in our view, a party holding foreign award can apply for enforcement of it but the court before taking further effective steps for the execution of the award has to proceed in accordance with Sections 47 to 49. In one proceeding there may be different stages. In the first stage the Court may have to decide about the enforceability of the award having regard to the requirement of the said provisions. Once the court decides that foreign award is enforceable, it can proceed to take further effective steps for execution of the same. There arises no question of making foreign award as a rule of court/decree again. If the object and purpose can be served in the same proceedings, in our view, there is no need to take two separate proceedings resulting in multiplicity of litigation. It is also clear from objectives contained in para 4 of the Statement of Objects and Reasons, Sections 47 to 49 and Scheme of the Act that every final arbitral award is to be enforced as if it were a decree of the court. The submission that the execution petition could not be permitted to convert as an application under Section 47 is technical and is of no consequence in the view we have taken. In our opinion, for enforcement of foreign award there is no need to take separate proceedings, one for deciding the enforceability of the award to make rule of the court or decree and the other to take up execution thereafter. In one proceeding, as already stated above, the court enforcing a foreign award can deal with the entire matter. Even otherwise, this procedure does not prejudice a party in the light of what is stated in para 40 of the Thyssen judgment.
32. Part II of the Act relates to enforcement of certain foreign awards. Chapter 1 of this Part deals with New York Convention Awards. Section 46 of the Act speaks as to when a foreign award is binding. Section 47 states as to what Page 22 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 evidence the party applying for the enforcement of a foreign award should produce before the court. Section 48 states as to the conditions for enforcement of foreign awards. As per Section 49, if the Court is satisfied that a foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that court and that court has to proceed further to execute the foreign award as a decree of that court. If the argument advanced on behalf of the respondent is accepted, the very purpose of the Act in regard to speedy and effective execution of foreign award will be defeated. Thus none of the contentions urged on behalf of the respondent merit acceptance so as to uphold the impugned judgment and order. We have no hesitation or impediment in concluding that the impugned judgment and order cannot be sustained."
6. In rejoinder, Mr.Vaidankar, learned counsel for the plaintiff has submitted that relief in the suit is based upon master agreement of 26.11.2013. He has submitted that the plaintiff is not challenging arbitration proceedings in Singapore. He has submitted that suit does not merge automatically in the award of Singapore arbitration. Present application is only for condonation of delay in preferring Second Appeal and substantial question of law is whether the jurisdiction of Civil Court is ousted in the facts and circumstances of case. He has submitted to allow present application and relied upon following decision.
(i) Thahakunju @ Thahakutty v. Chandra Sekhara Pillai and Others reported in 2021 (4) Kerala 525, wherein it is observed that when it comes to delay, it is not necessary on the part of the appellant to explain each and every day's Page 23 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 delay. It is also further observed therein that when a suitor alleges before the Court that he has a genuine grievance to be addressed before the Court, it is always desirable to hear the matter on merits rather than disallowing the application on technical ground of delay.
(ii) Olympus Superstructures Pvt. Limited v. Meena Vijay Khetan and Others reported in (1999) 5 SCC 651.
"14. It will be noticed that under the Act of 1996 the arbitral tribunal is now invested with power under sub-clause (1) of section 16 to rule on its own Jurisdiction including ruling on any objection with respect to the existence or validity of the arbitration agreement and for that purpose, the arbitration clause which forms part of the contract shall be treated as an agreement independent of other terms of the contract and any decision by the arbitral tribunal that the contract is null and void shall not entail ipso Jure affect the validity of the arbitration clause. This is clear from sub- clause (b) of Section 16(1) which states that a decision by the arbitral tribunal that the main contract is null and void shall not entail ipso Jure the invalidity of the arbitration clause.
15. In the present context sub-clauses (2) and (3) of Section 16 are relevant. They refer to two types of pleas and the stages at which they can be raised. Under sub-clause (2) a plea that the arbitral tribunal does not have Jurisdiction shall be raised not later than the submissions of the statement of defence: however, a party shall not be precluded from raising such a plea merely because he has appointed or participated in the appointment of, an arbitrator. Under sub- clause (3) a plea that the arbitral tribunal is exceeding the scope of its Page 24 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 authority shall be raised as soon as the matter alleged to be beyond the scope of its authority, is raised during the arbitral proceedings. These limitations in sub-clauses (2) and (3) are subject to the power given to the arbitrator under sub-clause (4) of Section 16 that the tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3) - admit a later plea if it considered the delay justified. Sub-section (5) requires the arbitral tribunal to decide on the pleas referred to sub-section (2) or sub-section (3) at that stage itself. It is further provided that if either of the pleas is rejected and the arbitral tribunal holds in favour of its own Jurisdiction, the tribunal will continue with the arbitral proceedings and proceed to make the arbitral award. Then comes sub- clause (6) which states that the party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with Section 34.
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17. Section 34 of the Act is based on Article 34 of the UNCITRAL Model Law and it will be noticed that under the 1996 Act the scope of the provisions for setting aside the award is far less the same under Section 30 or Section 33 of the Arbitration Act of 1940.
18. It will be noticed that under sub-clause 2(a) (iv) of Section 34, the arbitral award may be set aside by the Court if the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitrator or if it contains a decision on matters beyond the scope of the submission to arbitration. The proviso to clause (iv) deals with severability."
(iii) Vikram Bakshi and Another v. Mc.Donalds India Pvt. Limited and others, order dated 22.12.2014 passed by Page 25 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 Delhi High Court in I.A. No.6207 of 2014 in CS (OS) No.962 of 2014.
"10. The first contention of the Mr.Mukul Rohatgi, the learned senior counsel for the plaintiffs has been that the present suit is maintainable under Section 9 of CPC and the same is not barred under Section 5 of the Limitation Act, 1963. The learned senior counsel in support of his contention has relied upon the judgment of the apex court in World Sport Group (Mauritius)Ltd. V. MSM Satellite (Singapore) Pte.Ltd.,1 as well as Devinder Kumar Gupta (Dr.) v. Realogy Corporation & Anr2.
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49. Though the Chatterjee Petrochem's case (supra) clearly lays down that the civil court does not have the jurisdiction to entertain a suit in which injunction stood against a party to an arbitration agreement and necessarily a party has to be referred to arbitration, but, at the same time, the court in a latter case of World Sport Group's case (supra) also lays down that the reference of the dispute to an arbitrator is not an absolute proposition because Section 45 of the Arbitration and Conciliation Act, 1996 is carrying three provisos namely that the agreement should not be null and void, inoperative or incapable of being enforced etc.
50. Thus, both the Chatterjee Petrochem's case (supra) and World Sport Group (Mauritius) Ltd.'s case (supra) are taking a diametrically opposite view. The former stating that the civil court will not have the jurisdiction in case of an international arbitration agreement while as the latter view holds to the contrary.Page 26 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022
C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 ...........
54. Even in Devinder Kumar Gupta's case's (supra) also on which both the learned senior counsel have placed reliance by interpreting the judgment in their own way, one fact is noticeable, that it refers to the judgment of the Supreme Court in Abdul Gafur vs.State of Uttarakhand14 and states that there is a presumption of civil court having jurisdiction, (2005) 7 SCC 234 (2008) 10 SCC 97 though in this case the court had held that civil court does not have the jurisdiction to entertain the suit.
55. I have purposely not placed reliance on Devinder Kumar Gupta's case because this is a Division Bench Judgment of our own High Court while as we already have catena of judgments from the Supreme Court and that too covering whole spectrum and holding that the courts have or have not the jurisdiction depending on the facts and circumstances of the case. Therefore, the approach of the court has been governed more by the peculiar facts of the case which was being decided at that point of time. So far as the facts of the present case are concerned, I feel they are more akin to the facts of the World Sport Group's case (supra) incidentally being the last in the series, seems to be more appropriate to be applied to the facts of the present case."
7. Learned advocate Mr.Krishnamurthy for the defendant has submitted that reliance placed on the aforesaid decisions by learned advocate for the plaintiff were considered by the Singapore Tribunal and award is passed in favour of defendant. He has prayed to dismiss present application.
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8. Having considered the submissions made on behalf of both the sides coupled with the material placed on record and the decisions cited at bar, it emerges that there is no dispute regarding contract between the parties. It is also an admitted fact that the plaintiff has filed the suit for declaration before trial Court at Rajula. It is also an admitted fact that during that period, the defendant has taken recourse under clause of Charter Party Agreement raising arbitration before the Arbitral Tribunal at Singapore and award has been passed by the Arbitral Tribunal, Singapore. It is also an accepted position that for implementation of the said award, execution petition is preferred by the defendant before the trial Court and the same is pending. It also reveals from record that some adverse order has been passed against the plaintiff for furnishing security. It also reveals that contempt petition has also been filed against the plaintiff.
9. It also emerges from record that defendant has preferred application under Order 7, Rule 11 before the trial Court for rejection of the plaint, which came to be allowed and the plaint came to be rejected. Such order of the trial Court came to be challenged by the plaintiff before first appellate Court, who, in turn, has disposed of the appeal holding that it has no jurisdiction and observing that the plaintiff-appellant can take appropriate recourse under the provisions of law. It is an admitted fact that against that order, the plaintiff has preferred Special Civil Application No.10359 of 2018 before this Court, which ultimately came to be rejected on the ground that the plaintiff can file Second Appeal under Section 100 of CPC and the petition is not maintainable. Thus, the factum of prosecuting civil litigation before this Court in the nature of Page 28 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022 C/CA/4207/2019 CAV JUDGMENT DATED: 09/06/2022 Special Civil Application by the plaintiff is admitted. It is also crystal clear that time has been consumed in prosecuting said Special Civil Application before this Court.
10. Now, it is well settled principle of law, as per the various decisions referred to herein above, that under Section 5 of the Limitation Act, party has to show sufficient cause for condonation of delay. It is also well settled that if a party was prosecuting a lis before wrong forum, without any mala fide intention, time consumed in such lis can be considered at the time of condonation of delay. In the present matter also, the applicant has taken recourse of filing Special Civil Application, on the basis of legal advise, against the order of first appellate Court. Of course, Singapore Tribunal has already passed an award against present plaintiff and execution petition is pending before the trial Court. However, the question raised by the plaintiff is, in the facts and circumstances of the case, whether there is clear cut ouster of Civil Court's jurisdiction in present matter. It is also submitted that the first appellate Court has not decided the matter on merits and simply on the ground that the dispute is a commercial dispute, it is observed that it has no jurisdiction. Under these circumstances, whatever points have been raised by the defendant on interpretation of two different clauses in two different agreements between the parties, the same can be decided in substantial hearing of Second Appeal and it cannot be a sole ground to reject present application. Not only that the plaintiff was prosecuting a remedy before wrong forum against the order of the first appellate Court without any mala fide intention.
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11. In view of above, present application deserves to be allowed. Accordingly, it is allowed. Delay of 508 days in preferring Second Appeal is hereby condoned. Registry shall register the Second Appeal, if there is no other office objection. No order as to costs.
Sd/-
(DR. A. P. THAKER, J) R.S. MALEK Page 30 of 30 Downloaded on : Fri Jun 10 21:01:40 IST 2022