Jharkhand High Court
M/S. Ex-Servicemen Chotanagpur ... vs Central Coalfield Limited on 25 November, 2020
Equivalent citations: AIRONLINE 2020 JHA 1350
Author: Anil Kumar Choudhary
Bench: Anil Kumar Choudhary
Arb.App 26 of 2007
With
Arb.App 27 of 2007
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Arb. Appeal No.26 of 2007
------
(Against the Order dated 12.02.2007 passed by learned Subordinate Judge-
I, Ranchi in Misc. Case No.12 of 2005)
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M/s. Ex-Servicemen Chotanagpur Carrier Pvt. Limited, a Company
Limited by Shares and registered under the Companies Act 1956 having its
registered office near Ashok Cinema, Ranchi Road, P.O.- Marar, P.S. &
District- Ramgarh, (formerly Hazaribag), through its Director Shri Binod
Kumar Agarwal, s/o Late Radheshyam Agarwal, resident of Kanke Road,
P.S. Gonda, P.O. Ranchi, District- Ranchi
.... .... ....Claimant/Opposite party/Appellant
Versus
Central Coalfield Limited, a Subsidiary of Coal India Limited, a Govt. of
India Enterprise, through the General Manager, Transport, CCL, Ranchi,
having its head office at Darbhanga House, P.S.- Kotwali, P.O. & District-
Ranchi.
.... .... .... Respondent/Petitioner/Respondent
With
Arb. Appeal No.27 of 2007
------
(Against the Order dated 12.02.2007 passed by learned Subordinate Judge-
I, Ranchi in Misc. Case No.13 of 2005)
------
M/s. Pushpak Transport Company (India) Pvt. Limited, a Company
Limited by Shares and registered under the Companies Act 1956 having its
registered office Dutta Villa Area, New Morabadi, Ranchi through its
Director Shri Kanak Ghosh, s/o Late Banshidhar Ghosh, resident of
Burdwan Compound, P.S. Lalpur, P.O. Ranchi, District- Ranchi
.... .... .... Claimant/Opposite party/Appellant
Versus
Central Coalfield Limited, a Subsidiary of Coal India Limited, a Govt. of
India Enterprise, through the General Manager, Transport, CCL, Ranchi,
1
Arb.App 26 of 2007
With
Arb.App 27 of 2007
having its head office at Darbhanga House, P.S.- Kotwali, P.O. & District-
Ranchi. .... .... .... Respondent/Petitioner/Respondent
------
For the Appellants : Mr. Pandey Neeraj Rai, Advocate
For the Respondents : Mr. A. K. Srivastava, Advocate
Mr. Badal Vishal, Advocate
------
PRESENT
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HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
C.A.V. ON 02.09.2020 PRONOUNCED ON 25.11.2020
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Anil Kumar Choudhary, J.
Heard the parties through video conferencing.
2. Both the Arbitration Appeal No.26 of 2007 and Arbitration Appeal No.27 of 2007 have been tagged to be heard together vide order dated 10.07.2009 passed in these appeals by the then Chief Justice of this Court because the facts of the cases are identical, the arbitration tribunal was common, the awards were passed by the arbitral tribunal on the same day.
3. The facts, which are common to both the cases, in brief are that the appellants are companies of ex-servicemen engaged by the respondent for transporting of coal under the scheme of re-settlement of ex-servicemen. A memorandum of understanding was entered into between the Coal India Limited and the Director General of Re-settlement initially for a period of five years in 1983 which was further extended for another period of five years ending on 1993. No tender was called for the said work. The rates were worked out in accordance with the norms laid down jointly. The rates were to be proved each year on the 1st of April according to the formulae laid down. Agreements were used to be executed afresh between the respondent and the appellants. The agreement bears arbitration clause in shape of Clause 42.
2Arb.App 26 of 2007 With Arb.App 27 of 2007 Dispute arose between the parties on 02.11.1993 that is six months after completion of the contract as the Project Officer of KDH project ordered recovery of the over payment amount from the payment already made to the claimant-appellants for the work done by them during the year 1992-93. The ground for recovery of the amount was that upon a fresh measurement of the route, the respondent herein came to the conclusion that the actual route distance for the year 1992-93 was 4.95 km. As per the respondent the amount paid was in excess of the amount due to the appellants because the payment was made provisionally to the appellants upon the calculation of the amount paid taking into consideration the distance of the route to be more than 5 km for which a higher amount of ₹14.34 per ton is to be paid but when the distance is less than 5 km a lower amount of ₹11.65 per ton is payable. The appellants invoked Arbitration Clause vide their letters dated 21.12.1995 and thereafter again served another set of letters dated 3rd April, 1997. The appellants moved before this Court and the designate judge of this Court vide order dated 17.01.2003 appointed the arbitrator with the consent of both the parties for adjudicating the dispute. The arbitration tribunal prepared the arbitral award on 25.03.2005. The arbitral tribunal held that the claim of the appellants was within limitation and that the claim for the amount recovered by the respondent by the order dated 2.11.1993 was improper.
4. In the learned court below the respondent herein by filing separate petitions under Section 34 of the Arbitration and Conciliation Act, 1996, challenged the arbitral award inter alia on the following grounds:-
(a) The Arbitral Award is illegal, misconceived and against the material in the record.
(b) The Arbitral Tribunal should have held that the claim of the claimant/appellant was barred by law of limitation as the 3 Arb.App 26 of 2007 With Arb.App 27 of 2007 appellant invoked the Arbitration Clause on 03.04.1997 whereas their cause of action for the claim arose on 02.11.1993.
(c) The Arbitral Tribunal has erroneously travelled beyond the agreement and terms of the contract by holding that the recovery order was passed after six months of the completion of the work in a unilateral and arbitrary manner and failed to take into consideration the clause of the agreement which says that without prejudice to any other means or recovery, the company shall be entitled to deduct any money due or become due to the contractor.
(d) The arbitrator failed to take into consideration that the measurement shall be carried out at the appointed time notwithstanding the fact whether the contractor is present or not.
(e) The arbitral tribunal misconducted by not considering the vital documents of the respondent herein.
(f) The awarding interest @ 18% from the due date of payment and further interest @ 18% from 01.01.2005 was improper.
5. The appellants herein in their objection dated 17.04.2006 filed in the learned court below defended the arbitral award. The learned court below observed that present dispute arose on 02.11.1993 as six months after completion of the contract, the Project Officer of K.D.H. Project ordered recovery of over payment amount from the claimant already made to the claimant for the work done by him during the year 1992-93 on the ground that upon the fresh measurement the route distance by G.M. (N. K. Committee) showed the actual route distance for the year 1992-93 as 4.95 Kilometre. As such lower rate was payable during the entire period of contract and the excess amount paid had to be recovered. This order was challenged by the claimant by invoking the Arbitration Clause on 03.04.1997 was within time as the arbitral tribunal in the 4 Arb.App 26 of 2007 With Arb.App 27 of 2007 arbitral award impugned before the learned court below has taken note of the fact that letter dated 18.01.1996 conveying that the matter was under consideration amounts to acknowledgment of debt. Hence, the ground of limitation did not find fault with the learned court below. So far as the ground of arbitrator acting beyond his jurisdiction, the learned court below observed that it is true that the measurement was done in the absence of the claimant but as per the Clause 16 of the agreement the measurement of the work was to be made by the representative authorized by the Company's General Manager and there was also covenant in the agreement that the measurement shall be carried out at the appointed time notwithstanding whether the contractor is present or not present for the work done as approved and accordingly, in view of the said measurement being in terms of the covenants of the agreement between the parties, the appellants should not have been entitled to claim any damage or compensation on that account. The learned court below further observed that admittedly in this case the amount was paid to the contractor on provisional basis subject to the measurement and the claimant accepted the conditions. As per Clause 22 of the Contract Agreement if any sum was found due and payable to the respondent from the appellant in connection with the contract the respondent shall have the right and liberty to adjust the sum due under the other contract, if any. The appellant-claimants have admitted and accepted the agreement by their own conduct but the Arbitral Tribunal failed to take notice of the fact that the respondent herein was entitled to realize the said amount from the appellants herein and by relying upon the judgment of Hon'ble Supreme Court of India in the case of Rajasthan State Mines & Minerals Ltd. v. Eastern Engineering Enterprises and Another reported in (1999) 9 SCC 283 wherein the Hon'ble Supreme Court of India 5 Arb.App 26 of 2007 With Arb.App 27 of 2007 has observed that where the fundamental terms of agreement between the parties are ignored by an arbitrator such arbitrator exceeds his jurisdiction and where the reference to the arbitrator is solely based upon the agreement between the parties, the clauses of which are clear and unambiguous but still, the arbitrator ignores the said terms such arbitrator can be said to have travelled beyond his jurisdiction, as his existence depends upon the such agreement between the parties and his function is to act within the limits of the said agreement and such deliberate departure from the contract by the arbitrator amounts not only to manifest disregard of the authority or misconduct on his part but it may tantamount to mala fide action as the arbitrator is the creature of the contract between the parties and hence if he ignores the specific terms of the contract, it would be a question of jurisdictional error which could be corrected by the court and for that limited purpose agreement is required to be considered and the arbitrator in such case cannot go beyond the terms of the contract as referred to it and the arbitrator is bound by the terms of the contract; the learned court below observed that the appellant- claimants having neither protested nor objected at the time of signing the agreement of contract are not entitled to make a case for interpretation of Clause 16 or 22 of the Contract Agreement but as the arbitral tribunal has ignored the said clauses of the agreement, hence, it was held by the learned court below that the arbitrator has travelled beyond his jurisdiction and it set aside the arbitral award, the same being against the stipulation and prohibition contained in the contract between the parties and set aside both the awards.
6. It is pertinent to mention here that these two appeals were filed after a delay. By the common order dated 10.07.2009, passed in these appeals, by the then Hon'ble the Chief Justice, which reads as follows:-
6Arb.App 26 of 2007 With Arb.App 27 of 2007 "These appeals are admitted for hearing. The counsel for the appellant shall be at liberty to address this Court on merit as also on the ground of delay, since it has been submitted by the counsel for the appellant that the Limitation Act does not prescribe any period for preferring an appeal against the order passed by the Subordinate Judge.
This question also is allowed to be addressed at the time of hearing of the appeal."
both these appeals were admitted.
7. At the hearing of these appeals, Mr. Pandey Neeraj Rai, the learned counsel for the appellants relying upon the judgment of Hon'ble Supreme Court of India in the case of D.P. Maheshwari v. Delhi Administration & Others reported in (1983) 4 SCC 293 in para-1 of which it has been observed by the Hon'ble Court as under:-
"Xxxxxxxxx Tribunals and courts who are requested to decide preliminary questions must therefore ask themselves whether such threshold part-adjudication is really necessary and whether it will not lead to other woeful consequences. Xxxxxxxxxxxx."
submitted that in view of the said common order dated 10.07.2009, these appeals involving the identical facts and law should be heard on both the aspects of the merit of the appeals as well as in the matter of limitation.
8. Learned counsel for the respondents also agreed to the submission of the learned counsel for the appellants and submitted that the judgment be decided both on the point of limitation as well as on merits. In view of the said submissions made at the Bar, this Court heard the parties to this appeal both on limitation and merits. This judgment first deals with the aspect of limitation.
9. In the matter of limitation it was submitted by Mr. Pandey Neeraj Rai, learned counsel for the appellants that there are two facets on the point of limitation also. First, period of limitation and second, condonation of the delay in filing the appeal or extension of the period of limitation by the Court. It 7 Arb.App 26 of 2007 With Arb.App 27 of 2007 was submitted by Mr. Rai that no period of limitation has been provided for in the statute for appeals under Section 37 of the Arbitration and Conciliation Act, 1996. So, there is no question of condonation and if at all there is any delay, the same should be condoned. Learned counsel for the appellants draws the attention of this Court towards the judgment of Hon'ble Supreme Court of India in the case of N.V. International v. State of Assam & Others reported in (2020) 2 SCC 109 para-3 and 4 of which reads as under:-
3. "Having heard the learned counsel for both sides, we may observe that the matter is no longer res integra. In Union of India v. Varindera Constructions Ltd. [Union of India v. Varindera Constructions Ltd., (2020) 2 SCC 111] , this Court, by its judgment and order dated 17-9-2018 [Union of India v. Varindera Constructions Ltd., (2020) 2 SCC 111] held thus: (SCC p. 112, paras 1-5) "1. Heard the learned counsel appearing for the parties.
2. By a judgment dated 19-4-2018 in Union of India v. Varindera Constructions Ltd. [Union of India v. Varindera Constructions Ltd., (2018) 7 SCC 794] , this Court has in near identical facts and circumstances allowed the appeal of the Union of India in a proceeding arising from an arbitral award.
3. Ordinarily, we would have applied the said judgment to this case as well. However, we find that the impugned Division Bench judgment dated 10-4-2013 [Union of India v. Varindera Constructions Ltd., 2013 SCC OnLine Del 6511] has dismissed the appeal filed by the Union of India on the ground of delay. The delay was found to be 142 days in filing the appeal and 103 days in refiling the appeal. One of the important points made by the Division Bench is that, apart from the fact that there is no sufficient cause made out in the grounds of delay, since a Section 34 application has to be filed within a maximum period of 120 days including the grace period of 30 days, an appeal filed from the selfsame proceeding under Section 37 should be covered by the same drill.
4. Given the fact that an appellate proceeding is a continuation of the original proceeding, as has been held in Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri [Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri, 1940 SCC OnLine FC 10 : AIR 1941 FC 5] , and repeatedly followed by our judgments, we feel that any delay beyond 120 days in the filing of an appeal under Section 37 from an application being either dismissed or allowed under Section 34 of the Arbitration and Conciliation Act, 1996 should not be allowed as it will defeat the overall statutory purpose of arbitration proceedings being 8 Arb.App 26 of 2007 With Arb.App 27 of 2007 decided with utmost despatch."(Emphasis Supplied)
10. It is next submitted by Mr. Rai that it is the stand of the respondent in ground No. D of its application under Section 34 of the Act before the Sub-Judge that the Arbitration and Conciliation Act, 1996 is not applicable and if this Court holds that the Arbitration Act, 1940 is applicable to the facts of the case then the bar on condonation beyond 120 days as laid down by Union of India v. Varindera Constructions Ltd. (supra) and N.V. International v. State of Assam & Others (supra) will not be applicable in the facts of the case, as the principle laid down in the said two judgments are only for appeals filed under Section 37 of the Arbitration and Conciliation Act, 1996 and not for the appeals under the provisions of the Arbitration Act, 1940 and it is then submitted by Mr. Rai that these appeals be treated as appeals under the provisions of the Arbitration Act, 1940 and the delay in filing of these appeal be condoned.
Mr. Rai next relied upon the judgment of Hon'ble Supreme Court of India in the case of N.S. Nayak & Sons v. State of Goa reported in (2003) 6 SCC 56 para-13 of which reads as under:-
13. "As stated in paragraph 22, Conclusion 1 without any reservation provides that the provisions of the old Act shall apply in relation to the arbitral proceedings which have commenced before coming into force of the new Act.
Conclusion 2, in our view, is required to be read in context with Conclusion 1, that is to say, the phrase "in relation to arbitral proceedings" cannot be given a narrow meaning to mean only pendency of the proceedings before the arbitrator. It would cover not only proceedings pending before the arbitrator but would also cover the proceedings before the court and any proceedings which are required to be taken under the old Act for the award becoming a decree under Section 17 thereof and also appeal arising thereunder. Hence, Conclusions 1 and 2 are to be read together which unambiguously reiterate that once the arbitral proceedings have started under the old Act, the old Act would apply for the award becoming a decree and also for appeal arising thereunder."
9Arb.App 26 of 2007 With Arb.App 27 of 2007 and submits that the arbitration commences under the 1940 Act, all further proceedings including appeals shall continue to governed by the Arbitration Act, 1940 as is provided under Section 85 (2) (a) of the 1996 Act. In that event the appellants' plea could be that to treat these appeals as appeals under the Arbitration Act, 1940.
11. It is next submitted that the appellants' prayer for condonation will hold good which was founded upon the bona fide belief and understanding that the 1996 Act would apply for filing these appeals and there was no limitation provided in the statute. But it was contended by the appellants that it is his submission that the facts of these cases justify application of the Arbitration and Conciliation Act, 1996 in view of the agreement between of the parties discernible from their conduct to have the arbitration proceeded under the 1996 Act.
Mr. Rai further relied upon the judgment of Hon'ble Supreme Court of India in the case of Delhi Transport Corporation. Ltd. v. Rose Advertising reported in AIR 2003 SC 2523 wherein in paras- 3 and 5, the Hon'ble Supreme Court of India has held as under:-
"3. While referring to the judgment in Thyssen case [(1999) 9 SCC 334 : AIR 1999 SC 3923] the Court noted that parties can always agree that provision of law prevailing at the relevant time would apply to arbitral proceedings. The case of Rani Constructions (P) Ltd. [Rani Constructions (P) Ltd. v. H.P. SEB, CA No. 61 of 1999] decided in Thyssen case [(1999) 9 SCC 334 : AIR 1999 SC 3923] was held to squarely cover the present case. In view of the fact that the arbitrator was appointed after coming into force of the 1996 Act and the arbitration proceedings were conducted in pursuance of the provision of the said Act, it was held that the case would be governed by the 1996 Act. It also weighed with the High Court that the parties had expressed their intention in the arbitration proceedings to be governed by the 1996 Act. The Division Bench thus allowed the appeal and set aside the judgment of the Single Bench.
5. The above clause shows that the parties agreed to be governed by the law as in force at the relevant time. Section 85(2) of the 1996 Act recognizes such an agreement between the parties. The conduct of the arbitration proceedings and the 10 Arb.App 26 of 2007 With Arb.App 27 of 2007 participation of the parties therein shows that the parties acted under the 1996 Act. Even the arbitrator proceeded on that understanding and gave his award in pursuance of the 1996 Act. Therefore, the impugned judgment of the High Court appears to be totally unassailable. We are unable to find any ground or reason to differ with the view taken by the High Court on the main issue."(Emphasis Supplied)
12. It is next submitted by Mr. Rai that the Arbitration and Conciliation Act, 1996 is silent about the limitation for preferring the appeals under Section 37 of the said Act. Articles 114 to 117 of the Limitation Act, 1963 provide for limitation for four different kinds of appeals, none of which is about appeals under the Arbitration and Conciliation Act, 1996. There is no residuary provision as is there for suits and application. The nearest provision could be Article 116 which provides for limitation for appeal under the Code of Civil Procedure as 90 days but in the absence of anything else it would not apply to the appeals filed under section 37 of the Arbitration and Conciliation Act, 1996. It is, therefore, submitted that even if the limitation act may be applicable to the court proceedings under the 1996 Act, there is no corresponding article in the Limitation Act which would be applicable. Section 43 of the Arbitration and Conciliation Act, 1996 has got no relevance as it is meant for arbitration but not appeals. It provides for extending the Limitation Act to the arbitration before the tribunals and not to the appeals before the Court and the need for incorporating such a provision was that otherwise the Limitation Act would not apply to non-Court proceedings like arbitration.
The learned counsel for the appellant relied upon the judgment in the case of Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department and others reported in (2008) 7 SCC 169 last sentence of para-25 of which reads as under:-
25. The plea that in view of the decision rendered by the three-11
Arb.App 26 of 2007 With Arb.App 27 of 2007 Judge Bench of this Court in CST v. Parson Tools and Plants [(1975) 4 SCC 22 : 1975 SCC (Tax) 185 : (1975) 3 SCR 743] the provisions of Section 14 of the Limitation Act should not be held to be applicable to an application filed under Section 34 of the Act, has no substance. The question determined in CST [(1975) 4 SCC 22 : 1975 SCC (Tax) 185 :
(1975) 3 SCR 743] was "whether under the circumstances of the case, Section 14 of the Limitation Act extended the period for filing of the revisions by the time during which the restoration application remained pending as being prosecuted bona fide".xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxx. In appeal, this Court held that (1) if the legislature in a special statute prescribes a certain period of limitation, then the Tribunal concerned has no jurisdiction to treat within limitation, an application, by excluding the time spent in prosecuting in good faith, on the analogy of Section 14(2) of the Limitation Act, and (2) the appellate authority and the revisional authority were not "courts" but were merely administrative tribunals and, therefore, Section 14 of the Limitation Act did not, in terms, apply to the proceedings before such tribunals.
And submitted that in the absence of any time prescribed by the Arbitration and Conciliation Act, 1996 for filing the appeal under section 37 of the said Act, the Hon'ble Supreme Court of India ought not have prescribed the maximum period of 120 days in the case of N.V. International (supra).
13. It is next submitted by Mr. Rai that for more than a decade after coming into the force of 1996 Act, there was no reported judgment either of the Hon'ble Supreme Court of India or any of any High Court to the effect that the appeal under Section 37 would be governed by any limitation nor such a proposition was mentioned in any legal commentary rather on the contrary, there was one Division Bench judgment of the Hon'ble Bombay High Court reported in AIR 2005 Bom 335 in the case of Oil and Natural Gas Corporation Ltd. v. Jagson International Ltd. which held that Section 37 appeals 12 Arb.App 26 of 2007 With Arb.App 27 of 2007 under the new act has no limitation. In this respect learned counsel for the appellant drew attention of this Court to para- 14 and 15 of the said judgment of Hon'ble Bombay High Court which reads as under:-
14. "Perusal of the above quoted provisions of section 37 shows that sub section (2) of section 37 in terms provides for an appeal against the order granting or refusing to grant interim measure under section 17. Perusal of section 37 also shows that there is no period of limitation laid down for filing an appeal under that provision. Perusal of the provision of section 34 shows that there is a clear provision made for filing an application under that provision for challenging an award made by the Arbitral Tribunal. Therefore, when the Legislature provided the remedy against the arbitral award, it also provided a period of limitation for making an application under section 34. Perusal of the provisions of section 11, section 13 and section 16 show that the Legislature has mentioned a period of time for taking various steps. Therefore, it is clear that while the Legislature was aware of the necessity of providing a period of limitation and wherever the Legislature thought that providing a period of limitation is necessary it has been so provided for by various provisions of the Act. However, while providing an appeal under section 37, the Legislature has chosen not to prescribe any period of limitation. In this view of the matter, therefore, in my opinion, the Court will not be justified in importing the period of limitation provided by section 34 for filing an application and making it applicable to an appeal filed under section 37. Sub-section (1) of section 43 makes the provisions of Limitation Act applicable to arbitration as it applies to proceedings in Court. Perusal of the provisions of the Limitation Act also shows that the Limitation Act does not provide for any period of limitation for filing an appeal under section 37. It is second Division of the Schedule to the Limitation Act which deals with appeal. Perusal of those provisions show that Articles 114 and 115 lays down period for filing an appeal under the Code of Criminal Procedure and Article 116 provides for limitation for filing an appeal under the Code of Civil Procedure and Article 117 provides period of limitation for filing an appeal from decree or order passed by the High Court to the same Court. Thus in the Limitation Act there is no provision made prescribing the period of limitation for filing an appeal under section 37. Perusal of Article 119, which is found in Third Division the heading of which is "application" shows that there is a period of limitation laid down by Article 119 for making application under the Arbitration Act, 1940. The intention of the Legislature, in my opinion, therefore is clear that there is no period of limitation laid down for filing an appeal under section 37. In my opinion, in this situation, therefore, the observations of the Supreme 13 Arb.App 26 of 2007 With Arb.App 27 of 2007 Court in its judgment in the case of Uttam Namdeo Mahale v. Vithal Deo, (1997) 6 SCC 73, are relevant. It is paragraphs 3 and 4 of that judgment, which are material. They read as under:--
3. The admitted position is that respondent No. 1 is the owner of the property and earlier a notice was issued to the appellant to vacate the land in question. That order of eviction became final with the confirmation of the order by this Court in a special leave petition. Thereafter, proceedings were initiated for execution. An objection has been raised on the ground that since more than 12 years have elapsed, the order cannot be implemented. The High Court has pointed out that under section 21 of the Mamlatdar's Court Act, 1906, it has not prescribed any limitation for execution of the orders vide the Division Bench judgment of the High Court of Bombay in Balaji Bin Khanduji Patil v. Kushaba Bin Ramji Patil.
4. Mr. Bhasme, learned counsel for the appellant, contends that in the absence of fixation of the rule of limitation, the power can be exercised within a reasonable time and in the absence of such prescription of limitation, the power to enforce the order is vitiated by error of law. He places reliance on the decisions in State of Gujarat v. Patil Raghav Natha; Ram Chand v. Union of India and Mohd. Kavi Mohamad Amin v. Fatmabai Ibrahim. We find no force in the contention.
It is seen that the order of ejectment against the applicant has become final. Section 21 of the Mamlatdar's Court Act does not prescribe any limitation within which the order needs to be executed. In the absence of any specific limitation provided thereunder, necessary implication is that the general law of limitation provided in the Limitation Act (Act 2 of 1963) stands excluded. The Division Bench, therefore, has rightly held that no limitation has been prescribed and it can be executed at any time, especially when the law of limitation for the purpose of this appeal is not there. Where there is statutory rule operating in the field, the implied power of exercise of the right within reasonable limitation does not arise. The cited decisions deal with that area and bear no relevance to the facts.
15. Perusal of the above quoted paragraphs of the judgment of the Supreme Court show that the Supreme Court has laid it down as a law that when the special statute which creates the remedy does not provide limitation, for invoking that remedy general law of limitation cannot be made applicable to provide limitation. In the present case, however, as observed above, even the general law of limitation does not provide a period of limitation. In my opinion, therefore, the objection raised on behalf of the respondent that appeal is barred by the provisions of the Limitation Act and it has not been filed within the time prescribed has no substance. So far as the contention that though there is no period of limitation laid down, the appellant has to approach the Court in a reasonable time is concerned, in my opinion, this requirement will not apply while considering 14 Arb.App 26 of 2007 With Arb.App 27 of 2007 the aspect of maintainability of the appeal. The appeal would be maintainable whenever filed, the question whether the appellant has approached the Court promptly or he is guilty of laches may be considered by the Court while considering whether the relief which is in the discretion of the Court should be granted in favour of such appellant, who is guilty of laches or not. In other words the aspect of laches in invoking the remedy will be relevant when the Court considers the question whether the appellant is entitled to the reliefs from the Court which is in the discretion of the Court and not when the Court considers the question of maintainability of the appeal."
14. It is next submitted by Mr. Rai that it was during this period that the instant appeals were filed on 18.12.2007. It was most bona fide on the appellants and the advocates advising them to proceed under the impression that there was no limitation applicable and hence, it is submitted that this is the reason why the appellants have alternatively contended that if at all limitation is held to be applicable and consequently the view that no limitation was applicable, treated to be an erroneous view. Such bona fide erroneous belief founded upon the bona fide erroneous legal advice be treated as sufficient cause for condoning the delay and to buttress his submission, the learned counsel for the appellants has relied upon the judgment of Privy Council in the case of Kunwar Rajendra Bahadur Singh v. Rai Rajeshwar Bali reported in AIR 1937 PC 276 the last paragraph of which reads as under:-
"The question of negligence being out of the way, their Lordships are of opinion that the facts of the present case disclose sufficient cause within the meaning of S. 5, Limitation Act. They are of opinion that in applying S. 5 to such a case as the present, the analogy of S. 14 (which applies only to suits) is an argument of considerable weight. Mistaken advice given by a legal practitioner may in the circumstances of a particular case give rise to sufficient cause within the section though there is certainly no general doctrine which saves parties from the results of wrong advice. Xxxxxxxxxxxxxxx. (Emphasis supplied) In this respect the learned counsel for the appellants also relied upon the case of Lala Mata Din v. A. Narayanan 15 Arb.App 26 of 2007 With Arb.App 27 of 2007 reported in (1969) 2 SCC 770 wherein Hon'ble Supreme Court of India in a case where under mistaken legal advice reiterated the settled principle of law in para-6 , which reads as under:-
6. "The law is settled that mistake of Counsel may in certain circumstances be taken into account in condoning delay although there is no general proposition that mistake of Counsel by itself is always a sufficient ground. It is always a question whether the mistake was bona fide or was merely a device to cover an ulterior purpose such as laches on the part of the litigant or an attempt to save limitation in an underhand way. The High Court unfortunately, never considered the matter from this angle. If it had, it would have seen quite clearly that there was no attempt to avoid the Limitation Act but rather to follow it albeit or a wrong reading of the situation." (Emphasis supplied)
15. Mr. Rai further submitted that the judgments of Hon'ble Supreme Court of India in the case of N.V. International v.
State of Assam & Others (supra) and Union of India v. Varindera Constructions Ltd. (supra) are not binding precedents as in those judgments, the observation regarding the limitation was only a passing observations (obiter dicta) and not on points it decides (ratio decidendi) and in support of this, Mr. Rai relied upon the judgment of Full Bench of Hon'ble Patna High Court in the case of State Of Bihar Vs. Maksudan Singh and Others reported in 1985 PLJR 946 para-9 of which reads as under:-
"9. Even if any doubt remains in this context, it would stand dispelled by Article 141 of our Constitution which says that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. In a way so far as the judgment of the Supreme Court are concerned, constitutional sanction is given to their binding nature.xxxxxxxX"
16. It is next submitted by Mr. Rai that it is a settled principle of law that the point a Court decides should be decided on the arguments made which means the questions or issues placed before it and in this respect, learned counsel for the appellant relied upon the judgment of Hon'ble Patna High Court reported in the case of M/s Shree Goshala and Ors. v. State 16 Arb.App 26 of 2007 With Arb.App 27 of 2007 of Bihar and Ors. 1996 1 PLJR 815, in paragraphs 20 to 23 of which the Court observed as under :
20. It is well known right from the days of Queen v. Lethan 1910 A.C Page-495, that a decision is an authority for what it actually decides and not what remotely or logically follows from it. This ratio has been followed by the Apex Court in a numbers of cases.
21. The Hon'ble Supreme Court has also repeatedly observed that a decision on a question which has not been argued cannot be treated as a precedent. Relevant observation to this effect have been made by the Apex Court in the case of Rajpur Ruda Meha v. The State of Gujarat reported in (1980) 1 SCC 677:AIR 1980 SC page 1707 (paragraph -6). The said decision in the case of Rajpur Ruda Meha (supra) has been followed by the Supreme Court also in the case of Goodyear India Ltd. v.
The State of Haryana reported in (1990) 2 SCC 71:AIR 1990 SC page-781(para-34).
22. In the case of Municipal Corporation of Delhi v. Guman Kaur reported in (1989) 1 SCC 101:AIR 1989 SC page -38the Hon'ble Supreme Court held that 'Precedents sub-silentio without argument are of no moment'.
23. In this connection the elucidation of principle of sub- silentio by Salmonds in his famous treatise of jurisprudence 12th Edition at page-153 is set out:
"A decision passes sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. The Court may consciously decide in favour of one party because of point A which it considers and pronounces upon. It may be shown, however, that logically court should not have decide in favour of the particular party unless to also decided point B in his favour: but point B was to agreed or considered by the Court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub-silentio."
Further it was submitted that in the judgment of N.V. International v. State of Assam & Others (supra) and Union of India v. Varindera Constructions Ltd. reported in (2020) 2 SCC 111, the Hon'ble Supreme Court has misquoted the provisions of the Arbitration and Conciliation Act, 1996 in 17 Arb.App 26 of 2007 With Arb.App 27 of 2007 para-4 of the judgment as the said statute has not specifically provided any limitation for filing an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 and the grace period of 30 days was provided for in Section 34 (3) proviso of the said act.
17. It is further submitted by Mr. P. N. Rai that on 3rd April, 2008 the judgment in Consolidated Engineering Enterprises (supra) was rendered in which the issue was whether the proceeding under Section 34 of the Arbitration and Conciliation Act, 1996, the provision of exclusion of Section 14 of the Limitation Act, 1963 would apply or not. As in Popular Construction Case reported in (2001) 8 SCC 470, the Hon'ble Supreme Court of India had already held that Section 5 of the Limitation Act is not applicable in view of the special provision of the Arbitration and Conciliation Act, 1996. It is further submitted that in Consolidated Engineering Enterprises (supra) which was rendered by a Bench of three Hon'ble Judges the minority single judge judgment rendered by Hon'ble Mr. Justice R. V. Ravindran, the Hon'ble Judge went to the question of Limitation in respect of Section 37 of the Arbitration and Conciliation Act, 1996 and observed that if Limitation Act applies to court proceedings of the Arbitration and Conciliation Act, 1996 then Article 116 of the Limitation Act will apply as has been mentioned in para-38 of the said judgment and the reason given therefore, in para-41 was that in Vidyacharan Shukla Vs. Khubchand Baghel and Others reported in AIR 1964 SC 1099 it was held that all the appeals governed by the Code of Civil Procedure would be governed by the Article 116. It is then submitted by Mr. Rai that the question as to whether the procedure of appeal as given in Code of Civil Procedure would apply to the appeals under Section 37 of the 1996 Act regardless of absence of specific provision for the same was neither raised, nor argued nor 18 Arb.App 26 of 2007 With Arb.App 27 of 2007 decided. It is next submitted that Hon'ble Rajasthan High Court has rightly held that part of the minority judgment in Consolidated Engineering Enterprises (supra) would be obiter dicta in its judgment in the case of Rajasthan Housing Board and Another Vs. Alpha Engineer reported in 2013 SCC Online Raj 4243 at para-7 which reads as under:-
7. "So far as the first question is concerned, Article 141 of the Constitution unequivocally indicates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law. It is, therefore, an essential function of the Court to interpret a legislation. The statements of the Court on matters other than law like facts may have no binding force as the facts of two cases may not be similar. But what is binding is the ratio of the decision and not any finding of facts.
It is the principle found that upon a reading of a judgment as a whole, in the light of the questions before the Court that forms the ratio and not any particular word of sentence. To determine whether a decision has 'declared law' it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle underlying a decision. A judgment of the Court has to be read in the context of questions which arose for consideration in the case in which the judgment was delivered. An 'obiter dictum' as distinguished from a ratio decidendi is an observation by Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such an obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter may not have a binding effect as a precedent, but it cannot be denied that it is of considerable weight.
(Emphasis supplied by me)."
18. Hence, it is urged upon by Mr. Rai that the same view as adopted by Hon'ble Bombay High Court in the case of Oil and Natural Gas Corporation Ltd. v. Jagson International Ltd. (supra) be taken by this Court and it be held that no limitation is provided for the appeals filed under Section 37 of the Arbitration and Conciliation Act, 1996.
19. It is next submitted that by the learned counsel for the appellants that the non-applicability of the code of civil procedure to the appeal filed under section 37 of the Arbitration and Conciliation Act 1996 was laid down in the 19 Arb.App 26 of 2007 With Arb.App 27 of 2007 case of MTNL Vs. Applied Electronics Limited reported in (2017) 2 SCC 37 para-27 read with para-16, 18, 24 of which relied upon the self-contained code theory and the negative import of there being exclusion of non-provided matters placing reliance of Fuerst Day Lawson case reported in (2011) 8 SCC 333 which in turn had relied upon the Constitution Bench judgment of P.S. Sathappan (2004) 11 SCC 672.
20. It is next submitted that the judgment passed in the case of ITI Ltd. Vs. Siemens Public Communication Network Ltd. reported in AIR 2002 SC 2308 is not binding over the issue of applicability of CPC Procedure of appeals to the appeals filed under Section 37 of the Arbitration and Conciliation Act, 1996 because it was passed sub silentio in the sense that the point decided was that civil court "proceedings" are subject to the control of Code of Civil Procedure and therefore, revision under Section 115, Code of Civil Procedure "control" will apply to challenge an order passed under Section 37 by the Civil court and what was decided in ITI Vs. Siemens (supra) was on a point not argued as the point argued before the Bench was whether Code of Civil Procedure applied to govern the appeal in the civil court as has been mentioned in para-6 and the answer was that challenge to higher forum was governed by Code of Civil Procedure in the name of CPC's control in the matter of revision. It is next submitted by the learned counsel for the appellant that the judgment of ITI Vs. Siemens (supra) is per incuriam as it ignored all judgments which said that Arbitration Act was a self-contained code and that a self- contained code has a negative import as to impermissibility of the non-provided matter, coupled with the silence on absence of provision analogous to Section 41 of the Arbitration Act, 1940.
21. It is next submitted by Mr. Rai that while the judgments in the case of Consolidated Engineering (supra) and ITI 20 Arb.App 26 of 2007 With Arb.App 27 of 2007 (supra) could be stretched to hold against the appellants that the limitation of 90 days will apply, the appellant's fate was not sealed because the scope of condonation was there. But the two latest judgments in Varindera and N.V. International (supra) have suddenly introduced a non-extendable limitation of 120 days and seems to have applied the same to the appeals filed in the past too, which has made many appeals absolutely time barred overnight, thereby causing grave prejudice to all the affected parties who laboured under the pre-existing position of law. It is also submitted that the judgments of Varindera and N.V. International may be treated as not binding for the following reasons:
(i) What was decided was not argued or raised before the Bench as the argument before the Bench was whether delay can be condoned, sufficient cause was there, stricter scrutiny be made on sufficiency of cause in view of absolute power bar in Section 34 and the object of the speedy resolution. The answer is- non-extendable limitation of 120 days with no provision for condonation;
(ii) The observations are in the nature of obiter dicta incidentally remarked, including on the aspect of effect of the principle that appeal is continuation of the original proceeding;
(iii) That the said two judgments were founded upon the supposition that statutory limitation of 90 days was there, while in fact there was none. It cannot be said that these judgments on their own have decided that such 90 days' limitation is there. At best such decision can be said to have passed sub silentio in these two judgments as there was no argument advanced or considered or decided upon that CPC Procedure of appeals applied (as was the test laid down in Vidyacharan Shukla (supra)), or as to the test of self-contained code, the negative import attachable to it and lack of analogous provision in the 1996 Act.21
Arb.App 26 of 2007 With Arb.App 27 of 2007
(iv) These two judgments are per incuriam for the reasons that:
(a) it ignored the existing law as contained in the statutory provisions of the 1996 Act.
(b) it ignored the existing law as laid down by the judgment of Hon'ble Supreme Court in the case of Ajaib Singh v. Sirhind Coop. Marketing-cum-Processing Service Society Ltd. and Another reported in (1999) 6 SCC 82 para-10 of which reads as under in connection with the Courts laying down statutory limitation period of 5 years for raising industrial dispute in the following words:-
10. "Xxxxxxxxxxxxxxxxxx We are of the opinion that the Punjab and Haryana High Court was not justified in prescribing the limitation for getting the reference made or an application under Section 33-C of the Act to be adjudicated. It is not the function of the court to prescribe the limitation where the legislature in its wisdom had thought it fit not to prescribe any period. The courts admittedly interpret law and do not make laws. Personal views of the Judges presiding over the Court cannot be stretched to authorise them to interpret law in such a manner which would amount to legislation intentionally left over by the legislature. The judgment of the Full Bench of the Punjab and Haryana High Court has completely ignored the object of the Act and various pronouncements of this Court as noted hereinabove and thus is not a good law on the point of the applicability of the period of limitation for the purposes of invoking the jurisdiction of the courts/boards and tribunal under the Act."
(c) These two judgments ignored the existing law as laid down by the five Judge Constitution Bench in Padmasundara Rao and Others Vs. State of Tamil Nadu and Others reported in AIR 2002 SC 1334 paragraph-12 and 13 of which read as under:-
"12. The rival pleas regarding rewriting of statute and casus omissus need careful consideration. It is well-settled principle in law that the court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the legislature itself. The question is not what may be supposed and has been intended but what has been said. "Statutes should be 22 Arb.App 26 of 2007 With Arb.App 27 of 2007 construed, not as theorems of Euclid", Judge Learned Hand said, "but words must be construed with some imagination of the purposes which lie behind them". (See Lenigh Valley Coal Co. v. Yensavage [218 FR 547] .) The view was reiterated in Union of India v. Filip Tiago De Gama of Vedem Vasco De Gama [(1990) 1 SCC 277 : AIR 1990 SC 981].
13. In D.R. Venkatchalam v. Dy. Transport Commr. [(1977) 2 SCC 273 : AIR 1977 SC 842] it was observed that courts must avoid the danger of a priori determination of the meaning of a provision based on their own preconceived notions of ideological structure or scheme into which the provision to be interpreted is somewhat fitted. They are not entitled to usurp legislative function under the disguise of interpretation."
It is then submitted that this Court should follow the view of the five Judge Bench in Padmasundara Rao Vs. State of Tamil Nadu (supra) as per the ratio of the case of Sheo Narayan Gope reported in 1994 (1) PLJR 270 (Division Bench) para-20 of which reads as under:-
20. "A Division Bench of this Court in the case of Abdul Rahman v. The State of Bihar (1992 PLJR 161), relying upon the judgment of the Supreme Court in the case of Ishwar Singh (supra) held that as there was long delay in sending the first information report to the court, there is reason to believe that the F.I.R. is ante dated and investigation is tainted. In my opinion, the apex Court in the aforesaid case has not laid down an absolute rule of law that delay in sending the F.I.R., which is not explained by the prosecution, is itself fatal to the prosecution case. It appears that in the facts of the particular case it was held that the first information report was not forwarded or sent forthwith, as a result of which the prosecution case had become suspicious."
22. It is further submitted by Mr. Rai that out of the conflicting co-equal bench strength judgments in 1999- Ajaib Singh, Varindera and NV International, the 1999- Ajaib Singh judgment should be followed by the this Court being the more elaborate and accurate one, as held in the case of Amar Singh Yadav (1987 PLJR 184 FB) para-23 and 24 of which read as under:
"23. I am more than amply conscious of the difficulties of making a choice between decisions of the superior court when they are in direct conflict with each other. But, such a duty can neither be skirted nor evaded. It was rightly and forcefully 23 Arb.App 26 of 2007 With Arb.App 27 of 2007 pointed out by Lord Denning in Seaford Court Estates Ltd. v. Asher, (1949) 2 All ER 155 that when a Judge comes up against such a truck, he is not to fold his hands and it is his duty to iron out the creases. Therefore, when such a divergence arises and the litigant's fortune depends thereon, the issue has to be frontally adjudicated upon. Obviously, in such a situation, it is not the province of the High Court or the subordinate court to comment on the judgment of the Supreme Court, which are patently entitled to respect. Its plain duty, in the interest of justice, is to respectfully follow that which appears to it to state the law accurately or, in any case more accurately than the other conflicting judgment. The view I am inclined to take is not only fortified, but in a way derived from the Full Bench judgment in Indo Swiss Time Limited v. Umrao, AIR 1981 Punj & Har 213. It, perhaps, deserves highlighting that though on another point the learned Judges of the Full Bench differed but on this particular momentous issue there was an absolute unanimity. The subsequent Full Bench decision in Kulbhushan Kumar and Co. v. State of Punjab, AIR 1984 Punj & Har 55 is also in a way relevant and instructive.
24. To conclude on this aspect, it is held that where there is a direct conflict between two decisions of the Supreme Court rendered by co-equal Benches, the High Court must follow that judgment which appears to it to state the law more elaborately and accurately. The answer to question (1) posed at the outset is rendered in these terms."(Emphasis Supplied) as the judgments in Varindera and NV International are cryptic. Further, it is submitted that the judgment of Ajaib Singh is more accurate being in line with the views of the Constitution bench judgment in Padmasundara (supra).
23. It is next submitted that neither there is any pre-existed law, nor these two judgments can be said to be laying any law that the principle that appeal is continuation of the original proceeding will include reading the same limitation period as was there in the original proceeding. It is next submitted that even Lachmeshwar Prasad Shukul, AIR 1941 FC 5; 1940 SCC Online FC 10 which has been relied upon does not say so.
24. It is next submitted by Mr. Rai that the 120 days rule 24 Arb.App 26 of 2007 With Arb.App 27 of 2007 introduced by the Judge made law in Varindera and NV International should apply only to future appeals. Even the legislature never introduces limitation to make something time barred overnight, much less non-extendible so. Even though the facts of these two cases show that 120 days rule was applied to Section 37 appeals filed prior to these judgments, there seems to be no argument advanced or consideration made of this aspect. So, independent decision can be taken by this Court on this aspect. It was lastly submitted by the learned counsel for the appellants that the delay in filing these appeals be condoned and these two appeals be heard on merits.
25. Mr. A. K. Srivastava, the learned counsel for the respondents on the other hand relied upon the judgment of Hon'ble Supreme Court of India in the case of M/s N.V. International Vs. The State of Assam and Others reported in (2020) 2 SCC 109 paragraph-4 and 5 of which read as under:-
4. "We may only add that what we have done in the aforesaid judgment is to add to the period of 90 days, which is provided by statute for filing of appeals under Section 37 of the Arbitration Act, a grace period of 30 days under Section 5 of the Limitation Act by following Lachmeshwar Prasad Shukul [Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri, 1940 SCC OnLine FC 10 : AIR 1941 FC 5] , as also having regard to the object of speedy resolution of all arbitral disputes which was uppermost in the minds of the framers of the 1996 Act, and which has been strengthened from time to time by amendments made thereto. The present delay being beyond 120 days is not liable, therefore, to be condoned.
5. Accordingly, the appeal is dismissed."
And submitted that in the case of NV International (supra) the Hon'ble Supreme Court of India has, in no uncertain manner decided that the maximum period within which an appeal under section 37 of the Arbitration and Conciliation Act 1996 can be filed is 120 days and under no circumstances such appeal can be filed beyond a period of 120 days from the date of disposal of the application under section 34 of the said Act. It is further submitted by the learned counsel for the 25 Arb.App 26 of 2007 With Arb.App 27 of 2007 respondent that the Hon'ble Supreme Court has expressed that opinion, the formation of which was necessary for the decision arrived at in that case. It is next submitted by the learned counsel by the respondent that the said judgments cannot be termed per incuriam as the submissions made before the court were germane to arriving at the said conclusion by the court. It is next submitted that by no stretch of imagination it can be said that the said principle of law of putting a cap of 120 days for filing the appeal under section 37 of the Arbitration and Conciliation Act 1996 is an orbiter dicta. It is also submitted that in those judgments no existing law have been ignored by the court and the judgment of Varindera and NV International are binding precedents under article 141 of the Constitution of India and is squarely applicable to these two appeals which were filed on 18th of December 2007 though admittedly the learned court below passed the order on the application under section 34 of the Arbitration and Conciliation Act 1996 on 12th of February 2007 that is beyond the period of 120 days. It is then submitted by the learned counsel for the respondent that because of aforesaid reasons itself these two appeals are to be dismissed being hopelessly barred by limitation.
26. It is then submitted by Mr. A. K. Srivastava, the learned counsel for the respondent that as per sub-section (2) of section 85 of the Arbitration and Conciliation Act 1996, the provisions of Arbitration Act, 1940 shall apply in relation to arbitral proceedings which have commences before coming into force of the Arbitration and Conciliation Act, 1996 and the phrase "in relation to the arbitral proceeding" cannot be given a narrow meaning to mean only pendency of the arbitration proceedings before the arbitrator. It would also cover the proceeding before the court and any proceeding which are required to be taken under the Arbitration Act, 1940 for the award becoming the 26 Arb.App 26 of 2007 With Arb.App 27 of 2007 decree under Section 17 thereof and also appeal arising thereunder. But in this case the application under section 11 (5) of the Arbitration and Conciliation Act ,1996 having been filed after coming into force of the Arbitration and Conciliation Act, 1996 and the award which was impugned before the learned court below having been made by an arbitral tribunal constituted under the provisions of the Arbitration and Conciliation Act, 1996 in these cases and the provisions of the Arbitration and Conciliation Act, 1996 only are applicable to these cases and the ground of the application filed under section 34 of the Arbitration and Conciliation Act, 1996 in the learned court below cannot change the law as it is a subtle principle of law that is wrong mentioning of the law cannot change the law.
27. Mr. Srivastava next submitted that Section 85 of the Arbitration and Conciliation Act, 1996 repealed the Arbitration Act, 1940 and the only exception is provided in Section 85 (2) of the 1996 Act to the proceedings which has commenced when Arbitration Act, 1940 was in force and continued after coming into force of 1996 Act and in this respect, the learned counsel for the respondent relied upon the judgment of Hon'ble Patna High Court in the case of Rajan Kumar Verma and Another Vs. Sachchidanand Singh reported in AIR 2006 Patna 1 and submitted that when an act is repealed it must be considered that it never existed. Hence, it is submitted by the learned counsel for the respondents that the submission of the appellant that Section 85 (2) (a) of the Arbitration and Conciliation Act 1996, would keep alive the Arbitration Act, 1940 is fallacious.
28. On the point of grounds of sufficient cause tried to be established by the appellants for condoning the delay in filing these two appeals, learned counsel for the respondent 27 Arb.App 26 of 2007 With Arb.App 27 of 2007 submitted that in view of the pronouncement of the Hon'ble Supreme Court of India in the case of Varindera and NV International there is no question of condoning the delay beyond the period of 120 days and in this case admittedly there is a delay of more than 120 days in filing these two appeals hence the question of condoning the delay in filing these two time barred appeals does not arise. It is then submitted that otherwise also delay cannot be condoned for the following reasons:
(i) Delay was inordinate (ii) It was not properly explained
(iii) Grounds alleged in support of application filed under Section 5 of the Limitation Act did not constitute a sufficient cause.
And in this respect, learned counsel for the respondents relies upon the paragraph-11, 11.1, 11.2 and 11.3 of the judgment of Hon'ble Supreme Court of India in the case of HUDA v. Gopi Chand Atreja reported in (2019) 4 SCC 612.
Mr. Srivastava, in support of his contention that in view of sub-section (2) of Section 29 of the Limitation Act,1963 as other period has been prescribed under the special enactment of the Arbitration and Conciliation Act, 1996 for moving the application otherwise hence the period of limitation provided for in section 34 (3) of the said Act, will govern the proceedings under the act and not as per the provisions of the Limitation Act,1963, next relied upon the judgment of Hon'ble Supreme Court of India in the case of State of Goa Vs. Western Builders reported in (2006) 6 SCC 239 paragraph-15 of which reads as under:-
15. Therefore, general proposition is by virtue of Section 43 of the Act of 1996 the Limitation Act, 1963 applies to the Act of 1996 but by virtue of sub-section (2) of Section 29 of the Limitation Act, if any other period has been prescribed under the special enactment for moving the application or otherwise 28 Arb.App 26 of 2007 With Arb.App 27 of 2007 then that period of limitation will govern the proceedings under that Act, and not the provisions of the Limitation Act.
In the present case under the Act of 1996 for setting aside the award on any of the grounds mentioned in sub-section (2) of Section 34 the period of limitation has been prescribed and that will govern. Likewise, the period of condonation of delay i.e. 30 days in the proviso.
It is submitted by the learned counsel for the respondent that these appeals being hopelessly barred by time, the same are liable to be dismissed.
29. Having heard the submissions made at the bar, this Court thinks it fit to address the controversy regarding applicability of the provisions of the Arbitration Act of 1940 to this case. True it is that at the hearing of these appeals neither of the parties ultimately agitated before the court that the provisions of the Arbitration Act, 1940 is applicable to the facts of the case. The controversy arose because of the ground taken by the respondent in its application under section 34 of the Arbitration and Conciliation Act, 1996 before the learned court below that the provisions of the Arbitration Act, 1940 is applicable to the facts of the case. Sub-section 2 of the section 85 of the Arbitration and Conciliation Act, 1996, which is the saving clause of this new act, in categorical terms envisages applicability of the provisions of Arbitration Act, 1940 in the following circumstances:
(i) to the arbitral proceedings which commenced before coming into force of the arbitration and conciliation act 1996;
(ii) but they applicability of the provisions of the Arbitration Act 1940 given to the arbitral proceedings which commenced before coming into force of the Arbitration and Conciliation Act, 1996 is with a rider, that in case of such proceedings if the parties agree that the provisions of the Arbitration and Conciliation Act 1996 would be applicable to such arbitral proceeding, then the provisions of the Arbitration and Conciliation Act 1996 will still be applicable to such arbitral 29 Arb.App 26 of 2007 With Arb.App 27 of 2007 proceedings.
(iii) there is not even an iota of confusion that the provisions of the Arbitration and Conciliation Act 1996 would be applicable to all arbitral proceedings which commenced on or after the Arbitration and Conciliation Act 1996 came into force.
There is no dispute that the application under section 11 (5) of the Arbitration and Conciliation Act, 1996 was filed in this case after coming into force of the Arbitration and Conciliation Act 1996. The law has by now been settled that after the 1996 Act has come into force, parties cannot agree to the applicability of the Arbitration Act 1940. The new act would be applicable on or after the new act came into force as has been held by the Honourable Supreme Court of India in the case of Thyssen Stahlunion Gmbh v. Steel Authority of India Ltd (1999) 9 SCC 334.
Under such circumstances this Court has no hesitation in holding that only the provisions of the Arbitration and conciliation Act, 1996 is applicable to this case.
So far as the submission of the parties in the matter of Limitation is concerned, it is pertinent to mention here that there is no quarrel that if the law settled in the judgment of N.V. International Vs. The State of Assam (supra) is ratio decidendi then the same is a binding precedent in view of article 141 of the Constitution of India for all Courts of this country. It is the contention of the learned counsel for the appellants that the law settled in the judgment of N.V. International Vs. The State of Assam (supra) is obiter dicta whereas it is the contention of the learned counsel for the respondent that the same is ratio decidendi. So the point to be determined in this appeal so far as the first point regarding delay in filing this appeal is concerned is:
"Whether the principle of law settled in the judgment of N.V. International Vs. The State of Assam (supra) is obiter dicta or 30 Arb.App 26 of 2007 With Arb.App 27 of 2007 ratio decidendi?
30. The Supreme Court of India has the occasion to consider the difference between obiter dicta and ratio decidendi in the case of State of Haryana v. Ranbir, (2006) 5 SCC 167 wherein the Honourable Court observed as under in paragraph 12 and 13:
"12. Xxxxxxxx A decision, it is well settled, is an authority for what it decides and not what can logically be deduced therefrom. The distinction between a dicta and obiter is well known. Obiter dicta is more or less presumably unnecessary to the decision. It may be an expression of a viewpoint or sentiments which has no binding effect. See ADM, Jabalpur v. Shivakant Shukla. It is also well settled that the statements which are not part of the ratio decidendi constitute obiter dicta and are not authoritative. (See Divisional Controller, KSRTC v. Mahadeva Shetty.)
13. In Director of Settlements, A.P. v. M.R. Apparao it was held: (SCC pp. 650-51, para 7) "An 'obiter dictum' as distinguished from a ratio decidendi is an observation by the Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such a obiter may not have a binding precedent ... but it cannot be denied that it is of considerable weight."
(Emphasis Supplied)
31. The Supreme Court of India also considered the difference between obiter dicta and ratio decidendi in the case of Divisional Controller, KSRTC v. Mahadeva Shetty and Another, (2003) 7 SCC 197 paragraph-23 of which reads as under:
"23. Xxxxxxxxxxx The decision ordinarily is a decision on the case before the court, while the principle underlying the decision would be binding as a precedent in a case which comes up for decision subsequently. Therefore, while applying the decision to a later case, the court dealing with it should carefully try to ascertain the principle laid down by the previous decision. A decision often takes its colour from the question involved in the case in which it is rendered. The scope and authority of a precedent should never be expanded unnecessarily beyond the needs of a given situation. The only thing binding as an authority upon a subsequent Judge is the 31 Arb.App 26 of 2007 With Arb.App 27 of 2007 principle upon which the case was decided. Statements which are not part of the ratio decidendi are distinguished as obiter dicta and are not authoritative. The task of finding the principle is fraught with difficulty as without an investigation into the facts, it cannot be assumed whether a similar direction must or ought to be made as a measure of social justice. Precedents sub silentio and without argument are of no moment. Mere casual expressions carry no weight at all, nor every passing expression of a Judge, however eminent, can be treated as an ex cathedra statement having the weight of authority.(Emphasis Supplied)
32. In the case of Union of India and Others v. Dhanwanti Devi and Others, (1996) 6 SCC 44, the Supreme Court of India has the occasion to consider the difference between obiter dicta and ratio decidendi by observing as under in paragraph 9:
9. Before adverting to and considering whether solatium and interest would be payable under the Act, at the outset, we will dispose of the objection raised by Shri Vaidyanathan that Hari Krishan Khosla case2 is not a binding precedent nor does it operate as ratio decidendi to be followed as a precedent and is per se per incuriam. It is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi.
According to the well-settled theory of precedents, every decision contains three basic postulates--(i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in the judgment. Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there is not intended to be exposition of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. It would, therefore, be not profitable to extract a sentence here and there from the 32 Arb.App 26 of 2007 With Arb.App 27 of 2007 judgment and to build upon it because the essence of the decision is its ratio and not every observation found therein. The enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. The concrete decision alone is binding between the parties to it, but it is the abstract ratio decidendi, ascertained on a consideration of the judgment in relation to the subject-matter of the decision, which alone has the force of law and which, when it is clear what it was, is binding. It is only the principle laid down in the judgment that is binding law under Article 141 of the Constitution. A deliberate judicial decision arrived at after hearing an argument on a question which arises in the case or is put in issue may constitute a precedent, no matter for what reason, and the precedent by long recognition may mature into rule of stare decisis. It is the rule deductible from the application of law to the facts and circumstances of the case which constitutes its ratio decidendi.
33. The rule for determining ratio decidendi of a case is stated thus by Prof. John Chipman Gray at page 261 in the Nature and Sources of Law (2nd Ed., 1921) and quoted at page 193 of Jurisprudence in Action as under :
" It must be observed that at the common law not every opinion expressed by a judge forms a judicial precedent. In order that an opinion may have the weight of a precedent, two things must concur; it must be, in the first place, an opinion given by a Judge, and in the second place, it must be an opinion the formation of which is necessary for the decision of the particular case".
34. In view of the settled principle of law as discussed above and after carefully going through the judgment of the Honourable Supreme Court of India in the case of N.V. International Vs. The State of Assam (supra), this Court finds that the facts of the case before the Supreme Court of India was that the District Judge rejected the application under section 34 of the Arbitration and Conciliation Act 1996 on 30/05/2010. The appeal under section 37 of the Arbitration and Conciliation Act 1996 was filed in March 2017 after a delay of 189 days. The High Court did not condone the delay in filing the appeal as no 33 Arb.App 26 of 2007 With Arb.App 27 of 2007 sufficient cause was made out. It was argued by the appellant before the Supreme Court of India that unlike section 34, section 37 of the Arbitration and Conciliation Act,1996 does not exclude Section 5 of the Limitation Act, 1963 is a result of which, even if the 90 day period is over, if a condonation application is made under Section 5 of the Limitation Act, it should be considered on its own merit notwithstanding the length of delay. This contention of the appellant was countered by the learner counsel for the respondent before the Supreme Court by contending that the delay of 189 days cannot be condoned as the object of spiritual evolution of the dispute referred to arbitration would be subverted. The Hon'ble Supreme Court of India quoted their entire judgment passed by it in the case of Varindera (supra) where it had held that any delay beyond 120 days in filing an appeal under section 37 of the Arbitration and Conciliation Act, 1996 from the date of disposal of the application under section 34 of the said Act either dismissed or allowed should not be allowed as it will defeat the overall statutory purpose of arbitration proceedings being decided with utmost dispatch and went on to add that the period of 90 days which can be said to be equivalent to the period of three months as provided in section 34 (3) of the said act to be the period within which the application under Section 34 of the said act is to be filed, which the Hon'ble Court considered is applicable to filing of the appeal under Section 37 of the said act also on the principle that the appeal is continuation of the suit, and further added to the said period of 90 days, period of 30 days as envisaged in the proviso of the said sub-section (3) of Section 34 of the said act which is the period even after which a Court on being satisfied that the applicant was prevented by sufficient cause, may entertain. In this backdrop, it can very well be said that the principle of law that an appeal under Section 37 of the said Act should not be 34 Arb.App 26 of 2007 With Arb.App 27 of 2007 allowed if it is filed beyond 120 days from the date on which the application under Section 34 of the said Act was either dismissed or allowed on the ground that the same will defeat the overall statutory purpose of the arbitration proceedings being decided with utmost dispatch as decided in the case of Varindera(supra) and reiterated in the case of NV International (supra) is the enunciation of the reason and is also the principle on which the question before the court has been decided the case concerned as well as the formation of the said opinion was necessary for the decision of that particular case hence the same is a binding precedent. Because of the discussions made above, this Court has no hesitation in holding that by no stretch of imagination, it can be said that the principal of law decided in the case of Varindera(supra) and reiterated in the case of NV International (supra) is an obiter dicta. Accordingly, this Court is of the considered view that the principle of law settled in the judgment of N.V. International Vs. The State of Assam (supra) is ratio decidendi. This point for determination is answered thus.
35. So far as the contention of the appellants that the judgment of the Supreme Court of India in the case of Varindera(supra) and reiterated in the case of NV International (supra) is per inquriam, is concerned, this Court do not find any merit in the said submission as mentioning the period of 3 months as 90 days cannot be said to be a non- existent provision of law in the statute. The facts of the case of Ajaib Singh (supra) are entirely different from the facts in the case of Varindera(supra) and reiterated in the case of NV International (supra) in the sense that no period of limitation was prescribed in the industrial disputes act in respect of an application under section 33-C of the act, whereas the period of 3 months limitation and entertaining an application even the period of limitation of 3 months in case the Court is satisfied 35 Arb.App 26 of 2007 With Arb.App 27 of 2007 that the applicant was prevented by sufficient cause for making such application is existing in the section 34 (3) of the Arbitration and Conciliation Act 1996 and the Honourable Supreme Court of India has made the said period of limitation applicable to the appeal is filed under section 37 of the said act by applying the principle that an appeal is the continuation of the suit keeping in mind the overall statutory purpose of arbitration proceedings being decided with utmost dispatch. The other judgment of the Honourable Supreme Court of India relied upon by the learned counsel for the appellants are of general principles of law settled in various cases but keeping in view the specific purpose for which the law has been laid down by the Hon'ble Supreme Court of India in the case of Varindera(supra) and reiterated in the case of NV International (supra), this Court is of the considered view that those principles are not open to be applied to the case of Varindera(supra) and reiterated in the case of NV International (supra) for the purpose of terming the same to be per incuriam.
36. In view of the discussions made above, as admittedly both these appeals have undisputedly been filed beyond the period of 120 days and is in view of the principle of law settled in the case of Varindera(supra) and reiterated in the case of NV International (supra), both these appeals are barred by limitation hence are liable to be dismissed on this score alone. But in view of the reasons already mentioned in the foregoing paragraphs of this judgment, this court is also proceeding to consider the submissions made on the merits of the appeal.
37. On the merits of these appeals, it was submitted by the learned counsel for the appellants that the dispute between the parties was on rate which was payable. The variance of the rate which was payable to the appellants arose because of the change in distance slab which was earlier more than 5 km upon 36 Arb.App 26 of 2007 With Arb.App 27 of 2007 which a higher amount was paid but the entitlement of payment of the appellants was reduced as the distance slab of the route was subsequently reduced to be below 5 km by an ex parte measurement. It was contended by Mr P.N.Rai, the learned counsel for the appellants that the question to be considered by this court is as to whether the ex parte distance measurement of new route could be forced and what was the meaning of measurement that is measurement of the work or the measurement of the distance. It was next submitted by the learned counsel for the appellants that the award decided the dispute on facts, evidence and interpretation of contracts in favour of the transporter claimant. The Arbitrator was the final judge on these aspects. In support of his contention, the learned counsel for the appellants relied upon the judgment of Hon'ble Supreme Court of India in the case of McDermott International Inc. Vs. Burn Standard Co. Ltd. and Others reported in (2006) 11 SCC 181 para-112 of which reads as under:-
112. "It is trite that the terms of the contract can be express or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpretation of a contract is a matter for the arbitrator to determine, even if it gives rise to determination of a question of law. (See Pure Helium India (P) Ltd. v. ONGC [(2003) 8 SCC 593] and D.D. Sharma v. Union of India [(2004) 5 SCC 325]."(Emphasis Supplied)
38. Learned counsel for the appellant in this respect next relied upon the judgment of Hon'ble Supreme Court of India in the case of Navodaya Mass Entertainment Ltd. Vs. J.M. Combines reported in (2015) 5 SCC 698 para-8 of which reads as under:-
8. "In our opinion, the scope of interference of the court is very 37 Arb.App 26 of 2007 With Arb.App 27 of 2007 limited. The court would not be justified in reappraising the material on record and substituting its own view in place of the arbitrator's view. Where there is an error apparent on the face of the record or the arbitrator has not followed the statutory legal position, then and then only it would be justified in interfering with the award published by the arbitrator. Once the arbitrator has applied his mind to the matter before him, the court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the arbitrator would prevail. [See Bharat Coking Coal Ltd. v. L.K. Ahuja [(2004) 5 SCC 109] , Ravindra & Associates v. Union of India [(2010) 1 SCC 80 : (2010) 1 SCC (Civ) 20] , Madnani Construction Corpn. (P) Ltd. v. Union of India [(2010) 1 SCC 549 : (2010) 1 SCC (Civ) 168] , Associated Construction v. Pawanhans Helicopters Ltd.
[(2008) 16 SCC 128] and Satna Stone & Lime Co. Ltd. v. Union of India [(2008) 14 SCC 785] .]" (Emphasis Supplied)
39. Learned counsel for the appellant next submitted that it is a settled principle of law that an appellate court can interfere with the findings of the arbitral tribunal on the ground of public policy only when the award shocks the conscience of the Court but could not interfere with any award merely because it thinks it unjust to do what it thinks Justice and in this respect the learned counsel for the appellants relied upon the judgment of Hon'ble Supreme Court of India in the case of Sutlej Construction Ltd. Vs. State (UT of Chandigarh), (2018) 1 SCC 718 para-11of which read as under:-
"11. It has been opined by this Court that when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the Court and would not include what the Court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be "justice". ([Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204]) (Emphasis Supplied)
40. Learned counsel for the appellants in this respect next relied upon the judgment of Hon'ble Supreme Court of India in the case of National Highways Authority of India Vs. JSC Centrodorstory, (2016) 12 SCC 592 para-13 of which reads as under:-
13. "Having considered rival submissions, we are of the view that the assessment made by the Arbitral Tribunal in the instant case as affirmed by the High Court was definitely within its jurisdiction.
It has consistently been laid down by this Court that construction of 38 Arb.App 26 of 2007 With Arb.App 27 of 2007 the terms of a contract is primarily for an arbitrator or Arbitral Tribunal to decide and unless the arbitrator or Arbitral Tribunal construes the contract in such a way that no fair minded or reasonable person could do, no interference by Court is called for. Viewed thus, we do not see any reason or justification to interfere in the matter. The view that the increase in rates of service tax in respect of bank guarantee and insurance premium is directly relatable to terms of the contract and performance under the contract is certainly a possible view." (Emphasis Supplied)
41. Learned counsel for the appellants regarding the settled principle of law that for interpreting the terms of a contract, the conduct of the parties, the arbitral tribunal can look into and consider the correspondences exchanged between the parties the learned counsel for the appellants then relied upon the judgment of Hon'ble Supreme Court of India in the case of MMTC Ltd. Vs. Vedanta Ltd., (2019) 4 SCC 163 para-16 of which reads as under:-
16. "It is equally important to observe at this juncture that while interpreting the terms of a contract, the conduct of parties and correspondences exchanged would also be relevant factors and it is within the arbitrator's jurisdiction to consider the same. [See McDermott International Inc. v. Burn Standard Co. Ltd.
[McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] ; Pure Helium India (P) Ltd. v. ONGC [Pure Helium India (P) Ltd. v. ONGC, (2003) 8 SCC 593] and D.D. Sharma v. Union of India [D.D. Sharma v. Union of India, (2004) 5 SCC 325] .]" (Emphasis Supplied)
42. It is also submitted by the learned counsel for the appellants that the learned Sub-Judge set aside the award upon reading half of the contract clause-16 and failed to take into consideration the following words appearing in the said clause:
"area at any time fixed by him in writing subsequent to the suspension referred to ever" after the words company's GM concerned and this misreading led to the missing out clause 15 without which Clause 16 had no application. It is next submitted by the learned counsel for the appellants that the words "suspension referred to above" means the words "suspension" appearing in clause 15 of the contract agreement which reads as under:39
Arb.App 26 of 2007 With Arb.App 27 of 2007 "15. When any exigency exists which in the opinion of the company warrants immediate suspension of the work, the work shall immediately be suspended at any time at the discretion of the company and without incurring any liability whatsoever on this account."
It is then submitted by the learned counsel for the appellants that the learned Sub-Judge failed to consider that there was no question of any suspension involved in the facts of the case, and as such application of clause -16 was wholly misplaced. It is then submitted by the learned counsel for the appellants that the learned Sub-Judge misconstrued that clause 16 of the contract agreement contemplates that measurement shall be carried out at the appointed time means time fixed unilaterally and without notice to the contractor either before or even after fixing the time. It is next submitted that the learned Sub-Judge ought to have come to the conclusion that the expression "whether the contractor is present or not"
means the contractor being present or not despite notice of the measurement been given to him or knowing about the time of measurement. It is next submitted by the learned counsel for the appellants that the learned Sub-Judge ought to have held that under clause 22 of the terms and condition of the contract which empowers the company towards just any some due and payable from the contractor is a due which is payable to the company fairly and not a due which is claimed by the company on the basis of a measurement done behind the back of the appellants, without notice to the appellants and in violation of the other procedural requirements. It is further submitted by the learned counsel for the appellants that Clause 16 of the contract agreement applies to the measurement of work and not measurement to route and thus no ground was made out for interference with the award impugned before the learned court below as per the narrow scope of Section 34 of 40 Arb.App 26 of 2007 With Arb.App 27 of 2007 the Arbitration and Conciliation Act, 1996. It is then submitted by the learned counsel for the appellant that the issue of limitation of the main claim was also raised which has been decided in appellants' favour by the arbitral tribunal as well as by the Court under Section 34 and no appeal having been preferred by the CCL against the concurrent finding on limitation and the omission has continued even after the order of the Sub-Judge stood appealed against and went under the risk of being set aside on those points on which the Sub-Judge has found in CCL's favour. So, the matter has reached finality as unchallenged. Therefore, it is submitted that the respondent cannot be allowed to take the plea at this stage, that some part of the Sub-Judge's order was wrong. It is then submitted that the respondent at the hearing of the appeal has tried to take shelter of Order 41 Rule 33 of the Code of Civil Procedure to assail the order of the Sub-Judge on the point of limitation of the main claim, which may not be allowed for the following reasons:-
(a) CPC does not apply to arbitration appeals under Section 37 of the new act as Arbitration and Conciliation Act, 1996 is a self-contained code implying a negative import that whatever has not been mentioned in the said Act is not permissible.
In this respect, learned counsel for the appellant relied upon the judgment of Hon'ble Supreme Court of India in the case of Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd. (2011) 8 SCC 333 para-89 of which reads as under:-
89. "It is, thus, to be seen that Arbitration Act, 1940, from its inception and right through to 2004 (in P.S. Sathappan [(2004) 11 SCC 672] ) was held to be a self-contained code. Now, if the Arbitration Act, 1940 was held to be a self-contained code, on matters pertaining to arbitration, the Arbitration and Conciliation Act, 1996, which consolidates, amends and designs the law relating to arbitration to bring it, as much as possible, in harmony with the Uncitral Model must be held only to be more so. Once it is held that the Arbitration Act is a self-contained code and exhaustive, then it must also be held, using the lucid expression of Tulzapurkar, J., that it carries with it "a negative import that only such acts as are 41 Arb.App 26 of 2007 With Arb.App 27 of 2007 mentioned in the Act are permissible to be done and acts or things not mentioned therein are not permissible to be done". In other words, a letters patent appeal would be excluded by the application of one of the general principles that where the special Act sets out a self-
contained code the applicability of the general law procedure would be impliedly excluded." (Emphasis Supplied) It is lastly submitted by the learned counsel for the appellants that there had been no legal and valid ground for the learned Sub-Judge to interfere with the award of the arbitral tribunal impugned before it, hence the impugned order of the learned Sub-Judge is not sustainable in law and be set aside and the award of the learned arbitral tribunal be restored and these appeals be allowed.
43. Mr. A. K. Srivastava on the other hand defended the impugned order of the learned Sub-Judge and submitted that the jurisdiction of the civil court to which the right decide a lis between the parties have been conferred, can only be taken away by any statute in specific terms and such exclusion of right cannot be easily inferred because there is always a strong presumption that the civil courts have the jurisdiction to decide all question of civil nature, therefore, if at all there has to be an inference, the same should be in favour of the jurisdiction of the court rather than the exclusion of the jurisdiction and there being no such exclusion of the Code in specific terms except to the extent stated in Section 37 (2), inference cannot be drawn that merely because the Act has not provided Code of Civil Procedure to the applicable by inference it should be held that the Code is inapplicable. In support of this contention, Mr. Srivastava relied upon the judgment of Hon'ble Supreme Court of India in the case of ITI Limited Vs. Siemens Public Communication Network Limited reported in (2002) 5 SCC 510 paragraph-11 of which reads as under:-
11. "It has been held by this Court in more than one case that the jurisdiction of the civil court to which a right to decide a lis between the parties has been conferred can only be taken by a statute 42 Arb.App 26 of 2007 With Arb.App 27 of 2007 in specific terms and such exclusion of right cannot be easily inferred because there is always a strong presumption that the civil courts have the jurisdiction to decide all questions of civil nature, therefore, if at all there has to be an inference the same should be in favour of the jurisdiction of the court rather than the exclusion of such jurisdiction and there being no such exclusion of the Code in specific terms except to the extent stated in Section 37(2), we cannot draw an inference that merely because the Act has not provided CPC to be applicable, by inference it should be held that the Code is inapplicable. This general principle apart, this issue is now settled by the judgment of a three-
Judge Bench of this Court in the case of Bhatia International v. Bulk Trading S.A. [(2002) 4 SCC 105] wherein while dealing with a similar argument arising out of the present Act, this Court held:
(SCC p. 116, para 15) "While examining a particular provision of a statute to find out whether the jurisdiction of a court is ousted or not, the principle of universal application is that ordinarily the jurisdiction may not be ousted unless the very statutory provision explicitly indicates or even by inferential conclusion the court arrives at the same when such a conclusion is the only conclusion."
44. It is next submitted by Mr. Srivastava that in the case of Bhatia International Vs. Bulk Trading (supra) the law has been settled while examining a particular provision of the statute to find out whether the jurisdiction of a court is ousted or not, the principles of universal application is that ordinarily the jurisdiction may not be ousted unless the very statutory provision explicitly indicates or even by inferential conclusion, the court arrives at the same when such a conclusion is the only conclusion. Mr. Srivastava next submitted that the appellate court has power to pass any decree and make any order which ought to have been passed according to law or make such further or other decree or order as case may require and this power may be exercised by the court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any respondent, although such respondent and party may not have filed appeal or objection.
In support of his contention, Mr. Srivastava relied upon the judgment of Hon'ble Supreme Court of India in the case of Giani Ram and Others Vs. Ramji Lal and Others reported in AIR 1969 SC 1144 para-8 of which reads as under:-
43Arb.App 26 of 2007 With Arb.App 27 of 2007
8. "Order 41 Rule 33 of the Code of Civil Procedure was enacted to meet a situation of the nature arising in this case. Insofar as it is material, the rule provides:
"The appellate court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection."
The expression "which ought to have been passed" means "which ought in law to have been passed". If the appellate court is of the view that any decree which ought in law to have been passed, but was in the fact not passed by the subordinate court, it may pass or make such further or other decree or order as the justice of the case may require.
It is further submitted by the learned counsel for the respondent that it has been reiterated by the Hon'ble Supreme Court of India in the case of Koksingh Vs. Smt. Deokarbai reported in AIR 1976 SC 634 paragraph-6 and 7 of which reads as under:-
6. In Giani Ram v. Ramji Lal [(1969) 1 SCC 813 : (1969) 3 SCR 944] the Court said that in Order 41 Rule 33, the expression "which ought to have been passed" means "what ought in law to have been passed" and if an appellate Court is of the view that any decree which ought in law to have been passed was in fact not passed by the court below, it may pass or make such further or other decree or order as the justice of the case may require.
7. Therefore, we hold that even if the respondent did not file any appeal from the decree of the trial court, that was no bar to the High Court passing a decree in favour of the respondent for the enforcement of the charge."
45. Mr. Srivastava next submits that the words "as the case may require" used in Order 41 Rule 33 have been put in wide terms to enable appellate court to pass any order to meet ends of justice and the constraint on this power are:-
(a)That the parties before the lower court should be there before the appellate court.44
Arb.App 26 of 2007 With Arb.App 27 of 2007
(b)The question raised must properly arise out of judgment of lower court.
The appellate court should not refuse to exercise such discretionary power on mere technicality and further the power under Order 41 Rule 33, the appellate court can decide any question not only between the appellant and respondent but also respondent and co-respondent as has been held by the Hon'ble Supreme Court of India in the case of Mahant Dhangir and Another Vs. Madan Mohan and Others reported in AIR 1988 SC 54 paragraph-15 of which reads as under:-
15. "But that does not mean, that the Math should be left without remedy against the judgment of learned Single Judge. If the cross-objection filed under Rule 22 of Order 41 CPC was not maintainable against the co-respondent, the court could consider it under Rule 33 of Order 41 CPC. Rule 22 and Rule 33 are not mutually exclusive. They are closely related with each other. If objection cannot be urged under Rule 22 against co-respondent, Rule 33 could take over and come to the rescue of the objector. The appellate court could exercise the power under Rule 33 even if the appeal is only against a part of the decree of the lower court. The appellate court could exercise that power in favour of all or any of the respondents although such respondent may not have filed any appeal or objection. The sweep of the power under Rule 33 is wide enough to determine any question not only between the appellant and respondent, but also between respondent and co-respondents. The appellate court could pass any decree or order which ought to have been passed in the circumstances of the case. The appellate court could also pass such other decree or order as the case may require. The words "as the case may require" used in Rule 33 of Order 41 have been put in wide terms to enable the appellate court to pass any order or decree to meet the ends of justice. What then should be the constraint? We do not find many. We are not giving any liberal interpretation. The rule itself is liberal enough. The only constraint that we could see, may be these: That the parties before the lower court should be there before the appellate court. The question raised must properly arise out of the judgment of the lower court. If these two requirements are there, the appellate court could consider any objection against any part of the judgment or decree of the lower court. It may be urged by any party to the appeal. It is true that the power of the appellate court under Rule 33 is discretionary. But it is a proper exercise of judicial discretion to determine all questions urged in order to render complete justice between the parties. The court should not refuse to exercise that discretion on mere technicalities."(Emphasis Supplied) which has been reiterated by Hon'ble Supreme Court of India 45 Arb.App 26 of 2007 With Arb.App 27 of 2007 in the case of K. Muthhuswami Gounder Vs. N. Palaniappa Gounder reported in (1998) 7 SCC 327 paragraph-12 of which reads as under:-
12. "Order 41 Rule 33 enables the appellate court to pass any decree or order which ought to have been made and to make such further order or decree as the case may be in favour of all or any of the parties even though (i) the appeal is as to part only of the decree; and
(ii) such party or parties may not have filed an appeal. The necessary condition for exercising the power under the Rule is that the parties to the proceeding are before the court and the question raised properly arises (sic out of) one of the judgments of the lower court and in that event, the appellate court could consider any objection to any part of the order or decree of the court and set it right. We are fortified in this view by the decision of this Court in Mahant Dhangir v. Madan Mohan [1987 Supp SCC 528 : AIR 1988 SC 54] . No hard and fast rule can be laid down as to the circumstances under which the power can be exercised under Order 41 Rule 33 CPC and each case must depend upon its own facts. The Rule enables the appellate court to pass any order/decree which ought to have been passed. The general principle is that a decree is binding on the parties to it until it is set aside in appropriate proceedings. Ordinarily the appellate court must not vary or reverse a decree/order in favour of a party who has not preferred any appeal and this Rule holds good notwithstanding Order 41 Rule 33 CPC. However, in exceptional cases, the Rule enables the appellate court to pass such decree or order as ought to have been passed even if such decree would be in favour of parties who have not filed any appeal. The power though discretionary should not be declined to be exercised merely on the ground that the party has not filed any appeals. We are not impressed with the argument that the finding as to the nature of Exhibit A-6, the security deed has become final as the finding operates as res judicata. When the entire matter was still in appeal and any part of the finding could be varied by the appellate court, it is idle to contend that the same had become final. So also when the matter had not attained finality and was still in dispute, the principle of res judicata could not arise. In some cases, finding recorded at an earlier stage will operate as res judicata if such finding had become final. In the present case, that was not the position. The High Court had to find out the rights of the parties arising out of the deed under Exhibit A-6 and necessarily had to give a finding one way or the other to determine the status of the appellant as puisne mortgagee. In doing so, the High Court decided that the document Exhibit A-6 did not amount to a charge and therefore, the appellant did not derive any rights of puisne mortgagee thereunder.The High Court having so held proceeded further to upset the decree as otherwise if the decree for redemption remained in the face of the finding of non-existence of a charge with the consequent right as puisne mortgagee, the position would be anomalous, if not absurd. And so, the High Court in the special circumstances arising in this case exercised the discretion vested in it under Order 41 Rule 33 CPC. It cannot be said that such a question was not germane to 46 Arb.App 26 of 2007 With Arb.App 27 of 2007 the determination of the matter in issue. To defend the finding in his favour, the respondent could contend that the appellant could not claim to be a puisne mortgagee as no charge arises from Ex. A-6. In that event it cannot be said that there is any inconsistency in the stand of the respondent. Therefore, we find that there is no merit in the contention of the appellant and the same is rejected." (Emphasis Supplied).
46. At this stage it would be proper to decide the third point for determination involved in this appeal which is as under:
"Whether the respondent can attack an adverse finding of the trial court against it, in an appeal filed under section 37 of the Arbitration and Conciliation act 1996, even if such respondent has not filed any cross objection?"
So far as the contention of the learned counsel for the appellants regarding the judgment of Hon'ble Supreme Court of India in the case of Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd. (2011) 8 SCC 333 is concerned, in the considered view of this court, the Supreme Court in that case was not considering the applicability of the procedure laid down in order XLI of the Code of Civil Procedure to the appeals filed under Section 37 of the Arbitration and Conciliation Act, 1996. In my view, the facts before the Supreme Court in the case of Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd. (2011) 8 SCC 333 which is related to, as to whether letter patent appeal can be filed, are thus clearly distinguishable in the facts of this case. Under the provisions of the Arbitration and Conciliation Act, 1996, there is no express bar from the applicability of the code of civil procedure to arbitration proceedings in court. In the absence of any such express and/or implied bar, certainly the procedure applicable to the appeals as provided for in order XLI of the code of civil procedure are applicable to the arbitration proceedings. In my view, the provisions of the code of civil procedure 1908 would apply to the arbitration proceedings filed in the court to the extent, it is not inconsistent with any of the provisions of the Arbitration and Conciliation 47 Arb.App 26 of 2007 With Arb.App 27 of 2007 Act, 1996 as there is no bar under the provisions of the said Act from applicability of the provisions of the Code of Civil Procedure, 1908, the arbitration proceedings filed in Court though Section 19 of the Arbitration and Conciliation Act, 1996 provides that the arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908, but the said provision is not applicable to the proceedings filed in Court including the arbitration applications under Section 34 or appeals under Section 37 of Arbitration and Conciliation Act, 1996. The learned counsel for the appellants resisted the prayer of the respondent to attack the adverse finding on the point of limitation on the ground that no cross objection has been filed by the respondent. But this contention of the appellants is fallacious because if order 41 of the Code of Civil Procedure is not applicable to the appeal is filed under section 37 of the Arbitration and Conciliation Act, 1996, then in the absence of any provision in the Arbitration and Conciliation Act, 1996 to file any cross objection or cross appeal, under which provision of law the respondent would have filed the cross objection or cross appeal. Because of the discussions made above, this Court holds that the respondent-defendant in an appeal can, without filing cross objection attack any adverse finding upon which a decree in part has been passed against the respondent, for the purpose of sustaining the decree to the extent the lower court has dismissed the suit against the decision defendant- respondent. Filing cross objection after 1976 amendment of the Code of Civil Procedure is purely optional and not mandatory. The third point for determination is answered accordingly in the affirmative.
47. It is then submitted by Mr Srivastava, the learned counsel for the respondents that undisputedly the cause of action arose for the dispute leading to the award in the year 1993; notice for appointment of arbitrator was given in 1995 under the 48 Arb.App 26 of 2007 With Arb.App 27 of 2007 Arbitration Act, 1940. The appellant did not take any step for appointment of arbitrator under Section 8 and 20 of the Arbitration Act, 1940 till the Arbitration and Conciliation Act, 1996 came into force. Notice was again given for appointment in 1997 upon which the High court appointed arbitrator. Therefore, it is submitted that the claim of the appellant which is basically a money claim, is hopelessly barred by limitation as cause of action arose in 1993 and the period of limitation is three years. It is then submitted by the counsel for the respondent that the correspondence made by the respondent that the matter is under consideration cannot renew the period of limitation, as the same cannot be termed as acknowledgement of liability of the respondent in terms of section 18 of the Limitation Act 1963. In this respect the learned counsel for the respondents relied upon the judgment of Hon'ble Supreme Court of India in the case of J.C. Budhraja Vs. Chairman, Orissa Mining Corporation Ltd. and Another reported in (2008) 2 SCC 444 paragraph-20 and 21 of which read as under:-
20. "Section 18 of the Limitation Act, 1963 deals with effect of acknowledgment in writing. Sub-section (1) thereof provides that where, before the expiration of the prescribed period for a suit or application in respect of any right, an acknowledgment of liability in respect of such right has been made in writing signed by the party against whom such right is claimed, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. The explanation to the section provides that an acknowledgment may be sufficient though it omits to specify the exact nature of the right or avers that the time for payment has not yet come or is accompanied by a refusal to pay, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the right.
Interpreting Section 19 of the Limitation Act, 1908 (corresponding to Section 18 of the Limitation Act, 1963) this Court in Shapoor Freedom Mazda v. Durga Prosad Chamaria [AIR 1961 SC 1236] held: (AIR p. 1238, paras 6-7)"6. ... acknowledgment as prescribed by Section 19 merely renews debt; it does not create a new right of action. It is a mere acknowledgment of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or even by implication. The statement on which a 49 Arb.App 26 of 2007 With Arb.App 27 of 2007 plea of acknowledgment is based must relate to a present subsisting liability though the exact nature or the specific character of the said liability may not be indicated in words. Words used in the acknowledgment must, however, indicate the existence of jural relationship between the parties such as that of debtor and creditor, and it must appear that the statement is made with the intention to admit such jural relationship. Such intention can be inferred by implication from the nature of the admission, and need not be expressed in words. If the statement is fairly clear then the intention to admit jural relationship may be implied from it. The admission in question need not be express but must be made in circumstances and in words from which the court can reasonably infer that the person making the admission intended to refer to a subsisting liability as at the date of the statement. ... Stated generally courts lean in favour of a liberal construction of such statements though it does not mean that where no admission is made one should be inferred, or where a statement was made clearly without intending to admit the existence of jural relationship such intention could be fastened on the maker of the statement by an involved or far-fetched process of reasoning. ... In construing words used in the statements made in writing on which a plea of acknowledgment rests oral evidence has been expressly excluded but surrounding circumstances can always be considered.
7. ... The effect of the words used in a particular document must inevitably depend upon the context in which the words are used and would always be conditioned by the tenor of the said document...."
21. It is now well settled that a writing to be an acknowledgment of liability must involve an admission of a subsisting jural relationship between the parties and a conscious affirmation of an intention of continuing such relationship in regard to an existing liability. The admission need not be in regard to any precise amount nor by expressed words. If a defendant writes to the plaintiff requesting him to send his claim for verification and payment, it amounts to an acknowledgment. But if the defendant merely says, without admitting liability, it would like to examine the claim or the accounts, it may not amount to acknowledgment. In other words, a writing, to be treated as an acknowledgment of liability should consciously admit his liability to pay or admit his intention to pay the debt. Let us illustrate. If a creditor sends a demand notice demanding payment of Rs 1 lakh due under a promissory note executed by the debtor and the debtor sends a reply stating that he would pay the amount due, without mentioning the amount, it will still be an acknowledgment of liability. If a writing is relied on as an acknowledgment for extending the period of limitation in respect of the amount or right claimed in the suit, the 50 Arb.App 26 of 2007 With Arb.App 27 of 2007 acknowledgment should necessarily be in respect of the subject- matter of the suit. If a person executes a work and issues a demand letter making a claim for the amount due as per the final bill and the defendant agrees to verify the bill and pay the amount, the acknowledgment will save limitation for a suit for recovery of only such bill amount, but will not extend the limitation in regard to any fresh or additional claim for damages made in the suit, which was not a part of the bill or the demand letter. Again we may illustrate. If a house is constructed under the item rate contract and the amount due in regard to work executed is Rs two lakhs and certain part- payments say aggregating to Rs 1,25,000 have been made and the contractor demands payment of the balance of Rs 75,000 due towards the bill and the employer acknowledges liability, that acknowledgment will be only in regard to the sum of Rs 75,000, which is due. If the contractor files a suit for recovery of the said Rs 75,000 due in regard to work done and also for recovery of Rs 50,000 as damages for breach by the employer and the said suit is filed beyond three years from completion of work and submission of the bill but within three years from the date of acknowledgment, the suit will be saved from bar of limitation only in regard to the liability that was acknowledged, namely, Rs 75,000 and not in regard to the fresh or additional claim of Rs 50,000 which was not the subject-matter of acknowledgment. What can be acknowledged is a present subsisting liability. An acknowledgment made with reference to a liability, cannot extend limitation for a time-barred liability or a claim that was not made at the time of acknowledgment or some other liability relating to other transactions. Any admission of jural relationship in regard to the ascertained sum due or a pending claim, cannot be an acknowledgment for a new additional claim for damages."(Emphasis Supplied)
48. Mr. Srivastava next relied upon the judgment of Hon'ble Supreme Court of India in the case of Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation Department and Others reported in (2008) 7 SCC 169 paragraph-45 of which reads as under:-
45. "Learned counsel for the appellant contended that Section 43 of the AC Act makes applicable the provisions of the Limitation Act only to arbitrations, thereby expressing an intent to exclude the application to any proceedings relating to arbitration in a court. The contention of the appellant ignores and overlooks Section 29(2) of the Limitation Act and Section 43(1) of the AC Act. Sub-section (1) of Section 43 of the Act provides that the Limitation Act shall apply to arbitrations as 51 Arb.App 26 of 2007 With Arb.App 27 of 2007 it applies to proceedings in court. The purpose of Section 43 of the AC Act is not to make the Limitation Act inapplicable to proceedings before court, but on the other hand, make the Limitation Act applicable to arbitrations. As already noticed, the Limitation Act applies only to proceedings in court, and but for the express provision in Section 43, the Limitation Act would not have applied to arbitration, as arbitrators are private tribunals and not courts. Section 43 of the AC Act, apart from making the provisions of the Limitation Act, 1963 applicable to arbitrations, reiterates that the Limitation Act applies to proceedings in court. Therefore, the provisions of the Limitation Act, 1963 apply to all proceedings under the AC Act, both in court and in arbitration, except to the extent expressly excluded by the provisions of the AC Act."
49. Mr. Srivastava further submits that Section 3 (1) of the Limitation Act casts duty upon the Court to dismiss a suit if instituted after prescribed period. Hence, it is the duty of the Court in view of Section 3 of the Limitation Act to apply bars of limitation where on patent facts it is applicable even though not specifically pleaded. Evidently, an award under which a time bared debt has been allowed would be in conflict with the public policy of India and in support of his contention, Mr. Srivastava relied upon the judgment of Hon'ble Supreme Court of India in the case of State of Jharkhand and Another Vs. M/s Sutlej Construction Ltd. reported in JBCJ 2018 (4) 669 paragraph-17 and 18 of which read as under:-
17. "Question of limitation is a question relating to the jurisdiction of the Court in as much as it goes to the very root of the Court's jurisdiction to entertain and decide a matter. It has been held that laws of limitation are founded on public policy. It is in the maxim interest reipublicae ut sit finis litium which means it is for the general welfare that a period be put to litigation, the law of limitation finds its genesis. Section 3(1) of the Limitation Act casts a duty upon the Court to dismiss a suit if made after the prescribed period, although limitation is not set up as a defence. In "Maqbul Ahmad and Others Vs. Onkar Pratap Narain Singh and Others" reported in AIR 1935 PC 85, the Privy Council has held that the Court is bound under Section 3 of the Limitation Act to ascertain for itself whether the suit before it is within time and if it fails to do so and entertains a suit or claim which is barred by limitation the Court acts without jurisdiction. In "Rajendra Singh and Others Vs. Santa Singh and Others" reported in (1973) 2 SCC 705 the Supreme Court has held thus; "11.52
Arb.App 26 of 2007 With Arb.App 27 of 2007 ....... Indeed, it is the duty of the Court, in view of Section 3 of the Limitation Act, to apply the bar of Limitation where on patent facts it is applicable even though not specifically pleaded".
18. Evidently, an award under which a time-barred claim has been allowed would be in conflict with the public policy of India."(Emphasis Supplied)
50. Mr. Srivastava then submitted that even Section 43 (1) of Arbitration and Conciliation Act, 1996 provided that Limitation Act, 1963 shall apply to the arbitration as it applies to the proceeding in court. Hence, arbitration shall be deemed to commence on the date referred to in Section 21 of Arbitration and Conciliation Act, 1996 which is the date on which a request for that dispute to be referred to the arbitration is received by the respondent. In this respect, learned counsel for the respondents relied upon the judgment of Hon'ble Supreme Court of India in the case of Milkfood Limited Vs. GMC Ice Cream (P) Ltd. reported in (2004) 7 SCC 288 paragraph-26 and 27 of which read as under:-
26. "The commencement of an arbitration proceeding for the purpose of applicability of the provisions of the Indian Limitation Act is of great significance. Even Section 43(1) of the 1996 Act provides that the Limitation Act, 1963 shall apply to the arbitration as it applies to proceedings in court.
Sub-section (2) thereof provides that for the purpose of the said section and the Limitation Act, 1963, an arbitration shall be deemed to have commenced on the date referred to in Section
21.
27. Article 21 of the Model Law which was modelled on Article 3 of the UNCITRAL Arbitration Rules had been adopted for the purpose of drafting Section 21 of the 1996 Act. Section 3 of the 1996 Act provides for as to when a request can be said to have been received by the respondent. Thus, whether for the purpose of applying the provisions of Chapter II of the 1940 Act or for the purpose of Section 21 of the 1996 Act, what is necessary is to issue/serve a request/notice to the respondent indicating that the claimant seeks arbitration of the dispute."
51. It is next submitted by Mr. Srivastava that it is a settled principle of law that the question regarding the jurisdiction of 53 Arb.App 26 of 2007 With Arb.App 27 of 2007 the arbitrator can be determined by the arbitrator himself and in this respect, Mr. Srivastava relies upon the judgment of Hon'ble Supreme Court of India in the case of Rashtriya Ispat Nigam Limited and Another Vs. M/s. Verma Transport Company reported in (2006) 4 JLJR 97 (SC) paragraph-43 of which reads as under:-
43. "Such a question does not arise herein as the parties herein are parties to the arbitration agreement and the question in regard to the jurisdiction of the arbitrator, if any, can be determined by the arbitrator himself in terms of Section 16 of the 1996 Act."
52. On the point of acknowledgment, it was submitted by Mr. Srivastava that for such acknowledgment under Section 18 of the Limitation Act, 1963, not only the jural relationship of the debtor and creditor should be admitted but the admission of the liability of the debtor must be clearly or by necessary implication be made and the acknowledgment has to be made in writing, signed either personally or by an agreed duly authorized person in this behalf, which is lacking in the letter dated 18th of January 1996 of the respondents conveying the appellants that the matter was under active consideration.
53. It is further submitted by Mr. Srivastava that a note-sheet issued for internal use of office only and it cannot be said that such note-sheet would constitute an acknowledgment within the meaning of Section 18 of the Limitation Act,1963. In this respect, learned counsel for the respondents relied upon the judgment of Hon'ble Patna High Court in the case of Central Coalfields Limited & Others Vs. Nawajiwan Trading Company reported in 1991 (2) PLJR 713 paragraph- 60 and 61 of which read as under:-
"60. An acknowledgement has to be made in writing. Explanation (b) appended to Section 18 signifies the word "signed" means signed either personally or by an agent duly authorised in this behalf.
61. Ext. 3/a is merely a notesheet. There is nothing on record to show that the defendant appellant no. 2 was duly authorised by the appellant no. 1 to make any acknowledgment on its behalf."54
Arb.App 26 of 2007 With Arb.App 27 of 2007
54. Mr Srivastava also relied upon the judgment of Hon'ble Madras High Court in the case of Union of India owning the Southern Railway represented by the General Manager, Madras Vs. Seyadu Beedi Company and Another reported in AIR 1970 Mad 108 (110) paragraph-7 of which reads as under:-
7. "We shall first deal with the claim of the plaintiff in O.S. No. 5 of 1959 on the file of the Sub Court, Tirunelveli. Exhibits A-14 to A-17 show that the assessment of damages to the plaintiffs goods was made on 13th November, 1957. Even if this is taken as the starting point of limitation, and two months' time required to be given to the defendant in giving notice under Section 80 of the CPC is excluded, the suit should have been filed on 13th January, 1959. But the suit was actually filed on 30th January, 1959. The suit is, therefore, clearly barred by limitation. But the learned Subordinate Judge accepted the plea of the plaintiff that there was an acknowledgment of lability by the railway in Exhibit A-32, which is as follows:--
"While acknowledging receipt of your notice referred to above on behalf of your clients Messrs Seyadu Beedi Company, Sindu Poondurai, Tirunelveli, I have to state, that the Railway is having the matter thoroughly investigated and that the cause of damage by water is being enquired, and it is hoped your clients will be advised definitely on the finalisation of the claim shortly.
If, however, in the meanwhile, your clients take the matter to Court, please note and notify them that they will be held liable for all costs the Railway incur in such a proceeding."
Admittedly, there is no express acknowledgment of liability in this conununication sent by the railway to the plaintiff. Sri R. Gopala-swami Iyengar appearing for the respondent-plaintiff urged that on a reading of the plaintiffs Advocate's notice Exhibit A-29 along with this letter Exhibit A-32, it will be clear that there is an implied acknowledgment of liability. The railway has merely acknowledged the receipt of the notice Exhibit A-29 sent by the plaintiff. The fact that the Chief Commercial Superintendent of the Southern Railway has mentioned in Exhibit A-32 that the claim of the plaintiff was under investigation and that he will be advised definitely on the finalisation of the claim cannot be construed as even an implied admission of liability. The further statement in Exhibit A-32 calling upon the plaintiff to abstain from rushing to 55 Arb.App 26 of 2007 With Arb.App 27 of 2007 Court and threatening him that he would be held liable for costs if he did so could not also be considered as an implied acknowledgment of liability, on the ground that the plaintiff was invited to desist from suit on promise of settlement. It is not possible to spell out an admission of liability by even a liberal construction of the letter, Exhibit A-32. The claim of the plaintiff in O.S. No. 5 of 1959, on the file of the Sub-Court, Tirunelveli, is clearly barred by limitation."
55. It is then submitted by the learned counsel for the respondents that on merits also these appeals are liable to be dismissed as the learned Sub-Judge has erroneously observed that the arbitral tribunal considered the letter dated 18 th January, 1996 conveying that the matter was on active consideration of the respondent makes the claim of the appellants within time. It is next submitted by the learned counsel for the respondents that though not specifically mentioned in the impugned order yet the learned Sub-Judge meant that the said letter dated 18th January, 1996 amounts to an acknowledgement under Section 18 of the Limitation Act, 1963. Hence, it is submitted that this Court must set right the wrong committed by the learned Sub-Judge by holding that the said later dated 18th January, 1996 cannot be termed as an acknowledgement under Section 18 of the Limitation Act, 1963. It is also submitted by the learned counsel for the respondents that the finding of the learned Sub-Judge that the arbitral tribunal has ignored the terms of the contract agreement beyond his jurisdiction makes the award in contravention with the fundamental policy of Indian law and thus is in conflict with the Public Policy of India. It is lastly submitted by the learned counsel for the respondents that both these appeals be dismissed on merits.
56. At this stage, this Court would like to deal with the following two more points for determination, being the fourth and fifth points respectively:
(iv) Whether the claims of the appellants are barred by 56 Arb.App 26 of 2007 With Arb.App 27 of 2007 limitation?
(v) Whether the learned Sub-Judge rightly held that the award impugned before him was in conflict with the Public Policy of India?
57. So far as the third point for determination is concerned, undisputedly the claim was for recovery of money from the respondents which were allegedly unjustifiably deducted by the respondents from the other bills of the appellants. Undisputedly, the cause of action for the recovery of the said money claim arose on 2nd November, 1993. The claim being for recovery of money, the legal recourse for recovery of the same should have been made within three years from that date i.e. by 1st November, 1996. The notice invoking the arbitration clause leading to appointment of the present arbitrator, whose award was impugned before the learned Sub-Judge, was issued on 3rd April, 1997 i.e. beyond the period of three years from the date of the first cause of action arose. This Court is of the considered view that the earlier letter of the appellants dated 21st December, 1995 having not been pursued by the appellants the same will be of no help to the appellants so far as the limitation in making the claim is concerned. So far as the letter dated 18th January, 1996 is concerned, after carefully going through the same and keeping in view of the settled principles of law as already discussed in detail in the foregoing paragraphs of this judgment in this respect while discussing the submissions made by the counsels for the rival parties, this court is of the considered view that in the same no jural relationship is admitted by the respondent nor there is any admission of the debt in that letter, hence the said letter cannot constitute an acknowledgement under section 18 of the Limitation Act, 1963 so as to renew or extend the period of limitation for the claimants-appellants. Thus, this Court is of the considered view that the claim of the appellants agitated 57 Arb.App 26 of 2007 With Arb.App 27 of 2007 before the arbitral tribunal is barred by limitation and accordingly the award of the arbitral tribunal is liable to be set aside on this score also.
58. So far as the fourth point for determination is concerned, after carefully going through the documents available in the record, this Court finds that there is no dispute regarding the measurement made for the second time upon which the alleged excess payment made to the appellants was ordered to be recovered by the respondents. In the award which was impugned before the learned court below the arbitral tribunal found fault with the same on the ground that the same was not logically and transparently established in writing and on record with full involvement and participation of an agreement between both the parties. This Court could not find any grievance of the appellants that they were not intimated about the time of the second measurement. Under such circumstances, keeping in view the verbatim of clauses 16 and 22 of the contract agreement, this Court is of the considered view that the learned court below has rightly held that the award passed by the arbitral tribunal was in conflict with the Public Policy of India in view of the several principles of law discussed above and the part of clause 16 which has not been specifically mentioned in the impugned order will certainly in the facts of the case cannot be of any help to the appellants. This fourth point for determination is answered in the affirmative accordingly.
59. The conclusions are summed up as under:
(i) The provisions of the Arbitration and Conciliation Act, 1996 are applicable to these cases.
(ii) The principle of law settled in the judgment of N.V. International Vs. The State of Assam (supra) is ratio decidendi.
(iii) Both these appeals are barred by limitation hence 58 Arb.App 26 of 2007 With Arb.App 27 of 2007 are liable to be dismissed.
(iv) The respondent can attack an adverse finding of the trial court against it, in an appeal filed under section 37 of the Arbitration and Conciliation Act, 1996, even if such respondent has not filed any cross objection.
(v) The claims of the appellants agitated before the arbitral tribunal are barred by limitation.
(vi) The learned Sub-Judge has rightly held that the award impugned before him was in conflict with the Public Policy of India.
60. Because of the discussions made above, this Court is of the considered view that there is no merit in these appeals. Accordingly, these two appeals are dismissed on contest but under the circumstances without any costs.
(Anil Kumar Choudhary, J.) In the High Court of Jharkhand, Ranchi Dated 25/11/2020 AFR/ Animesh 59