Delhi District Court
National Seeds Corporation Ltd vs Smt Dwarkabai Shankarrao Khandagale on 1 September, 2025
IN THE COURT OF SH. PULASTYA PRAMACHALA
DISTRICT JUDGE, (COMMERCIAL COURT)-01,
PATIALA HOUSE COURT, NEW DELHI
INDEX
Sl. HEADINGS Page Nos.
No.
1. Memo of Parties 2
2. Description of case 2-3
4. Grounds of objection 3-4
5. Reply of respondent 4-5
6. Arguments of petitioner & respondent 5-7
7. Appreciation of Arguments, Facts & Law 8-22
8. Decision 23
Digitally
signed by
PULASTYA
PULASTYA PRAMACHALA
PRAMACHALA Date:
2025.09.01
15:27:42
+0530
OMP (comm) No.228/2019 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.1 of 23 Patiala House Court, New Delhi
OMP (COMM) No.228/2019
In the matter of: -
NATIONAL SEEDS CORPORATION LTD.
Having its Registered Office at:
Beej Bhawan, Pusa Complex,
New Delhi-110012.
...Petitioner
Versus
Smt. Dwarkabai Shaankarrao Khandagale,
B-57, New Shanti Niketan Colony,
Trimurti Chowk Jawahar Colony,
Aurangabad-431210.
...Respondent
Date of Institution : 16.12.2019
Arguments heard on : 20.08.2025
Decided on : 01.09.2025
Decision : Petition is dismissed.
JUDGMENT
DESCRIPTION OF CASE
1. Petitioner i.e. National Seeds Corporation Ltd., has filed this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') challenging the impugned Award dated 05.09.2019 as passed by Ld. Sole Arbitrator.
2. The brief facts as averred in the petition are that petitioner and respondent entered into the NSC Grower Agreement on 14.06.2012, whereunder the respondent had purchased "Urid" and "Harbhara" seeds from the petitioner. As per the agreement, the respondent was required to produce crop from the said seeds and return it to the OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.2 of 23 Patiala House Court, New Delhi petitioner. Petitioner pleaded that raw seeds were processed and were transferred to Maharashtra State Ware Housing Corporation, Aurangabad for storage on 12.08.2013. Petitioner averred in the petition that samples were submitted to the State Seed Testing Laboratory, Aurangabad and out of which one lot of seeds belonging to respondent herein, was found infected after seed certification and grading procedure. Petitioner asked respondent to lift her seeds from the warehouse. However, respondent requested for regrading/resampling of the seeds and her request was accepted, but despite various letters, respondent failed to deposit such charges and had not even lifted the defective stock of seeds. Thereafter, petitioner received a legal notice from the respondent, which was replied by the petitioner. Thereafter, respondent approached Hon'ble High Court of Bombay for appointment of arbitrator. As per deliberation before the court, respondent gave notice to the petitioner to invoke arbitration clause and Sh. M.M. Sharma was appointed as sole arbitrator. Vide Award dated 05.09.2019, Ld. Arbitrator allowed part claim of the respondent. Thus, the petitioner filed the present petition.
GROUNDS OF OBJECTION
3. Aggrieved by the said award, present objection petition has been filed by the petitioner mainly on following grounds: -
i. That the Award is contrary to fundamental public policy of India;
ii. That ld. Sole Arbitrator has mechanically passed the award without due application of judicial mind to the factual and legal position OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.3 of 23 Patiala House Court, New Delhi placed before the Ld. Sole Arbitrator.
iii. That the impugned award passed by the Ld. Arbitrator is perverse and suffers from manifest errors;
iv. That the arbitrator has committed a grave error in allowing the claim of the respondent herein even though the same was hopelessly barred by limitation as the limitation expired on 30.09.2016;
v. That the time period spent before Hon'ble High Court of Bombay being excluded while calculating period of limitation, was illegal and arbitrary in the light of the supplementary agreement dated 20.06.2017 as well as the no claim letter given by the respondent;
vi. That ld. Arbitrator failed to appreciate that the issuance of notice as stipulated under Section 21 of the Act and clause 13 of the agreement is mandatory in nature for initiation of the arbitration proceedings;
vii. That ld. arbitrator failed to appreciate the judgment in case Krishan Mittal vs. Municipal Corporation of Delhi (2010) 2 Arb LR 439;
viii.That ld. arbitration has committed grave error on the fact as well as law in holding that petitioner is responsible for the infected seeds by invoking the doctrine of trust;
REPLY/ARGUMENTS FILED BY THE RESPONDENT
4. No reply to the petition was filed by the respondent. Respondent filed written submissions taking plea that the petition is not maintainable as the same is frivolous and baseless; that the petitioner failed to satisfy the grounds mentioned in the petition;
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District Judge (Commercial Court)-01,
Page No.4 of 23 Patiala House Court, New Delhi
that re-appreciation of evidence cannot be allowed; that arbitration award is reasoned and there is no error apparent on the face of it; that the claim of the respondent was not barred by limitation; that the petitioner had made baseless and frivolous claims without proving their legal stand. Respondent has taken stand that ld. Arbitrator had followed due process and gave sound reasoning in reaching the conclusions. (Ref: Om Prakash Verma vs. State of UP (Arb. Appeal No.4 of 2018 Allahabad HC) and Associate Builders vs. Delhi Development Authority, (2015) 3 SCC 49. It has been submitted that this Court ought not to re-examine the issue of Section 14 of Limitation Act. (Ref: Vijay Rampal vs. Diwan Devi and Ors. AIR 1985 SC 1669; Globe Transport vs. Triveni, 1984 86 PLR 259 and Associate Builders vs. Delhi Development Authority, (2015) 3 SCC 49 1996 (4) ALT 798). It has been also submitted that it goes beyond the purview of this Court to go into the merits of the case and re-appreciate the entire evidence. (Reference: MTNL vs. Fujitshu India Pvt. Ltd. (FAO (Os) DHC 63/2015 and McDermott International Inc. vs. Burn Standard Co. Ltd. & Ors. (2006) 11 SCC
181.
ARGUMENTS/SUBMISSIONS OF THE PETITIONER &
RESPONDENT
5. Oral arguments were not made before me. I have perused the plea taken by both the parties in their pleadings and written submissions. It is plea of the petitioner that the cause of action first arose on 30.09.2013, when the petitioner for the first time rejected infected lots of seeds. Ld. Arbitrator had himself admitted that the limitation OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.5 of 23 Patiala House Court, New Delhi expired on 30.09.2016, still he passed the award in favour of respondent disregarding the law of the land. (Ref: State of Orissa vs. Damodar Das (1996) 2 SCC 216; A.V. Cottex Limited vs. National Insurance Company and Ors. Arbitration case no.196 of 2006 passed by the Court of Punjab and Haryana; Lalit Kumar vs. M/s India bulls Securities Ltd. And Ors., 242 (2017) DLT 210; M/s Kotak Securities Ltd. Bangalore vs. Sri Chethan Bhandary and Ors., 2010 SCC OnLine Kar 5270). It has been further submitted that issuance of notice under Section 21 of the Arbitration Act is mandatory, but no notice seeking appointment of arbitrator had been served upon the petitioner in terms of Clause 12 and 13 of the Agreement and under Section 21 of the Act.
6. Petitioner has relied upon following judgments: -
i. Krishna Mittal vs. Municipal Corporation of Delhi, (2010) 2 Arb LR 439;
ii. Major Inder Singh Rekhi vs. DDA, (1988) 2 SCC 338;
iii. XS Infosol Pvt. Ltd. Vs. M/s GLS Technologies, (2018) 247 DLT 7;
iv. M/s J.K. Laxmi Cement Ltd. Vs. M/s Namit Plastic, (2009) 160 DLT 340;
v. State of Orrisa vs. Damodar Das, (1996) 2 SCC 216;
vi. Mr. Lalit Kumar vs. M/s Indiabulls Security, 242 (2017) DLT 210;
vii. M/s Kotak Securities vs. Sh. Chethan Bhandary, 2010 SCC OnLine Kar 5270;
viii. Bhanumati J. Bhuta vs. Ivory Properties, 2020 SCC OnLine Bom OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.6 of 23 Patiala House Court, New Delhi 157;
ix. M/s Anacon Process Control Pvt. Ltd. vs. Gammon India Ltd., 2016 SCC OnLine Bom 10076;
x. Nabha Power Ltd. vs. Punjab State Power Corporation, (2018) 11 SCC 508;
xi. Har Shankar and Ors. vs. The Dy. Excise and Taxation Commr., (1975) 1 Supreme Court Cases 737;
xii. Madan Mohon Jew vs. Bejoyabati, 1953 SCC OnLine Cal 70;
xiii. Al. AR. Vellayan Chettiar vs. Govt. of the Province of Madras, I.L.R (1945) Mad 263;
xiv. Anis Imam vs. Daughter of Jamunabai, 1948 SCC OnLine Pat 143.
7. In the written submissions also, respondent took the same plea which have already been mentioned herein-above. Along with written submissions, respondent relied upon following case laws: -
i. Prasar Bharti Vs. Maa Communication, AIR 2011 Delhi 26;
ii. Alpuro Building Systems Pvt. Ltd.Vs. Ozone Overseas Pvt. Ltd.
2017 SCC OnLine Del 7228;
iii. A.V. Cottex Ltd. vs. National Insurance Company, Arb no.
196/2006, MANU/PH/0775/2011;
iv. M. P. Steel Corpn. vs. Commr. Of Central Excise, (2015) 7 SCC 58;
v. UOI vs. West Coast Paper Mills Ltd., (2004) 3 SCC 458;
vi. Consolidated Engineering Enterprises vs. Principal Secretary, (2008) 7 SCC 169.
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8. I have examined the rival contentions and the record of arbitration proceedings.
APPRECIATION OF ARGUMENTS, FACTS & LAW
9. The scope of enquiry under section 34 is restricted to consideration whether any one of the grounds mentioned in section 34 exists for setting-aside the award. Section 34 of the Act reads as under: -
"34. Application for setting aside arbitral award- (1) Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub- section (2) and sub- section (3).
(2) An arbitral award may be set aside by the court only if-
(a) the party making the application furnishes proof That-
i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration;
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only That part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.8 of 23 Patiala House Court, New Delhi agreement, was not in accordance with this Part; or
(b) the court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India. Explanation 1 - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-- (i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.- For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. (2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence.""11. As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e., if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the "fundamental policy of Indian Law" would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.9 of 23 Patiala House Court, New Delhi justice, and reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract.
12. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of Section 34(2) (b)(ii), but such interference does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts."
10. The general principles are that Arbitrator is a Judge of the choice of the parties and his decision, unless there is an error apparent on the face of the award which makes it unsustainable, is not to be set aside by the Court, even if the Court of law could come to a different conclusion on the same facts. The Court cannot reappraise the evidence and it is not open to the Court to sit in appeal over the conclusion of the Arbitrator. It is not open to the Court to set aside a finding of fact arrived at by the Arbitrator and only grounds on which the award can be set aside are mentioned in the Arbitration Act. Where the Arbitrator assigns cogent grounds and sufficient reasons and no error of law or misconduct is cited, the award will not call for interference by the Court in exercise of the power vested in it. Where the Arbitrator is a qualified technical person and expert, who is competent to make assessment by taking into consideration the technical aspects of the matter, the Court would generally not interfere with the award passed by the Arbitrator.
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11. Hon'ble Supreme Court in the case of Associate Builders vs. Delhi Development Authority, (2015) 3 SCC 49 held that the interference with an arbitral award is permissible only when the findings of the arbitrator are arbitrary, capricious or perverse or when conscience of the Court is shocked or when illegality is not trivial but goes to the root of the matter. It was held that once it is found that the arbitrator's approach is neither arbitrary nor capricious, no interference is called for on facts. The arbitrator is ultimately a master of the quantity and quality of evidence while drawing the arbitral award. Patent illegality must go to the root of the matter and cannot be of trivial nature.
12. Hon'ble Supreme Court in case of Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India, 2019 SCC OnLine SC 677 held that under Section 34 (2A) of the Act, a decision which is perverse while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. A finding based on the documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties and therefore, would also have to be characterized as perverse. It was held that a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision, would be perverse and liable to be set aside on the ground of patent illegality.
13. Hon'ble Supreme Court in the matter of PSA SICAL Terminals Pvt.
OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.11 of 23 Patiala House Court, New Delhi Ltd. vs. Board of Trustees of V.O Chidambranar Port Trust Tuticorin, 2021 SCC OnLine SC 508, reiterated its view as taken in MMTC Limited Vs. Vedanta Limited reported as (2019) 4 SCC 163, and held as follows: -
"11. As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e., if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the "fundamental policy of Indian Law" would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract.
12. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of Section 34(2) (b)(ii), but such interference does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts."
14. Hon'ble Delhi High Court in the case of National Highway Authority of Indiav Vs Unitech-NCC (JV) [2025 SCC OnLine Del 4280], after referring to various judgments passed by Hon'ble OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.12 of 23 Patiala House Court, New Delhi Supreme Court, summarized the legal principles dealing with requirements to challenge an arbitral award under Section 34 of Arbitration and Conciliation Act, 1996, in the following manner: -
"12. I proceed, therefore, to distil some of the relevant principles that emerge from the decisions cited supra.
13. The principles that emerge From the decisions cited earlier, the following principles emerge:
(i) An arbitral award cannot be interfered with on grounds not envisaged by Section 34(2) or (3) of the 1996 Act.
(ii) Section 34 jurisdiction is not appellate. Interference with arbitral awards is generally proscribed, and is to be limited to rare and exceptional cases.
(iii) Interference on the ground that another, more appropriate and perhaps better, view, different from that adopted by the arbitrator, is possible, is impermissible.
(iv) There can be no interference with factual findings of an arbitral tribunal, unless they are perverse. A possible view by the arbitrator, on the facts, has to be respected. The arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon.
(v) "Perversity" exists where-
(a) the arbitral tribunal ignores or excludes relevant material, or
(b) the arbitral tribunal takes into consideration irrelevant material, or
(c) the finding is so outrageously in defiance of logic as to suffer from the vice of irrationality.
(vi) If there is no evidence, or the evidence is thoroughly unreliable OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.13 of 23 Patiala House Court, New Delhi in the sense that no reasonable person would act on it, there is perversity. Where there is some acceptable evidence on record, on which the arbitral tribunal relies, the conclusion would not be perverse.
(vii) The Section 34 Court cannot look into the merits of the dispute.
(viii) An award is in conflict with the public policy of India if it
(a) is patently violative of a statutory provision, or
(b) reflects an approach by the arbitral tribunal which is not judicial, or
(c) has been passed in violation of the principles of natural justice, or
(d) is patently illegal, which would include a case in which
(i) the award is in patent contravention of applicable substantive law, or
(ii) the award patently breaches the 1996 Act, or
(iii) the award militates against the interests of the nation, or
(iv) the award is shocking to the judicial conscience, or
(v) the award ignores the specific terms of the contract, which would not include a case of mere erroneous contractual interpretation, unless the error of interpretation was fundamental, as in Ssangyong Engineering, which resulted in the award being contrary to the "most basic notions of justice", which shocked the judicial conscience, in which the arbitral tribunal substituted a clause in the contract with another.
(ix) The Court cannot interfere with an arbitral award on the ground OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.14 of 23 Patiala House Court, New Delhi that it does not do justice, in the opinion of the Court, as that would require examination of the merits of the dispute, which is proscribed.
(x) Infraction of fundamental policy of Indian law includes a law meant to serve public interest or public good. Mere Page 26 of 56 O.M.P. (COMM) 23/2017 infraction of the municipal laws of India does not render the award violative of the fundamental policy of Indian law.
(xi) An arbitral award infracts the fundamental policy of Indian law if it contravenes all or any of the fundamental principles which provide a basis for administration of justice and enforcement of law in the country. This would include, for example,
(a)violation of the principles of natural justice,
(b) disregarding orders of precedentially superior Courts, or their binding effect, or
(c) violating laws linked to public good or public interest.
(xii) "Justice" is nothing more or less than exact conformity to some obligatory law.
(xiii) "Morality" includes agreements which cannot be enforced given the prevailing mores of the day. That said, an arbitral award can be set aside on the ground that it is contrary to the most basic concepts of morality only if it shocks the judicial conscience of the Court.
(xiv) An unreasoned award is patently illegal.
(xv) In the matter of interpretation of contractual covenants by the arbitral tribunal, the following principles apply:
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(a) An interpretation which is completely unacceptable, in that it is one which no fair-minded or reasonable person would take, merits interference. If the arbitrator adopts a view which is not a possible view, it merits interference. An impossible view is one which no reasonable body of persons could possibly have taken.
(b) The arbitral tribunal, being a creature of the contract, cannot travel beyond it. (c) An arbitral tribunal cannot rewrite the contract, or substitute one clause with another.
(d) An arbitral tribunal cannot foist, on a party, a covenant which is not to be found in the contract and is not binding on it.
(e) An arbitral tribunal cannot proceed ex debito justitiae, de hors the contract.
(f) The arbitral tribunal must also take into account the usages of trade applicable to the transaction, while interpreting the contract.
(g) An arbitrator has the jurisdiction to interpret a contract having regards to its terms and conditions, conduct of the parties including correspondences exchanged, circumstances of the case, the manner in which the parties worked out the contract, and pleadings of the parties. Thus viewed, if the interpretation accorded by the arbitrator to the contract is based on a possible view, the Court would not interfere.
(h) An unexpressed term can also be read into an agreement if such a term was always and obviously intended by the parties thereto. It must be a term which goes without saying, which is necessary to give business efficacy to the contract and which, although tacit, forms part of the contract. It must, however, OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.16 of 23 Patiala House Court, New Delhi
(a) be just and equitable,
(b) be necessary to give business efficacy to the contract, in that, if the contract is effective without it, the term will not be implied,
(c) be obvious, in that it "goes without saying",
(d) be capable of clear expression, and
(e)not contradict any term of the contract."
15. Hon'ble Delhi High Court in the case of Alupro Building Systems Pvt Ltd vs Ozone Overseas Pvt Ltd, (2017) SCC OnLine Del 7228, inter alia held that where a notice under Section 21 of the Act invoking arbitration clause is not served upon the other party by the party invoking the said clause and the arbitration proceedings are held, then in absence of any agreement by the petitioner for waiving of requirement of notice under Section 21 of the Act, the impugned arbitral award would be opposed to the fundamental policy of Indian law since the mandatory requirement of the Act stands not complied and ground under Section 34 (2)(b) (ii) of the Act is attracted and such impugned award could be set aside on this ground.
16. In the present case, it is borne out from the pleadings of petitioner, award in question, as well as from the order dt. 21.03.2018 passed by Bombay High Court in ARB 12/2015, that respondent had not given notice to petitioner for invoking arbitration clause before filing the application u/s 11 of the Act before the Bombay High Court. However, as per deliberation before that court, respondent gave notice dt 27.03.2018 to the petitioner for invoking arbitration clause, in pursuance to order dt. 21.03.2018. Ld. Sole Arbitrator was OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.17 of 23 Patiala House Court, New Delhi appointed thereafter by the petitioner, in consequence to afore-said order. Thus, ld. Arbitrator was appointed after compliance of mandate u/s 21 of the Act. Therefore, I do not find any merit in the objection of the petitioner based on S. 21 of the Act.
17. Other objection of the petitioner is in respect of limitation. Ld. Arbitrator held the claim of respondent within limitation, while extending benefit u/s 14 of the Limitation Act. The dispute is regarding applicability of S. 14 of the Limitation Act, in the present case. It is case of petitioner that limitation to seek remedy started since 30.09.2013, which expired on 30.09.2016. However, arbitration proceedings were initiated in 2018, which were beyond the limitation period. According to petitioner, ld. Arbitrator wrongly extended the period. In the Award, ld. Arbitrator noted that respondent had filed application u/s 11 of the Act before Bombay High Court on 22.09.2015, which was decided on 21.03.2018. Petitioner has not disputed these factual aspects. These facts show that respondent had approached Bombay High Court seeking appointment of arbitrator and to initiate arbitration proceedings. Since, a notice was not given prior to approaching Bombay High Court, therefore, that court came to pass order dt. 21.03.2018, because it did not have the jurisdiction to appoint arbitrator in absence of such legal compliance.
18. In the case of Roshanlal Kuthalia vs. R. B. Mohan Singh Oberoi, (1975) 4 SCC 628, Hon'ble Supreme Court while dealing with ambit of S. 14 of the Limitation Act, observed that " Section 14 of the Limitation Act is wide enough to cover such cases where the OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.18 of 23 Patiala House Court, New Delhi defects are not merely jurisdictional strictly so called but others more or less neighbours to such deficiencies. Any circumstance, legal or factual, which inhibits entertainment or consideration by the court of the dispute on the merits comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right."
19. Section 14 of the Limitation Act, 1963 is reproduced here under: -
Exclusion of time of proceeding bonafide in Court without jurisdiction.- (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of like nature, is unable to entertain it. In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, where in a court of first instance or of appeal or revision against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908) the provisions of sub- section (1) shall apply in relation to a fresh suit instituted on permission granted by the Court under rule 1 of that Order, where OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.19 of 23 Patiala House Court, New Delhi such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the Court or other cause of a like nature.
Explanation: - For the purposes of this section- in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;
a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;
misjoinder of parties or of causes of action shall be deemed to be a cause of a lime nature with defect of jurisdiction.
20. Section 14 of the Limitation Act has been enacted by the legislature to exempt a period covered by litigious activity and to protect a litigant against the bar of limitation, when a proceeding is dismissed on account of a technical defect instead of being decided on merits. The intent is to prevent a litigant from being saddled with an adverse decision, which is, on account of the fact that the Court did not have the jurisdiction to entertain the case.
21. In the case of Consolidated Engineering (supra), Hon'ble Supreme Court held that "there is no provision in the Arbitration and Conciliation Act, 1996 which excludes applicability of Section 14 of the Limitation Act to an application submitted under Section 34 of the said Act. On the contrary, Section 43 makes provisions of the Limitation Act, 1963 applicable to arbitration proceedings. The proceedings under Section 34 are for the purpose of challenging the award whereas the proceeding referred to under Section 43 are the OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.20 of 23 Patiala House Court, New Delhi original proceedings which can be equated with a suit in a court. Hence, Section 43 incorporating the Limitation Act will apply to the proceedings in the arbitration as it applies to the proceedings of a suit in the court."
22. Above-mentioned observations leave no doubt that Section 14 of the Limitation Act was applicable in the present case and reliance upon the same by ld. Arbitrator, hence, cannot be questioned. Next question is that whether such provision was rightly applied by ld. Arbitrator?
23. It is well apparent that respondent had approached Bombay High Court, as a part of remedy taking measure to initiate arbitration proceedings, on account of same dispute which became subject matter of the arbitration. There is no reason to question the intentions of the respondent. It is different matter that compliance of legal mandate was not done by the respondent. That is why order dt. 21.03.2018 came to be passed. However, respondent had approached Bombay High court well within limitation period. Hence, ld. Arbitrator had the discretion to apply Section 14 of the Limitation period and to give benefit of the same to the respondent. In these circumstances, I do not find any illegality in the approach and decision of ld. Arbitrator. Petitioner has relied upon some judgments, which were passed on the basis of peculiar facts and circumstances of those cases. Hence, decision given therein cannot be of any help in the present matter.
24. Apart from aforesaid two legal objections, petitioner has raised OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.21 of 23 Patiala House Court, New Delhi questions over appreciation of facts and evidence of the case. However, this court is not supposed to make reappraisal of the evidence in the present proceedings. Moreover, if there is anything to shake the conscience of this court, then I find it in the clause of agreement between the parties. The agreement dt 14.06.2012 in clause 4 mentions that "Not withstanding the place where this agreement is to be implemented, it is mutually understood and agreed by and between the parties here to that this contract shall be deemed to have been entered into the parties concerned at New Delhi and the courts of law in Delhi alone shall have jurisdiction to adjudicate thereon."
25. The above-mentioned terms show that irrespective of actual place of signing of the agreement, it was imposed on the other party to assume the place of agreement to be New Delhi. Such clause in the agreement, was apparently at the instance of petitioner and it amounted to mention factually false term in the agreement regarding place of agreement. Such practice in fact, is against the public policy of India and is illegal as well.
26. As far as factual finding given by ld. Arbitrator is concerned, he mentioned about "pest control measures arising out of Q.C. circular no. 257 dt. 17.08.1994 of the NSC i.e. petitioner herein" and recorded that petitioner did not take action as per those measures. Petitioner has kept mum over such finding of ld. Arbitrator. In my opinion, the decision given by ld. Arbitrator on appraisal of expected actions from the petitioner and omissions on the part of the petitioner, cannot be said to be without any basis or evidence. OMP (comm) No.228/2019 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.22 of 23 Patiala House Court, New Delhi DECISION
27. In view of foregoing discussions and observations, I find that petitioner has failed to establish any of the grounds available u/s 34 of the Act, in the present case. Hence, petition is dismissed. File be consigned to Record Room after due compliance.
Digitally signed by PULASTYA PULASTYA PRAMACHALA
PRAMACHALA Date:
2025.09.01
15:27:51 +0530
Pronounced in the (PULASTYA PRAMACHALA)
Open Court on this District Judge (Commercial Court)-01,
1st day of September, 2025 Patiala House Court, New Delhi
OMP (comm) No.228/2019 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.23 of 23 Patiala House Court, New Delhi