Kerala High Court
J.B. Enterprises vs State Of Kerala And Anr. on 29 September, 1989
Equivalent citations: AIR1990KER65, AIR 1990 KERALA 65, 1989 (2) KER LJ 839 (1989) 2 KER LT 757, (1989) 2 KER LT 757
ORDER P. Krishnamoorthy, J.
1. The revision petitioner entered into a contract with the State for the work of "Construction of a building for Government High School, Ollur" on 26-2-1977. Disputes and differences arose between the petitioner and the respondents relating to the contract and as per the arbitration clause in the agreement the disputes were referred to the appointed arbitrator. He gassed an award on 22-3-1985. The Arbitrator by an authorisation letter dated 11-3-1986 authorised an advocate (who is the advocate for the revision petitioner also) to file the award in Court. Accordingly the award was filed on 11-7-1986. On the same day the revision petitioner filed O. P. (Arb.) No. 82/86 under Section 17 of the Arbitration Act, for making the award a rule of court and to pass a decree in accordance with the award.
2. The respondents filed an objection contending among other things that the award was filed long after the expiry of the period of limitation provided for under Article 119(a) of the Limitation Act. They further contended that as the award was not filed in Court within 30 days from the date of receipt of notice of passing of the award, the application is barred by limitation and a decree according, to the award cannot be passed.
3. The lower court came to the conclusion that notice of the passing of the award was given to the revision petitioner immediately on the passing of the award. It also held that since the petitioner has not taken any steps to cause the award to be filed in time as contemplated under Article 119(a) of the Limitation Act, he is not entitled to have a decree passed under Section 17 of the Arbitration Act as the application is barred by time. The above order is challenged in revision.
4. Counsel for the revision petitioner contended that the provisions contained in Article 119(a) of the Limitation Act are not applicable for the filing of the award by the Arbitrator himself and that the provisions will apply only to an application by any of the parties to compel the Arbitrator to file the award in court under Section 14(2) of the Arbitration Act. On the other hand, Government Pleader contended that the Arbitrator has to file the award or the party has to file an application compelling him to file the award within the period contemplated under Article 119(a) of the Limitation Act and as that having not been done within the prescribed time, no decree can be passed in terms of the award. It is relevant in this context to quote Article 119(a) of the Limitation Act :--
Description of suits Period of Limitation Time from which period begins to run
119. Under the Arbitration Act, 1940--(a) for the filing in court of an award;
Thirty days The date of service of the notice of the making of the award;
(b) for setting aside an award or getting an award remitted for reconsideration, Thirty days The date of service of notice of the filing of the award."
Article 119 is in the Third Division to the Schedule to the Limitation Act which deals with applications. It is well-settled, that the suits, appeals or applications which, are contemplated, under the Limitation Act are normally proceedings before a court. The application contemplated under Article 119 is also one to be made in court. What Article 119(a) contemplates is the period of limitation for an application to be filed in court by any of the parties to compel the Arbitrator to file the award in court. As the Limitation Act deals with the time within which proceedings are to be initiated before court, the provisions therein containing periods of limitation cannot apply to an act to be done by the Arbitrator. Under Section 14(1) of the Arbitration Act when the arbitrators or umpires have made their award, it shall be signed and notice of the making of the award shall be given to the parties. Section 14(2) of the Arbitration Act provides that the arbitrators or umpires shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court cause the award or a signed copy of it to be filed in court. On such filing the court shall give notice to the parties of the filing of the award. From Section 14(2) of the Arbitration Act it is clear that an Arbitrator who makes an award can file it in court suo motu or at the request of any party thereto or under a direction from the court. The above Section contemplates an application by a party to the court to compel the Arbitrator to file the award in court in case he does not file it either at the request of the party or suo motu. From the scheme of the Limitation Act and especially the wording of Article 119, it is clear that the above Article of the Limitation Act will apply only to an application which can be made by a party under Section 14(2) of the Arbitration Act and not for the filing of the award by the Arbitrator himself in the court either at the request of the party or suo motu.
5. The interpretation of Article 178 of the Limitation Act, 1908 which corresponds to Article 119 of the 1963 Act came up for consideration before their Lordships of the Supreme Court in Champalal v. Mst. Samrathbai, AIR 1960 SC 629. From paragraph 3 of the judgment it is seen that the first point which was considered by their Lordships was to the following effect, namely, whether the filing of the award was not within time as no application was made under Section 14 within the time allowed by the Limitation Act. In answering that point it was observed as follows:--
"Article 178 of the Limitation Act which was relied upon by the appellant applies to applications made by the parties and not to the filing of the award by the arbitrators."
6. It is clear from the above decision that for the filing of an award by the Arbitrator in court, there is no period of limitation and that Article 119(a) will apply only for applications by parties for compelling the Arbitrator to file the award in court. To the same effect is the decision in Balkishen v. Panna Lal, AIR 1973 Delhi 108. It was observed (at p. 110):
"If the arbitrator himself files the award in the Court, Article 178 of the Limitation Act, 1908 is not applicable as the said Article has been held to be applicable only where a party applies and not to the filing of the award by the arbitrator -- See Champalal v. Mst. Samrathbai, AIR 1960 SC 629 vide Sub-section (2), therefore, if the party requests the arbitrator to file the award and the arbitrator chooses to file the award no period of limitation is provided for and the same can be done by the arbitrator himself at any time: see Moti Ram v. Mangal Singh etc. C. R. No. 276 of 1968 decided by me on 15-9-1971. But if after the party had asked the arbitrator or even asking him wants the Court to direct him to file the award ,it is incumbent on him to move an application to the Court to make the said order. It is 'this application' which is made to the Court to direct the arbitrator to file the award to which Article 178 of the Limitation Act (1908) applies."
In Chowdhury & Gulzar Singh v. Frick India Ltd. AIR 1979 Delhi 97 it was held as follows (at p. 100):
"13. Now coming to the next question whether there is any limitation period for filing the award in Court by an arbitrator? In the present case, admittedly the award was filed by the arbitrators.
14. In the case of Champalal v. Mst. Samrathbai, AIR 1960 SC 629, which was a case under the Limitation Act (1908), it was held that Article 178 of the Limitation Act applies to applications made by the parties and not to the filing of the award by the arbitrators. Corresponding Article in the Limitation Act, 1963 is Article 119 where the words are similar to the words of Article 178 of the Limitation Act, 1908. The matter came up for consideration in this Court. In the case of Moti Ram v. Mangal Singh, ILR (1971) 2 Delhi 451, it was held that the application moved by the arbitrator to file the award in court 7 years after the same was made was not barred by limitation and it was further held that there is no provision in the Limitation Act which is applicable to an application made by the arbitrator to file an award under Section 17 of the Arbitration Act. It is, therefore, held that the arbitrators rightly filed the award in court and that the filing of the award by the arbitrators was not barred by any period of limitation. As a matter of fact, no period of limitation is prescribed for the arbitrator to file the award in court. Since the award is filed in court it is for the court to proceed with the matter to serve notice of the filing of the award in court and to give an opportunity to the parties to file objections and in case no objections are filed against the award, it is the duty of the court to make the award a rule of the Court."
In this context it is relevant to refer to the decision of the Supreme Court in Parasramka Commercial Co. Ltd. v. Union of India, AIR 1970 SC 1654, on which great reliance was placed by the learned Government Pleader. That was a case which arose out of an application under Section 14 of the Arbitration Act by the party. Though in the decision it says that it was an application for making the award a rule of Court, from the discussion it seems clear that it was only an application for compelling the Arbitrator to produce the award in Court. As the application was by the party under Section 14 of the Arbitration Act, the Supreme Court held that Article 178 of the Limitation Act, 1908 (corresponding to Article 119(a) of the 1963 Act) is applicable and that the application is barred by limitation. On the question as to what will be the effect of the Arbitrator himself filing the award in court, their Lordships did not express any opinion and left open the decision on that question as follows (At p. 1656):
"..............But we make it clear that the other part of the case, namely what is to happen to the award sent by the Arbitrator himself to the Court has yet to be determined and what we say here will not affect the determination of that question. Obviously enough that matter arises under the second sub-section of Section 14 and will have to be considered quite apart from the application made by the company to have the award made into rule of Court.
Again the question whether a plea of limitation can be raised with respect to the suo motu filing of the award by the arbitrator was left open as follows (At p. 1656):
"..............As to whether similar objections can be raised in answer to the award filed at the instance of the arbitrator is a question which we cannot go into in the present appeal and no expression of opinion must be attributed to us on that point."
In a later decision reported in State of M.P. v. S. & S. Ltd., AIR 1972 SC 1507, also their Lordships of the Supreme Court did not express any opinion whether the period of limitation will apply when the arbitrator files his award suo motu before the Court as it was unnecessary for decision in that case. But, as pointed out in Champalal's case, AIR 1960 SC 629, there is no period of limitation prescribed for an arbitrator to file an award in Court by himself, and Article 119 of the Limitation Act will apply only to applications filed by any of the parties for a direction to the arbitrator to file the award in Court. The decision reported in Rambilas v. Durga Bijai Prasad, AIR 1965 Pat 239, referred to by the learned Government Pleader has taken the view that:
"If the arbitrators file the award in Court long after the period of limitation prescribed by Article 178 the implication is that one or the other party has moved the arbitrators or the umpire for filing the award in Court after the expiry of the period of limitation. Therefore the act of filing the award in Court after the expiry of the period of limitation, though ostensibly the act of the arbitrators or the umpire, is in reality the act of one, the other or both parties to the arbitration agreement, that is to say, that the award has been filed on behalf of the one or both the parties. Therefore, the award cannot remain effective or binding upon the parties if no steps taken to file it in Court within the time allowed for the purpose by the law and the rights of the parties cannot be affected by an award which has not been filed by the arbitrators in Court for several years after it has been made and notice has been given by the arbitrators to the parties of making and signing thereof."
7. With great respect, the decision referred to above seems to be contrary to the view expressed in Champalal's case, AIR 1960 SC 629. The decision referred to above has not been referred to by their Lordships and with great respect I am not inclined to follow that decision.
8. That there is no period of limitation for the arbitrator to file his award in Court is also accepted by the Law Commission in its Third Report wherein it was observed :
"172. Section 14 of the Arbitration Act, 1940 provides for the filing of an award in a Court and under Section 17 of that Act, the Court must proceed to pronounce judgment according to the award. Section 32 bars suits to question the award. In the result an award can be enforced only by filing it in Court and obtaining a judgment thereon and a suit cannot be filed on it. An award has to be filed even for purpose of setting it aside. A provision is therefore required fixing a time within which an arbitrator should file his award. Section 14(2) of the Arbitration Act provides that he shall file it into Court (a) at the request of any party or person claiming under him and (b) on an order from the Court. It has been held by the various High Courts that Article 178 applies only to an application by the party to the Court to direct the arbitrator to file his award into Court. The present position is that the arbitrator can file the award even after a party's application has been barred and he can do so even after a suit on the original cause of action has been instituted as there is no limitation for his doing so. We consider that there should be a time limit for the arbitrator to file the award and the period should be 30 days from the last date of service of notice of the making of the award on any of the parties. The Arbitration Act may be suitably amended to give effect to this recommendation."
Though the Law Commission made a recommendation to make suitable amendments in the Arbitration Act, so far the legislature has not chosen to amend the law to bring it in conformity with the recommendation of the Law Commission.
9. In view of the above I hold that there is no period of limitation for an arbitrator to file his award in Court and the view taken by the lower Court that the application filed by the revision petitioner is barred by limitation is unsustainable. The award in this case was filed on 11-7-1986 and on the same day the revision petitioner filed his application for making it a rule of Court. The said application cannot be said to be barred by limitation and the view taken by the lower Court is erroneous.
10. As the lower Court took the view that the application is barred by limitation, the other objections raised by the respondents have not been considered. In the light of my above finding I set aside the order of the lower Court and remand the matter to, that Court for consideration of the other objections raised by the respondents in the matter.
The C.R'.P. is allowed. No costs. '