IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE
WRIT PETITION NO. 2827 OF 2006
M/s.Jai Jagdish Sugar. ... Petitioner. V/s.
Vasantdada Patil Sahakari
Sakhar Karkhana. ... Respondent. G.S.Godbole with S.S.Kanetkar for the petitioner. N.N.Bhadrashete for the respondent.
CORAM: V.C.DAGA, J.
DATED: 9th September 2008.
. This petition is directed against the order dated 23rd December, 2005 passed by the District Judge, Nashik below Exh.1 in Civil Misc. Application No.154/2005 (Arbitration) whereby the application for condonation of delay came to be rejected. The Facts in short :
2. It is not necessary to draw detailed factual matrix. Suffice it to say that the petitioner and the respondent entered into an agreement dated 30th October, 2001 containing therein arbitration clause to resolve dispute, that may arise, relating to the agreement.
3. The respondent- Vasant Dada Patil Sahakari Sakhar Karkhana Ltd. filed Cooperative Case No.1725/2002 against the petitioner in the Co-operative Court at Nashik under section 91 of the Maharashtra Co-operative Societies Act, 1960 ("MCS Act" for short). In the said proceeding, the petitioner filed an application (Exh.14) for referring the dispute to Arbitrator in accordance with the agreement dated 13th August, 2001.
4. The learned Judge of the Co-operative Court was pleased to pass order dated 4th February, 2003 and appointed retired Judge of this Court as Arbitrator to arbitrate the dispute between the parties. The learned sole Arbitrator was pleased to pass the award on 28th August, 2003 in favour of the respondent- Karkhana and against the petitioner. With the result, claim set up by the respondent- Karkhana was allowed.
5. The petitioner challenged the aforesaid award before the Co-operative Court, Nashik and applied for setting aside the said award under section 34 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act" for short).
- 3 -
6. The respondent- Karkhana filed its written statement dated 12th December, 2004 contending that the Co-operative Court does not have jurisdiction to try and entertain application under section 34 of the Arbitration Act.
7. The learned Judge of the Co-operative Court, Nashik, vide his order dated 6th July, 2004 was pleased to hold that the Co-operative Court did not have jurisdiction to entertain the application under section 34 of the Arbitration Act.
8. Being aggrieved by the aforesaid order, the petitioner filed writ petition being Writ Petition No.8695/2004 in this Court. The learned single Judge of this Court, vide his order dated 2nd September, 2005 was pleased to permit the petitioner to withdraw an application filed before the Co-operative Court and present it before the District Court.
9. The petitioner, immediately, on 5th September, 2005 presented an application under section 34 of the Arbitration Act before the District Court, Nashik by withdrawing the application filed before the - 4 -
Co-operative Court since the proceedings before the Co-operative Court were filed under mistaken legal advise.
10. It appears that again under mistaken belief that it is necessary to seek condonation of delay, the petitioner filed application for condonation of delay being Civil Misc.Application No.154/2005. The said application was opposed by the respondent- Karkhana vide its reply dated 15th October, 2005.
11. The learned District Judge, Nashik, vide his order dated 23rd December, 2005 was pleased to dismiss the said application for condonation of delay relying upon the judgment of this Court as well as that of the Apex Court holding that the provisions of sections 4 to 24 of the Limitation Act are not attracted to an application under section 34 of the Arbitration Act. Since the application for setting aside the arbitral award was filed beyond the limitation period prescribed under section 34(3) of the Arbitration Act, the application for condonation of delay in filing the said application came to be rejected by learned District Judge vide his order dated 23rd December, - 5 -
2005. The learned District Judge relied upon the judgment of the Apex Court in the case of Union of India v. M/s.Popular Construction Co., AIR 2001 Co. SC
4010 = (2001) 8 SCC 470; wherein application of Arbitration Act of 1996 was in question. The Arbitration Act clearly provided for a limitation in the matter of exercise of discretionary jurisdiction for condoning delay only for a period of 30 days and not thereafter. It was in this situation Court held that section 5 of the Limitation Act as such will have no application, as special limitation has been provided.
12. Being aggrieved by the aforesaid order of learned District Judge dated 23rd December, 2005, the petitioner has invoked writ jurisdiction of this Court under Article 227 of the Constitution of India. Consideration :
13. Mr.Godbole, learned counsel appearing for the petitioner submits that the earlier decision of the Apex Court in the case of Union of India v. M/s.Popular Construction Co. (supra), whereupon reliance has been placed by the District Judge has - 6 -
since been revisited by the Apex Court in State of Goa v. Western Builders (2006) 6 SCC 239, holding: "14. The question is whether Section 14 of the Limitation Act has been excluded by this special enactment i.e. the Arbitration and Conciliation Act, 1996. Section 43 of the Arbitration and Conciliation Act, 1996 clearly says that the Limitation Act, 1963 shall apply to arbitration as it applies to the proceedings in the court.
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 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.
16. But there is no provision made in the Arbitration and Conciliation Act, 1996 that if any party has bona fidely prosecuted its remedy before the other forum which had no jurisdiction then in that case whether the period spent in prosecuting the remedy bona fidely in that court can be excluded or not. As per the provision, Sub-section (3) of Section 34 which prescribes the period of limitation (3 months) for moving the application for setting aside the award before the court then that period of limitation will be applicable and not the period of limitation prescribed in the Schedule under Section 3 of the Limitation Act, 1963. Thus, the provision of moving the application prescribed in the - 7 -
Limitation Act, shall stand excluded by virtue of Sub-section (2) of Section 29 as under this special enactment the period of limitation has already been prescribed. Likewise the period of condonation of delay i.e. 30 days by virtue of the proviso.
17. Therefore, by virtue of Sub-section (2) of Section 29 of the Limitation Act what is excluded is the applicability of Section 5 of the Limitation Act and under Section 3 read with the Schedule which prescribes the period for moving application.
18. Whenever two enactments are overlapping each other on the same area then the courts should be cautious in interpreting those provisions. It should not exceed the limit provided by the statute. The extent of exclusion is, however, really a question of construction of each particular statute and general principles applicable are subordinate to the actual words used by legislature."
14. Referring to Popular Construction case (supra) and National Aluminimum Co. Ltd. v. Pressteel & Fabrications (P) Ltd., (2004) 1 SCC 540, it was held: Ltd.
"25. Therefore, in the present context also it is very clear to us that there are no two opinions in the matter that the Arbitration and Conciliation Act, 1996 does not expressly exclude the applicability of Section 14 of the Limitation Act. The prohibitory provision has to be construed strictly. It is true that the Arbitration and Conciliation Act, 1996 intended to expedite commercial issues expeditiously. It is also clear in the Statement of Objects and Reasons that in order to recognise economic reforms the settlement of both domestic and international commercial disputes should be disposed of quickly so that - 8 -
the country's economic progress be expedited. The Statement of Objects and Reasons also nowhere indicates that Section 14 of the Limitation Act shall be excluded. But on the contrary, intendment of the legislature is apparent in the present case as Section 43 of the Arbitration and Conciliation Act, 1996 applies the Limitation Act, 1963 as a whole. It is only by virtue of Sub-section (2) of Section 29 of the Limitation Act that its operation is excluded to that extent of the area which is covered under the Arbitration and Conciliation Act, 1996. Our attention was also invited to the various decisions of this Court interpreting Sub-section (2) of Section 29 of the Limitation Act with reference to other Acts like the Representation of the People Act or the provisions of the Criminal Procedure Code where separate period of limitation has been prescribed. We need not overburden the judgment with reference to those cases because it is very clear to us by virtue of Sub-section (2) of Section 29 of the Limitation Act that the provisions of the Limitation Act shall stand excluded in the Act of 1996 to the extent of area which is covered by the Act of 1996. In the present case under Section 34 by virtue of Sub-section (3) only the application for filing and setting aside the award a period has been prescribed as 3 months and delay can be condoned to the extent of 30 days. To this extent the applicability of Section 5 of the Limitation Act will stand excluded but there is no provision in the Act of 1996 which excludes operation of Section 14 of the Limitation Act. If two Acts can be read harmoniously without doing violation to the words used therein, then there is no prohibition in doing so.
15. The ratio laid down in the said decision has since been reiterated in Union of India and Anr. v. Bhavna Engineering Co., 2007 (5) RAJ 458, stating: Co.
- 9 -
"This Court in a recent judgment rendered in State of Goa v. Western Builders (2006) 6 SCC 239, held that Section 14 of the Limitation Act, 1963 is applicable in the Arbitration and Conciliation proceedings. Having gone through the various facts, we are of the view that the mistake committed by the appellant in approaching the Madhya Pradesh High Court and the Bombay High Court is bona fide. We, therefore, condone the delay. In the facts of this case and in the interest of justice, we, however, think it proper that the Section 34 Application pending before the Additional District Judge, Gwalior be transferred to the Bombay High Court. The application will be decided on merits expeditiously. Parties are at liberty to urge all the contentions before that Court."
16. There cannot be any doubt whatsoever in terms of sub-section (2) of section 34 of the Arbitration Act that an arbitral award may be set aside only if one of the conditions specified therein is satisfied. Sub-section (3) of section 34 provides for the period of limitation within which an application under section 34 of the Arbitration Act is to be filed. The proviso appended thereto empowers the Court to entertain an application despite expiry of the period of limitation specified therein, namely, three months. No provision, however, exists as regards application of section 14 of the Limitation Act.
- 10 -
17. The Apex Court as noticed hereinbefore in Western Builders opined that sub-section (2) of section 29 of the Limitation Act would apply to an arbitration proceedings and, consequently, section 14 of the Limitation Act would also be applicable.
18. The question, however, as to whether the period spent by the petitioner in prosecuting the aforesaid proceedings should be excluded or not is a matter requiring consideration on merits and must fall for decision before learned District Judge. The necessary corollary of the aforementioned finding is that as to whether the petitioner had been prosecuting his remedy, with due diligence or not would fall for consideration before learned District Judge.
19. Mr.Godbole wanted this Court to consider application under section 14 of the Arbitration Act. However, in view of the observations made hereinabove, I do not propose to go into that question since it would be privilege of the learned District Judge.
20. In the result, the matter is remitted back to the Principal District Judge for consideration of - 11 -
application to be filed under section 14 of the Limitation Act by the petitioner before the District Judge, which the Court may consider on its own merits. At this juncture, it is made clear that the District Judge is right in holding non-applicability of section 5 of the Limitation Act to the subject proceedings on the basis of the law holding the field. However, in view of the very same issue pending before the larger Bench of the Supreme Court the issue relating to the applicability of section 5 of the Limitation Act is left open (see State of M.P. & another v. Anshuman Shukla, 2008 (8) SCALE 425, paras-32, 33S). Shukla
21. In the result, petition is partly allowed for the reasons stated herein. Rule is made absolute in terms of this order with no order as to costs. (V.C.DAGA, J.)