LARSEN AND TOUBRO LIMIED Vs. K S BAIDWAN

JUDGEMENT

(1.) THE short point involved in this first appeal from order is whether the appellant is entitled for exclusion of the period from 6.2.2004 to 18.7.2005 during which period the appellant had been pursuing a wrong remedy before the Delhi High Court for the purposes of limitation for filing objections under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter for short "the Act"). THE award under the Act was made on 11.12.2003. Against the said award the appellant preferred objections under Section 34 of the Act but quite belatedly on 10.8.2005, though the limitation prescribed by the Act was only 90 days which could have been condoned for sufficient reasons for another 30 days. Thus, an application under Section 14 of the Limitation Act was moved by the appellant on 10.11.2005 alleging that objections were wrongly filed on 6.2.2004 before the Delhi High Court which was registered as C.M.P. No.30 of 2004 and was returned for presentation to appropriate court of jurisdiction as the courts at Delhi were possessed with no jurisdiction. Heard Sri Vishnu Gupta learned counsel for the appellant and Sri R.N.Singh, Senior Advocate assisted by Sri Anurag Khanna for contesting respondent no.2. As a small question needs decision, required record which have been referred in argument are on record, both sides jointly requested for deciding the appeal, the court having given ample opportunity of hearing is deciding the appeal. Learned counsel for the appellant has argued that the appellant acted bona fidely and it was in good faith that the objections were preferred before the Delhi High Court though it had no jurisdiction in the matter and therefore, the period during which the objections were pending before the said court is liable to be excluded and the appellant is entitled to benefit of Section 14 which has wrongly been denied by the court below, particularly when the award is null and void for the reason of appointment of another arbitrator. Learned counsel in support of his submission placed reliance on a judgment given by the Apex Court in the case of Dharma Prathishthanam Vs. Madhok Construction Private Ltd. reported in 2004 (9) JT 335 and the decision given by the Apex Court in the case of Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation Department and others reported in (2008) 7 SCC 169. In reply, Sri R.N.Singh has submitted that the objections of the appellant have not been decided on merits by the court below. THEy have been rejected on the ground of delay as the appellant was not found to be pursuing the remedy before Delhi High Court in good faith. THErefore, the scope of the appeal is limited to the ground of benefit of Section 14 of the Limitation Act and illegality in the award or that the award is void cannot be the scope or argued in this appeal. In support of the submission about the scope of the appeal, learned counsel placed reliance on a Full Bench decision of this Court given in the case of Babu Ram Ashok Kumar and another Vs. Antarim Zila Parishad reported in AIR 1964 (Alld.) 534. To begin with we are to address about the scope of the appeal as submitted. THE learned District Judge has rejected the objections filed under Section 34 of the Act as barred by time and refused to give the benefit of Section 14 of the Limitation Act. In the judgment given by this Court in the case of Babu Ram Ashok Kumar (supra) it has been clearly emphasised that the court of appeal would not interfere with the exercise of discretion by the court below, if the discretion has been exercised in good faith after giving due weight to relevant matters. THE observation as made by the Full Bench of this Court in paragraph 9 of the judgment is quoted below: "(9) A Court of appeal would not interfere with the exercise of discretion by the Court below, if the discretion has been exercised in good faith after giving due weight to relevant matters and without being swayed by irrelevant matter. If two views are possible on the question, then also the Court of appeal would not interfere, even though it may exercise discretion differently were the case to come initially before it. THE exercise of discretion should manifestly be wrong." THEre is no argument from the appellant's side that the discretion has been exercised by the court below in mala fide manner or on irrelevant considerations and thus, the court below has exercised the discretion in a bona fide manner by assigning cogent reasons. Now to understand forum/jurisdiction of the court we are to advert to clause 11 and 12 of the agreement between the parties which clearly provide that all payments under the contract shall be made only at Ghaziabad; all disputes arising out of or in connection with the agreement shall be deemed to have arisen at Ghaziabad; and only the courts at Ghaziabad shall have the jurisdiction to determine the said disputes. THE said agreement in clause 33 contains an arbitration agreement and it was under the aforesaid clause that the dispute between the parties was referred to the arbitrator who gave the award on 11.12.2003. It is a recognised principle of law that whenever there is a specific clause in an agreement conferring jurisdiction on a particular court to decide the matter then it automatically oust the jurisdiction of other courts. THErefore, in view of above clause in the agreement only the courts at Ghaziabad and no other court had the jurisdiction in the matter. Besides aforesaid two earlier suits between the parties, namely, civil suit no.288 of 2001 for permanent injunction instituted in the court at Delhi in anticipation of an adverse order for want of jurisdiction and civil suit no.308 of 2003 instituted by the appellant himself again in Delhi Court restraining from appointment of new arbitrator, on application under Order 7 Rule 11 for rejecting the plaint moved by the contesting respondent as the court had no jurisdiction, were ultimately withdrawn for want of jurisdiction. Moreover, when the award was made, its execution was moved before the court of District Judge, Ghaziabad, appellant's bank accounts were got attached. All this was within the knowledge of the appellant. In view of above circumstances, the appellant knew fully well that the Delhi High Court had no jurisdiction in the matter, but even then it chose to prefer objections before the said court inspite of clear cut agreement between the parties to have the matter adjudicated by the Courts at Ghaziabad. This being the factual position, the court below held that the appellant cannot be said to be bona fide and in good faith pursuing the remedy in court who had no jurisdiction. Section 14 of the Limitation Act provides as under: "14. Exclusion of time of proceeding bona fide in court without jurisdiction. - (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (3) Notwithstanding anything contained in rule 2 of Order XXXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature." THE above provision deals with exclusion of time during which the proceedings remained pending bona fidely in a court having no jurisdiction and for the application of the above provision it is imperative to satisfy the following conditions: (i) Both the proceedings ought to be civil proceedings prosecuted by the same parties. (ii) THE earlier proceedings ought to have been prosecuted with due diligence and in good faith. (iii) THE earlier proceedings ought to have failed due to defect of jurisdiction. (iv) Earlier proceedings and the subsequent proceedings should relate to the same subject matter in issue. (v)Both the proceedings ought to be before the court of law. THErefore, for the purposes of excluding the time during which the earlier proceedings, i.e. objections of the appellant remained pending in the Delhi High Court, it is necessary to examine as to whether the said proceedings were initiated by the appellant in good faith and were prosecuted with due diligence. THE phrase "good faith" has been defined under Section 2(h) of the Limitation Act which reads as under: "2....... (h) "good faith" - nothing shall be deemed to be done in good faith which is not done with due care and attention." THErefore proof of due care and attention in prosecuting a remedy before the wrong court is necessary for holding that the same was being prosecuted in good faith. THE Apex Court while considering the provisions of Sections 14 and 2(h) of the Limitation Act in Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation Department and others (2008) 7 SCC 169 ruled that the provisions of Section 14 of the Limitation Act deserves to be considered liberally but due diligence and caution are essential pre-requisite for getting the benefit of the above provisions. Due diligence cannot be measured by any absolute standards. Due diligence is a measure of prudence or activity expected from and ordinarily exercised by a reasonable and prudent person in a given situation. THE said provision would not help a party who is guilty of negligence, lapse or inaction and mere filing of an application in a wrong court would not prima facie mean that it was in good faith and that the period for which it remained pending in the wrong court is to be excluded. In the case of Consolidated Engineering Enterprises (supra) on which reliance was placed from the appellant's side the fact was that record does not indicate about any pretended mistake intentionally made by the appellant with a view to delaying the proceedings or harassing the respondent and there was an honest doubt about the court competent to entertain the application. THE observation in this respect as appear in the judgment of Apex Court is to be quoted below: "THE record does not indicate that there was pretended mistake intentionally made by the appellant with a view to delaying the proceeding or harassing the respondent. THEre was an honest doubt about the court competent to entertain the application for setting aside the award made by the arbitrator. THE mere fact that the question of jurisdiction is an arguable one would not negative good faith because the appellant believed bona fide that the court in which it had instituted the proceeding had jurisdiction in the matter. By filing the application in the courts which had no jurisdiction to entertain the same, the appellant did not achieve anything, more particularly when the lis was never given up" So far the case in hand is concerned, in view of specific stipulation in clauses 11 and 12 of the agreement and in view of the fate of earlier two proceedings in cannot be said to be a case of of honest doubt about the court competent to entertain the application. THE Apex Court observed in the above case that by filing the application in the courts which had no jurisdiction to entertain the same, the appellant did not achieve anything. Here is the case where the award is of 2002 and thus allowing time to pass on account of pendency of these proceedings the execution proceedings can be said to be stalled. In another Division Bench judgment of this Court in the case of Jagannath Prasad Vs. Sant Hardasram Sevashram reported in AIR 1978 (Alld.) 250 it has been said that if after repeated opportunities the appellant is not able to explain the counsel who gave wrong advice upon which the error was committed, then it cannot be said to be a case of good faith and due care. Here in this case, there is absolutely no averment from the side of the appellant by giving the name of any counsel who is said to have given the wrong advice inspite of clear stipulation about the jurisdiction of the court in the agreement to which no one can plead ignorance. In another judgment given by the Apex Court in the case of Rabindra Nath Vs. Sivakami reported in AIR 1972 SC 730, the Apex Court approved the view taken by the High Court that inspite of objections about the jurisdiction of forum the party insisted to continue with that forum and thereafter it is found that the court lacks jurisdiction, the time spend in that jurisdiction cannot be said to be in good faith with due care. THE observation as has come in the judgment of the Apex Court is to be quoted below: "From what we have stated above, it will be plain that the appellant took objection to the non impleading of the Government as a party at the earliest possible opportunity. THE respondents would not take note of that objection. THEy persisted in their attitude till ultimately the High Court of Travancore-Cochin held that the suit will have to fail for the non-impleading of the necessary party." Here also is the case where in two earlier civil proceedings before the Delhi Courts it was found that the courts lack jurisdiction and therefore, the appellant can be said to be fully aware of the consequence of presenting the matter before Delhi High Court, besides there being clear stipulation in clauses 11 and 12 of the agreement as quoted above. In another decision given by the Apex Court in the case of Ghasi Ram and others Vs. Chait Ram Sainti and others reported in AIR 1998 SC 2476 the Apex Court observed as follows: "2......... (h) "good faith"........ nothing shall be deemed to be done in good faith which is not done with due care and attention............. THE aforesaid definition shows that an act done with due care and attention satisfied the test of "good faith". "Due Care" means that sufficient care was taken so far as circumstances demanded and there was absence of negligence. In other words, plaintiff has taken sufficient care which a reasonable man is expected to take in order to avoid any injury............." In the case of Ghasi Ram (supra) the Apex Court gave benefit of Section 14 of the Limitation Act to the appellant on the ground that the plaintiff was an illiterate person and he was not found to be legally trained and thus he sought advice of the counsel for future course of action and accordingly mistake was committed. THE observation of the Apex Court in this respect in the case of Ghasi Ram (supra) is quoted below: "Where a plaintiff is illiterate and is not acquainted with the procedural law, the only thing that he can do is to consult some lawyer for advice. It is not disputed that the plaintiff-appellant filed the revision before the High Court on the advice of his counsel, although it may be that he was ill-advised." Here in this case admittedly this is not the situation. THE appellant can be said to be well educated and legally trained having expert's advice for the proper course of action but inspite of aforesaid and specific stipulation in clauses 11 and 12 of the agreement beside the fate of earlier two proceedings the appellant chose a wrong court. Beside the aforesaid there is absolutely no averment in the application as recorded in the order of the court below that who was the counsel and in what manner the advice of presenting the matter before the Delhi High Court was given. In this Court also during course of argument, Sri Gupta fairly admitted that in the application there is no averment about name of the counsel who gave the advice or otherwise about any wrong advice of the counsel. Thus, the oral argument during the course of submission about wrong advice of the counsel for choosing the forum can be of no help to appellant. It is settled that no amount of evidence is to be entertained beyond the pleadings and if there is no pleading in respect of wrong advice the oral submission during the argument can be of no help. THE purpose of the Act in which the present proceedings are permitted is to provide speedy remedy for either of the sides and thus against the award the challenge has been restricted on limited grounds and therefore, that object cannot be permitted to be frustrated in a light and casual manner if a party has not taken care to get the proceedings proceeded even by taking minimum level of care and diligence. In the instant case, the appellant had full knowledge that the agreement provides for jurisdiction of the court at Ghaziabad and as such, there was no scope on its part to have preferred the objections before the Delhi High Court, particularly when in the earlier two proceedings before the Delhi Court on objection of jurisdiction being raised the proceedings were withdrawn. THE appellant has not pleaded nor can plead the ignorance of the condition contained in the agreement. THE appellant cannot be treated like any other ordinary litigant and is supposed to be having the best of the legal assistant available. It is also not the case of the appellant that it was under the wrong legal advice that the objections were filed before the wrong court, inasmuch as the application moved under Section 14 of the Limitation do not contain any such pleading or particulars of the person who may be said to have given the incorrect advice of filing objections before the Delhi High court. Mere argument without any pleading to above effect cannot be considered. If the argument of filing the case/proceeding in a wrong court is treated to be case of good faith in every case than that may amount to a general rule of being accepted in all matters and thus the consideration of due care and attention will become redundant. Distinction between an ordinary litigant who is illiterate and a litigant who is well red, educated and is capable of understanding the things besides is possessed of expert opinion will have to be drawn. Every case/litigant cannot be placed at par. A wrong advice and that too if is bona fide or confusion about forum if it is not clear, if honestly analysed and thought and then if it resulted to approach wrong court may constitute good faith (due care and attention) but not otherwise. For this there has to be specific and clear pleading and evidence/proof and and not just routine or casual averment. So far the case of Dharma Prathishthanam (supra) on which reliance was placed by the counsel for the appellant is concerned, suffice it to say that it was found that there is no dispute that the arbitrator was wrongly appointed but here is the case where this is not an admitted situation, rather in respect of appointment of arbitrator the appellant had approached the civil court but failed to get any effective order as by the time the arbitrator was appointed in the matter and that was never challenged before the competent/appropriate court/forum and the award is given by the arbitrator. THE appellant filed the objections before the court which is found to have no jurisdiction in which quite long time was taken. In view of discussion as made above, there can be no doubt that the appellant is well educated organisation, equipped with all kind of expertise, assistant and advice of imminent lawyers and clear stipulation in clauses 11 and 12 of the agreement were in the knowledge of the appellant beside the fate of two earlier proceedings, but it chose to present matter in a court which had no jurisdiction and thus, in view of various decisions given by the Apex Court it cannot be said to be a case of good faith as the good faith has to demonstrate exercise with due care and attention. THE court below has rightly said that there is neither any pleading nor material about the wrong advice and therefore, it is not a case of prosecution of the proceedings in good faith. Thus, in the facts and circumstances, the appellant is not entitled to the benefit of Section 14 of the Limitation Act and to get the period during which its objections remained pending before the Delhi High Court excluded for the purposes of counting limitation. Accordingly, we are of the opinion that the court below has not committed any error of law which can be said to be manifest in rejecting appellant's application under Section 14 of the Act and consequently in dismissing the objections. THE appeal as such has no merit and is dismissed with no orders as to costs. 0