PURSHOTTAMDAS HASSARAM SABNANI Vs. IMPEX INDIA LTD

JUDGEMENT

(1.) THIS appeal arises out of a suit filed by the plaintiff claiming a sum of Rs. 2,008-14-0 being the difference between the preferential custom duty on textile goods of British manufacture and similar goods of non-British manufacture which he alleges he had to pay in clearing the contract goods after their arrival in the Port of Bombay, This amount he claimed as damages on the footing of a breach of warranty by the defendants.

(2.) THE question that arises 'in limine' is whether the suit is barred by limitation. . The contract of sale is dated 21 September, 1948, and the seller is the defendant and the purchaser is the plaintiff and the goods that were sold were printed cotton haircord which were described as of U. K. origin. The shipment was October/november 1948 and the contract was a C. I. P. contract. The payment was to be made by a confirmed and unequivocal letter of credit to be opened by the purchaser in favour of the British suppliers Messrs. Michael Settons' Sons and Hallwood Ltd. , London. It appears that the plaintiff opened the letter of credit, the goods arrived in Bombay, and the suppliers were paid the price out of the letter of credit opened by the plaintiff. Dispute then arose between the plaintiff and the Customs authorities as to the duty that he had to pay. If these goods were of U. K. origin, the duty he would have to pay would be 18 per cent, and if they were of non-U. K. origin, then the duty he would have to pay would be 60 per cent. He was asked to pay and in fact he did pay at the rate of 60 per cent, the Customs authorities taking the view that the goods were of non-U. K. origin. The documents which constitute really the delivery under a O. I. P. contract was tendered to the plaintiff between 11 January, 1949, and January 17, 1949, and the plaintiff filed the present suit on 22 February, 1952, claiming the difference between the amount that he would have to pay on the basis of 18 per cent, duty and the 60 per cent, duty which in fact he paid. It is not disputed by the plaintiff that the article that governs this case is Article 115, Limitation Act, and if no other factor was to be taken into consideration, the suit was filed beyond three years and the suit would be out of time. But what is relied upon by the plaintiff for the purpose of saving limitation is the fact that there were certain infructuous arbitration proceedings, and the plaintiff wishes to exclude the time taken up by these arbitration proceedings. The section of the Limitation Act on which the plaintiff relies is Section 14. That section provides: "in computing the period of limitation prescribed 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 in a Court of appeal, against the defendant, shall be excluded, where the proceeding is founded upon the same cause of action 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. " There is no doubt that the arbitration proceeding was founded upon the same cause of action as the present suit and it is not in dispute that those proceedings were prosecuted in good faith. The trial court has held that assuming Section 14 applies, those proceedings were not prosecuted with due diligence. For the purpose of this argument we will assume that they were prosecuted with due diligence, and the question which still remains to be determined is whether Section 14 has any application to the facts of this case. Looking at Section 14 and giving to it its plain natural construction, it is clear that the Legislature never intended that proceedings before an arbitrator should come within the ambit of this section. Undoubtedly, proceedings before an arbitrator may be civil proceedings, but what is emphasised by S. 14 is that they must be civil proceedings in a Court of first instance or in a Court of appeal. Therefore, the intention of the Legislature was to apply this section to judicial Courts which hear suits and from whose decision an appeal lies to a higher Court. The opening words of Section 14 refer to computing the period of limitation prescribed for any suit. Therefore, when the period of limitation is computed in respect of a suit filed in a civil Court, what has to be excluded is a suit or a civil application which was being prosecuted in another Court or in the Court of appeal. Therefore, if we were to strictly construe Section 14 it is clear that the plaintiff would not be entitled to exclude the period taken up in arbitration proceedings.

(3.) NOW, the case before us is not identical with the case which the Privy Council was considering. The Privy Council was considering two arbitration proceedings. The Limitation Act strictly did not apply to those proceedings at all. They applied the Limitation Act by analogy and they went on also to apply the principle of Section 14 to arbitration proceedings. Before us we have a suit to which the Limitation Act expressly applies and therefore there can be no question of applying Section 14 by analogy, and if Section 14 was strictly construed, as we have already pointed out, it cannot possibly cover a case of arbitration proceedings.