UNION OF INDIA Vs. PRITHIPAL SINGH CO

JUDGEMENT

(1.) PURSUANT to a contract executed on 5-4-1977 for construction of Central School building, Amla between the respondent contractor and the appellant, the respondent executed the work and completed it on 1-11-1978. In so doing, some extra work was also done for which the contractor laid a claim with the appellant. However, since the respondent wanted of amount shown in the final bill, he had to withdraw the claim for the extra work done. This withdrawal, according to him, was under coercion. The respondent the invoked the arbitration clause in the agreement and the dispute was referred to the solo arbitrator before whom another claim for Rs. 96,000/- was made by the respondent. In all, before the arbitrator, the respondent's claim was for Rs. 2,16,000. Before the arbitrator, statements were filed and evidence - both documentary and oral - was tendered. After hearing the parties, the arbitrator delivered the award on 15-5-1980 whereunder the respondent's claim for Rs. 1,74,629.96 paise was accepted. Interest at six per cent per annum has also been awarded on this sum from 90 days after the making of the award until payment. Even 16-6-1980, the respondent moved an application before the Court along with a copy of the award duly signed by the arbitrator for making it rule of the Court and for a decree in terms thereof. Notice of this application was served upon the appellant on 21-6-1980. This case was registered as Miscellaneous Judicial Case No. 2 of 1980, in the Court of Additional District Judge, Betul. After the service of this notice upon the appellant as aforesaid, an application on its behalf was filed on 26-6-1980 for getting the award filed by the arbitrator. This application was registered as Miscellaneous Judicial Case No. 3 of the 1980 and notice of this application was served on the appellant on 7-7-1980. Both these cases were then taken up together by the Court and on 5-8-1980, the appellant filed objections to the award. The objections related to the admissibility of claims against various items in favour of the respondent contractor. The respondent then filed a reply to this objection. Apart from justifying the claim on merits, the objection filed by the appellant was said to be barred by time being filed beyond 30 days of 21-6-1980 on which date notice of the filing of the award in Miscellaneous Judicial Case No. 2 of 1980 was served on the appellant. On pleadings, the Court framed issues and permitted the parties to adduce such evidence as they desired. By judgement dated 29-11-1980 passed in Miscellaneous Judicial Case No. 3 of 1980, the Court upheld the respondent's contention and held the objection filed by the appellant as barred by time. It also held that the arbitrator neither misconducted the proceedings nor himself nor could the award be said to be otherwise invalid. The award was, therefore, upheld and made the rule of Court. Rs. 1720/- have been saddled on the appellant as costs of arbitration. From the date of the order passed by the learned Additional District Judge, the appellant has been directed to pay interest at nine per cent annum until realisation of the amount. This appeal under S.39 of the Arbitration Act has been directed against this judgement and consequent decree passed by the learned Additional District Judge.

(2.) WE shall first take up the issue relating to limitation. From the facts narrated above, it is clear that if the award is taken to be filed on 16-6-1980 and the notice of the filing of this award is taken as served on 21-6-1980, the objection filed under S.33 of the Arbitration Act on 5-8-1980 must be held to be barred by time as the period prescribed admittedly for filing such objection is 30 days (under Art.119 of the Limitation Act, 1963) from the date of filing of the award in Court. To resolve this issue, two things have to be determined : (i) the date of filing of the award in Court by the arbitrator, and (ii) the service of the notice of such filing of the award upon the appellant. Relevant provisions are contained in S.14(2) of the Arbitration Act which must, therefore, be quoted :

(3.) THE further requirement of S.14(2), as we have noticed above, is that the Court shall give notice to the parties of the filing of the award. Obvious purpose of giving of such notice is to enable the parties to file objections to the award within the prescribed period of limitation. i.e. 30 days. Such notice by a Court need not be in writing. THEre can even be an oral notice. Precisely for this reason, notice need not be served on the party in any formal manner. In Nilkantha v. Kashinath, AIR 1962 SC 666 it was held that the communication of the information to the Pleader of the party that an award has been filed is sufficient compliance with the requirements of Sub-Sec. (2) of S.14 with respect to the giving of the notice to the parties concerned about the filing of the award. If a proceeding is initiated by either of the parties calling upon the arbitrator to file the award and if in such a proceeding when both the parties are represented by counsel and the arbitrator files the award in Court to the knowledge of the respective counsel, notice under S.14(2), thereafter, may not be necessary. If, however, where one of the parties objects to the filing of the award for want of compliance under S.14(2) and requests the Court to pass an order deciding the issue, and the Court orders notice of filing of award to be issued to the parties, it is such notice which shall be material and the limitation for filing objection shall commence from the date the notice is served on the parties. A Division Bench of the Nagpur High Court, in Kawalsingh v. Baldeosingh, AIR 1957 Nag 57 speaking on the requirement of notice under S.14(2), observed that it contemplates a case where arbitrators or umpire file an award in Court in absence of the parties. It is for this reason that Sub-Sec. (2) of S.14 requires issuance of notice of the filing of the award. THEre is no prescribed procedure for service of notice. When a party who is already cognizant of the filing of the award applies for leave to examine the award and for time to file objections, no service of a separate notice would be necessary and limitation for filing the objection shall start running from the date when the party entered appearance in the proceedings. It was, however, cautioned that ordinarily the Court would not presume a party to be aware of the filing of the award unless the matter is beyond controversy. A learned single Judge (V.B. Raju, J.) of the Gujarat High Court, in Hasanalli Abdulalli v. Shantilal, AIR 1962 Guj 317 after referring to the aforesaid decision of the Nagpur High Court, observed that where parties have otherwise knowledge of the filing of the award and also the notices under S.14(2) of the Arbitration Act were directed to be issued to them, the service of notice shall be the date of starting point of limitation. However, if there is no written notice, then the date on which oral or informal or constructive intimation was given to the parties by the court of the fact that the award was filed would be the starting point for limitation. From the aforesaid decisions, it can, therefore, be legitimately inferred that after the award is filed in Court as required by S.14(2) of the Arbitration Act, and if the parties have not caused appearance or are not represented in Court where the award is filed, notice of the filing of the award has to be issued to the parties. THE date of service of such notice shall be the date of starting point of limitation for the purpose of Art.119 of the Limitation Act, 1963. A notice in writing is not necessary even to the pleader of a party representing that party in Court. A constructive or informal notice is also included. When, therefore, parties are present in Court or are represented by their pleaders, even an oral intimation to them of the filing of the award would be enough compliance with the provisions of S.14(2) of the Arbitration Act. If, however, in spite of such informal information or otherwise knowledge to a party of the filing of the award, the Court chooses to issue a notice to be served upon the parties, it is the date of the service of notice which shall be the staring point of limitation.