UNION OF INDIA Vs. WAZIR CHAND

JUDGEMENT

(1.) THIS appeal by the Union of India is directed against an order of Shri Sant Ram, the then Senior Subordinate Judge of Chamba whereby an agreement for reference to arbitration was ordered to be filed.

(2.) AN agreement dated 1-11-1950 was entered into between Trilok Chand Mahajan, respondent No. 2, and the Chief Commissioner Himachal Pradesh whereby the former agreed to Purchase and the latter agreed to sell the right to extract, collect and export certain medicinal herbs out of the forests of Chamba district except for certain regions thereof. The agreement was to be operative for one year with effect from 1-9-1950. One of the terms of agreement was that if differences will arise with regard to the construction or any matter or thing touching the agreement the said dispute shall be referred to the sole arbitration of the Deputy Commissioner Mandi district. Differences arose between Trilok Chand and the officers of the Forest Department. The grievance of the aforesaid Trilok Chand was that he was not allowed to exploit some of the ranges for about three weeks in September 1950 and the others till about the middle of October 1950 as a result of which he suffered a loss of Rs. 1,37,412/11/-. The herbs extracted by Trilok Chand worth about Rs. 18,165/5/- were seized by the Forest Department on the ground that the same had been extracted without any right prior to the coming into operation of the agreement. Later on, the Chief Conservator of Forests wrote to Trilok Chand that the seized herbs could be returned upon payment of a sum of Rs. 1,577/8/-. The aforesaid sum was accordingly paid on 30-4-1955 but the herbs were not returned. He served a notice dated 30-5-1952 on the Chief Conservator of Forests Himachal Pradesh requiring the submission of the matters in difference to the arbitration of the Deputy Commissioner Mandi. The Chief Conservator of Forests replied on 236- 1952 that the matters which were desired to be referred to arbitration were outside the purview of the agreement for reference. In the meantime Trilok Chand had transferred his right under the agreement to Wazir Chand Mahajan, respondent No. 1. On 23-6-1955 an application was filed by the aforesaid respondents under Section 20 of the Arbitration Act for the filing of the agreement for reference. The application was inter alia opposed by the appellant on the ground that it was barred by the law of limitation. The contention was that differences had arisen between the parties in September and October 1950 and the application under Section 20 should have been filed within three years of October 1950. The aforesaid objection did not find favour with the learned Senior Subordinate Judge and hence has been filed the present appeal.

(3.) IN the case of Amarnath v. the Union of INdia reported in AIR 1957 All 206 it was held that Article 181 which is a residuary article must be held to apply to applications not only under the Code of Civil Procedure but also under the Arbitration Act for which no provision is made elsewhere in the third division.