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PETITIONER: B.N. AGARWALLA

       Vs.

RESPONDENT: STATE OF ORISSA

DATE OF JUDGMENT16/10/1995

BENCH: VERMA, JAGDISH SARAN (J) BENCH: VERMA, JAGDISH SARAN (J) VENKATASWAMI K. (J)

CITATION:  1996 AIR  385            1995 SCC  (6) 509  JT 1995 (7)   454        1995 SCALE  (6)54

ACT:

HEADNOTE:

JUDGMENT:                           JUDGMENT J.S. VERMA, J. :      Leave granted.      By the  impugned judgment  the High  Court allowed  the appeal  against  the  judgment  of  the  Subordinate  Judge, Bhubaneswar making  an award dated 26.3.1983 the rule of the court, by which a sum of Rs.95,003/- was directed to be paid to the  appellant by 24.6.1983 failing which it was to carry interest at the rate of 12 per cent per annum from 27.3.1983 till the  date of  payment. On behalf of the resoondent, the award was  challenged on  the ground that the arbitrator was incompetent to  make the  award in view of Section 41A(7) of the Arbitration  (Orissa Amendment)  Act, 1982 (Orissa Act 3 of 1983)  which came into force w.e.f. 26.3.1983 and had the effect of  amending the  Indian Arbitration Act, 1940. Since the date of the award and the date of the enforcement of the amending  Act   are  the   same,  the  question  is  of  the applicability of  the  said  amendment.  This  is  the  only question involved  for decision  in this  appeal by  special leave.      The Arbitration (Orissa Amendment) Act, 1982 was an Act to amend the Arbitration Act, 1940 in its application to the State of  Orissa. It received the assent of the president of India on 21.3.1983 and came into force on publication in the Orissa Gazette, Extraordinary, No.358 dated 26.3.1983. A new Section 41-A  was inserted  in the principal Act relating to constitution of  and references to the Arbitration Tribunal. Sub-section   (1)    of   Section    41-A   provided    that notwithstanding  anything   contained  in  the  Act  or  any contract or  any other  instrument, in  all cases  where the State Government,  a local  or other authority controlled by the State  Government, statutory corporation or a Government company is  a  party  to  the  dispute,  all  references  to arbitration shall  be made to the Arbitration Tribunal. Sub- section (2)  provided for  constitution  of  an  Arbitration

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Tribunal by  the State  Government in  the  manner  provided therein. Sub-sections  (3),  (4),  (5)  and  (6)  relate  to ancillary  matters   pertaining  to   constitution  of   the Arbitration Tribunal.  Sub-section (7)  relates  to  pending proceedings and  it is  the construction  of this  provision which is  involved in  this appeal.  Sub-section (7)  is  as under:-      "All arbitration proceedings relating to      a dispute  of the  nature  specified  in      sub-section (1) which are pending before      any   arbitrator    on   the   date   of      commencement of  the Arbitration (Orissa      Amendment) Act,  1982 and  in  which  no      award has  been made  by the  said date,      shall stand  transferred to and disposed      of by Arbitration Tribunal."      The only  question in  the present case is: Whether the arbitration proceeding  in  the  present  case  was  such  a pending proceeding  before the  arbitrator to be governed by sub-section (7)  of Section  41-A ?  The controversy  really relates to  the meaning of the expression "by the said date" occurring in sub-section (7).      The contention  of learned counsel for the appellant is that the  arbitration proceeding in the present case was not pending before the arbitrator on 26.3.1983 which is the date of commencement  of the  Act as  the award  had been made on that day.  He submits  that the  date of commencement of the Act is  to be  included in the expression "by the said date" and,  therefore,   the  arbitrator   was  not   divested  of jurisdiction to  make the  award on  26.3.1983. On the other hand, learned  counsel for  the respondent contends that the Act having  come into  force on  26.3.1983, an award made on that day  was without  jurisdiction in a pending arbitration proceeding  which   stood  transferred  to  the  Arbitration Tribunal by  virtue of  sub-section  (7)  of  Section  41-A. Learned counsel  for the  respondent further  submitted that the object  of the anactment was to prevent the mischief for which  the   provision  was   enacted  and,  therefore,  the contemplated legislation  being widely  publicised with  the assent of  the  President  being  given  on  21.3.1983,  the construction which  he suggests  would promote the object of the legislation.  It is  well known  that this amendment was made in  the Arbitration  Act because  of the realisation on account of  strong observations  by the  courts  in  several arbitration cases from Orissa suggesting the desirability of an Arbitration  Tribunal to  decide the arbitration disputes in which  the State  Government,  its  instrumentalities  or other public bodies were parties.      Sub-section (7)  of Section 41-A provides for automatic transfer to  the Arbitration  Tribunal  of  all  arbitration proceedings of  the kind  specified in sub-section (1) which were  "pending   before  any   arbitrator  on  the  date  of commencement" of  the said  Act and  "in which  no award had been made  by the  said date". Obviously, the expression "by the said date" here means by the date of commencement of the Arbitration  (Orissa   Amendment)  Act,   1982.  The   first expression clearly  means an  arbitration proceeding pending before any  arbitrator on  the date  of commencement  of the Act, namely, 26.3.1983. The meaning of the second expression should be consistent with that of the first expression since the two  could not be used to create a conflict. The purpose of sub-section  (7) is to divest the arbitrator of authority to make  the award in all such arbitration proceedings which were  pending   before  the   arbitrator  on   the  date  of commencement of  the said  Act  and  to  provide  for  their

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automatic transfer  to the Arbitration Tribunal. The General Clauses Act.  1897 orovides  that  unless  the  contrary  is expressed,  an   Act  shall  be  construed  as  coming  into operation immediately on the expiration of the day preceding its commencement.  There being no contrary indication in the Act, it  must be  held that  the said Act came into force on the midnight  on the  expiration of  the day  preceding  its commencement, i.e.,  the  midnight  between  25th  and  26th March, 1983.  There can  be no  doubt  that  if  the  second expression "in  which no  award has  been made  by the  said date" was  not also  present in  sub-section (7),  then  the undoubted result  of the  first expression  would be that an arbitration proceeding  in which no award had been made upto the midnight  between 25th  and 26th  March, 1983 would be a pending arbitration  proceeding  which  automatically  stood transferred  to  the  Arbitration  Tribunal.  The  question, therefore, is  whether the  further words used in the second expression in  sub-section (7)  must  lead  to  a  different conclusion. The  construction of  the first expression being unambiguous,  the   second  expression   must  be  construed harmoniously unless  that is  not a permissible construction of the expression "by the said date".      It does  appear  to  us  that  the  second  expression, namely, "in  which no  award has been made by the said date" was further  used in sub-section (7) ex abundante cautela to clarify the  meaning of  pending proceedings  by  indicating that only  those arbitration  proceedings in which the award also had been made "by the said date" were excluded from the operation  of   sub-section  (7)   and  that   every   other arbitration proceeding  including those  in which  the award alone  remained   to  be  made  "by  the  said  date"  stood transferred to  the Arbitration Tribunal. In other words, if the  arbitration   proceedings  had   been  closed  but  the arbitrator had  not made the award till the midnight between 25th and  26th March,  1983 when the Act came into force, it was a pending arbitration proceeding governed by sub-section (7). Acceptance  of the  appellant’s contention would amount to holding  that even  though the Act had come into force on the midnight  between 25th  and 26th  March, 1983,  an award made thereafter  on 26th  March,  1983  was  not  a  pending arbitration proceeding  on the  date of  commencement of the Act. Unless  meaning of  the expression  "by the  said date" used in  sub-section (7)  be only  that suggested by learned counsel for  the appellant,  the  construction  which  would harmonise with  the meaning  of the earlier expression, must be given to the provision.      We may  now consider  the meaning  of the word ‘by’ for ascertaining the  meaning of  the expression  "by  the  said date". Meaning  of the word ‘by’ in some of the dictionaries is :-      Black’s Law Dictionary (Sixth Edition)      "Before a  certain time;  .......... not      later than  a certain time; on or before      a certain time; .........."      The   New    Shorter   Oxford    English      Dictionary      "........ On  or before,  not later than      .........."      No doubt the word ‘by’ means ‘before a certair time’ as well as  ‘on or  before a  certain time’.  The question is : whether, the  word ‘by’ in the expression "by the said date" would mean  in other words ‘before’ or ‘on’ 26.3.1983 in the present context?  We have  already indicated  the meaning of the first  expression "pending  before any arbitrator on the date of  commencement" to  mean  clearly  and  unambiguously

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pending upto the midnight between 25th and 26th March, 1983, i.e., before  commencement of  the date  26.3.1983 or at the time of  expiry of  preceding day  i.e. 25.3.1983. The other expression must, therefore, be construed in this context and since the  word ‘by’ means ‘before’ also, in this context it must be  held to  mean ‘before’  and not  ‘on’ the  date  of commencement of the Act. So construed, the second expression would read  as "in  which no  award has been made before the said date"  i.e. in  which no award has been made before the date of  commencement of  the Act,  namely, 26.3.1983.  This would be  the harmonious construction of the two expressions in the provision.      Obviously, an award made on 26.3.1983 cannot be said to be an  award made before 26.3.1983 and, therefore, the award in the  preset case  having been  made on  26.3.1983 and not before 26.3.1983,  the date  of commancement of the Act, the arbitrator had no jurisdiction to make the award as it was a pending arbitration  proceeding  which  automatically  stood transferred to the Arbitration Tribunal.      Learned counsel  for the appellant has referred to some decisions wherein  the word  ’by’ has been construed to mean that it includes the end or the expiry of the date or period indicated. As  we have  indicated, the  meaning of  the word ’by’ is  both ’before’  as  well  as  ’on  or  before’  and, therefore, the  context in  which it  has been  used becomes decisive. Where  the  context  does  not  exclude  the  date specified and  permits its  inclusion the  word ’by’  can be construed to  mean  ’on’  and  not  ’before’;  and  in  that situation, specification  of the limit of time by saying "by that date"  would require  including the specified date upto the expiry  of that  date for  computation of  the permitted period. P.C.  Muthu  Chettiar  vs.  Narayanan  Chettiar  and others, AIR  1928 Madras  528; Sheikh Nuroo vs. Seth Meghraj Ramkaran Marwadi, AIR 1937 Nagpur 139; T.A. Janakuara Nainar vs. Periaswamy  Goundan and others, AIR 1949 Madras 376; and Dharamraj Mahadeo  vs. Additional  Deputy Commissioner Akola and others,  AIR 1957  Bombay 154 are all decisions in which the context  required the  word ‘by’  to be read as ‘on’ and not ‘before’  to permit  inclusion of  the period  upto  the expiry of the date specified. We have already indicated that the context  in the present case excludes the date specified and, therefore,  excludes the  meaning ‘on’ and requires the word ‘by’ to be read as ‘before’.      Eastaugh and  others vs.  Macpherson, [1954] 3 All E.R. 214 supports  the view we have taken that the meaning of the word ‘by’  in the  phrase ‘by’  the date’  can mean  ‘on  or before the  date’ or  ‘before the  date’  depending  on  the context in which the word ‘by’ has been used and the meaning to be  preferred should  be that  which it  has in the given context. We  have indicated  that  in  the  context  of  the provision made in sub-section (7) of Section 41-A meaning of the word  ‘by’ must  be ‘before’  and not  ‘on’ in  order to harmonise with  the meaning  of the  earlier  part  of  sub- section (7)  and to promote the object of its enactment. The High Court’s  conclusion that  the arbitrator in the present case had no jurisdiction on 26.3.1983 to make the award does not suffer from any infirmity.      Consequently, the appeal fails and is dismissed.