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CASE NO.: Appeal (civil)  10104 of 2003

PETITIONER: M/s.Gurbax Singh                                         

RESPONDENT: Punjab Mandi Board                               

DATE OF JUDGMENT: 18/12/2003

BENCH: N.Santosh Hegde & B.P.Singh

JUDGMENT: J U D G M E N T

1 7442 2003 5 of 2003 1 15844 2003

SANTOSH HEGDE,J.

       Leave granted.

       A dispute which arose between the parties to these appeals  came to be referred to arbitration as per the contract clause contained  in the agreement between the parties. Before the arbitrator there was  a claim and counter-claim by the parties. The arbitrator after  considering the said claims by his award dated 26.10.1991 awarded  a sum of Rs.58,74,691.12 towards the claim of the appellant herein.  He also awarded Rs.8,82,923.60 towards the claim of the respondent  herein. Deducting the said amounts awarded to the respondent from  the amount awarded to the appellant the arbitrator directed the  respondent to pay the balance amount of Rs.49,91,767.52 within 30  days of the signing of the said award failing which he directed an  interest @ 12% per annum. It is admitted from either side that as per  the terms of the arbitration clause the same did not require the  arbitrator to make a reasoned award.         A copy of the signed award was despatched to both the parties  on 28.10.1991 by the arbitrator with a direction to file the same  before an appropriate court to make the same rule of the court. The  appellant herein on 29.10.1991 filed the award in the Court of the  Additional Senior Sub-Judge, Sultanpur Lodhi, which court issued a  notice of the filing of the said award on 30.10.1991 to the  respondent herein. Though the said notice mentioned the next date  of hearing as 24.12.1991, as per Article 119 of the Limitation Act  the respondent had to file its objections if any, within 30 days from  the service of notice. As per the postal endorsement received by the  court the said notice of the court was sought to be served on the  respondent on 6.11.1991 but the same was refused to be accepted  hence a deemed service came to be effected. Consequently, the  respondent became liable in law to file its objections on or before  6.12.1991 i.e. within 30 days from the date of deemed service. On  30.10.1991 along with a fresh notice by substituted service to the  respondent herein, a notice was also issued to the arbitrator who was  impleaded as second respondent to the application filed by the  appellant to make the award a rule of the court.          On 24.12.1991 when the matter was listed for further orders,  the court was pleased to pass the following order :         "24.12.91

       Present : Counsel for the Petitioner

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       Respondent No. 2 Shri M.S. Sikand has  been served. But none is present on his behalf. He  is proceeded against exparte. Respondent No.1 has  refused process. He be served through substituted  service by way of publication in the news paper  Nawan Jamana, Jullunder. To come up on  30.1.92."

       As per the said order it is seen that since nobody represented  the arbitrator, he was set ex parte. The court also noticed the fact that  the respondent herein had refused process therefore a direction was  given to serve it through substituted service by way of publication in  the newspaper. The matter was then listed to be brought up before  the court on 30.1.1992.         It seems that after passing the above order, the arbitrator  appeared in the court in person on 24.12.1991 itself and moved an  application for setting aside the ex parte proceedings against him.  That application was accepted and the court recorded another order  on the same day which reads thus :          "24.12.91

       Present : (At this stage) counsel for petitioner.      

       Respondent No.2 appeared in person. S.G.S.  Suchdeva Adv. filed PA for Respondent No. 1.  Application for set aside order of Respondent No.2  accepted. Exparte order set aside. Arbitration file  (Award & proceedings) produced. Be placed on  file. Now to come up for filing objections if any on  or before 30.1.92 dated already fixed."

       As per this subsequent order of 24.12.1991 it records that the  arbitrator appeared in person on that day and requested for setting  aside the ex parte order while the respondent herein was represented  by his Power of Attorney. The court accepted the arbitrator’s  application to set aside the ex parte order against him. It also  directed the arbitrator by that order to produce the file pertaining to  the award and proceedings. It gave 1.1.1992 which was the date  already fixed by the previous order as the next date of hearing. On  18.1.1992 the respondent herein filed an objection purporting to be  one under sections 16, 30/33 of the Act. The trial court as per its  order dated 6.6.1992 rejected the said objections filed by the  respondent herein on the ground of limitation. Consequently, it made  the award a rule of the court.         Against the said order of the trial court respondent herein  preferred an appeal before the High Court of Punjab & Haryana at  Chandigarh raising various grounds; one of which was challenging  the finding of the trial court on the question of bar of limitation  invoked by the trial court as against the objections filed by it. It was  also argued before the High Court, inter alia, that the filing of the  award by itself without the connected papers would not amount to a  proper filing as contemplated under the Act therefore the trial court  ought to have rejected the said application filed by the appellant  under section 14/17 of the Act. The High Court by the impugned  order firstly came to the conclusion that mere filing of the award  would not satisfy the requirement of law hence notice of such filing  would not start the period of limitation running because such filing  is not as contemplated under section 14(2) of the Act attracting  Article 119(b) of the Limitation Act. It further observed that since  all the connected papers were filed only on 24.12.1991 the period of  limitation would run only from that day hence the objection filed by  the respondents on 18.1.1992 would be within the period of

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limitation. Primarily, on this basis the High Court set aside the  award of the trial court on the ground that the objections of the  respondents were erroneously rejected without going into the merits  of the same. The High Court also went into certain other issues  raised by the respondents herein and gave its finding on those issues  also. In our opinion in this appeal it is not necessary for us to go into  those questions if the finding of the trial court in regard to the  applicability of the bar of limitation is a just view. In other words, if  the trial court is right in its view of applicability of limitation, then  other issues will not arise for consideration because the court will  have to proceed with original application as if there was no objection  to the award. Therefore, we will consider the question of limitation  first.         Mr. P.P. Rao, learned senior counsel appearing for the  appellants submitted that the finding of the High Court that the filing  of mere signed award by itself would not amount to a proper filing  in the eye of law under Section 14(2) of the Act is contrary to the  judgment of this Court in East India Hotels Ltd. v. Agra  Development Authority [2001 4 SCC 175]. Learned counsel  submitted there is no legal obligation to file all the papers pertaining  to the arbitration proceedings while seeking the court’s intervention  for making the award a rule of the court. In East India Hotels’ case  (supra) this Court while dealing with a similar argument, held thus :

"We may now consider the submission  of Mr Dwivedi, learned Senior Counsel for the  respondent. Learned Senior Counsel has  contended that the stage of issuance of notice  would come only after filing of the records by  the Arbitrator/Umpire and as no records were  filed on 13.11.1998, the order passed by the  court on that date could not be treated as notice  to the parties. We cannot accept this contention.  From a plain reading of sub-section (2) of  Section 14 it would appear that under this sub- section the stage at which notice is required to  be given by the court is after "filing of the  award" and the notice pertains to the fact of  "filing of the award" in court. It is the duty of  the Arbitrator/Umpire to file depositions,  documents, etc. along with the award. If only  award is filed and other documents are not  filed, the court may issue notice under this sub- section after the award is filed. It need not  postpone issuing of notice till all the documents  are filed. In our view a notice issued after filing  of the award but before filing of other  documents is a valid notice under sub-section  (2) of Section 14 of the Act and no fresh notice  need be issued after filing of other documents  by the Arbitrator/Umpire."

       From the above enunciation of law by this Court, it is clear  that for the purpose of entertaining an application for making the  award a rule of the court and for issuing notice thereon it is not  necessary that the application should contain all or any other papers  apart from the signed award. In the instant case it is an admitted fact  that the signed award was filed in the court and based on that a  notice was issued to the respondent herein and the arbitrator.  Mr. Har Dev Singh, learned senior counsel appearing for the  respondents, per contra submitted that the law laid down by this  Court in the case of East India Hotels (supra) may not be a correct  proposition of law in view of the two judgments of this Court; one of  which is of a larger Bench. They are : Ch. Ramalinga Reddy v.  Superintending Engineer & Anr. [1999 (9) SCC  610] \026 a judgment

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of 3-Judge Bench; and Deo Narain Choudhury v. Shree Narain  Choudhury [2000 (8) SCC 626]. Learned counsel for the  respondents in support of his above contention relied on paragraphs  8, 11 and 16 of Ramalinga Reddy’s case (supra). We have gone  through the judgment of this Court in Ramalinga Reddy’s case  (supra) with special reference to the abovementioned paragraphs but  we do not find any proposition of law contrary to one laid down by  this Court in East India Hotels’ case (supra). In our opinion the issue  as it arises in the case in hand and as decided by this Court in East  India Hotels’ case (supra) did not arise in the case of Ramalinga  Reddy (supra). The larger Bench judgment in Ramalings Reddy’s   case (supra) merely states that the notice which the court issues to  the parties for filing an award need not be in writing but the notice  under section 14(2) must be served by the court. Therefore we do  not think the judgment of the larger Bench in Ramalinga Reddy’s  case (supra) is of any assistance to the appellant in supporting its  argument that there is a requirement of the entire arbitration papers  being filed along with the application before issuing notice of the  said application under section 14(2) of the Act.            We are also of the opinion that the decision of this Court in  Deo Narain Choudhury (supra) does not assist the respondents  which while following the earlier judgment in Ramalinga Reddy’s  case (supra) only held that the notice should be issued by the court  and not by an arbitrator as was the fact  in Choudhury’s case (supra).  In the instant case there is no dispute in regard to the fact that the  notice was actually issued by the court.         Learned counsel then contended that the notice dated  13.10.1991 issued by the court was recalled by it on 24.12.1991 and  a fresh notice was issued on that day which would give the  respondent 30 days’ time from that date which will be uptil  23.1.1992 and the respondent having filed its objections on  18.1.1992 the same was within time hence the trial court was legally  bound to have considered the said objections. We do not think that  we can agree with this argument of the learned counsel also. We  have already extracted the two orders of 24.12.1991 hereinabove and  if we peruse the same once again we notice that the court on  24.12.1991 has not recalled its notice issued on 30.10.1991 by either  of the two orders made on 24.12.1991. By the first order of that day,  it placed the second respondent arbitrator ex parte. It also noticed the  fact that respondent No.1 who is also respondent herein but had  refused process hence it had ordered a substituted service by way of  publication. That issuance of a fresh notice by substituted service  would not take away the effect of a deemed service which was  effected on the respondent on 6.11.1991. For the purpose of Article  119 of the Limitation Act, 1963 the date of service will have to be  taken as the first service effected. In the instant case it cannot be  legally disputed that the service effected on 6.11.1991 was not an  effective service. If that be so the limitation of 30 days would start  from that day namely 6.11.1991. Even the second order of  24.12.1991 does not make the issuance of notice by the court on  30.11.1991 ineffective. Therefore, this argument of learned counsel  would also fail.         If the appellant succeeds on the question of bar of limitation  in filing the objections, in the eye of law there being no objection to  the award other questions do not arise for our consideration. For the  reasons stated above, these appeals succeed. The impugned order of  the High Court is set aside and that of the trial court restored. The  appeal is allowed with costs.

SLP) No. 15844/2003

       We find no merit in this petition. The special leave  petition is dismissed.