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CASE NO.: Appeal (civil)  1457 of 2004

PETITIONER: State of Goa                                              

RESPONDENT: M/s. Western Builders                            

DATE OF JUDGMENT: 05/07/2006

BENCH: H. K. SEMA & A.K. MATHUR

JUDGMENT: J U D G M E N T  With   (CA. Nos1458, 1459-1460, 1461, 1462, 1463, 1464, 1465/2004)

A.K. MATHUR, J.

       All these batch of appeals are disposed of by a common  judgment  as same question  of law  involves in these appeals         The basic question which involves in these appeals is  applicability of Section 14 of Limitation Act, 1963 in The  Arbitration and Conciliation Act, 1996.         However in order to appreciate the controversy involve in  these appeals  it is necessary to give few facts for that purpose  the facts given in the C.A. No. 1457 of 1004 are taken into  consideration.         A dispute arose between M/s. Western Builders Bito’s  Compound & The State of Goa,  represented by  The Executive  Engineer, Works Division XX (PHE), Public Works  Department, Fatorda, Margoa, Goa.  Mr. P.K. Mohan, Ex- Executive  Engineer, Goa P.W.D.  residing at House No. 1505,  Dr. Rego Bag, P.O. Barbolim Complex, Goa \026 403202 was  appointed as the Sole Arbitrator.  He gave  an award  on 7th  February, 1995 in favour of claimant and against the State of  Goa   and   directed  that    the claimant      is entitled to a sum of  Rs. 89763/- and he further directed the State to pay simple  interest on Rs. 75553/- from 4th January, 1993  at the rate of  15% per annum.  This interest was payable till the date of decree   of the award and till payment whichever  is earlier.           Aggrieved against this award, a petition was filed before  Civil Court,  Civil Judge,  Margao under sections 30 and 53 of  the Arbitration Act, 1940 for making rule of the Court.   Objection was raised that since The Arbitration and Conciliation  Act, 1996 (hereinafter referred to as the Act of 1996) has come  into force therefore, Civil Court had no jurisdiction to entertain  the proceedings  under the Arbitration Act, 1940.  The Civil  Judge, Senior Division held that under  the Arbitration and  Conciliation Act, 1996 there is no provision for making the  award as a Rule of the Court.  He observed that as per new Act   of 1996 the award can be executed as decree.   The learned  Judge held that  in view of the decision of the apex court given  in the case of Thyseen Stahlunion SMBH vs. Steel Authority  of India and in view of the decision of the Goa Bench  in the  case of Reshma Construction vs. State of Goa  the Act of  1940 is not applicable and present proceedings shall be  governed by the Act of 1996 and accordingly he disposed of the  proceedings.         Thereafter the State of Goa filed a petition before the

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District Judge, South Goa along with the application under  Section 14 read with Section 5 of  The Limitation Act, 1963 for  condoning the delay as the Civil Judge, Senior Division has held  that he had no jurisdiction, therefore, the time which is spent in  these  proceedings before the Civil Judge, Senior Division may  be condoned and the petitions filed by the State of Goa for  setting aside the award under Section 34 be considered.   This  application of State of Goa for condonation of delay under  Section 14/5 of Limitation Act, 1963 was rejected by IInd Addl.  District Judge, Sourth Goa on the ground  that there is no  provision for extension of time under the Act of 1996 & Section  14 of Limitation Act, 1963 is not applicable by  the order dated  7th March, 2002.  Likewise the application under Section 34 was  also rejected.         Aggrieved against this order an appeal was preferred by the  State of Goa before the High Court of  Bombay, Panaji Bench at  Goa under Section 37(1b) of The Arbitration and Conciliation  Act, 1996.  This appeal came to be dismissed by the Ld. Single  Judge by order dated 26.9.2002, in view of his detail reasons  given in  of the judgment delivered on 26.9.2002. It was held  that Section 14 of the Limitation Act is not maintainable in view  of sub-section 3 of  Section 34 of the Act, 1996.  Hence the  present appeal.           In this background a common question of law arises in all  these appeals,  whether Section 14 of the Limitation Act, 1963 is  applicable to the Arbitration Act, 1996 or not.            The learned counsel for the appellant has submitted that  since the Arbitration proceedings are of civil nature & in view of  Section 43 of 1996 Act  Limitation Act 1963 is applicable to the  Act of 1996.  Learned counsel for appellant submitted  that  in  the Arbitration and Conciliation Act, 1996 there is no provision  which prohibit the  applicability of the Limitation Act 1963  therefore wherever it is not prohibited by Act, 1996 the  provisions of Limitation Act, 1963 may be made applicable  mutatus mutandi.  As against this,  learned counsel for  respondent has submitted that this is special enactment &  legislature in its wisdom has provided for every eventuality and  therefore the operation of Limitation Act is ousted by virtue of  Sub-section (2) of Section 29.  In this connection our attention  was invited to Section 34 of the Act which lays down the ground  on which award can be set aside & period within which it can be  set aside.  Therefore, it is a complete code in itself and the   operation of Section 14 & Section 5 of Limitation Act stands  excluded.  However in order to appreciate the submission of  learned counsel it would be necessary to reproduce the Section  34 of the Act:-   

34.  Application for setting aside arbitral award. \026  (1) Recourse to a Court against an arbitral award  may be made only by  an application for setting  aside such award in accordance with sub-section   (2) and sub-section (3).

(2)  An arbitral award may be set aside by the  Court only if \026      (a)  the party making the application furnishes  proof that \026         (i) a party was under some incapacity, or   (ii)  the arbitration agreement is not valid under  the law to which the parties have subjected it or,  failing any indication thereon, under the law for  the time being in force; or

 (iii)  the party making the application was not  given proper notice of the appointment of an

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arbitrator or of the arbitral proceedings or was  otherwise unable to present his case; or    (iv)  the arbitral award deals with a dispute not  contemplated by or not falling within the terms of  the submission to arbitration, or it contains  decisions on matters beyond the scope of the  submission to arbitration:

       Provided that, if the decisions on matters  submitted to arbitration can be separated from  those not so submitted, only that part of the  arbitral award which contains decisions on matters  not submitted to arbitration may be set aside; or

  (v)  the composition of the arbitral tribunal or  the arbitral procedure was not in accordance with  the agreement of the parties, unless such  agreement was in conflict with a provision of this  Part from which the parties cannot derogate, or,  failing such agreement, was not in accordance  with this Part; or  

(b)  the Court finds that \026

 (i) the subject-matter of the dispute is not capable  of settlement by arbitration under the law for the  time being in force, or  

 (ii)  the arbitral award is in conflict with the  public policy of India.

Explanation- Without prejudice to the generalityof  sub-clause (ii) it is hereby declared, for the  avoidance of any doubt, than an award is in  conflict with the public policy of India if the  making of the award was induced or affected by  fraud or corruption or was in violation of section  75 or section 81.

 (3)  An application for setting aside may not be  made after three months have elapsed from the  date on which the party making that application  had received the arbitral award or, if a request had  been made under section 33, from the date on  which that request had been disposed of by the  arbitral tribunal:

       Provided that if the Court is satisfied that the  applicant was prevented by sufficient cause from  making  the application within the said period of  three months it may entertain the application  within a further  period of thirty days, but not  thereafter.                   (4) On receipt of an application under sub- section (1), the Court may, where  it is appropriate  and it is so requested by a party, adjourn the  proceedings for a period of time determined by it in  order to give the arbitral tribunal an  opportunity to  resume the arbitral proceedings or to take such other  action as in the opinion of arbitral tribunal will  eliminate the grounds for setting aside the arbitral  award."

       We are primarily concerned with sub-section (3) of

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Section 34 read with proviso.   Reading of sub-section 3  alongwith the proviso  of Section 34, it clearly transpires  that  the application for setting aside the award on the grounds  mentioned in sub-section (2) of  Section 34 should be made  within 3 months and the period can be further extended on  sufficient cause by another period of 30 days & not thereafter  that means so far  as application for making setting aside the  award the period of limitation has been prescribed in sub-section  (3)   i.e. 3 months but it can be extended  for another period of  30 days on sufficient cause be shown to the satisfaction of court.     Therefore, the applicability of Section 5 of the Limitation Act   stands excluded & the application for condonation of delay upto  a period of 30 days can be made by the court and not beyond  that.  Therefore, it was submitted that there is no scope for  applicability of  Section 14 of  Limitation Act in these  proceedings by virtue of  sub-section (2) of  Section  29 of the  Limitation Act.              Sub-section (2) of Section 29 of the Limitation Act reads as  under -         " (2) Where any special or local law  prescribes for any suit, appeal or application a  period of limitation different from the period  prescribed by the  Schedule, the provisions of  section 3 shall apply as if such period  were the  period prescribed by the Schedule and for the  purpose of determining any period of limitation  prescribed for any suit, appeal or application by  any special or local law, the provisions contained  in sections  4 to 24 (inclusive) shall apply only in  so far as, and to the extent to which, they are not  expressly excluded by such special or local law."                    That means if special period of limitation has been  prescribed for making application for any condonation of delay  or for any other purpose  then that period of limitation  prescribed under the special law shall prevail and to that extent  the provisions of Limitation Act shall stand excluded.  To this  extent there is no dispute.   But the question is whether there is  any provision to cater for present  controversy or not. The  Limitation Act  applies to the arbitral provisions because of  Section 43 of the Arbitration and Conciliation  Act, 1996.  Section 43  reads as under:   "43.Limitation.-  (1)  The Limitation Act,  1963 (36 of  1963), shall apply to arbitrations  as it applies to proceedings in Court.

(2) For the purposes of this section and the  Limitation Act, 1963 (36 of 1963)  an  arbitration shall be deemed to have  commenced on the date referred in section 21.

       (3) Where an arbitration agreement to submit  future disputes to arbitration provides that any  claim to which the agreement applies shall be  barred unless some step to commence arbitral  proceedings is taken within a time fixed by  the agreement, and a dispute arises to which  the agreement applies, the Court, it if is of  opinion that in the circumstances of the case  undue hardship would otherwise be caused,  and notwithstanding that the time so fixed has  expired, may on such terms, if any, as the  justice of the case may require, extend the  time for such period as it thinks proper."

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       (4) Where the  Court orders that an arbitral  award be set aside,  the period between the  commencement of the arbitration and the date  of the order of the Court shall be excluded in  computing the time prescribed by the  Limitation Act,  1963 (36 of 1963),  for the  commencement of the proceedings (including  arbitration) with respect  to the dispute so  submitted."

Therefore, as general proposition Limitation Act, 1963 applies   but still question is as to what extent.  Section 14 of  Limitation  Act which deals with exclusion of  time spent in prosecuting the  remedy before wrong forum bona fide  reads as under:           "14.  Exclusion of time of proceeding bona  fide in court without jurisdiction \026 (1) In  computing the period of limitation for any suit the  time during which the plaintiff has been  prosecuting with due diligences another civil   proceeding, whether in a court of first instance or of  appeal or revision, against the defendant shall be  excluded, where the proceeding relates to the same  matter in issue 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.

(2)  In computing the period of limitation for any  application, the time during which the applicant has  been prosecuting with due diligence another civil  proceeding, whether in a court of first instance or of  appeal or revision, against the same party for the  same relief shall be excluded, where such  proceeding 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.

 (3)  Notwithstanding anything contained in rule 2  of Order XXIII of the Code of Civil Procedure,  1908 (5 of 1908), the provisions of sub-section (1)  shall apply in relation to a fresh suit instituted on  permission granted  on the ground that the first suit  must fail by reasons of a defect in the jurisdiction   of the court or other cause of a like nature."

       The question is whether Section 14 of the Limitation Act  has been excluded by this special enactment i.e. Arbitration  and Conciliation Act, 1996.  Section 43 of the Arbitration  and Conciliation  Act, 1996 clearly says  that  The Limitation  Act, 1963 shall apply to arbitration as it applies to the  proceedings in court.           Therefore, general proposition is by virtue of Section 43   of the Act of 1996 The Limitation Act 1963  applies to the Act  of 1996  but  by virtue of sub-section (2) of Section 29 of the  Limitation Act, if any other period has been  prescribed under  the special enactment for moving the application or otherwise  then that period of limitation will govern the proceedings under  that Act, and not the provisions of the Limitation Act.  In the  present case under the Act of 1996 for setting aside the award on  any of the  grounds mentioned in Sub-Section (2) of Section 34  the period of limitation has been prescribed and that will govern.  Likewise,  the period of condonation of delay i.e. 30 days in  proviso.

       But there is no provision made in The Arbitration and

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Conciliation Act, 1996 that if any party has bona fidely  prosecuted its remedy before the other forum which had no  jurisdiction then in that case whether  the period spent in  prosecuting the remedy bona fidely in that Court can be  excluded or not.   As per the provision sub-section (3)  of  Section 34 which prescribes the period of limitation (3 months)  for  moving the application for setting aside the award before the  court then that period of limitation will be applicable and not the  period of limitation prescribed in schedule under section 3 of the  Limitation Act, 1963.  Thus the provision of moving the  application prescribed in Limitation Act, shall stand excluded by  virtue of sub-section (2) of  Section 29 as under this special  enactment the period of limitation has already been prescribed.   Likewise the period of condonation of delay i.e. 30 days by  virtue of proviso.

       Therefore, by virtue of sub-section (2) of  section 29 of the  Limitation Act what is excluded is the applicability of Section  5  of the Limitation Act & under Section 3 read with Schedule  which prescribes the period for  moving application.           Whenever two enactments are overlapping each other on  same area then courts should be cautious in interpreting those  provisions.  It should not exceed the limit provided by statute.   The extent of exclusion is however, really a question of  construction of each particular statute & general principles  applicable are subordinate to the actual words used by  legislature.

       There is no provision in whole of the Act which prohibit  discretion of the court. Under section 14 of the Limitation Act  if   the party has been bona fidely prosecuting his remedy before the  court which has no jurisdiction whether the period spent in that  proceedings shall be excluded or not.  Learned counsel for the  respondent has taken us to the provisions of the Act of 1996;  like section 5, section 8(1), section 9, section 11  sub-section  (4), (6), (9) and sub-section (3) of section 14, section 27,  sections 34, 36, 37, 39 (2) (4), section 41, sub-section (2) section  42 & 43  and tried to emphasis with reference to the aforesaid   sections that the legislature wherever wanted to give power to  the Court that has been  incorporated in the  provisions,  therefore,  no further power should lie in the hands of the court  so as to enable to exclude the period spent in prosecuting  remedy before other forum.  It is true but at the same time there  is no prohibition incorporated in statute  for curtailing the power  of  the court under Section 14 of the Limitation Act> Much  depends upon the words used in statute & not general principles  applicable.  By virtue of section 43 of the Act of 1996,  the  Limitation Act applies to the proceedings under  the Act of 1996  and the provisions of Limitation Act can only stand excluded to  the extent wherever different period has been prescribed under  the Act, 1996. Since there is no prohibition provided under  Section 34,  there is no reason why Section 14 of Limitation be  read in Act of 1996,  which  will advance the cause of justice.     If statute is silent  and  there is no specific prohibition then   statute  should be interpreted which advances the cause of  justice. Our attention was invited to various decisions of  this  Court but  we shall refer to a few of  them which has some  relevance.

Union of India vs. Popular Construction Co.  in 2001  (8) SCC 470.     This is a case with regard to the applicability of  section 5.  His Lordship while  interpreting the provision of sub- section 3 of section 34 has clearly observed  that the words " but  not thereafter" clearly indicate prohibition  of  applicability of  Section 5  of Limitation Act to that extent. His  Lordship

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observed as follows:

" As far as the language of Section 34 of the 1996  Act is concerned, the crucial words are "but not  thereafter" used in the proviso to subs-section (3).   In our opinion, this phrase would amount to an  express exclusion within the meaning of Section  29(2) of the Limitation Act, and would therefore  bar the application of Section 5 of that Act.   Parliament did not need to go further.  To hold  that the court could entertain an application to set  aside the award beyond the extended period under  the proviso, would render the phrase "but not  thereafter" wholly otiose.  No principle of  interpretation would justify such a result."

National Aluminum Co. Ltd. vs. Pressteel &  Fabrication (P) Ltd.  and Another  reported in 2004 (1) SCC  540.  In that case unilateral appointment of the arbitrator under  the Arbitration Act 1940 was challenged.  This Court in the said  appeal after hearing the parties appointed a sole arbitrator.   Before  the sole arbitrator both the parties by  consent agreed  that the  proceedings  should be governed by the provisions of  the Arbitration and Conciliation Act, 1996.   The arbitrator  proceeded on that basis  and  gave a final award.  That final  award was challenged.  The question arose whether the  proceeding shall be governed by the 1940  Act  or of  1996 Act?  And  which is the appropriate Court.  The dispute prolonged    for nearly 16 years.  This Court dismissed the appeal and held  that in the present case proceedings should go on under the  provisions of  the  Act, 1996 though the dispute arose prior to  coming into force of the Act 1996, the appropriate  forum  for  challenging the award under Section 34  was  Principal Civil  Court of original jurisdiction as contemplated under  Section  2(e) of the Act, 1996. However, with regard to delay  in filing objection before  the principal civil court of original jurisdiction ,  this Court  directed that the petitioner shall file objection for setting aside  the award before the Court concerned within 30 days  from this  date,  the delay in regard to filing  of the petition  as  contemplated under Section 34 of the Act, 1996 shall be  condoned by the said Court since the time consumed was  bona  fide in  prosecution of its remedy.         The exact observation of this Court is as under: "This application fails and the same is dismissed  with a direction to the applicant to file  its  objections to the award before the court concerned  and if the same are filed within 30 days from this  date, the delay in regard to the filing of the  objections as contemplated under Section 34 of  the  1996 Act shall be condoned by the said Court  since the time consumed was in bona fide  prosecution of the application in a wrong forum."

While interpreting the provisions of  statute their  Lordships in case of  Nasiruddin and Others vs Sita Ram  Agarwal in  2003 (2) SCC 577   have  observed in this context  as follows:

"In a case where the statutory provision is  plain and unambiguous, the court shall not  interpret the same in a different manner, only  because of harsh consequences arising  therefrom."

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It  further observed : "Rent control statutes are welfare  legislation not entirely beneficial enactments  for the tenant but also  for the benefit of the  landlord.  Therefore balance has to be struck  while interpreting  the provisions of Rent  Acts."

Therefore, in the present context also it is very clear to us  that there is no two opinion in the matter that the Arbitration and  Conciliation Act, 1996 do not  expressly excluded the  applicability of Section 14 of the Limitation Act.  The  prohibitory  provision has to be construed strictly.  It is true that  the Arbitration and Conciliation Act, 1996 intended to expedite  the commercial issue expeditiously.  It is also clear in the  statement of objects and reasons that in order to recognize  economic reforms the settlement  of both of domestic &  international  commercial disputes should be disposed of  quickly so that  country’s economic progress be expedited.     The statement of objects  and reasons also nowhere indicate that  Section 14 of the Limitation act shall be excluded.  But on the  contrary intendment of legislature is apparent in the present case   as Section 43 of the Arbitration and Conciliation Act, 1996  applies the Limitation Act, 1963 as a whole.   It is only by virtue  of sub-section (2) of section 29 of the Limitation Act, its  operation is  excluded to that extent of the area which is covered  under the Arbitration and Conciliation Act, 1996.  Our attention  was also invited to the various  decisions of this Court  interpreting sub-section 2 of section 29 of Limitation Act with  reference  to other Acts  like The Representation of Peoples Act  or the provisions of Criminal Procedure Code where separate  period of limitation has been prescribed.  We need not  over-  burden the judgment with reference to those cases because it is  very clear to us by virtue of sub-section   (2) of section 29  of  the Limitation Act that  the provisions of Limitation Act shall  stand excluded in Act of 1996 to the extend area which is  covered by the Act of 1996.    In the present case under section  34 by virtue of sub-section 3 only the application for filing and  setting aside the award a period has been prescribed as 3 months  and delay can be condoned to the extent of 30 days  To this  extent the applicability of section 5 of Limitation will stand  excluded but there is no provision in the Act of 1996 which  excludes operation of section 14 of the Limitation Act.  If  two  Acts can be read harmoniously  without doing violation  to the  words used therein, then there is no prohibition in doing so. As the result of the above discussion we are of the opinion  that the view taken by the court below excluding the  applicability of Section 14 in this proceeding is not correct.  We  hold that section 14 of the Limitation Act, 1963 is applicable in  the Arbitration and Conciliation Act, 1996.  We set aside all the  judgments/Order and remand all these cases back to the Trial  Court/District Court  for deciding  the application under  Section  14  of Limitation  Act on merit  after hearing both the parties  and in case  the delay is condoned then the case should be  decided on merits after hearing  all the concerned parties.  All  the appeals are allowed.  No order as to costs.