Indian
Rayon Corpn. Ltd. Vs. Raunaq & Company Pvt. Ltd. [1988] INSC 204 (4 August 1988)
Mukharji,
Sabyasachi (J) Mukharji, Sabyasachi (J) Sharma, L.M. (J)
CITATION:
1988 AIR 2054 1988 SCR Supl. (2) 231 1988 SCC (4) 31 JT 1988 (3) 482 1988 SCALE
(2)739
ACT:
Arbitration
Act, 1940: ss. 14 & 30: Award-Application for setting aside of-Time for-30
days from service of notice of filing of award by Court-Statutory
requirement-Filing of award in proper Court and intimation thereof by Court or
its office-Notice need not be in writing-Can be communicated in any form.
%
Limitation Act, 1963: Article 119(b)-Award-Application for setting aside
of-Time for-30 days from service of notice of filing of award by Court or its
office.
HEAD NOTE:
Section
14(2) of the Arbitration Act, 1940 enjoins the arbitrator or the umpire to give
notice to the parties of filing of the award. Under clause (b) of Article 119
of the Limitation Act, 1963, the time for making an application for setting
aside an award or getting an award remitted for reconsideration is thirty days
from the date of service of the notice of the filing of the award.
The
award was filed in the court on 4th February, 1977.
The
respondent affirmed an affidavit on 29th November, 1977 to that effect and prayed that a
notice be issued and served on the appellant. Thereafter a Master's Summons was
taken out by the respondent on 10th January, 1978 using the said affidavit as the ground for the prayers. On 4th February, 1978 the appellant filed an affidavit
stating that the award had been wrongly filed in the High Court and it should
be taken off the file. On 3rd May, 1978
an order was passed as prayed in the affidavit and the Master's Summons, and on
July 30, 1981 a notice under s. 14(2) of the Act
was served on the appellant.
The
appellant applied for certified copy of the award on 18th August, 1981 and received the same on lst
September, 1981. It made an application under s. 30 of the Act on 8th September, 1981 for setting aside of the award. The
High Court held that the notice was served prior to 30th July, 1981 and as such the application was barred by lapse of time.
PG NO
232 Dismissing the appeal by special leave,
HELD:
In order to be effective both for the purpose of the judgment in terms of an
award and for setting aside the award, the award must be filed in the proper
court. There must be service of notice or intimation or communication of the
filing of the said award by the court to the parties. If all these factors are
established or are present, the mode of service of the notice would be
irrelevant. It need not necessarily be in writing. If the substance is clear
the form of the notice is irrelevant but the notice of award having been filed
in the court, is necessary. The filing in the court is necessary and the
intimation thereof by the Registry of the court to the parties concerned is
essential.
Beyond
this there is no statutory requirement of any technical nature under s. 14(2)
of the Arbitration Act.
[234D]
It is upon the date of service of such notice that the period of limitation
begins and as at present under clause (b) of Art. 119 of the Limitation Act,
1963 the limitation expires on the expiry of the thirty days of the service of
that notice for an application for setting aside of the award. l236F] In the
instant case, on 4th February, 1978 an affidavit had been filed in the High
Court, stating on behalf of the appellant that the award had been wrongly filed
in that Court. The appellant had, therefore, acknowledged that it had notice of
the said filing communicated to it by the Court. The notice can thus be
attributed to have been served on the appellant either on 3rd or 4th February,
I978, prior to 30th
July, 1981. If that is
the position then the application for setting, aside of the award was clearly barred
by lapse of time. [234C, 236B-H, 237A] Nilkantha Shidramappa Ningashetti v. Kashinath
Somanna Ningashetti & Ors., [1962] 2 SCR 551 and Dewan Singh v. Champat
Singh & Ors., [1970] 2 SCR 903 referred to.
CIVIL
APPELLATE JURISDICTION: Civil Appeal No. 2746 of 1988.
From
the Judgment and Order dated 25.8.1987 of the Calcutta High Court in Appeal
from Original Order No. 158 of 1982.
D. Bhandari
for the Appellant.
S.K. Dholakia
and Vineet Kumar for the Respondent.
PG NO
233 The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. Special
leave granted. The appeal is disposed of by the order herein.
This
appeal is directed against the judgment and order of the Division Bench of the
High Court of Calcutta, dated 25th August, 1987,
dismissing the application for setting aside the award, on the ground that the
said application was barred by lapse of time. The award in this case was filed
in the High Court on 4th
February, 1977. The
respondent affirmed an affidavit on 29th November, 1977 stating that the award had been
filed in the Court on 4th
February, 1977 and
Prayed that a notice be issued and served on the appellant so that the judgment
in terms of the award could be passed.
On 10th January, 1978 the respondent's advocate-on-
record took out a Master's Summons and used the aforesaid affidavit as the
ground for the prayers which were made in the summons. On lst February, 1978
M/s. Khaitan & Company, solicitors, on behalf of the appellant, filed a Vakalatnama
and a requisition in the department of the High Court for searching the records
in this case. On 2nd
February, 1978, M/s. Khaitan
& Co. searched the records of the High Court of Calcutta. On 4th February, 1978, the appellant filed an affidavit
stating that the award had been wrongly filed in the High Court of Calcutta and
it should be taken off the file.
On 3rd
May, 1978 an order was passed as prayed in the affidavit and the Master's
Summons, and on 30th July, 1981, a notice under Section l4(2) of the
Arbitration Act, 1940 (hereinafter called `the Act') was served on the
appellant.
Section
14(2) of the Act enjoins the arbitrator or the umpire to give notice to the
parties of filing of the award in order to facilitate the passing of the order
thereon.
On 18th August, 1981, the appellant applied for a
certified copy of the award and the application for setting aside the award
under Section 30 of the Act, was filed on 8th September, 1981. Under clause (b) of Article 119 of
the Limitation Act, 1963 the time for setting aside an award or getting an
award remitted for reconsideration is 30 days from the date of the service of
the notice of the filing of the award. Hence, there must be filing of the award
in Court. A notice must be given to the party/parties concerned of such filing
of the award in the Court and on the expiry of 30 days from the service of the
said notice limitation for setting aside an award expires. ln this case, it
appears PG NO 234 that the appellant applied for a certified copy of the award
on 18th August, 1981 and on lst September, 1981, the
appellant received the certified copy from the Court. The application under
Section 30 of the Act, for setting aside the award was made on 8th September, 1981. Hence, if the date of service of
the notice of the filing of award be 30th July, 1981, then in the events that have
happened as narrated above, indisputably the application was within time. If,
however, the notice is attributed to have been served prior to that date then
the application was barred by lapse of time. The High Court held that the
notice in this case was served prior to 30th July, l981.
It
appears as mentioned before that on 4th February, 1978 an affidavit had been filed in the
High Court, stating on behalf of the appellant that the award had been wrongly
filed in that Court. The appellant has, therefore, acknowledged that the award
had been filed and a notice was issued to it in respect of the said award. ln
our opinion, this conclusion irresistibly follows from the narration of events
mentioned hereinbefore. ln order to be effective both for the purpose of
obtaining the judgment in terms of the award and for setting aside the award,
the award must be filed in the Court. There must be service of notice or
intimation or communication of the filing of the said award by the Court to the
parties. If all these factors are established or are present, the mode of
service of the notice would be irrelevant. If the substance is clear, the form
of the notice is irrelevant but the notice of the award having been filed in
the court, is necessary. The filing in the Court is necessary and the
intimation thereof by the Registry of the Court to the parties concerned, is
essential. Beyond this there is no statutory requirement of any technical
nature under Section 14(2) of the Act.
This
conclusion, in our opinion, irresistibly follows from the principles enunciated
by this Court in Nilkantha Shidramappa Ningashetti v. Kashinath Sommanna Ningashetti
& Ors., [1962] 2 SCR 551 where this Court held that the communication by
the Court to the parties concerned or their counsel, of the information that an
award has been filed was sufficient compliance with the requirements of
sub-section (2) of Section 14 of the Act. ln the aforesaid decision this Court
reiterated that the notice need not necessarily mean "communication in
writing". The expression "give notice" in sub-section (2) of
Section 14 of the Act simply means giving intimation of the filing of the
award. Such intimation need not be given in writing and could be communicated
orally or otherwise. That would amount to service of the notice when no
particular mode was specified. Elaborating the aforesaid PG NO 235 principles
this Court at page 555 of the said report observed as follows:
"Sub-section
(1) of s. 14 of the Arbitration Act, 1940 (X of 1940) requires the arbitrators
or umpire to give notice in writing to the parties of the making and signing of
the award. Sub-section (2) of that section requires the Court, after the filing
of the award, to give notice to the parties of the filing of the award. The
difference in the provisions of the two sub-sections with respect to the giving
of notice is significant and indicates clearly that the notice which the Court
is to give to the parties of the filing of the award need not be a notice in
writing. The notice can be given orally. No question of the service of the
notice in the formal way of delivering the notice or tendering it to the party
can arise in the case of notice given orally. The communication of the
information that an award has been filed is sufficient compliance with the
requirements of sub-s.(2) of s. 14 with respect to the giving of the notice to
the parties concerned about the filing of the award. `Notice' does not
necessarily mean `communication in writing'. `Notice' according to the Oxford
Concise Dictionary, means `intimation, intelligence, warning' and has this
meaning in expressions like `give notice, have notice' and it also means
`formal intimation of something, or instructions to do something' and has such
a meaning in expressions like `notice to quit, till further notice'. We are of
opinion that the expression `give notice' in sub-s. (2) of s. 14, simply means
giving intimation of the filing of the award, which certainly was given to the
parties through their pleaders on February 21, 1948. Notice to the pleader is notice to
the party, in view of r. 5 of O. III, Civil Procedure Code, which provides that
any process served on the pleader of any party shall be presumed to be duly
communicated and made known to the party whom the pleader represents and,
unless the court otherwise directs, shall be as effectual for all purposes as
if the same had been given to or served on the party in person." The
aforesaid question was again examined from a slightly different angle later in Dewan
Singh v. Champat Singh & Ors., [1970] 2 SCR 903 where this Court while
dealing with Article 158 of the Limitation Act, 1908 which was the previous
Article corresponding to clause (b) of Article 119 of the Limitation Act, 1963,
held that the said PG NO 236 Article gave 30 days' time for applying to set
aside the award; from the date of service of the notice of the filing of the
award. As mentioned hereinbefore, the notice of the service of the award may be
communicated in any form. It need not necessarily be in writing. If that is the
position in law then in view of the facts of this case the conclusion would
irresistibly be that the notice was served at least either on 3rd or 4th
February, 1978 because at that time the appellant had acknowledged that the
award had been filed in view of the affidavit filed by it in the High Court of
Calcutta and that the award had been filed in a wrong Court, according to the
appellant, and that he had notice of the said filing communicated to him by the
Court. That would be natural and ordinary inference to draw from the conduct of
the parties as narrated before. lf that is the position then the application,
in our opinion, for setting aside the award was, indisputably, barred by
limitation.
Counsel
for the appellant, however, drew our attention to the statement recorded by the
High Court where it was stated as follows:
"The
learned counsel for both parties have agreed the service of notice under
section 14(2) of the Arbitration Act is a mandatory provision and an
application for setting aside of the award shall not be time barred so long as
the aforesaid notice is not served." It was, however, submitted on behalf
of the appellant that there cannot be any concession on a question of law. We
are of the opinion that this concession does not, as such, help the parties
very much. The fact that the parties have notice of the filing of the award, is
not enough. The notice must be served by the Court. We reiterate again that
there must be (a) filing of the award in the proper court; (b) service of the
notice by the court or its officer to the parties concerned; and (c) such
notice need not necessarily be in writing. It is upon the date of service of
such notice that the period of limitation begins and as at present under clause
(b) of Article 119 of the Act, the limitation expires on the expiry of the
thirty days of the service of that notice for an application for setting aside
of the award.
The
importance of the matter, which need be emphasised, is the service of the
notice by the Court. It is not the method of the service that is important or
relevant. In this case as both the Courts have, in fact, found that the notice
was issued and served and, in our opinion, that finding is based on cogent
material and relevant evidence, prior to 30th July, 1981, the application made
in this case was clearly barred by lapse of time.
PG NO
237 We find, therefore, no ground to interfere with the decision of the High
Court. The appeal accordingly fails and is dismissed without any order as to
costs.
P.S.S.
Appeal dismissed.
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