Vs. State of Orissa  INSC 563 (16 October 1995)
Jagdish Saran (J) Verma, Jagdish Saran (J) Venkataswami K. (J) J.S. Verma, J. :
1996 AIR 385 1995 SCC (6) 509 JT 1995 (7) 454 1995 SCALE (6)54
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.
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.
(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 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).
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.
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.
(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 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".
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.
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 :
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
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.
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.
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'.
and others vs. Macpherson,  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.
the appeal fails and is dismissed.