Of Goa Vs. M/S. Western Builders  Insc
371 (5 July 2006)
K. Sema & A.K. Mathur
(CA. Nos1458, 1459-1460, 1461, 1462, 1463, 1464, 1465/2004) A.K. MATHUR, J.
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.
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.
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 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.
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.
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.
the State of Goa filed a petition before the 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.
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.
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.
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.
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:-
setting aside arbitral award.
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).
award may be set aside by the Court only if
the party making
the application furnishes proof that
a party was
under some incapacity, or
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
the party making
the application was not given proper notice of the appointment of an arbitrator
or of the arbitral proceedings or was otherwise unable to present his case; or
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:
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
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
the Court finds
subject-matter of the dispute is not capable of settlement by arbitration under
the law for the time being in force, or
award is in conflict with the public policy of India.
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.
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:
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
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 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.
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.
(2) of Section 29 of the Limitation Act reads as under –
" 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
43 reads as under:
Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to
proceedings in Court.
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.
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."
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:
of time of proceeding bona fide in court without jurisdiction
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.
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.
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.
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.
the period of condonation of delay i.e. 30 days in proviso. But there is no
provision made in The Arbitration and 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.
the period of condonation of delay i.e. 30 days by virtue of proviso.
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
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.
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.
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;
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.
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
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
observed as follows:
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
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.
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.
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.
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.
exact observation of this Court is as under:
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:
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." 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.