STATE OF MADHYA PRADESH Vs SETH MOHANLAL HIRALAL

High Court Of Madhya Pradesh

Arb. Appeal No. 11 of 2013

Judgment Date:
08-08-2016

STATE OF MADHYA PRADESH ..Petitioner

SETH MOHANLAL HIRALAL ..Respondent

Bench :
{ Sujoy Paul, J. }

Citation :
(2016) 4 MPLJ 114

Judgment
Sujoy Paul, J.—This appeal filed under section 39 of the Arbitration Act, 1940 (hereinafter referred to as
''the Act'' of 1940) is directed against the order dated 29.10.11 passed by the IInd Additional District Judge,
Hoshangabad in A.C. No. 2/08.

2. The appellant contends that a work order was issued to the respondent/contractor on 14.4.1978. Certain
dispute arose because of which the respondent preferred an application for appointment of Arbitrator before
the court below on 29.8.2004. The court by order dated 17.8.1998 appointed Shri R.D. Singh as sole
Arbitrator. The respondent was not satisfied with the proceedings conducted by aforesaid Arbitrator and,
therefore, a fresh application for appointment of Arbitrator was filed before the court below on 28.2.2003. In
turn, by court order dated 8.10.2003, Shri L.M. Sarkar was appointed as new Arbitrator. On conclusion of
arbitration proceedings, the arbitration award was passed on 30.6.2005. The parties were informed by the
Arbitrator about passing of said award by communication dated 08.07.2005.

3. Shri Pushpendra Yadav, GA contends that the respondent received the award on 13.7.2005. The
respondent filed an application for making the award as rule of court before the court below on 14.11.2005.
The present appellant also filed its objection before ADJ Sohagpur under section 30 and 31 of the Act on
27.9.2005. This objection was pregnant with an application filed under section 5 of the Limitation Act.

4. Shri Yadav contends that on 14.11.2005, an application under section 14 of the Act was filed before
District Judge, Hoshangabad for condonation of delay. On 11.4.2008, the record of the objection filed by
the appellant was transferred to Hoshangabad. He fairly submits that there was no representation by the
Government before the court below and impugned order was passed ex-parte on 29.10.2011 (Annexure
A/6). During the course of arguments, learned counsel for the appellant contends that there are certain pure
questions of law which can be decided by this court despite the fact that appellant/State did not raise those
objections before the court below and did not participate in the proceedings.

5. To elaborate, the points raised by Shri Yadav are as under :-

(A). The respondent/contractor filed second application for appointment of fresh Arbitrator on 28.2.2003.
Before that, with effect from 12.10.1983, M.P. Madhyastham Adhikaran Adhiniyam, 1983 came into being

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and tribunal was constituted on 12.2.1985. As per section 20 of the Adhiniyam, second application preferred
by the contractor for appointment of Arbitrator was not tenable. Thus, appointment of Shri L.M. Sarkar and
award passed by him must be treated as nonest/nullity in the eyes of law.

(B). The award was passed on 30.6.2005 and application of contractor under section 14 of the Act was
filed on 14.11.2005. As per section 37 of the Act read with Article 119 of Limitation Act, the application of
respondent was clearly barred by time. It is a jurisdictional fact, existence of which should have been seen by
the court below. Putting it differently, it is urged that unless the application of respondent is held to be within
limitation, the order of the court below must be treated as without authority of law. Moreso, when admittedly
no application for condonation of delay was filed by the respondent along with its application dated
14.11.2005 which became the reason for passing of the order dated 29.10.2011 (Annexure A/6). It is
relevant to mention here that during the course of arguments, Shri Pushpendra Yadav, GA has given-up the
argument regarding non-consideration of his objection filed under section 30 and 31 before the court below.
He fairly admitted that as per order dated 8.3.2008 (Annexure R/1), the objections were returned back to
the appellant to enable him to file it before the court of competent jurisdiction. The appellant did not file any
such objection before the competent court at Hoshangabad.

6. Per contra, Shri Sobhani, learned counsel for the contractor contends that the application filed by the
contractor before the court below was under section 17 of the Act and not under section 14 as projected by
the appellant. He submits that the appellant did not challenge the order passed by the court below on
8.10.2003 for appointment of new Arbitrator. In absence of challenge to the said order, it has attained finality
and at this stage its validity cannot be questioned. He further submits that in view of the judgment in the case
of State of Kerala and others v. T.A. Thomas, AIR 1973 Kerala 262 and J.B. Enterprises v. State of Kerala
and another, AIR 1990 Kerala 65, the application for the contractor before the court below cannot be
treated as barred by time. Lastly, he placed reliance on the judgment rendered in the case of The District
Co-operative Development Federation Ltd. v. Ram Samujh Tewari, AIR 1973 All 476.

7. No other point is pressed by learned counsel for the parties.

8. I have heard the parties at length and perused the record.

9. As to Point ''A'':

The appellant contended that as per Section 20 of the Adhiniyam of 1983, the Civil Court had no jurisdiction
after enforcement of the said Adhiniyam and hence the order passed by the Civil Court appointing Shri L.M.
Sarkar and consequential award passed by him should be treated as nullity in the eyes of law. The said
orders, as urged by the appellant, should be treated as void orders. Admittedly, the appellant did not
challenge the said orders of the Civil Court, whereby Shri Sarkar was appointed as an Arbitrator. The
appellant appeared before the Arbitrator and submitted to his jurisdiction. This is trite law that an order
passed by a Court remains enforceable unless necessary proceedings are taken to get it quashed. [See: 1990
(1) SCC 234 (Shiv Chander Kapoor v. Amar Bose), 2002 (9) SCC 28 (Government of Orissa v. Ashok
Transport Agency and others), 2008 (1) SCC 285 (Anita Enterprises and another v. Belfer Cooperative
Housing Society Ltd. And others), 2006 (5) SCC 353 (Prem Singh and others v. Birbal and others), 1996
(1) SCC 435 (State of Kerala v. M.K. Kunhikannan Nambiar Manjeri Manikoth, Naduvil and others),
2004 (2) SCC 377 (Sultan Sadik v. Sanjay Raj Subba and others) and 2011 (3) SCC 363 (Krishna Devi
Malchand Kamathia and others v. Bombay Environmental Action Group and others)]. In the light of law laid
down in the aforesaid judgments, in absence of any challenge made to the order of the Civil Court, the said
order whereby Shri Sarkar was appointed as Arbitrator cannot be treated as void or nullity in the eyes of
law. The said point is accordingly decided against the appellant.

10. As to Point ''B'':

The parties are at loggerheads on the question of limitation in filing the application before the Court below.
The appellant contended that the application filed by the Contractor was under Section 14 of the Act. The

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said application is filed beyond the period of limitation mentioned in Article 119 of the Limitation Act. This
point needs serious consideration. The application of the Contractor shows that he has made a specific
prayer that the award dated 30.06.2005 be made “Rule of the Court“. The ancillary question is whether the
question of limitation can be raised for the first time during the course of arguments. Admittedly, the appellant
did not participate in the proceedings before the Court below and even did not raise the objection of
limitation in the present appeal memo. However, this point is no more res integra. The question of limitation
can be raised for the first time because the Limitation Act is a statute of repose and bar of a cause of action in
a Court of law, which is otherwise lawful and valid, because of unreasonable lapse of time as contained in the
Limitation Act, has been made on a well accepted principles of jurisprudence and public policy. If a claim is
barred by limitation and such plea is raised during the arguments specifically, the Court cannot straightway
dismiss the plea simply on the score that such plea is ignoble. (See: Vinod Bihari Singh v. Union of India,
(1993) 1 SCC 572). Thus, in my view, the question of limitation on the basis of admitted facts can be gone
into being a pure question of law.

11. The spinal issue which needs consideration is whether the application preferred by the Contractor was an
application under Section 14 of the Act or it should be treated as an application under Section 17 of the Act
? The answer to this question will determine whether Article 119(a) of the Limitation Act can be pressed into
service in the present case.

12. A plain reading of the said application (Annexure-R/2) shows that it was filed under Section 17 of the
Act. The document dated 05.07.2003 (Annexure-R/5) clearly shows that the sole Arbitrator had duly
authorised the parties to file the signed copy of the award before the Court on behalf of Arbitrator. It is apt to
refer to the judgment of Vinod Bihari Singh (supra), wherein the Apex Court considered the judgment of AIR
1953 SC 313 (Kumbha Mawji v. Dominion of India). After in depth analysis of factual matrix of the matter,
the Apex Court opined in the said case that there was no express authority given by the Arbitrator to the
applicant to file the award and to make it a Rule of Court although a signed copy of the award was sent to
the applicant. In this factual backdrop, the Apex Court gave stamp of approval to the judgment of Patna
High Court wherein the High Court opined that the application preferred by the Contractor should be treated
to be an application filed under Section 14 of the Act and hence Article 119(a) of the Limitation Act is
attracted. Conversely, in the present case, there exists a specific/express authorisation by the Arbitrator in
favour of the respondent-Contractor. Thus, in my view, a conjoint reading of authorisation and application of
Contractor (Annexure-R/2) makes it clear that it is an application under Section 17 of the Act.

13. In T.A. Thomas (supra), the Kerla High Court opined that when respondent prayed for a decree in terms
of the award, it is not an application under Section 14 (2) or Section 30 of the Arbitration Act. Article 119 is
not, therefore, attracted to these proceedings. The Kerla High Court followed the said principle in the
subsequent judgment cited by the respondent. The same view is taken by the Gwahati High Court in National
Insurance v. Amal Kanti Das, (AIR 1998 Gwahati 1). In 2009 (17) SCC 571 (Tamil Nadu Electricity Board
v. Hindustan Construction Company Ltd.), the Apex Court opined that “what was barred by limitation after
30 days was making of an application to the Court seeking a direction to the Arbitrator to file the award“.
The Apex Court gave the said finding while interpreting Section 14 (2) of the Act and Article 119(a) of the
Limitation Act.

14. For the reasons stated herein above, I am in respectful agreement with the view taken by the Kerla High
Court and Gwahati High Court. Accordingly, the point B is also decided against the appellant.

15. On the basis of foregoing analysis, both the points raised by the appellant are decided against him. The
appeal is devoid of merits and is hereby dismissed. No cost.

Final Result : Dismissed

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