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citation codes
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  • provisions of O. XXX, rr. 3 and 5 of the Code of Civil Procedure. Rule 3
  • Sections 14 and 17 of the Arbitration Act
  • Article 158 of Indian Limitation Act
  • SECTION 41 ARBITRATION ACT
  • s. 14(2) of the Arbitration Act,
  • INDIAN LIMITATION ACT
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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • provisions of O. XXX, rr. 3 and 5 of the Code of Civil Procedure. Rule 3
  • Sections 14 and 17 of the Arbitration Act
  • Article 158 of Indian Limitation Act
  • SECTION 41 ARBITRATION ACT
  • s. 14(2) of the Arbitration Act,
  • INDIAN LIMITATION ACT
Smart Summary

Structured Summary of the Opinion (Nain, J.) — Revision under s.115 CPC

Factual and Procedural Background

The following facts and procedural steps are stated in the opinion:

  • An arbitral award was made against the petitioners in favour of the respondents on June 7, 1962.
  • The arbitrator filed the award in Court on March 23, 1963. The Court issued a notice of filing of the award on April 11, 1963 and dispatched it by registered cover addressed to the petitioners (a partnership firm).
  • An acknowledgment for the registered cover is dated April 25, 1963 and is signed by a person identifying himself as "Raja Shankar"; the record does not state whether Raja Shankar was a partner or manager of the petitioners-firm.
  • Relying on that acknowledgment, the respondents took out a notice of motion for judgment in terms of the award on July 3, 1963.
  • The petitioners filed a petition in the City Civil Court on July 4, 1963 seeking to set aside the award and averring that they had not been served with the notice of filing of the award.
  • The respondents filed a replying affidavit asserting that the notice had been served on April 25, 1963. The petition to set aside the award was dismissed by the City Civil Court on July 24, 1964 (order quoted in the opinion).
  • After dismissal as premature, the petitioners appeared before the Registrar and accepted service on August 4, 1964. Subsequently, the respondents sought an injunction and pursued their notice of motion for judgment in terms of the award; on September 8, 1964 the City Civil Court made the notice of motion absolute and passed judgment in terms of the award.
  • The petitioners brought the present revision under s.115 CPC challenging the City Civil Court's order of September 8, 1964 which made the notice of motion for judgment in terms of the award absolute and passed decree accordingly.

Legal Issues Presented

  1. Whether the acknowledged receipt dated April 25, 1963 (signed by "Raja Shankar") constituted sufficient service of the notice of filing of the award on the petitioners (a partnership firm), having regard to Order XXX, rr. 3 and 5 of the Code of Civil Procedure.
  2. Whether the City Civil Court had jurisdiction to pass judgment in terms of the award when the conditions precedent in ss. 14 and 17 of the Arbitration Act (including proper service of notice of filing of the award and the absence or refusal of any petition to set aside) had not been satisfied.
  3. Whether the procedural provisions of the Civil Procedure Code (Order XXX, rr. 3 and 5) apply to notices under s. 14(2) of the Arbitration Act (as contended by the respondents).

Arguments of the Parties

Petitioners' Arguments

  • They denied having been served with the notice of filing of the award (despite the April 25, 1963 acknowledgment).
  • They filed a petition on July 4, 1963 to set aside the award; the petitioners maintained that the notice had not been served upon them and therefore their petition was not premature.
  • After the City Civil Court dismissed the petition as premature, the petitioners later accepted service before the Registrar on August 4, 1964 and filed an affidavit in reply to the respondents' notice of motion when it was taken up on September 8, 1964.

Respondents' Arguments

  • The respondents relied on the acknowledgment dated April 25, 1963 as proof that the notice of filing of the award had been served on the petitioners, and they relied on that fact when moving for judgment in terms of the award.
  • It was argued (by the respondents' counsel) that the provisions of Order XXX, rr. 3 and 5 CPC are not applicable to notices under s. 14(2) of the Arbitration Act.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court's reasoning proceeds step by step as follows (recounted only as stated in the opinion):

  1. The learned Judge below treated the petition as if on a plea of demurrer and dismissed the petition as premature while at the same time believing that service had been effected on April 25, 1963. The revising court found this approach inconsistent: the City Civil Court neither resolved the disputed factual question of service nor conducted the inquiry required by the relevant procedural rules.
  2. The revising Judge examined the acknowledgment dated April 25, 1963 and noted it was signed by "Raja Shankar." The record did not indicate whether Raja Shankar was a partner of the petitioners or the manager in charge at the time of service; neither party could state who he was, and no affidavit was produced to establish his status.
  3. The court analysed the applicable procedural provisions: Order XXX, rr. 3 and 5 of the Code of Civil Procedure require that summons addressed to a firm be served either on one or more partners or upon a person having control or management of the partnership's principal place of business, and that the person served must be informed in what capacity he is being served (r. 5).
  4. Order V, r. 21-A (permitting service by registered post) is a facility meant to supplement, not supplant, the requirements of Order XXX, rr. 3 and 5. The revising court emphasized that service by registered post does not relieve compliance with the specific requirements as to whom the process is addressed and the necessity of informing the recipient of the capacity in which he is served.
  5. The court noted that Order V, r. 21-A deems an acknowledgment purporting to be signed by the defendant to be only "prima facie" proof of service; because in this case the acknowledgment did not even purport to be signed by a named defendant or partner, the Court should have held an inquiry and declared the summons either duly served or ordered fresh service in a proper manner.
  6. The revising Judge rejected the respondents' contention that Order XXX, rr. 3 and 5 do not apply to notices under s. 14(2) of the Arbitration Act. The court relied on the proposition in the opinion that s. 141 of the Code of Civil Procedure makes the provisions of the Civil Procedure Code applicable to proceedings other than suits and that Section 41 of the Arbitration Act similarly provides that the provisions of the Civil Procedure Code apply to proceedings in Court under the Arbitration Act.
  7. Because the procedural requirements were not complied with and there was no satisfactory proof that proper service was effected on April 25, 1963, the revising court held that there was in fact no service of the notice of filing of the award on that date. Given that proper service is a condition precedent to a Court assuming jurisdiction to pass judgment in terms of an award (per ss. 14 and 17 of the Arbitration Act as cited in the opinion), the City Civil Court lacked jurisdiction to pass judgment in terms of the award.
  8. On that basis, the revising court allowed the revision, set aside the City Civil Court’s order dated September 8, 1964, and declared the judgment and decree passed in terms of the award to be set aside. The court also allocated costs and made the rule absolute.

Holding and Implications

Holding: The revising court allowed the revision application, held that the service dated April 25, 1963 was insufficient and bad in law, and therefore held that the City Civil Court had no jurisdiction to pass judgment in terms of the award. The court set aside the City Civil Court's order of September 8, 1964 and ordered that the judgment and decree in terms of the award be set aside. (The opinion states: "I, therefore, allow the revision application and set aside the order dated September 8, 1964 ... The judgment and decree shall stand set aside.")

Implications (direct effect):

  • The judgment and decree passed by the City Civil Court on September 8, 1964 (making the respondents' notice of motion for judgment in terms of the award absolute) are set aside.
  • Each party is to bear its own costs with respect to the notice of motion dated July 3, 1963 (on which the order dated September 8, 1964 was passed) and of the present petition (the revision).
  • The opinion stresses that the court must ensure procedural compliance (service in the manner required by Order XXX, rr. 3 and 5 and the prima facie character of registered-post acknowledgments under Order V, r. 21-A) before assuming jurisdiction to enter judgment in terms of an arbitral award.
  • The opinion does not set out any broader changed principle of law beyond the particular requirement that proper service (including identification of the capacity in which a recipient is served) is essential before a court may pass judgment in terms of an award; the decision's practical effect is to vacate the specific judgment and decree against the petitioners.

    Shrinath Brothers v. The Century Spg. & Mfg Co. Ltd.

    Nain, J.:— This is a revision application under the provisions of s. 115 of the Code of Civil Procedure against an order of the Bombay City Civil Court, making a notice of motion for pronouncing judgment in terms of an award absolute and passing a decree in terms of the said judgment.

    2. The facts leading to this case briefly stated are:

    That on June 7, 1962, there was an award made against the petitioners in favour of the respondents. On March 23, 1963, the arbitrator filed the said award in the Court. On April 11, 1963, notice of filing of the award was issued by the Court and dispatched to the petitioners, who are a partnership firm, in a registered cover addressed to the firm. The acknowledgment for this registered cover appears to have been signed on April 25, 1963 by a person signing as Raja Shankar. It is not stated in the acknowledgment as to whether this Raja Shankar was a partner of the petitioners-firm or the manager in charge of the business at the time of service. Whether this is sufficient service of notice of filing of the award or not is a matter in controversy with which I shall deal later. On July 3, 1963, the respondents took out a notice of motion for judgment in terms of the award relying on the acknowledgment dated April 25, 1963. On the next day, i.e, July 4, 1963, the petitioners in this revision application filed a petition in the City Civil Court for setting aside the award dated June 7, 1962, on grounds stated in the said petition. The petitioners, however, stated in the said petition that the notice of the filing of award had not been served upon them by the Court. The respondents filed an affidavit in reply to the petition alleging that the notice of filing of award had been served on the petitioners on April 25, 1963, and also controverting the grounds on which the award was sought to be set aside. On July 24, 1964, the petition for setting aside the award was dismissed. The order on the said petition is exh. “A” to this petition and reads as under:

    “This Petition to set aside an Award can be disposed on a short point viz. whether it is maintainable.

    2. The facts necessary to this petition may be briefly stated. The disputes between the parties were referred to arbitration and the Arbitrators made their Award on 7th June, 1963. It appears that on 11th April, 1963 Notice of filing of the Award was issued and was served on the Petitioners on 25th April, 1963. But the Petitioners deny that notice was ever served upon them. Assuming that statement as correct, then in my opinion, the Petitioners were not entitled to file any petition at all, till they were served with the Notice of filing of the Award because under Article 158 of Indian Limitation Act the period of limitation of 30 days would begin from the date of service of notice of filing of the Award and if the Petitioners say that they were not served with the Notice of filing of the Award I do not see why at all it was necessary for them to file a Petition in this Court to have that Award set aside. But the Petitioners say that they took search of the proceedings on 24th June, 1963 and thereafter on 4th July, 1963 they filed the present Petition. If the statement of the Petitioners is to be accepted as correct that they were not served with the notice of filing of the Award, the Petition is misconceived and not maintainable. The Petition is, therefore, dismissed. Petitioners to pay the respondent the costs of the Petition.”

    3. I must say here that the learned Judge on the one hand says that it appeared to him that on April 11, 1963, the notice of filing of the award was issued and the same was served on the petitioners on April 25, 1963, on the other hand, he dismissed the petition as premature on the footing that the notice of filing of the award had, as alleged by the petitioners, not been served on them. The learned Judge decided the matter as if on a plea of demurrer. I am assured by the learned advocates of the parties that the fact of service of the notice of filing the award was alleged by one party and denied by the other and was a matter in controversy and neither of the parties had either pleaded or applied that the matter be decided as if on a plea of demurrer. The learned Judge ought to have examined the nature of service and determined whether the service was proper or sufficient. In case, he came to the conclusion that on April 25, 1963, the petitioners had been served with notice under s. 14(2) of the Arbitration Act, he would have come to the conclusion that the petition dated July 4, 1963, was barred by the law of limitation, in which event if the petitioners had made any application for condoning delay under the Indian Limitation Act, 1961, he would have considered such application on merits. And if he came to the conclusion that there had been no proper service of the notice of filing of award he could have dismissed the petition as premature, in which case the petitioners could have waived or accepted service and repeated their petition. The learned Judge, however, decided the petition not on the actual position as to whether there was or was not a good service, but on the assumption of correctness of the contention of the petitioners that the notice of filing of the award had not been served on them, which assumption he again negatived when he passed judgment in terms of the award. This has led to certain curious results, which I will mention now. On August 4, 1964, after their petition for setting aside the award was dismissed as premature, the petitioners appeared before the Registrar of the Court and, in fact, accepted the service of the notice of filing of the award. On August 17, 1964, the respondents in this petition filed a petition against the petitioners in this petition, alleging that the petitioners here had in fact been served with the notice of filing of the award on April 25, 1963, and applying for an injunction, restraining the petitioners from acting on the alleged service of the notice of filing of the award on August 4, 1964, and restraining them from filing a petition for setting aside the award on the basis of such service. The respondents served this injunction on the petitioners and thereafter had their notice of motion for judgment in terms of the award placed on the board for hearing. This notice of motion came up for hearing on September 8, 1964. The petitioners filed an affidavit in reply to the notice of motion, setting out the correct facts, but, notwithstanding this, the learned Judge made the notice of motion absolute on the footing that the petitioners had been served with the notice of filing of the award on April 25, 1963, and had not filed any petition for setting aside the award. Thus judgment in terms of award has been passed against the petitioners without giving them any opportunity to contest the award.

    4. I have examined the acknowledgment dated April 25, 1963, and the affidavit of service of the notice of filing of the award and I find that the acknowledgment is signed by one Raja Shankar. “When this petition came up for hearing before me on November 14, 1967, I drew the attention of the learned advocate for the respondents to the provisions of O. XXX, rr. 3 and 5 of the Code of Civil Procedure. Rule 3 provides that a summons for a firm must be served either upon any one or more of the partners or, in the alternative, at the principal place at which the partnership business is carried on in India upon any person having at the time of service the control or management of the partnership business there, and r. 5 provides that the person who is served must also be served with a notice informing him in what capacity he was being served. I told the learned advocate for the respondents that if it was his contention that Raja Shankar, who had signed the acknowledgment, was either a partner or a manager of the business in charge of it at the time of service, he must make inquiries and make a further affidavit before I hold the service to be sufficient. No such affidavit has, however, been made. In fact neither of the parties is able to state who this Raja Shankar is. It is not even alleged that a notice under r. 5 of O. XXX accompanied the notice of filing of the award showing in what capacity the notice was being served.

    5. Personal service of the processes of a Court by the officers of the same or another Court is and has always been the normal mode of service. Order V, r. 21-A, of the Code of Civil Procedure gives a facility in this modern age of permitting parties to serve processes of a Court by registered post to save them from the trouble and expense of effecting personal service at places outside or even within the jurisdiction of the Court, but this facility does not take away or affect the provisions of O. XXX, rr. 3 and 5 which must, in any event, be complied with. If a process is addressed to a partner by registered post, he must also be informed in what capacity it is addressed to him. Similarly, if the process is addressed to a person in his capacity as manager of the business in charge of it at the time of service, he must be so informed, even if the service is by registered post.

    6. Order V, r. 21-A as applicable to Bombay itself provides that an acknowledgment purporting to be signed by the defendant shall be deemed only to be “prima facie” proof of service. In this case it does not even purport to be signed by the defendant. In all such cases the Court should hold an inquiry and either declare the summons to have been duly served or to order fresh service in a proper manner. In this case, I find that these provisions were not complied with, and I hold that the service dated April 25, 1963, was insufficient and, therefore, bad in law. It has been argued before me by Mr. Jhunjhunwala for the respondents that the provisions of O. XXX, rr. 3 and 5 are not applicable to notices under s. 14(2) of the Arbitration Act. There is, however, no substance in this argument in view of the fact that s. 141 of the Code of Civil Procedure makes the provisions of Civil Procedure Code applicable to proceedings other than suits. Section 41 of the Arbitration Act also provides that the provisions of the Civil Procedure Code apply to proceedings in Court under the Arbitration Act.

    7. There being no service of the notice of filing of the award on April 25, 1963, there can be no judgment in terms of the award. Sections 14 and 17 of the Arbitration Act provide certain conditions precedent before a Court assumes jurisdiction in the matter of passing judgment in terms of an award. A notice of filing of the award should have been served on the party against whom the judgment is passed and he should have either filed no petition for setting aside the award or if he had filed such petition, it should have been refused.

    8. These conditions have not been satisfied and, in my opinion, the City Civil Court had no jurisdiction to pass judgment in terms of the award. I, therefore, allow the revision application and set aside the order dated September 8, 1964, of the City Civil Court, making the respondents' notice of motion for passing judgment in terms of the award against the petitioners absolute. The judgment and decree shall stand set aside.

    9. Each party shall bear its own costs of the notice of motion dated July 3, 1963, on which the order dated September 8, 1964, was passed and of this petition.

    10. Rule made absolute.

    11. Application allowed.

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    Shrinath Brothers v. The Century Spg. & Mfg Co. Ltd.
    (Nov 21, 1967)