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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

A partition suit was filed against members of a joint family described as defendants Nos. 1 to 10 and 12; defendant No. 11 was an outsider and partner in the family shop. Defendant No. 1 was the father and initial guardian of the appellant (defendant No. 12), who was a minor at the time. The parties (other than defendant No. 11) referred matters in difference to an arbitrator who filed his award in Court on 18 February 1948.

On 21 February 1948 the Civil Judge adjourned the matter "for parties' say to the arbitrator's report" to 22 March 1948. Defendant No. 1 made various applications: on 16 March 1948 he asked for certain papers and on 22 March 1948 he sought and obtained 15 days to peruse them and to intimate his say about the award. Defendant No. 1 filed his say on 2 April 1948 and later withdrew his contentions on 31 March 1949. Defendant No. 1 resigned as guardian (resignation accepted 13 April 1948) and the minor's mother, Dhondavvabai, was appointed guardian on 16 June 1948.

A summons for settlement of issues was served on the new guardian on 5 September 1948. She applied for and obtained time to file a written statement on 7 September 1948 and again on 7 October 1948. On 9 November 1948 she filed a written statement on behalf of defendant No. 12 challenging the validity of the award and praying that it be declared null and void.

On 24 August 1949 the Civil Judge ordered that the award be filed, a decree be drawn up in terms of the award and that the decree contain certain terms relating to the Bombay shop. The trial Court's order recorded that no party other than defendant No. 1 had put in objections to the award and that defendant No. 1's objections were time-barred and had been withdrawn; it also recorded that the objections filed by the guardian-ad-litem for defendant No. 12 on 9 November 1948 were filed beyond the period of limitation.

Defendant No. 12 appealed to the High Court, which dismissed the appeal holding (inter alia) that the Civil Judge's order did not amount to an order refusing to set aside an award so as to attract an appeal; that a formal written notice under Sub-section (2) of Section 14 was not necessary to start the limitation period under Article 158 of the Limitation Act; and that objections under Section 33 of the Arbitration Act amounted to objections for setting aside the award. This appeal on a certificate under Article 133(1)(c) of the Constitution challenges the High Court's order.

Legal Issues Presented

  1. Whether the period of limitation for filing an application to set aside the arbitrator's award (Article 158, First Schedule, Limitation Act) began to run against defendant No. 12 before 9 November 1948, given that no written notice of filing was served on the appellant or his guardian.
  2. Whether the Civil Judge's order of 24 August 1949 amounted to an order refusing to set aside the award and was therefore appealable to the High Court under Section 39(1)(w) of the Arbitration Act.
  3. Whether an objection that the award was illegal and beyond the arbitrator's jurisdiction (i.e., included property outside his authority) could be considered by the appellate court where that objection had not been pressed in the trial Court.

Arguments of the Parties

Appellant's Arguments

  • The limitation period under Article 158 for applying to set aside the award never began to run because no notice in writing was issued by the Court to the appellant or his guardian informing them that the award had been filed; without such a written notice there could be "no date of service of notice."
  • Finally, it was submitted in the appeal that the award was illegal and without jurisdiction because the arbitrator included property outside the scope of his authority; this objection, appellant contended, should have been considered by the trial Court.

Respondents' Arguments

  • The period of limitation began to run from 21 February 1948 — the date the Court adjourned the case for parties' say — because on that date the pleaders were present and the parties were effectively informed of the award; notice to counsel is notice to the party.
  • Alternatively, respondents relied on 7 September 1948 (when the guardian applied for time after having received a summons dated 5 September 1948) as a date from which the appellant had notice and the limitation should run.
  • Implicitly, respondents contended that the Civil Judge's order was not an order refusing to set aside the award so as to permit an appeal under Section 39(1)(w), because no party had actually filed an objection praying for the setting aside of the award before the trial Court.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court addressed each issue by applying statutory provisions in the record and construing the relevant words and procedural context strictly in accordance with the text of the statutes and the facts before it.

1. On commencement of limitation (Article 158 and Section 14(2), Arbitration Act):

  • The court examined Sub-section (1) and (2) of Section 14 of the Arbitration Act. Sub-section (1) requires the arbitrator to give written notice to parties of making and signing the award; sub-section (2) requires the Court, after filing the award, to "give notice" to the parties of the filing.
  • The court found a meaningful difference between the two sub-sections: the notice required of arbitrators is expressly in writing, whereas the Court's duty under sub-section (2) to "give notice" of filing the award does not necessarily require a written notice. The phrase "give notice" was interpreted to mean "intimation" or "intelligence" and thus can be satisfied by oral communication.
  • The court relied on Rule 5 of Order III, Civil Procedure Code, which provides that any process served on a pleader shall be presumed to be duly communicated to the party. In the factual matrix the pleaders were present on 21 February 1948 when the matter was adjourned "for parties' say to the arbitrator's report"; the court therefore held that intimation to pleaders on that date amounted to notice to the parties.
  • Section 42 of the Arbitration Act (modes of serving notice) was considered irrelevant to the Court's duty under sub-section (2) because that section governs service by a party or the arbitrator, not notice given by the Court.
  • The court further examined the ordinary meaning of "service" and "notice" (citing dictionary meanings) and held that "service" can include oral or constructive notice when no particular mode is prescribed. The statutory text of Article 158 uses the phrase "date of service of notice"; the court refused a narrow construction that would confine "service" to formal written service only.
  • Policy considerations were invoked: to construe "notice" as only a formal written service could enable a party with full knowledge to later challenge a decree for want of formal service, frustrating the object of arbitration (speedy resolution). Accordingly the court held that informally given or constructive notice suffices to start limitation.
  • Applying these principles to the facts, the court found that the parties (through their pleaders) knew of the filing of the award on 21 February 1948. The court also observed that defendant No. 1 (the earlier guardian) had indicated intent to object as early as 17 February 1948, and the appellant's subsequent guardian had actual knowledge by 7 September 1948 when she applied for time after receiving a summons. Even if 7 September 1948 be taken as the date of notice to the appellant's guardian, the objection filed on 9 November 1948 was beyond the thirty-day period prescribed by Article 158. Therefore the objection was time-barred.

2. On whether the Civil Judge's order was "refusing to set aside" the award (appealability under Section 39(1)(w), Arbitration Act):

  • The court agreed with the High Court that the Civil Judge's order did not amount to an order refusing to set aside the award. There had been no application before the trial Court asking it to set aside the award; when no party files an objection praying for setting aside, the notion of a refusal to set aside cannot arise.
  • Consequently, no appeal lay under Section 39(1)(w) against the trial Court order on the ground that it was a refusal to set aside the award.

3. On the objection of illegality/ultra vires (award including property outside arbitrator's authority):

  • The court noted that the objection that the award was illegal and without jurisdiction had not been pressed before the trial Court. Because that objection was not advanced at trial it would be presumed to have been abandoned. The High Court was therefore right in not allowing the objection to be raised in the appeal.

Holding and Implications

Holding: The court dismissed the appeal. The core rulings are:

1. The notice required by Sub-section (2) of Section 14 of the Arbitration Act may be given informally (including orally), and intimation to a party's pleader (when the pleader is present) suffices as notice to the party for the purpose of Article 158 of the Limitation Act; thus the limitation period for applying to set aside an award can commence upon such intimation.

2. The Civil Judge's order did not constitute an order refusing to set aside the award (because no application to set aside had been made), and therefore no appeal lay to the High Court under Section 39(1)(w) on that basis.

Direct consequences for the parties: The objection filed on behalf of the appellant on 9 November 1948 was held to be time-barred and consequently the appeal failed; the appeal is dismissed with costs. The court refused to entertain, on appeal, an objection not pressed in the trial Court (the ultra vires/illegality point), treating it as abandoned.

Implications as to precedent: The opinion applies statutory construction to the words "give notice" and "date of service of notice" and confirms that informal or constructive notice by the Court, communicated to pleaders, can start the limitation period under Article 158. The decision is confined to the statutory interpretation and the facts before the court; the opinion does not state that it establishes any broader new rule beyond its statutory construction and its application to these facts.

Show full summary ...

    Nilkantha Sidramappa ... v. Kashinath Somanna Ningashetti

    1. This is an appeal on certificate under Article 133(1)(c) of the Constitution, granted by the High Court of Judicature at Bombay.

    2. A suit for partition was filed against, defendants Nos. 1 to 10 and 12, members of a joint family. Defendant No. 1 was father of the appellant, who was then a minor, defendant No. 12. Defendant No. 11 was an outsider, he being a partner in the partnership shop of the family. Parties other than defendant No. 11 referred the matters in difference to an arbitrator. The arbitrator filed the, award in Court on February 18, 1948. On February 21, 1948, the Civil Judge adjourned the matter 'for parties' say to the arbitrator's report', to March 22, 1948. On March 16, 1948, an application was presented on behalf of defendant No. 1 praying that certain papers and documents be called for from the arbitrator. On March 22, 1948, an application was presented on behalf of defendant No. 1 praying for fifteen days' time for going through the papers and documents which he had asked arbitrator to send to the Court and to intimate his say regarding the arbitrator's award. The Court granted the request. Defendant No. 1 filed his say about the arbitrator's report on April 2, 1948. He withdrew his contentions on March 31, 1949. It is to be noted that neither the objections filed on April 2, nor the other applications, purported to have been filed on behalf of defendant No. 12.

    3. On February 17, 1948, defendant No. 1 filed an application stating therein:

    An arbitrator is to be appointed in the matter of the suit and the arbitrator is to submit an award. For the aforesaid reasons it is impossible for me to put forth properly necessary contentions etc., in the said matter. Consequently, the minor will be put to a heavy loss. In these circumstances, I have no desire to act as a guardian of the minor. Therefore, my appointment as a guardian of the minor may be cancelled and further steps may be taken after appointing a proper guardian of the minor. His mother Dhondavvabai may be appointed guardian of the minor. I have put forth a contention against the arbitrator's award. I may be granted time for that purpose.

    His resignation from guardianship was accepted on April 13, 1948, and Dhondavvabai, the mother of the minor defendant No. 12, was appointed guardian on June 16, 1948.

    4. On September 5, 194-8, a summons purporting to be for settlement of issues, was served on her. On September 7, 1948, she applied for, and was granted, one month's time for submitting the written statement with regard to the claim and the award in the said matter. On October 7, 1948, she applied for, and was granted another one month's time for the same purpose. On November 9, 1948, she filed a written statement on behalf of defendant No. 12, with regard to the suit and the award, questioning the validity of the award and praying that it be declared null and void and that the suit be heard after taking into consideration the interest of the minor.

    5. On August 24, 1949, the Civil Judge ordered that the award be filed, that a decree be drawn up in terms of the award and that the decree should further contain the terms as to the Bombay shop run in partnership with defendant No. 11 as was mentioned in the order. It was said in this order that none of the parties except defendant No. 1 put in any objections to the award, that defendant No. 1 filed his objections beyond the period of limitation and subsequently withdrew them and that the objections filed by the guardian-ad-litem of defendant No. 12 on November 9, 1948, was also filed beyond the period of limitation.

    6. Defendant No. 12 then went up in appeal to the High. Court. The High Court dismissed the appeal holding that it was incompetent as the order of the Civil Judge did not amount to an order refusing to set aside an award, as there had been no objection before him for the setting aside of the award. It further held that the issue of a formal notice under Sub-section (2) of Section 14 intimating the filing of the award was not necessary for the commencement of the period of limitation under Article 158 of the Limitation Act and that objections corning under Section 33 of the Arbitration Act also amounted to objections for the setting aside of the award. It is this order of the High Court whose correctness is challenged in this appeal,

    7. The first question to determine is whether limitation for filing an application to set aside the award began to run against the appellant-defendant No. 12 from a date more than a month before November 9, 1948, when a written statement on his behalf was filed stating that the award be declared null and void. According to Article 158 of the First Schedule to the Indian Limitation Act, the period of limitation for an application to set aside an award under the Arbitration Act, 1940, begins to run from 'the date of service of the notice of the filing of the award.' No notice in writing was issued by the Court to the appellant or his guardian intimating that the award has been filed in Court. It is, therefore, urged for the appellant that the period of limitation for filing an application to set aside the award never began to run against him, There could be no date of service of notice, when no notice had been issued. On the other hand, it is submitted for the respondents, that the limitation began to run from February 21, 1948, the date on which the Court; adjourned the case for parties' say to March 22, 1948, and that, in any case, from September 7, 1948, when his guardian had applied for time to file the statement after having received a summons from the Court on September 5, 1948. On February 21, 1948, the pleaders were present, according to the entry against the date in the roznama of the Court. Notice to the counsel of the filing of the award means or amounts to notice to the party.

    8. Sub-section (1) of Section 14 of the Arbitration Act, 1940 (Act 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 a notice given orally. The communications of the information that an award has been filed is sufficient compliance with the requirements of Sub-section (2) of Section 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-section (2) of Section 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 Rule 5 of Order 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.

    9. We have been referred to Section 42 of the Arbitration Act for the modes of serving notice. This section does not apply to the giving of notice by Courts. It applies to the service of notice by a party to an arbitration agreement or by an arbitrator or umpire. It is contended that verbal communication of the filing of the award does not amount to serving of a notice. The expression 'date of service' of notice is used in Article 158, First Schedule of the Limitation Act because Sub-section (2) of Section 14 would be applicable both when the reference to arbitration is out of Court or in a suit. When the arbitration reference is out of Court, no party is expected to be present in Court and, therefore, the notice will have to go to the party formally, i.e., a written notice will issue from the Court to the parties concerned, intimating them that an award had been filed. It is only in cases where an arbitration is through Court that, when the award is filed, the Court can have the counsel for the parties present at the time the case is put up with the award and that the Court can then orally intimate to the counsel about the filing of the award. Further, 'service', according to Webster's New International Dictionary, II Ed., unabridged, means act of bringing to notice, either actually or constructively, in such manner as is prescribed by law'. Oral communication will, therefore, amount to service too, when no particular mode of service is prescribed.

    10. We see no ground to construe the expression 'date of service of notice' in col. 3 of Article 158 of the Limitation Act to mean only a notice in writing served in a formal manner. When the Legislature used the word 'notice' it must be presumed to have borne in mind that it means not only a formal intimation but also an informal one. Similarly, it must be deemed to have in mind the fact that service of a notice would include constructive or informal notice. If its intention were to exclude the latter sense of the. words 'notice' and 'service' it would have said so explicitly. It has not done so here. Moreover, to construe the expression as meaning only a written notice served formally on the party to be affected, will leave the door open to that party, even though with full knowledge of the filing of the award he has taken part in the subsequent proceedings, to challenge the decree based upon the award at any time upon the ground that for want of a proper notice his right to object to the filing of the award had not even accrued. Such a result would stultify the whole object which underlies the process of arbitration-the speedy decision of a dispute by a tribunal chosen by the parties.

    11. In this case, the parties knew of the filing of the award. Defendant No. 1 had probably known of the imminence of the filing of the award when he stated, in his application dated February 17, 1948, that he intended to file an objection to the award. He was then the guardian of the appellant. He continued to be the guardian till April 1948. The appellant's mother became guardian in June 1948. It has to be presumed that she would have known of the filing of the award on that day. Any way, she knew definitely on September 7, 1948, that an award had been filed and that she had to file an objection. She took one month's time on September 7, for filing the objection and again, one month's time, on October 7. She actually filed the objection on November 9. If she be held to have notice of the filing of the award on September 7, 1948, even then the filing of the award on November 9, 1948, was beyond the period of thirty days prescribed in Article 158 of the Limitation Act. We, therefore, see no justification for the contention that the period of limitation had not begun to run against the appellant and that the objection filed on his behalf on November 9, 1948, was within the period of limitation prescribed under Article 158 of the First Schedule to the Limitation Act,

    12. We, therefore, agree with the High Court that the intimation to the pleaders of the parties on February 21, 1948, amounted to service of the notice 011 the parties about the filing of the award and that objection filed on behalf of the appellant was filed after the expiry of the period of limitation.

    13. The second question is whether the order of the Civil Judge amounted to an order refusing to set aside the award and, therefore, appealable to the High Court. The High Court held that it was not such an order and we agree. When no party filed an objection praying for the setting aside of the award, no question of refusing to set it aside can arise and, therefore, no appeal was maintainable under Section 39(1)(w) of the Arbitration Act which allows an appeal against an order refusing to set aside an award.

    14. Lastly, it was submitted that the objection to the effect that the award was illegal and without jurisdiction, inasmuch as the arbitrator included in the award property which did not fall within the scope of his authority, should have been considered by the trial Court. Such an objection was not pressed before the trial Court and, therefore, the High Court did not allow that objection to be taken before it. We think that the High Court was right in not allowing the objection to be raised since it, being not pressed in the trial Court will be presumed to have been given up.

    15. We, therefore, see no force in this appeal and dismiss it with costs.

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    Comments

    Nilkantha Sidramappa ... v. Kashinath Somanna Ningashetti
    (Apr 28, 1961)