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Commissioner, M.P. Housing Board v. Mohanlal And Company
Factual and Procedural Background
The applicants, authorities of the Housing Board, filed a revision under section 115 of the Code of Civil Procedure challenging an order dated 4-7-2012 passed by the Xth Additional District Judge, Bhopal, in Arbitration Case No. 45/2011. The impugned order allowed the respondent's application under section 14, read with section 5 of the Limitation Act, excluding the period spent by the respondent prosecuting a prior proceeding before another forum from the limitation period for filing a challenge under section 34 of the Arbitration and Conciliation Act, 1996 ("The Act").
The dispute arose from a work order given to the respondent by the Housing Board authorities. After a grievance was dismissed by the Deputy and Additional Housing Board Commissioners, the respondent issued a notice for appointment of an arbitrator under section 10 of The Act, which was ignored. The respondent then filed Arbitration Case No. 135/2010 under section 11(5) of The Act seeking appointment of an arbitrator. The Court held that the order dated 11-11-2010 passed by the Additional Housing Board Commissioner was an arbitration award and declined appointment of a new arbitrator. It was observed that the respondent could challenge that award in accordance with law.
Subsequently, the respondent filed a proceeding under section 34 of The Act to challenge the said award and applied for exclusion of the period spent prosecuting Arbitration Case No. 135/2010 from limitation under section 14 of the Limitation Act. The Arbitration Court allowed this application relying on the earlier order and the principle laid down by the Apex Court in Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department.
Legal Issues Presented
- Whether the period spent by the respondent prosecuting a prior proceeding under section 11(5) of The Act before a different forum can be excluded from the limitation period for filing a challenge under section 34 of The Act by invoking section 14 of the Limitation Act?
- Whether the prior proceeding was bona fide and concerned the same cause of action or prayer, justifying exclusion of the limitation period?
- Whether the impugned order allowing the exclusion of the period under section 14 of the Limitation Act was legally sustainable?
Arguments of the Parties
Applicants' Arguments
- The prior proceeding was not prosecuted bona fide by the respondent for the same prayer before an appropriate forum.
- The impugned order wrongly applied section 14 of the Limitation Act to exclude the period spent in the earlier proceeding.
- The earlier proceeding under section 11(5) was for appointment of arbitrator, not for challenging the award, hence no basis for exclusion of limitation period.
- Relied on case law to support that exclusion under section 14 of the Limitation Act is not applicable in these facts, including Muralilal Vishwakarma v. Meena Sharma, Consolidated Engineering Enterprises v. Principal Secretary, Union of India v. Popular Construction Co., and State of Arunachal Pradesh v. Damani Construction Co.
Respondent's Arguments
- The impugned order is justified based on the earlier order dated 13-9-2011 in Arbitration Case No. 135/2010 and the principle laid down by the Apex Court in Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department.
- The earlier proceeding was effectively an arbitration award, and the respondent was directed to challenge the award in accordance with law.
- The period spent prosecuting the earlier arbitration case is rightly excluded under section 14 of the Limitation Act.
- Prayed for dismissal of the revision filed by the applicants.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Muralilal Vishwakarma & Anr. v. Smt. Meena Sharma, AIR 2010 Chhattisgarh 87 | Limitation principles relating to exclusion of time under section 14 of the Limitation Act | Distinguished by the Court as decided on different facts and not applicable. |
| Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department, (2008) 7 SCC 169 | Established that period spent in bona fide prosecution of earlier proceeding can be excluded under section 14 of the Limitation Act | Followed by the Court as binding precedent supporting exclusion of limitation period. |
| Union Of India v. Popular Construction Co., (2001) 8 SCC 470 | Principles relating to limitation and arbitration proceedings | Distinguished by the Court as facts differ from the present case. |
| State Of Arunachal Pradesh v. Damani Construction Co., (2007) 10 SCC 742 | Limitation principles in arbitration context | Distinguished by the Court on facts and circumstances. |
Court's Reasoning and Analysis
The Court examined the factual matrix and the procedural history, noting that the respondent initially sought appointment of an arbitrator under section 11(5) of The Act after the authorities dismissed its grievance. The Court held that the order dated 11-11-2010 passed by the Additional Housing Board Commissioner was an arbitration award within the meaning of The Act. Consequently, the respondent's prior proceeding seeking appointment of an arbitrator was effectively an attempt to challenge that award.
Relying on the earlier order dated 13-9-2011 and the binding precedent of the Apex Court in Consolidated Engineering Enterprises, the Court found that the respondent had prosecuted the earlier proceeding bona fide and for the same cause of action. Therefore, the period spent in that proceeding was rightly excluded from the limitation period under section 14 of the Limitation Act.
The Court distinguished the cases cited by the applicants, finding them factually inapplicable. It concluded that the impugned order did not suffer from any perversity, illegality, or irregularity warranting interference.
Holding and Implications
The Court DISMISSED the revision filed by the applicants.
The direct effect of this decision is that the respondent is entitled to exclude the period spent in prosecuting the earlier arbitration proceeding from the limitation period for filing a challenge under section 34 of The Act. No new precedent was set; the Court applied established legal principles and affirmed the correctness of the impugned order.
ORAL ORDER
Applicants, the authorities of Housing Board have filed this revision under section 115 of the Code of Civil Procedure being aggrieved by the order dated 4-7-2012 passed by the Xth Additional District Judge, Bhopal in Arbitration Case No. 45/2011, whereby in the proceeding of the respondent filed under section 34 of the Arbitration and Conciliation Act 1996, in short “The Act” by allowing the application of the respondent filed under section 14, read with section 5 of the Limitation Act, the period spent by it under the bona fide advise in prosecuting some proceeding before some other forum has been excluded in assessing the period of limitation in filing the aforesaid proceedings under section 34 of the Act.
2. The applicants' counsel after taking me through the averments of the petition as well as impugned order, by referring sub-section (2) of section 14 of the Limitation Act, so also sub-section (3) of section 34 of the Act argued that the alleged other proceeding was not prosecuted by the respondent bona fidely for the same prayer before other appropriate forum and, therefore, the respondent was not entitled to extend the benefit of exclusion of the period in limitation to file the proceeding under section 34 of the Act. In continuation he said that contrary to the abovementioned provision of Limitation Act as well as of the Act, the impugned order has been passed by the trial Court under the wrong premises. As such the provision of section 14 of the Limitation Act was wrongly taken into consideration to exclude the alleged period from limitation.
3. In continuation by referring the order dated 13-9-2011 passed by the Co-sordinate Bench of this Court in Arbitration Case No. 135/2010, (Ann. R-1), the proceeding filed by the respondent under section 11(5) of the Act for appointment of the Arbitrator, said that such earlier proceeding was filed before this Court for appointment of Arbitrator and not for challenging the award passed by the Arbitrator. In such premises, it could not have been deemed that the respondent was prosecuting the proceeding against the award of arbitrator before the wrong forum with the same prayer, as prayed in the impugned proceeding of section 34 of the Act. Consequently, the respondent was not entitled to get the benefit of exclusion of the period in limitation to file such proceeding and prayed for admission and allowing this revision. In support of his contention he also placed his reliance on the following reported cases:—
(a) In the matter of Muralilal Vishwakarma & Anr. v. Smt. Meena Sharma, reported in AIR 2010 Chhattisgarh, 87, (b) In the matter of Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department, reported in (2008) 7 SCC 169, (c) In the matter of Union Of India v. Popular Construction Co.., reported in (2001) 8 SCC 470, (d) In the matter of State Of Arunachal Pradesh v. Damani Construction Co.., reported in (2007) 10 SCC 742.
4. Responding the aforesaid arguments, Shri Shekhar Sharma, learned counsel for the respondent by justifying the impugned order said that in view of aforesaid earlier order of this Court passed in Arbitration Case No. 135/2010, (Ann. R-1), so also in view of the principle laid down by the Apex Court in the matter of Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department, reported in (2008) 7 SCC 169, the impugned order does not require any interference at this stage. In continuation by referring the aforesaid order, Annexure R-1, he said that undisputedly after passing the order on dated 11-11-2010 by the authorities of the applicants, the respondent has come to this Court with the aforesaid Arbitration Case No. 135/2010 for appointment of Arbitrator but on consideration the aforesaid order dated 11-11-2010 passed by the authorities itself was held to be arbitration award by this Court in such arbitration case and pursuant to that on such technical ground his arbitration case for appointment of Arbitrator was not allowed. It was observed that if the respondent is aggrieved by the adjudication of its dispute by the aforesaid award, he can now challenge the same in accordance with law. So in any case the impugned proceeding being filed by the respondent under section 34 of the Act along with the impugned application in compliance of the aforesaid observation of this Court, the Arbitration Court has not committed any error in allowing its application and excluding the period spent by the respondent in prosecuting the aforesaid Arbitration case before this Court and prayed for dismissal of this revision.
5. Having heard the counsel at length, keeping in view their arguments, I have carefully gone through the papers placed by the parties on record.
6. It is undisputed fact on record that on the basis of some agreement, some work order was given to the respondent by the department of the applicants and while carrying out such work, some dispute has arisen between them, on which the respondent has first approached to applicant No. 3, Dy. Housing Board Commissioner to resolve its alleged grievance. The same was dismissed by the authorities, on which it approached to applicant No. 2, the Additional Housing Board Commissioner. On consideration such authorities also dismissed its dispute, vide order dated 11-11-2010, on which it had given a notice to the applicants-authorities for appointment of Arbitrator in accordance with section 10 of the Act. In spite service of the same within one month no response was given by the applicants-department on such notice, then the respondent came to this Court with the aforesaid Arbitration Case No. 135/2010 under section 11(5) of the Act for appointment of the Arbitrator. On consideration, in the aforesaid Arbitration Case, vide order dated 13-9-2011, (Ann. R-1), it was held that the aforesaid order dated 11-11-2010 passed by the applicant No. 2, Additional Commissioner being passed under Clause 29 of the agreement is an arbitration award of the Arbitrator, therefore further appointment of Arbitrator is not necessary in the matter. Simultaneously, it was also observed that if the respondent, herein is aggrieved by the aforesaid award, then it can now challenge the same in accordance with law.
7. It appears that subsequent to aforesaid order of this Court, dated 13-9-2011, (Ann. R-1) the respondent herein approached the Arbitration Court under section 34 of the Act to challenge the aforesaid award dated 11-11-2010 along with impugned application under section 14, read with section 5 of the Limitation Act with a prayer to exclude the period of limitation in filing such proceeding, which has been spent by it in prosecuting the aforesaid proceeding of the Arbitration Case No. 135/2010. The averments of aforesaid application were opposed on behalf of the applicants before the Arbitration Court but on consideration in view of the aforesaid observation of this Court in the order dated 13-9-2011, (Ann. R-1) and the principle laid down by the Apex Court in the aforesaid cited case of Consolidated Engineering Enterprises (supra), holding that section 14 of the Limitation Act could be invoked in such matter, by allowing such application the period spent by the respondent in prosecuting the aforesaid arbitration case has been excluded in computing the period of limitation for filing the proceeding under section 34 of the Act and in such premises the matter was directed to be decided on merits.
8. After perusing the aforesaid earlier order dated 13-9-2011, (Ann. R-1), so also the cited case of Apex Court, in the matter of Consolidated Engineering Enterprises (supra), I am of the considered view that the aforesaid Arbitration Court has not committed any error in allowing the application of the respondent and excluding the aforesaid period from limitation to file the proceeding under section 34 of the Act.
9. So far the case laws cited on behalf of the applicants are concerned, the same were decided on some different facts and circumstances, which are not the subject-matter of the case at hand. Thus, the same being distinguishable are not helping to the applicants. Even otherwise in view of the aforesaid cited case of Consolidated Engineering Enterprises (supra) being decided by the Larger Bench of the Apex Court presided over Hon'ble Three Judges, the cases cited on behalf of the applicants are not helping to them.
10. In view of the aforesaid discussion, I have not found any perversity, irregularity, illegality or anything against the propriety of law in the order impugned requiring any interference at this stage in the order impugned. Consequently this revision being devoid of any merit is hereby dismissed. There shall no order as to cost.
Revision dismissed.
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