Mohammad Hasan And Another v. Mohammad Anwar Ahmad And Others Opp. Party.

Choudhary, J.:— This civil revision application is directed against an order of the Subordinate Judge of Darbhanga, dated the 23rd September, 1965, holding that the filing of the award by the arbitrator was beyond time and the case was, therefore, barred by limitation.

2. It appaers that certain disputes between the parties were decided by arbitration without the intervention of the Court, and the arbitrator gave his award on the 16th June, 1963. It was registered on the 11th July, 1963, and the notice of the making of the award was given to the parties on the 12th July, 1963. The award, however, was filed by the arbitrator in Court on the 22nd April, 1965 and a miscellaneous case, No. 41 of 1965, was started. Opposite party No. 3 of the Court below raised a point that, the award having been filed after the expiry of the period of limitation, it could not be made a rule of the Court as being barred by limitation. It was contended on his behalf that the question of limitation should be decided as a preliminary point; and the learned Subordinate Judge, relying on a decision of this Court in Rambilas Mahto v. Durga Bijai Prasad Singh, AIR 1965 Pat 239, held that the award was filed beyond the time prescribed by the Limitation Act, and dismissed the miscellaneous case. Hence, fie present revision application has been filed in this Court on behalf of opposite party Nos. 1 and 2 of the Court below. Counsel for the petitioners has advanced an argument that no limitation is prescribed for the filing of an award in Court by an arbitrator and the decision on which the learned Subordinate Judge relied is of no authority, inasmuch as the question at issue in the present case did not directly arise to be considered in that case, and the view expressed in that case on that point is merely obiter dictum. According to the aforesaid decision of this Court, the filing of award by the arbitrator has been held to be barred under Article 178 of the old limitation Act. Article 178, after the new amendment, is Article 119 of the Act. Article 178 stated that, under the Arbitration Act, 1940, for the filing in Court of an award the period of limitation is 90 days from the date of service of the notice of the making of the award. The new Article 119(a) of the Act lays down exactly a similar provision, except that the period of limitation is 30 days instead of 90 flays. It states that, under the Arbitration Act, 1040 (10 of 1940), for the filing in Court of an award the period of limitation is 30 days from the date of service of the notice of the making of the award.

3. Sub-section (1) of Section 14 of the Arbitration Act lays down that, when the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award. Sub-section (2) of this section states, that the arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award. According to the above provisions, the procedure that has to be adopted by the arbitrators or umpire, after making the award, is as follows:—

(a) the arbitrators or umpire shall sign it;

(b) they shall give notice in writing to the parties of the making and signing of the award and of the amount, of fees and charges payable in respect of the arbitration and award;

(c) they shall, at the request of any party to the arbitration agreement, or any person claiming under such party, cause the award or a signed copy of it to be filed in Court; and

(d) they shall, if so directed by the Court, cause the award or a signed copy of it to be filed in Court.

4. In other words, if they do not file the award in Court at the request of any of the parties, the aggrieved party has a right to apply to the Court for a direction to the arbitrators or umpire to file the award in Court, and the arbitrators or umpire have then to file the award in Court. According to Article 178 (new Article 119(a)), the period of limitation is prescribed only for making an application in Court for the filing of the award in Court, and the period of limitation starts from the date of service of the notice on the parties of the making of the award. In the present case, as the award has been filed in Court more than 90 days after the making of the award, it is immaterial whether the case is governed by Article 178 of the old Act or Article 119(a) of the new Act. The real question that has to be decided is as with respect to what matter the period of limitation starts and from which date the period of limitation is to be counted. According to grammatical construction of the terms of the article, the limitation prescribed is only for the making of an application for filing the award, and not for the filing of the award itself. As provided in Section 14(2) of the Arbitration Act, the arbitrators or umpire have to file the award in Court, it they are directed to do so by the Court. For such a direction, if the parties want to make an application to the Court, then the application must be made within the period of limitation prescribed under the above article from the date of service of the notice of the making of the award under sub-section (1) of Section 14; and, on filing of such an application, the Court may ask the arbitrators or umpire to file the award in Court. There is, however, no period of limitation prescribed for giving notice to the parties after the making of the award as provided in sub-section (1) of Section 14, or for a request to be made by any of the parties to the arbitration agreement for filing the award under sub-section (2) of Section 14. Therefore, in terms, Article 178(119(a)) can have no application to the filing of an award by tile arbitrators or umpire.

5. The effect of the view taken above is that the arbitrators can file the award at any time without any consideration of the period of limitation. Counsel for the opposite party has, therefore, urged that such an interpretation of the law results in bringing about inconsistencies on the question of law arising in the present case. According to his argument, if a party wants a direction from the Court to the arbitrator to file the award, he can do so only within the period prescribed under the Limitation Act, as referred to above. If, however, he fails to do so within the prescribed period of limitation, it will always be open to him to get the award filed by an arbitrator at any time he chooses. There is no doubt that such inconsistencies may arise on the interpretation of the above Article of the Limitation Act. If, however, on a fair and legal construction of a provision of law, there is an occasion for creating inconsistencies, the Court is helpless, and it is for the Legislature to remove the inconsistency by a proper enactment. The function of the Court is to interpret a provision of law as it is, and no extraneous consideration can be of any avail if there is no ambiguity in the said provision. Chagla J. (as he then was), in Jayantilal Jamnadas, AIR 1945 Bom 417, pointed out that inconsistencies in a statute are for the Legislature, and to the extent that the language of a section is clear, the Court must give effect to it, especially in a Statute like the Limitation Act which deprives a party of a valuable right.

6. It has then been argued on behalf of the opposite party that, though Article 178(119(a)) of the Limitation Act does not, in terms, apply to a case of filing of an award by an arbitrator, the principle underlying the above Article should be applied to a case of the filing of an award by an arbitrator, and by implication such a filing must be held to be subject to the Law of limitation. The provisions of the Limitation Act create a bar to the seeking of a remedy by a person in respect of his right. Such an Vet, therefor, must be strictly construed, and, unless the remedy has been expressly barred it cannot be applied by implication of the prinsciples where no clear provision has been made to bar a remedy. If any authority is needed, reference may be made to a Bench decision of the Calcutta High Court in Makhanlal Roy Pramanick, AIR 1953 Cal 50, in which it has beers faeld that Statutes of Limitation are, in their nature, strict and inflexible, and, in construing the provisions of such Statutes, equitable considerations are out of place and the strict grammatical meaning of the words is the only safe guide.

7. The views taken by me gain support from decisions of almost all the High Courts, Including this Court, with the exception of a single decision of this Court reported in AIR 1985 Pat 239, on the basis of which the learned Subordinate Judge decided the case.

8. As early as in 1881, the Calcutta High Court, in Roberts v. Harrison, (1881) ILR 7 Cal 333, took the same view on this question. At that time, the Limitation Act of 1877 was in force of which Article 176 corresponded to Article 178 of the Limitation Act of 1908, prior to its amendment by the Arbitration Act of 1940. The period of limitation for filing the award was six months. The award had been published on the 29th September, 1880 and was filed in Court on the 29th April, 1881, that is, more than six months after the date of the publication of the award. An objection was taken that the filing of the award was barred by time as having been filed more than six months after it was made. It was held that the limitation period applied to applications for the award to be filed, and not for the filing of the award itself in Keshrimull v. Meghraj Basdeo, AIR 1942 Cal 542, the award was made on the 16th July, 1941, and on that very date the arbitrator informed the parties that he had duly made the award. On the very next day, the plaintiffs requested the arbitrator to file the award in Court and the arbitrator sent the award to the Court, together with Rs. 3 in cash for filing charges. On the 19th July, 1941, by a document the parties were informed by the Court that the award would be filed on payment of the requisite stamps. On the 21st November, 1941, stamps of the value of Rs. 3 were affixed and the award was filed. The contention raised on behalf of the defendant was that, the award having been published and notified on the 16th July, 1941, it should have been filed within 90 days of that date, which period had expired before the 21st November, 1941, when the filing actually took place. It was held in that case that the limitation provided by Article 178 and all other articles in the third division of the Limitation Act is in respect of applications for the acts to be done in respect of which the articles provided, and is not a period of limitation in respect of the act itself.

9. In Jayantilal Jamnadas v. Chhaganlal Nathoobhai, AIR 1945 Bom 417, the arbitrator made and published his award on the 14th July, 1943. On the 15th July, 1943, he gave notices to the advocates of the parties, who had been appearing before him during the reference, that he had published and signed his award on the 14th July, 1943. On the 3rd March, 1944, he gave notices to the parties themselves of the making of the award. Subsequently, the arbitrator filed the award in Court. An objection was taken that the award be taken off the file as the filing was barred by limitation. Chagla, J. (as he then was) held that, under Article 178 of the Limitation Act, it must be an application made to Court for the filing in Court of an award which can come under that Article. When the arbitrator files the award under Section 14(2) of the Arbitration Act at the request of a party to the arbitration agreement, he does not make an application to the Court, but does an act which the statute requires him to perform and intimates to the Court by his letter of request that he has made an award and that it should be taken on file. Therefore, Article 178 does not apply to the filing of the award by the arbitrator at the request of one of the parties to the arbitration agreement. It is only when a party to the arbitration applies to the Court to direct the arbitrator to me the award and the arbitrator, in pursuance of the order of the Court, files the award that Article 178 applies. It may be noted here that in that case, as in the present case, there was no direction by the Court to the arbitrator to file the award, nor was there anything on the record to show that the award was filed at the request of a party. But, for the purposes of that case it was presumed that it must have been filed at the request of any of the parties to the arbirtation agreement. In this connection the following observation of the learned Judge is of great significance:—

“…. inconsistencies in a statute are for the Legislature. To the extent that the language of a section is clear, the Court must give effect to it and especially in a statute like the Limitation Act which deprives a party of valuable rights. Column 3 of Article 178 which lays down the period from which limitation begins to run, namely, the date of service of the notice of the making of the award, seems to indicate that it is only when a party to a reference applies that the article would come into operation as the notice could only be served on one or other of the parties to the reference. It could not have been contemplated that this article should apply when the arbitrator files the award. Further, there is considerable force in Mr. Desai's argument that the Limitation Act applies to applications made by parties to proceedings. It cannot apply to any act done by one who is not a party to the proceedings and who is not interested in the result of the proceedings, and, therefore, it could not have been intended that any act on the part of the arbitrator should be controlled by an article of the Limitation Act. In my opinion, therefore, when an arbitrator files his award he is not making any application to the Court and, therefore, Article 178 does not apply to the filing of the award by the arbitrator.”

10. Similarly, in Dwarka Das v. Pearay Lal, AIR 1949 All 234, the award was given on the 2nd August, 1944 and the arbitrator Informed the parties of his having made the same. The arbitrator, however on the 31st August, 1940, about two years after the making of the award, made an application to the Court stating that, the disputes between the parties having been referred to him for arbitration, he had given an award and had informed the parties also about it and that he was filing the award in Court. It was contended on behalf of the opposition that the filing of the award was barred under Article 178 of the Limitation Act. It was held that Article 178 applies to an application under the Arbitration Act for the filing in Court of an award and that such an application must be by a party to the award, and not by the arbitrator. It was further observed as follows:—

“It is clear that a party may ask the arbitrator himself to file the award in Court. If the arbitrator agrees, he will file it in Court. In that case the arbitrator need not make any application to the Court. He may merely file the award in Court, and Just intimate to the Court that he is doing so. Such an intimation will not be an application as contemplated under Article 178 of the Limitation Act, for filing the award in Court. The arbitrator merely does a ministerial act in filing the award in Court. If, however, the arbitrator does not comply with the request of a party to file the award in Court, the party then has to make an application to the Court asking the Court to order the arbitrator to file the award in Court. Such an application by the party to the Court is covered by Article 178 of the Limitation Act. This a party can do within 90 days of the service of the notice given by the arbitrator that he has made an award. If the party fails to make such an application within the period prescribed, his remedy is lost unless he can persuade the arbitrator to file the award in Court at his own instance.”

11. Thus, the above observation makes it perfectly clear that an arbitrator can be persuaded to file the award in Court, even after the period of limitation under Article 178 of the Limitation Act had expired, because that article has no application to the filing of an arbitrator. Again, in Gendalal Motilal v. Mathuradas Ramprasad, AIR 1951 Nag 32, an award was given on the 17th July, 1943, and notice of the making of the award was given to the parties on 18th July, 1943. On the 27th July, 1948, about five years after the making of the award, the Sarpanch of the arbitrators made an application in Court under Section 14(2) of the Arbitration Act for filing of the award. It was held by the lower Court that the application was barred by limitation under Article 178 of the Limitation Act. In revision, Hidayatullah, J. (as he then was), held that the arbitrator could file the award in Court and that Article 178 of the Limitation Act did not apply to an arbitrator.

12. In R. Dasaratha Rao v. K. Ramaswamy Iyengar, AIR 1956 Mad 134, the award was made on the 28th May, 1948 and the same was signed by all the parties on the 19th June, 1948. The award was filed by the arbitrators in Court on the 10th January, 1949. It was contended that the filing of the award was barred under Article 178 of the Limitation Act. It was held that the application to which Article 178 applies is not an application by arbitrators or Umpire, but the application of the party making the reference to arbitration on whom notice of the making of the award by the arbitrators has to be served. In that case, under the rules framed by the Madras High Court, it was provided that the filing of the award should be by means of an application or petition and such an application was filed by the arbitrators while filing the award. It was pointed out that mere fact that the rules required that the filing of the award should be by means of an application or petition would not by itself be sufficient to say that the application of the arbitrator to the Court to receive the award for the purpose of filing the same would be governed by Article 178 of the Limitation Act.

13. The point was set at rest so far as Madras High Court is concerned by a Full Bench decision in Mohamed Yusuf v. Mohammed Hussain Rowther, AIR 1964 Mad 1 (FB). It was held in that case that, where an award made on a reference out of Court has not been filed into Court at the instance of any of the parties thereto within the time permitted by Article 178 of the Limitation Act, 1908, it will be open to the Court to pass a decree in terms thereof, if it is produced before the Court by the arbitrators themselves. The same view was taken by the Madhya Pradesh High Court in Nathuram Girwarchand v. Baijnath Mangakhanlal, AIR 1959 Madh Pra 422. It has been held there that Article 178 of the Limitation Act does not apply where an award is filed by the arbitrator himself. In Lachhmi Prasad v. Gobardhan Das, AIR 1948 Pat 171, a Bench of this Court held that the period of 90 days referred to in Article 178 of the Limitation Act is to be computed front the date when one of the parties or both file an application in Court under Section 14 of the Arbitration Act, but it has no reference to the time when the arbitrators or umpire are requested to file the award.

14. A decision of the Supreme Court in Champalal v. Mst. Samrath Bai, AIR 1960 SC 629, has settled the law on this point. It was held there that Article 178 of the Limitation Act applies to applications made by the parties and not to the filing of the award by the arbitrators in that case the award was made on 18th October, 1946, and, on the 21st October, 1940, it was filed by the arbitrators in the Court of the First Additional District Judge, Akola. On the 30th October, 1946, the Court gave to the parties ten days' time for objection. On the 15th November, 1946, the appellant before the Supreme Court filed objections to the award. On the 31st January, 1947, the respondent applied for a judgment in terms of the award and for a decree. As the award was unregistered, at the request of the respondent, it was handed over to one Mithulal, who was an attorney for two out of the three arbitrators, for getting if registered. The award was presented for registration on the 7th February, 1947, but the Sub-Registrar returned the same as it was not accompanied by a list and particulars of the property covered by the award. On the 15th February, 1947, the list and particulars signed by the attorney were supplied and the award was re-presented for registration by that attorney it was registered on the 26th March, 1947 so far as the two arbitrators represented by the attorney were concerned; and under orders of the Registrar, it was registered also for the third arbitrator, and it was filed in Court on the 21st July, 1948. On the 30th August, 1948, the Court ordered a proper application, as required under the High Court Rules, to be filed; and, on 15th September, 1948, the application under Section 14(2) of the Arbitration Act was filed. It was contended before the Supreme Court that the filing of the award was not within time as no application was made under Sec. 14 within the time allowed by the Limitation Act. It was held that the above point was wholly without any substance and that Article 178 of the Limitation Act which was relied upon by the appellant, applied to applications made by the parties, and not to the filing of the award by the arbitrators.

15. In Makhanlal Roy Pramanick v. Pramathanath Basu, AIR 1953 Cal 50, with respect so the question of application of Article 178 of the Limitation Act by implication with reference to its principle and to the inconsistencies to be caused by the interpretation as stated above, it was pointed out that a Court ought not to put such an interpretation upon a statute of limitation by implication and inference as may have a penalising effect unless the Court is forced to do so by the irresistible force of the language used. It was further pointed out that the Limitation Act, being an Act which takes away or restricts the right to take legal proceedings, must, where its language is ambiguous, be construed strictly, that is, in favour of the right to proceed. It was also held that Statutes of Limitation are, in their nature, strict and inflexible and in construing the provisions of such Statutes, equitable considerations are out of place, the strict grammatical meaning of the words being the only safe guide.

16. Our attention has been drawn to a Bench decision of this Court in AIR 1965 Pat 239. That was a case in which the question to determine was whether Section 32 of the Arbitration Act bars a suit or a defence where the award made by an arbitrator has not been made a rule of the Court. While putting forward an argument with respect to the question of the period within which the award could be filed, a point was raised by Mr. Dasu Sinha, appearing for the appellants, that the award could be filed at any time and a decree in terms thereof could be passed, even though it had not been filed within the period of limitation prescribed for the same.

17. While considering this argument, their Lordships pointed out that, though Article 178 of the Limitation Act does not apply in terms, by implication, its principle can very well be applied even to the filing of the award by an arbitrator. No reference was made to any decision on the point, including the Supreme Court decision and the Bench decision of this Court referred to above. From the discussion in the judgment, it is clear that their Lordships did not give the fullest consideration to the said principle as that question did not arise directly for consideration, and it way an observation merely by way of obiter dictum. That case, therefore, is no authority on the point at issue.

18. The result, therefore, is that the application is allowed, the judgment and order of the Court below dismissing the miscellaneous case on the ground of limitation is set aside, and it is held that the filing of the award by the arbitrator was not barred by time. The Court below will now proceed with the case in accordance with law on merits. There will, however, be no order as to costs of this Court.

19. K.B.N Singh, J.:— I agree.

JHS/D.V.C

20. Revision allowed.