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Tamil Nadu Electricity Board v. Hindustan Construction Company Limited And Others
Factual and Procedural Background
The appellant entrusted certain construction work to the first respondent. Owing to non-settlement of the first respondent’s claims, disputes arose and were referred to arbitration. Respondents 2 and 3 were appointed as arbitrators, entered upon reference on 20-5-1992, and rendered an award on 19-6-1998. On 26-10-1999 the arbitrators suo motu filed the award before the Madras High Court, where it was registered as O.P. No. 150 of 2000.
After notice of filing, the first respondent filed Application No. 2731 of 2000 seeking to make the award a rule of the court. The appellant objected, contending that the court could not entertain an award filed without a prior request by the parties or a court direction and that the filing was time-barred under Article 119(a) of the Limitation Act, 1963. A learned Single Judge of the High Court rejected these objections by order dated 15-6-2006. Aggrieved, the appellant preferred the present appeal to the Supreme Court by special leave.
Legal Issues Presented
- Whether, under Section 14(2) of the Arbitration Act, 1940, arbitrators may file an award suo motu without a request from the parties or a direction from the court.
- Whether such suo motu filing is barred by limitation under Article 119(a) of the Limitation Act, 1963.
Arguments of the Parties
Appellant's Arguments
- The court should not accept an award filed unless a party has requested the arbitrators to file it or the court has directed them to do so, as allegedly required by Section 14(1)–(2) of the Arbitration Act, 1940.
- Article 119(a) of the Limitation Act, 1963 prescribes a thirty-day period from notice of the award for a party to apply for filing; if no such application is made within that time, the award cannot subsequently be received by the court.
- The first respondent’s alleged request to the arbitrators to file the award was made after the limitation period and was an attempt to circumvent statutory requirements.
The opinion does not contain a detailed account of the first respondent's legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| State of M.P. v. Saith & Skelton (P) Ltd., (1972) 1 SCC 702; AIR 1972 SC 1507 | Section 14 of the Arbitration Act, 1940 does not prohibit arbitrators from filing an award suo motu. | Relied upon to reject the appellant’s contention that the award could be filed only upon a party’s request or a court direction. |
| Champalal v. Mst. Samrathbai, AIR 1960 SC 629 | Article 178 of the Limitation Act, 1908 (corresponding to Article 119(a) of the 1963 Act) applies only to applications made by parties, not to suo motu filings by arbitrators. | Used to hold that Article 119(a) does not bar an award filed by arbitrators on their own initiative. |
Court's Reasoning and Analysis
The Supreme Court observed that Section 14(2) of the Arbitration Act contains no express prohibition against arbitrators filing an award on their own initiative. Citing State of M.P. v. Saith & Skelton, the Court reaffirmed that a suo motu filing is permissible.
Turning to limitation, the Court relied on Champalal v. Mst. Samrathbai to clarify that Article 119(a) of the Limitation Act governs only applications by parties for filing an award; it does not govern the act of an arbitrator placing the award before the court. Consequently, the thirty-day period invoked by the appellant was held inapplicable.
The appellant’s allegation that the first respondent sought the filing after expiry of limitation was found unsubstantiated. Even assuming such a request was late, the Court noted that (i) limitation could be condoned under Section 5 of the Limitation Act for party applications, and (ii) there is no prescribed limitation for the arbitrator to file an award. Absent an inordinate or prejudicial delay—which was not present here—the High Court was entitled to receive the award.
Holding and Implications
APPEAL DISMISSED. The Supreme Court upheld the High Court’s order permitting the award to be taken on file.
Implications: The decision confirms that arbitrators may file their awards in court suo motu, and such filings are not constrained by the thirty-day limitation period in Article 119(a) of the Limitation Act, 1963. The ruling reinforces earlier precedent without setting new jurisprudential ground, but it clarifies procedural practice for courts and arbitrators under the Arbitration Act, 1940.
Order
1. The appellant entrusted certain construction work to the first respondent. On account of non-settlement of its claims, the first respondent raised some disputes which were referred to arbitration. Respondents 2 and 3 appointed as arbitrators, entered upon the reference on 20-5-1992 and made an award dated 19-6-1998. The arbitrators suo motu filed their award before the High Court on 26-10-1999. It was registered as OP No. 150 of 2000.
2. On receiving the notice of filing of the award the first respondent also made an application (Application No. 2731 of 2000) in OP No. 150 of 2000 for making the award, a rule of the court. On the other hand the appellant contended that the court should not take cognizance of the award, that unless the parties or either of them requested the arbitrators to file the award into court, or the court directed them to file the award, the arbitrators could not file the award in court, nor could the court receive the award. Reliance was placed upon sub-sections (1) and (2) of Section 14 of the Arbitration Act, 1940 (“the Act”, for short) in support of the said contention.
3. The appellant also contended that under Article 119(a) of the Limitation Act, 1963, the period of limitation to file an application under the Act, for filing the award in the court, was 30 days from the date of service of notice of making of the award; and if such an application was not filed by a party under Section 14(2) of the Act, within 30 days of service of notice, the award could not be filed thereafter, being barred under Article 119(a) of the Limitation Act, 1963.
4. A learned Single Judge of the Madras High Court, by the impugned order dated 15-6-2006, negatived the contentions of the appellant and held that the award could be filed suo motu by the arbitrators and received by the court. The said order is challenged in this appeal by special leave.
5. Sub-sections (1) and (2) of Section 14 of the Act, relevant for our purpose is extracted below:
“14. Award to be signed and filed.—(1) 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.
(2) 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.”
6. This Court in State of M.P v. Saith & Skelton (P) Ltd. (1972) 1 SCC 702, AIR 1972 SC 1507 while interpreting Section 14 of the Act, held that it was not correct to say that the award could be filed only if the parties make a request to the arbitrator to file the award or make an application to the court for that purpose, when there is no prohibition in the Act, particularly, in Section 14(2), against the arbitrator suo motu filing an award in the court.
7. In Champalal v. Mst. Samrathbai . AIR 1960 SC 629 this Court, while considering Article 178 of the Limitation Act, 1908 [corresponding to Article 119(a) of the Limitation Act, 1963] held that the said article would apply only when an application is made by any of the parties for filing the award, and not when the arbitrator himself suo motu files the award into the court. It is well settled that the act of arbitrator filing the award in the court cannot be characterised as an application to the court under Article 14(2) of the Act which is referred to in Article 119(a) of the Limitation Act, 1963. In the circumstances, the High Court was right in rejecting the contentions of the appellant and receiving the award.
8. The learned counsel for the appellant submitted that the first respondent in its Application No. 2731 of 2000 dated 13-7-2000 filed in OP No. 150 of 2000, had admitted that it had made a request to the arbitrators to file the award in the court. The appellant contends that after the expiry of the period of limitation for filing an application seeking a direction to the arbitrators to file the award, the first respondent had requested the arbitrators to file the award into the court, and this was an attempt by the first respondent to circumvent the provisions of Section 14(2) of the Act and Article 119(a) of the Limitation Act, 1963.
9. Firstly, there is nothing in the application to show when such a request was made by the respondent, to the arbitrators, whether within thirty days of receiving notice of making of the award, or after the expiry of thirty days. Secondly, what was barred by limitation after thirty days, was making of an application to the court seeking a direction to the arbitrator to file the award. But even that was subject to condonation of delay by the court, as period of limitation could be extended if sufficient cause was shown under Section 5 of the Limitation Act, 1963. Thirdly, there was no bar to a party making a request to the arbitrators to file the award even after thirty days, or for the arbitrators acting on the request of the party, or suo motu filing the award into court.
10. As there is no limitation prescribed for the arbitrator to file an award, the court would entertain it, unless it was of the view that the period between the date of award and filing of the award was so huge as to attract the principle of denial of relief on the ground of delay and laches. In this case the delay was not of such magnitude, so as to invite refusal by the court to receive it.
11. We, therefore, find no reason to interfere with the order of the High Court. The appeal is dismissed.
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