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Union Of India And Others v. M/S Deepak Electric Trading Co.
Court Opinion Summary — Devinder Gupta, A.C.J.
Factual and Procedural Background
The arbitrator made and published an award on 17 June 1996. On 8 July 1996 respondents filed an application under Sections 14 and 17 of the Arbitration Act, 1940 asking that the arbitrator be directed to file his award with the complete record and that, once received, the award be made rule of the Court and a decree be passed in accordance with the award.
The Court issued notice to the arbitrator for 14 October 1996 to file the award and proceedings; by that date the award had been filed. Notices of the filing of the award were directed to be issued to the parties for 13 January 1997, but service on the Executive Engineer (one of the named respondents) failed because he was out of station. Fresh notices were directed for 1 April 1997 and subsequently for 17 July 1997 when service on the Executive Engineer remained outstanding.
On 15 April 1997 an application (IA.349/97) was filed to correct the manner of arraying the Union of India; that application was allowed on 21 April 1997. Earlier, on 21 March 1997 the Executive Engineer wrote to the Registrar stating that he believed the award had been filed but that he had received no formal notice and requested the status so he could defend the case with Government counsel.
On 21 May 1997 counsel authorised by the Union of India inspected the file (endorsement shows Mr. Yadav carried out inspection on that date). On 23 July 1997 objections were filed on behalf of the Union of India (registered as IA.9423/1997) raising a preliminary contention that the objections were time barred. The Single Judge dismissed the objections as time barred on 28 September 1991 (as recorded in the appeal), and this appeal challenges that order.
Legal Issues Presented
- Whether the objections to the arbitrator's award were barred by the period of limitation applicable to such objections.
- Whether, under the circumstances of this case and the precedent of this Court, service on the Executive Engineer (a departmental official who handled the arbitration proceedings on behalf of the Union of India) was necessary in addition to service on the Union of India.
- On what date the Union of India (or the Union through the Executive Engineer) acquired knowledge of the filing of the award for the purpose of computing the limitation period.
- Whether the ratio of the Supreme Court's decision in P.K. Ramachandran v. State of Kerala permitting condonation of delay on equitable grounds could be applied to excuse the delay in filing objections in this case.
Arguments of the Parties
Appellant's Arguments
- The Executive Engineer, who had been specifically arrayed as respondent No. 2, had not been served with notice and it was the Executive Engineer alone who had to file objections; accordingly the objections filed on 23 July 1997 should not be treated as time barred because the Executive Engineer had not been served.
- An oral prayer was made before the Single Judge seeking condonation of any delay, which the Single Judge declined to accept.
Respondent / Union of India Arguments
- A preliminary objection was raised that the objections themselves were not within the period of limitation; counsel for the Union of India (Ms. Neera Aggarwal) filed objections on 23 July 1997 and contended limitation had expired.
- It was contended (and accepted by the Single Judge) that service on the Union of India had occurred earlier (the Single Judge referenced service in November 1996 and on 1 April 1997), and therefore the objections were time barred.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Union of India v. Surinder Kumar — 61 (1996) DLT 42 (D.B.) | Where a departmental official (here the Executive Engineer) represents the Central Government in arbitration proceedings, service on the departmental official may be necessary because that official is effectively looking after the proceedings before the arbitrator. | The Court held that, in view of this decision, the Executive Engineer ought to have been served or otherwise acquired knowledge of the filing of the award; the relevant inquiry was therefore when the Union of India was served or when the Union of India through the Executive Engineer obtained knowledge of the filing. |
| P.K. Ramachandran v. State of Kerala — AIR 1998 S.C. 2276 | The Supreme Court's ratio concerning condonation of delay on equitable grounds (as discussed in that decision). | The Court held that the ratio of P.K. Ramachandran could not be applied to excuse the delay in the present case because the Executive Engineer, on his own showing, had requisite information of the filing (letter to Registrar and inspection) and yet did not file objections within the statutory period nor filed a separate condonation application explaining the delay. |
Court's Reasoning and Analysis
The Court reviewed the chronology and the relevant communications and acts indicating knowledge of the award by the Union of India and by the Executive Engineer:
- The award was made on 17 June 1996 and the respondents moved under Sections 14 and 17 (application dated 8 July 1996) for the arbitrator to file his award and record and for the award to be made rule of the Court.
- Notices concerning filing were repeatedly issued; although the award was on file by 14 October 1996, effective personal service on the Executive Engineer repeatedly failed and fresh notices were directed on several dates (including 1 April 1997 and 17 July 1997).
- The Executive Engineer himself wrote to the Registrar on 21 March 1997 indicating awareness that an award had been filed but that he had received no formal notice of hearing — an acknowledgement that he had some knowledge of the filing.
- On 21 May 1997 authorised counsel inspected the court file on behalf of the Union of India (Mr. Yadav carried out inspection). The Court inferred from the combination of the Executive Engineer's earlier letter and the subsequent inspection that the Executive Engineer had, at the latest, by 21 May 1997 acquired knowledge of the date for hearing and of the filing of the award.
- Objections were filed on 23 July 1997. The Court treated 21 May 1997 as the date on which the Executive Engineer (and thereby the Union through him) must be taken to have had knowledge sufficient to trigger the limitation period for filing objections.
- The Court noted that no reasons were given in the objections for the delay, and no formal application for condonation of delay had been filed. The Court refused to apply the Supreme Court's equitable condonation principle from P.K. Ramachandran because the Executive Engineer had actual or constructive knowledge of the filing (letter + inspection) and yet failed to file objections or seek condonation within the statutory window. Accordingly the objections were time barred.
- The Single Judge's contrary view that service on the Executive Engineer was unnecessary (relying on the position that the Union of India is the proper party under Section 79 CPC) was observed to conflict with the Surinder Kumar decision; however, even accepting the need to consider service on the Executive Engineer, the Court found that the objections were nevertheless barred by limitation because of the Executive Engineer's knowledge by 21 May 1997 and the absence of any condonation application.
Holding and Implications
APPEAL DISMISSED.
Direct effect on the parties: The Court upheld the Single Judge's dismissal of the objections as time barred — the objections filed on 23 July 1997 were not entertained because the Executive Engineer (through his letter and the subsequent inspection of the file) had acquired the requisite knowledge of the filing of the award by 21 May 1997 and no condonation application or explanation for delay was filed within the statutory period.
Broader implications: The opinion applies existing authorities (the Court's own decision in Union of India v. Surinder Kumar and the Supreme Court decision in P.K. Ramachandran) to the facts and declines to extend the scope of equitable condonation in P.K. Ramachandran to this factual matrix. The Court did not purport to lay down a new legal principle; its decision is fact-specific and stands as an application of established authorities to the timeline and conduct of the departmental official and the Union.
Devinder Gupta, A.C.J:— This appeal is against the order passed on 28.9.1991 by learned Single Judge of this Court dismissing the appellant's objections to the award of arbitrator as time barred.
2. Facts in brief are that on 17.6.1996 the arbitrator made and published his award. An application under Sections 14 and 17 of the Arbitration Act, 1940 was filed by the respondents 8.7.1996 praying that the arbitrator be directed to file his award along with complete record and after award is received the same be made rule of the court and decree be passed thereupon in terms of the award.
3. Notice of this application was directed to be issued to the arbitrator for 14.10.1996 calling upon him to file award and the proceedings. On 14.10.1996 it was noticed that the award has since been filed. Notice of filing of the award was directed to be issued to the parties without process fee for 13.1.1997 It appears that notice for 13.1.1997 was issued to the Executive Engineer but same could not be served. The report was that he was out of station. Notice was also not served on the respondent. Fresh notices were directed to be issued for 1.4.1997 Notice was served upon Union of India but service of the notice on the Executive Engineer was still awaited. Fresh notice was accordingly directed to be issued to the Executive Engineer for 17.7.1997 In the meanwhile, an application (IA. 349/97) was filed on behalf of the respondent on 15.4.1997 stating that the Union of India had not correctly been arrayed and it should be arrayed as follows:-
“Union of India
The Secretary,
Ministry of Urban Affairs and Employment,
C-Wing, Nirman Bhawan,
New Delhi-110001”
4. The application came up on 21.4.1997 and it was allowed. Before the said date on 21.3.1997 a letter was addressed by the Executive Engineer to the Registrar of this Court pointing out that the arbitrator must have filed the award but more than five years had passed and no formal notice had been received from the High Court by him. He, therefore, requested that the status of the case be intimated so as to enable him to defend the case along with the Government counsel.
5. On 17.7.1997 on behalf of the respondent notice of filing of the award was accepted. Notice was directed to be issued to Union of India and Executive Engineer without process fee. Notice on Union of India was served on 29.7.1997 Notice could not be served on the Executive Engineer. It was still awaited. On 23.7.1997 objections were filed on behalf of Union of India by its counsel Ms. Neera Aggarwal, which were registered as IA. 9423 of 1997. A preliminary objection was raised that the objections were not within the period of limitation.
6. Another fact, which deserves to be noticed besides the facts aforementioned is that on 20.5.1997 Ms. Neera Aggarwal, counsel for Union of India, applied to the Registry for being allowed to inspect the record of the case on 21.5.1997 One Mr. Yadav was authorised to carry out the inspection and as per the endorsement on the said application, the inspection was carried out on 21.5.1997
7. In the aforementioned background, we heard learned counsel for the parties in this appeal.
8. The reasons assigned by learned Single Judge in coming to the conclusion that the objections were not within period of limitation were that on 1.4.1997 notice of filing of the award had been duly served on Union of India. It was observed that the Union of India had also been served in November, 1996, therefore, the objection filed on 23.7.1997 were not within the period of limitation. It was contended on behalf of the appellant that the Executive Engineer, who had been arrayed as respondent No. 2 had not been served, who alone had to file objections. Learned Single Judge turned down this argument on the ground that under Section 79 of the Code of Civil Procedure when a suit is filed against the Central Government it is Union of India, who is arrayed as a party. The Executive Engineer by no stretch of imagination can be taken to be a party to such proceedings and as such the Court was only considering the objection of Union of India, who had been served in November, 1996. Learned Single Judge even declined to take a lenient view in the matter and also declined to condone the delay for which prayer was made orally.
9. There is no doubt that Union of India had duly been served, but in view of the decision of this Court in Union Of India… v. Surinder Kumar…S 61(1996) DLT 42 (D.B) it was necessary to have served the Executive Engineer since it was the Executive Engineer who on behalf of Union of India was looking after the proceedings before the arbitrator. Therefore, the question in this case would be that on which date Union of India was served with the notice of filing of the award or on which date Union of India through Executive Engineer got knowledge of the filing of the award.
10. It is apparent that inspection was carried out on 21.5.1997 and it is also borne on record that on 21.3.1997 letter had been sent by the Executive Engineer to the Registrar of this Court stating that he was aware of the fact that the arbitrator had filed his award in this Court but was not aware of the date of hearing since no notice had been received by him. It is also a fact that the same counsel, who inspected the file on 21.5.1997 filed objection on behalf of the Executive Engineer, without disclosing in the objections the fact that inspection had been carried out on 21.5.1997 It is but natural and it must be inferred in the facts and circumstances that as Executive Engineer, who was so keen to get any intimation from the Registrar of the date of hearing, obviously instructions must have been passed on to counsel to carry out inspection of the record and in fact inspection was carried out on 21.5.1997 Therefore, if not earlier, on 21.5.1997 the Executive Engineer will be deemed to have acquired knowledge of the next date of hearing. Executive Engineer prior to the said date had also knowledge of the fact that award had been filed in this Court. Though the reasoning of learned Single Judge that it was not necessary to have served the Executive Engineer, which view is contrary to what has been laid down in the decision of this Court in Surnder Kumar's case (supra) on other ground, the objections were liable to be dismissed as time barred. The ratio of the decision of Supreme Court in P.K Ramachandran v. State of Kerala AIR 1998 S.C 2276 cannot be applied to the facts of this case by condoning delay on equitable grounds irrespective of the fact that the Executive Engineer was not served with the actual notice of filing of the award but he on his own showing had the requisite information of the filing of the award. He did address letter to the Registrar. File was also got inspected through lawyer. No reason is assigned in the objections about the delay. No separate application was moved seeking condonation, which it was incumbent on the Executive Engineer or the Union of India to have done so explaining the reason as to why within 30 days at least from 21.5.1997 objections were not filed. The objections as such were rightly held to be not within period of limitation.
11. Thus we find no substance in the appeal, which is hereby dismissed.
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