Brij Mohan Lall, J.:— This is a second appeal by a plaintiff whose claim for damages for breach of two contracts for purchase of Arhar and Lal has been thrown out by both the courts below.
2. The appellant's version is that respondent had entered into two forward contracts with him to purchase the aforesaid commodities but since the prices went down he refused to make the purchases. He produced a written agreement which provided, inter alia, that in case of a dispute between the parties it would be referred to the arbitration of the National Chamber Arbitration Board. The appellant preferred two claims before the aforesaid Board on 10-10-1942 on the ground of the alleged breaches of contract committed by the respondent. It may be mentioned at this stage that he did not serve any notice on the respondent either before or after preferring the said claims. The Board issued certain notices to the respondent and after several abortive attempts to serve him the Board came to the conclusion at a later stage some time in January, 1944 that notices had been served. An award was made on 15-11-1945 in favour of the appellant. An application was then made by the arbitrators to the Munsif for making the said award a rule of the Court. The learned Munsif, however, refused to do so and passed a decree on 15-3-1947 setting aside the said award. The suit which has given rise to this second appeal was instituted on 24-8-1947. It is admitted in the plaint that causes of action arose on 18-8-1942 and 27-8-1942 when the respondent refused to make the purchases.
3. The respondent denied having entered into any contract and further contended that the contracts even if made were wagering contracts and, as such, were not enforceable at law. Lastly he pleaded limitation.
4. The trial court held that no contract had been proved and that even if any contract had been proved it would have been wagering and uneforceable. He however treated the claims as within time.
5. On appeal by the plaintiff the learned judge of the lower appellate court held that the contracts had been duly proved and that they were not of a wagering nature. But he was of the opinion that the claims were time barred.
6. The plaintiff has now come up to this Court in second appeal and the only point on which I have heard arguments is whether the appellants suit was filed within time. Admittedly the suit was instituted almost 5 years after the breaches of contract and as such it was prima facie time barred. The learned counsel for the appellant, however, places reliance on two provisions of law, viz. those contained in Sec. 37 of the Indian Arbitration Act X of 1940 and Sec. 14 of the Limitation Act.
7. The relevant portion of sub-sec. (5) of Sec. 37 of the Arbitration Act runs as follows:—
“Where the Court orders that an award be set aside…. the period between the, commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed by the Indian Limitation Act, 1908, for the commencement of the proceedings (including arbitration) with respect to the difference referred.”
8. It will appear from the language of this sub-section that a certain period is to be excluded in the event of an award being set aside. The later end of this period is the date of the order of the court setting aside the award. The earlier end is described as the date of the “commencement of the arbitration”. This phrase is defined under Sec. 37(3) as follows:—
“For the purposes of this section and of the Indian Limitation Act, 1908, an arbitration shall be deemed to be commenced when one party to the arbitration agreement serves on the other parties thereto a notice requiring the appointment of an arbitrator, or where the arbitration agreement provides that the reference shall be to a person named or designated in the agreement, requiring that the difference be submitted to the person so named or designated.”
9. It is apparent from a plain reading of the language of this sub-section that the arbitration does not commence unless a notice is served by one party on the other requiring him either to appoint an arbitrator or, where an arbitrator has already been agreed upon, calling upon him to submit the difference to him. In the present case, the arbitrator had been agreed upon and that was the National Chamber Arbitration Board. The arbitration could not therefore commence unless a notice was served by the appellant on the respondent calling upon him to submit the difference to the aforesaid Board. The language of the statute leaves no room for doubt that such a notice should be served by one party on the other. In the present case the appellant made an ex parte submission to the aforesaid Board and the Board issued notice to the respondent. That is not the same thing as service of a notice by the appellant on the respondent if the named arbitrator sends a notice to one party, that is not a compliance with the provisions of sub-sec. (3) of Sec. 37. This sub-section contemplates, as already stated, that the notice should be served on one party by the other party and not by the arbitrator.
10. This means that there was, in the present case, no commencement of arbitration or, to put it otherwise, the period which could possibly be excluded under sub-sec. (5) of Sec. 37 did not in fact commence to run. The result therefore is that the appellant cannot claim the benefit of Sec. 37 and no period can be excluded under that section.
11. Coming now to Sec. 14 of the Limitation Act, one finds that before a plaintiff can take advantage of the provisions of that section he has to prove, inter alia that he had been prosecuting the former proceedings “with due deligence.” In the present case, this element is totally missing. The mere circumstance that the appellant never cared to serve a single notice on the respondent makes it clear beyond doubt that he was not prosecuting the proceedings before the arbitrator “with due deligence.” Therefore, even if it be assumed in his favour that all other ingredients of Sec. 14 exist and that the said section is applicable to arbitration proceedings, he cannot get the benefit of that section.
12. The result is that the suit was time barred and was rightly dismissed on the ground of limitation. The appeal fails and is hereby dismissed with costs. Leave to file a Special Appeal is refused.
13. Appeal dismissed.