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Decided on;IS*** May,2013 F.A.O.(OS)No.261 of2009
MMTC LTD(INDIA) Appellant
Through: Mr.J.P.Sengh,Senior Advocate with Ms.Padma Priya,Ms.Meenakshi Sood, Mr.SumeetBatra& Ms.Ankita Gupta, Advocates.
Through: Mr.Dharmendra Rautray,Ms.Ankit Khushu& Ms.Yashika Vats,Advocates.
HON'BLE MR.JUSTICE NAJMIWAZIRI S.RAVINDRA BHAT.J.(ORAL)
JUDGMENT
1. The present appeal questions the judgment and order ofthe learned Single Judge dated 16.3.2009. By that order, the learned Single Judge proceeded to treat the request of the respondent (hereinafter called the petitioner) as an application under Section 14(1)of the Arbitration Act, 1940thereafter also condoned the delay in filing the suit.
2. Brief facts of the case are that the petitioner had invoked an arbitration clause in terms ofwhich the Sole Arbitrator was appointed under 2013:DHC:8001-DB the aegis of the International Chamber of Commerce. The arbitration proceedings have been held in terms ofthe ICC rules; they culminated an award dated 17.2.2000. The petitioner filed execution proceedings,i.e.,Ex.
3. In these circumstances, it appears that the appellant filed its reply to LA. No.1708/2002, i.e., the application seeking condonation of delay, on 6.3.2007 contesting that'sufficientcause'existed forcondonation ofdelay.
4. The appellant had contended that the proceedings under Section 17 were not maintainable. It had argued before the learned Single Judge that since the petitioner did not disclose any authority-express or implied-for filing the award under Section 14(2),the proceedings for seeking to make the award rule ofcourt were not maintainable. It was urged in this regard that the original award itself was not a part of the proceedings in Suit NO.379-A/2002. In this regard, the petitioner had relied upon the decision reported as Secretary to Government of Karnataka & Anr. Vs. V. Harishbabu;(1996)5SCC400. Additionally,the appellant contended that the delay in filing Section 17 should not be condoned since the petitioner had not taken bona fide steps, a condition precedent to the exercise of FAO(OS)No.261/2009 Page3of14 ">1 discretion under Section 14 ofthe Limitation Act in condoning the delay. The learned Single Judge by the impugned judgment accepted the contentionofthe appellantthattheawardcould havebeenfiled in aproperly constituted proceedings only with the authority ofthe Arbitrator and could not have been made rule of court unless the procedure prescribed under Section 14 ofthe 1940 Act wasfollowed. The court also concluded thatthe petitioner had not shown such authority. However,the court granted the reliefofcondoning the delay observing that the original award had already come on record in the execution proceedings i.e., Execution Petition NO. 181/2000, which had been assimilated in the later Section 17 proceeding, i.e.,SuitNo.379-A/2002.
5. Taking into account the entire circumstances,the court condoned the delay and thereafter proceeded to hear the requestfor makingthe award rule ofcourton merits along with the objections ofthe appellant.
6. It is argued on behalfofthe appellant by Mr.J.P. Sengh,the learned senior counsel thatthe approach and order ofthe learned Single Judge is not sustainable in law. He placed reliance upon the decision of the Supreme Courtin V. Harishbabu's case{supra)to state that the mere circumstance of FAO(OS)No.261/2009 Page4of14 one ofthe litigants approaching the court and filing the award did not vest thecourtwithjurisdictiontodeal withit. Learned counselstressed uponthe statutory mandate in Section 14 of the 1940 Act and contended that the statute envisions only 2 situations whereby the original award of the proceedingscould betaken onrecord. Thefirstis wherethe Arbitratorfiles the award pursuanttothe requestby one ofthe parties and second would be where the Arbitrator is called upon by the court to place the award on its record in a properly constituted proceeding.
7. It was urged thatin the presentcase,neither did the Arbitratorfilethe original award nor was a request made for bringing on record the proceedings ofthe ICC and in the circumstances,the learned Single Judge could not have taken cognizance ofthe matter at all in proceeding under Section 17. Learned counsel also relied upon the decision reported in Koneru Venkata Subbaiah vs. Koneru Venugopal & Ors.; 2001 (3) APLJ
256. It was urged that a party to the arbitration agreement has to make an application under Section 14 and not directly approach the court under Section 17 to make the award a rule ofthe court. Counsel also emphasized upon the consequence ofthe limitation period prescribed under Article 119 ofthe Limitation Actexpiring and stated that in the facts and circumstances FAO(OS)No.261/2009 Page5of14 ofthis case,the petitioner did not explain the delay ofalmost two years in filing the award,under Section 17.
8. To say that the court should not have exercised its discretion and condone the delay under Section 14 ofthe Limitation Act,learned counsel forthe appellant relied upon the decision reported in Deena(Dead)through LRs. Vs. Bharat Singh (Dead) through LRs. & Ors.: AIR 2002 SC 2768 wherethe Supreme Court held asfollows "15. The mainfactor which would influence the Court in extending the benefit of Section 14 to a litigant is whether the prior proceeding had been prosecuted with due diligence and goodfaith. The party prosecuting the suit in goodfaith in the court having no jurisdiction is entitled to exclusion ofthatperiod. The expression 'good faith'as used in Section 14 means "exercise ofdue care and attention". In the context ofSection 14 expression 'goodfaith' qualifies prosecuting the proceeding in the Court which ultimately isfound to have no Jurisdiction. The finding as to good faith or the absence of it is a finding offact."
9. Learned counsel also relied upon the judgment reported as Rabindra Nath Samuel Dawson vs. Sivakasi & Ors.; AIR 1972 SC 730. where the court set out certain parameters to determine whether an earlier proceedings is prosecuted in'good faith' as to warrant due exercise ofjurisdiction under Section 14 ofthe Limitation Act. In this context, counsel urged that the FAO(OS)No.261/2009 Page6of14 ^0 petitioner was well aware ofthe factthat its earlier proceeding under Section 36 ofthe Arbitration and Conciliation Act, 1996 was not maintainable and yetchose to keep it on the file ofthe courtfor abouttwo years,after which it withdrew the same,for facing any adverse order on the maintainability. It was submitted that this conduct disentitled it to the reliefofcondonation of delay and assailed that the impugned judgment and order of the learned Single Judge requiresto be set aside.
10. Counsel for the petitioner(respondent in this case)submitted that the initial mistake in preferring an application under Section 36 was on account ofthe unsettled position in law. He highlighted the fact that the proper interpretation ofSection 85(2)ofthe 1996 Act got finally settled by the decision in Delhi TransportCorporation Ltd.vs.Rose Advertising(2003)6 see36in2003tillthen,thelaw wasinastateofflux. Sincethe petitioner became aware that the proceedings were covered by the 1940 Act,it took active stepsto withdraw the earlier proceedings i.e.Ex.P.No.181/2000and preferred the Section 17 petition i.e. Suit No.379-A/2002. Counsel submitted thatso farasthe question oforiginal award not being partofthe record or thatthe proceedings under Section 14 not being maintainable are concerned, no such objection was articulated or even urged in the ^ 1 application made by the present appellant under Section 30/33 of the Arbitration Act 1940,i.e., LA.No.353/2003. It was submitted that on the other hand on 23.4.2003,the court made an order which clearly indicated thatthe appellantdid not contestthe requestfor consolidation ofthe earlier proceeding which in turn led to the logical conclusion that the original award had to be considered as an intrinsic part ofSection 17 proceedings i.e. SuitNo.379-A/2002.
11. Learned counsel submitted that in almost identical circumstances,the Allahabad High Courtin HaziRahmetulla vs. Chaudhari VidyaBhusan;MR 1963Allahabad602,held thatproceedings under Section 17ofthe 1940 Act were maintainable, if no objection had been voiced on behalfofthe other party, in the pleadings. Learned counsel particularly relied upon the following observations
FAO(OS)No.261/2009 Page8of14 powers- conferredon the Court underSection 17. x)axxxxxcxxxa:
11. The question whetheraparty hadthe authority of the umpire or the arbitrator tofile the award in Court as his agentor on his behalfwas a question offactandas all questions offact, it had to be determined on the evidence and circumstances ofeach particular case. As wepointed out earlier, in this particular case, we find that the originalaward had beenfiled along with the record ofall the proceedings taken before the Arbitrators by Rahmatullah in the Court. We also find that the other party never made any objection as to the competence of Rahmatullah tofile the award in Court. No question was raised as to there being any want of authority in Rahmatullahfor his having acted in the manner in which he did act. The Arbitrators were examined in the case and it was never suggested to them that Rahmatullah had surreptitiouslyfiled the award in Court, or atany rate, he had done so without their specific authority. The Arbitrators came to give evidence and they supported the award. The opposite-party challenged the award on all possible grounds but not on this ground, namely, that the award had not been properlyfiled. Further, the point was neither raised before the Civil judge nor before the learned single Judge who made this reference to us. Therefore, in such circumstances it could not but be held that the award when it wasfiled by Rahmatullah wasfiled with the authority of the Arbitrator and that the award could be acted upon by the Court for the purpose of makinga decree on its basis."
12. Learned counsel submitted that on the question of exercise of discretion under Section 14, the learned Single Judge had applied the FAO(OS)No.261/2009 Page9of14 principles properlyand condonedthe delay infilingofthe applicationi.e.in SuitNo.379-A/2002.
13. Counsel also additionally relied upon thejudgmentreported asRadha Kishen vs. Madho Krishna & Anr.; AIR 1952Allahabad856to submit that the baroflimitation did notapplyinthe factsand circumstances ofthiscase.
14. From the discussion in the preceding portion of the judgment, it is evidentthatthe controversy in the presentappeal is narrow,i.e., whetherthe award is said to have been filed. Atthe outset,this court notices that in the application/objections preferred by the appellantunder Section 30/33 ofthe 1940 Act(LA.No.353/2003),noobjection astothe questionoflimitation or even to the maintainability of the award and the manner in which it was brought on the record has been voiced. In these circumstances, it seems some\\hat strange that the appellant was allowed to urge the ground that it did to say thatthe entire proceedings were not maintainable. Having regard to these facts, the court is of the opinion that the reasoning and the observations in Hazi Rahmetulla's case {supra)apply squarely to the facts and circumstances ofthe case. Nevertheless, since the appellant did place reliance upon V. Harishbabu's case {supra) as well as the decision in FAO(OS)No.261/2009 10of14 Koneru's case{supra),this court would deal with the same.
15. In V. Harishbabu's case(supra),the Supreme Court stated that ifthe Arbitrator himselffiles an award in court,the latter is bound to give notice to the parties in that regard and no decree can be made unless such notice is served upon the other party and the period of30 days thereafter has lapsed. In that proceeding, to follow the same trail of thought, the court held as follows "Section 14(2)ofthe Actreads: The arbitrators or umpire shall, atthe requestofanyparty to the arbitration agreementor anyperson claiming under suchparty or ifso directed by the courtand upon payment ofthefees and charges due in respect ofthe arbitration and award and of the costs and charges offiling the award, cause the award or a signed copy ofit, together with any depositions and documents which may have been taken andproved before them,to befiled in court, and the courtshallthereupon give notice to theparties ofthefiling ofthe award."
16. In thatreported decision,the successful litigant,thatis,the respondent had filed a petition under Section 14 of the Arbitration Act, 1940. The respondent filed a petition under Section 14 ofthe Arbitration Act seeking for claiming that the award should be made rule of court. Notice ofthe FAG(OS)No.261/2009 Page II of14 ->3 petition wasissued bythe courttothe appellantand otherson 24.4.1993 and made returnable on 22.6.1993. In the meanwhile, the Arbitrator himself filed the original award before the concerned court along with the proceedings and indicated documents. The GovernmentPleader,thatis,the appellant's representative appears to have made an endorsement and accepted the notice stating "seen,subject to objections". However,formal notice in the proceedings arising outofthe award filed by the Arbitrator had not been issued. It was in that contextthatthe court observed that where the courtissues notice upon an award filed by the Arbitrator,the question as to expiry oftime would not arise until the period of30 days lapsed. In the facts ofthe case,the court was ofthe opinion that since the original award had been filed on the record by the Arbitrator, in the absence ofany notice upon it,the period of30days could not be said to have commenced.
17. Jn the present case, however, the facts are entirely different. The original award apparently was made available to both the parties. It is notin dispute that one of those signed awards is a part of the proceedings on record i.e. in Ex. P. No.181/2000. Even though the petitioner withdrew those proceedings, nevertheless the original award is on the record ofthe court as has been included as a part of Suit No.379-A/2002. Furthermore, the appellantinthiscase never objected totaking on record the said awardas is evident in the order of the court in that regard made in LA. No.1718/2002 on 23.4.2003. Even in the objections,i.e.,LA.No.353/2003, the appellantdid notobjecttothe procedure adopted.
18. Having regard to these circumstances,the court is ofthe opinion that the proceedings in the present case initiated after the withdrawal ofSection 36(ofthe 1996 Act)on 5.2.2002,were maintainable and in order.
19. As regards the second question, i.e., whether the petitioner had disclosed 'sufficient cause' in approaching the court belatedly,this court is conscious ofthe circumstances thatthe primary discretion to decide whether to grantreliefunder Section 14or notto grant such a relief,is with the court of first instance. Sans an unreasonable or manifestly erroneous approach, this court sitting in appeal would be circumspect and slow in upsetting such a determination. Furthermore, the decisions cited by the appellant, i.e., Deena's case {supra)and Rabindra Nath's case {supra)nowhere indicate a proposition contrary to the ultimate decision of the learned Single Judge. The petitioner mistakenly assumed that the award in this case had the force of a decree and sought to have the same executed by initiating execution FAO(OS)No.261/2009 Page 13of14 proceedings. It is also a matter ofcommon knowledge that atthattime,the correct interpretation of Section 85 ofthe Arbitration & Conciliation Act, 1996 had not been settled.
20. Having regard to these circumstances, the exercise of discretion in condoning the delay under Section 14 by proceeding to hold that the petitioner had been prosecuting its case in a wrong forum by adopting a wrong procedure,bonafide,cannot be characterized as manifestly erroneous warranting interference by this court in these proceedings.
21. In view ofthe above conclusion, this court is ofthe opinion that the presentappeal lacksin merits and is accordingly dismissed. MAY 15,2013 *AA' S.RAVINDRA BHAT [JUDGE] NAJMIWAZIRI [JUDGE]