IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF AUGUST, 2019 PRESENT THE HON’BLE MRS. JUSTICE B.V.NAGARATHNA AND THE HON'BLE MR.JUSTICE ASHOK G. NIJAGANNAVAR M.F.A. No.3294 OF 2015 (AA) C/w.
M.F.A. No.3987 OF 2015 (AA) IN M.F.A. No.3294 OF 2015:
BETWEEN:
THE MYSORE URBAN DEVELOPMENT AUTHORITY, J.L.B.ROAD, MYSORE-570 005, REPRESENTED BY ITS COMMISSIONER. …APPELLANT (BY SRI S VIJAY SHANKAR, SENIOR COUNSEL FOR; SRIYUTHS P.S.MANJUNATH AND T.P.VIVEKANANDA, ADVOCATES) AND:
1. M/S KMC CONSTRUCTIONS LIMITED, MCH NO.555, ARORA COLONY, ROAD NO.3, BANJARA HILLS, HYDERABAD – 500 064, (ADDRESS AS STIPULATED IN THE CONTRACT AGREEMENT).
REPRESENTED BY CHIEF GENERAL MANAGER, SHRI D.J.NEHRU, M/S KMC CONSTRUCTIONS LTD., DOOR NO.1-80/40/SP/58-65, SHILPA HOMES LAYOUT, NEAR NASR BOYS SCHOOL, GACHIBOWLI, HYDERABAD – 500 033, ANDHRA PRADESH (PRESENT OFFICIAL ADDRESS FOR CORRESPONDENTS) AND REPRESENTED BY PROJECT DIRECTOR, SHRI P.MADHUSUDHANA REDDY, NO.1763, JUDICIAL LAYOUT, 7TH CROSS, 7TH MAIN, YELAHANKA, BANGALORE – 560 064.
2. DR.WOODAY P KRISHNA, SOLE ARBITRATOR, CHARTERED ENGINEER, 39/1, 8TH CROSS, 13TH MAIN, RAJAMAHAL VILAS EXTENSION, SADASHIVANAGAR, BANGALORE – 560 080. …RESPONDENTS (BY SRI MURALIKRISHNA, K.R, ADVOCATE FOR CAVEATOR/RESPONDENT NO.1;
VIDE ORDER DATED 29.01.2016 – NOTICE TO R2 DISPENSED WITH) **** THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 37(1)(A) OF THE ARBITRATION AND CONCILIATION ACT, AGAINST THE ORDER DATED: 02.03.2015 PASSED ON IA NO.1 IN A.S.NO.06/2014 ON THE FILE OF THE VI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU CITY, ALLOWING IA NO.1 FILED UNDER SECTION 34(3) OF THE ARBITRATION AND CONCILIATION ACT.
IN M.F.A. No.3987 OF 2015: BETWEEN:
THE MYSORE URBAN DEVELOPMENT AUTHORITY, J.L.B.ROAD, MYSORE-570 005, REPRESENTED BY ITS COMMISSIONER. …APPELLANT (BY SRI S VIJAY SHANKAR, SENIOR COUNSEL FOR; SRIYUTHS P.S.MANJUNATH AND T.P.VIVEKANANDA, ADVOCATES) AND:
1. M/S KMC CONSTRUCTIONS LIMITED, MCH NO.555, ARORA COLONY, ROAD NO.3, BANJARA HILLS, HYDERABAD – 500 064, (ADDRESS AS STIPULATED IN THE CONTRACT AGREEMENT).
REPRESENTED BY CHIEF GENERAL MANAGER, SHRI D.J.NEHRU, M/S KMC CONSTRUCTIONS LTD., DOOR NO.1-0/40/SP/5-65, SHILPA HOMES LAYOUT, NEAR NASR BOYS SCHOOL, GACHIBOWLI, HYDERABAD – 500 033, ANDHRA PRADESH (PRESENT OFFICIAL ADDRESS FOR CORRESPONDENTS) AND REPRESENTED BY PROJECT DIRECTOR, SHRI P.MADHUSUDHANA REDDY, NO.1763, JUDICIAL LAYOUT, 7TH CROSS, 7TH MAIN, YELAHANKA, BANGALORE – 560 064.
2. DR.WOODAY P KRISHNA, SOLE ARBITRATOR, CHARTERED ENGINEER, 39/1, 8TH CROSS, 13TH MAIN, RAJAMAHAL VILAS EXTENSION, SADASHIVANAGAR, BANGALORE – 560 080. …RESPONDENTS (BY SRI MURALIKRISHNA, K.R, ADVOCATE FOR CAVEATOR/RESPONDENT NO.1;
VIDE ORDER DATED 29.01.2016 – NOTICE TO R2 DISPENSED WITH) THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 37(1)(B) OF THE ARBITRATION AND CONCILIATION ACT AGAINST THE ORDER DATED: 22.10.2013 PASSED ON IA NO.3 IN ARBITRATION SUIT No.3/2013 ON THE FILE OF THE PRINCIPAL DISTRICT JUDGE, MYSORE, ALLOWING IA NO.3 FILED UNDER SECTION 42 OF THE ARBITRATION AND CONCILIATION ACT.
THESE APPEALS COMING ON FOR ADMISSION THIS DAY, NAGARATHNA J., DELIVERED THE FOLLOWING:
JUDGMENT Though these appeals are listed for admission, with the consent of learned counsel for both sides, they are heard finally. Both the appeals have been filed under Section 37 of the Arbitration and Conciliation Act, 1996.
2. MFA No.3294/2015 has been filed by the Mysore Urban Development Authority (‘MUDA’ for the sake of convenience) assailing order dated 02.03.2015 passed by the VI Additional City Civil & Sessions Judge, Bengaluru City on I.A.Nos.1 and 2 in A.S.No.6/2014. By the said order, the said trial Court has allowed the application I.A.No.1 filed under Section 34(3) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”, for the sake of brevity) filed by defendant No.1 therein and I.A.No.2 filed by the plaintiff under Section 14 of the Limitation Act, 1963 has been allowed-in-part. The trial Court has excluded the period from 20.05.2013 to 22.10.2013 in computing the period of limitation under Section 34 of the Act while it has refused to exclude the period between 23.10.2013 and 13.01.2014 in computing the period of limitation for the purpose of filing of the application under Section 34 of the Act. In the circumstances, the suit A.S.No.6/2014 has been dismissed as barred by time.
3. The precursor to A.S.No.6/2014 is A.S.No.3/2013, which was filed by the appellant-MUDA before the Court of Principal District Judge at Mysuru, which was also filed under Section 34 of the Act, seeking setting aside the award passed by defendant No.2 dated 15.04.2013 directing the appellant-plaintiff to pay a sum of Rs.9,49,61,285/- to defendant No.1. By order dated 22.10.2013, A.S.No.3/2013 was dismissed as not maintainable for want of territorial jurisdiction by allowing I.A.No.3 filed under Section 42 of the Act and consequently, ordering the return of the plaint for presentation before the appropriate forum. Being aggrieved by the order dated 22.10.2013, MFA No.3987/2015 has been filed. There is a delay of 465 days in filing the appeal. Hence, I.A.No.1/2015 has been filed seeking condonation of delay.
4. For the sake of convenience, the parties shall be referred to in terms of their status before the trial Court.
5. The appellant-plaintiff filed A.S.No.3/2013 at the trial Court at Mysuru under Section 34 of the Act seeking setting aside of the award passed by defendant No.2 on 15.04.2013 directing the plaintiff to pay a sum of Rs.9,49,61,285/-. Defendant No.1 succeeded in the arbitration proceedings, which was conducted by defendant No.2-Sole Arbitrator.
6. In response to the suit summons and Court notices, defendant No.1 appeared and filed its written statement and issue No.5 was raised in the suit as a preliminary issue. The said issue was:
“Whether this Court has no territorial jurisdiction to try the suit?”
7. In fact, defendant No.1 also filed an application (I.A.No.3) under Section 42 of the Act seeking dismissal of the suit as not maintainable for want of jurisdiction.
Plaintiff filed detailed objections to I.A.No.3. Arguments were addressed on issue No.5 as well as on I.A.No.3. By order dated 22.10.2013, the trial Court at Mysuru, allowed the application filed by defendant No.1 under Section 42 of the Act (I.A.No.3) and held that the suit filed by the plaintiff was not maintainable for want of territorial jurisdiction and ordered return of the plaint for presentation before the appropriate forum.
8. At this stage itself it may be noted that after the impugned order was passed on 22.10.2013, the plaintiff filed an application seeking certified copy of the said order on 23.10.2013, the copy was received on 26.10.2013. Thereafter, the plaintiff sought for actual return of the plaint on 13.01.2014 and it was returned on the said date by the trial Court at Mysuru. Subsequently, on 17.01.2014, the plaintiff re-presented the plaint before the Court at Bengaluru. The plaint was renumbered as A.S.No.6/2014.
9. In the aforesaid suit, two applications were filed. I.A.No.1 was filed by defendant No.1 under Section 34(3) of the Act seeking dismissal of the suit as time barred and not maintainable, while I.A.No.2 was filed by plaintiff seeking exclusion of the period of 237 days spent in prosecuting the suit A.S.No.3/2013 on the file of Principal District Judge, Mysuru, which plaint was returned by the said Court and thereafter was presented before the Court at Bengaluru on 17.01.2014. By the impugned order dated 02.03.2015, the trial Court at Bengaluru allowed I.A.No.1 filed by defendant No.1 and partly allowed I.A.No.2 filed by the plaintiff and consequently excluded the period from 20.05.2013 to 22.10.2013 in computing the period of limitation in filing the application under Section 34 of the Act while refusing to exclude the period from 23.10.2013 to 13.01.2014. At this stage itself it may be mentioned that the period subsequent to 13.01.2014 has not been considered by the trial Court at Bengaluru. In the circumstances, the plaintiff has preferred two appeals as detailed above.
10. We have heard Sri.S.Vijaya Shankar, learned senior counsel for the appellant and Sri.Muralikrishna K.R., learned counsel for caveator/respondent No.1; notice to respondent No.2-Arbitrator has been dispensed with vide order dated 29.01.2016. We have perused the material on record.
11. Learned Senior Counsel for the appellant contended that the appellant herein has filed two appeals being aggrieved by the order passed by the Principal District Judge at Mysuru as well as the VI Additional City Civil & Sessions Judge at Bengaluru. He submitted that respondent No.1 and appellant-MUDA had entered into an agreement in the nature of works contract viz., construction of ring road (Mysuru-Nanjangud portion of ring road). The appellant-MUDA is based in Mysuru and the dispute arose between the parties, the arbitration proceedings were no doubt conducted in Bengaluru, but being aggrieved by the award passed by the Arbitrator, the appellant sought setting aside of the same before the District Court at Mysuru. The District Court at Mysuru considered the application filed by respondent No.1- defendant No.1 in A.S.No.3/2013 and has allowed the said application. The said application was filed under Section 42 of the Act. He contended that the application filed by defendant No.1 under Section 42 of the Act was wholly misconceived and that the Principal District Judge at Mysuru misdirected himself in holding that the District Court at Mysuru did not have the territorial jurisdiction to adjudicate upon A.S.No.3/2013.
12. He next submitted that when the application was filed by defendant No.1 under Section 42 of the Act and the same was allowed, the learned District Judge at Mysuru did not intimate to the plaintiff under Order VII Rule 10A(1) of the Code of Civil Procedure, 1908, (hereinafter referred to as ‘CPC’, for the sake of brevity) about his decision to return the plaint. Our attention was drawn to the original plaint filed in A.S. No.3/2013 to contend that the date of return of the plaint is also not mentioned while other details have been mentioned. In the absence of any date being mentioned with regard to return of the plaint, there was no certainty in the matter. He submitted that it was only on 13.01.2014 that there was actual return of the plaint by the District Court at Mysuru and three days thereafter i.e., on 17.01.2014, the plaint was re-presented before the City Civil Court at Bengaluru and that was numbered as A.S. No.6/2014.
13. He next submitted that the District Court at Bengaluru was not right in refusing to exclude the period between 23.10.2013 and 13.01.2014 under Section 14 of the Limitation Act as, for the entire period the plaintiff was prosecuting A.S.No.3/2013 bona fide before the District Judge at Mysuru and it is only at the instance of defendant No.1 that the suit was held to be not maintainable for want of territorial jurisdiction by the learned District Judge at Mysuru and consequently, plaintiff sought return of the plaint on 13.01.2014 and re-presented the plaint before the City Civil Court at Bengaluru on 17.01.2014.
14. He contended that there are two flaws in the entire proceeding, and the appellant herein cannot be held to be at fault for the same, rather the appellant has been put to prejudice. Firstly, there is no compliance of the mandatory procedure contemplated under Order VII Rule 10A(1) of the CPC in the instant case in as much as there was no intimation by the District Court at Mysuru to the appellant-plaintiff about its decision to return the plaint. But, on the request made by the appellant-plaintiff, the plaint was returned. Secondly, it is not mandatory for the plaintiff to file an application to seek actual return of the plaint, but it is the duty of the District Court, on intimation to the plaintiff to endorse the date on which the plaint would be actually returned and thereafter it is the responsibility of the plaintiff to seek actual return and re- present the same before the Court of competent jurisdiction. He contended that if the plaintiff is aggrieved by the order of return of the plaint made by the District Court, Mysuru, the plaintiff would have ninety (90) days which is the limitation period to file an appeal against the order under Order XLIII Rule 1(a) of CPC before the High Court and in the instant case, in the absence of District Court intimating the plaintiff about its decision to return the plaint nor indicating in the plaint the date on which it was returned to the plaintiff, there was no fault on the part of the plaintiff in seeking its actual return on 13.01.2014 which is well within the period of limitation. In fact, the plaintiff sought for actual return of the plaint on 13.01.2014, in the absence of there being any communication from the trial Court. On the plaint being returned on the same day with an endorsement by the learned District Judge, on 17.01.2014, the same was re- presented and numbered as A.S. No.6/2014 before the City Civil Court at Bengaluru. The City Civil Court at Bengaluru ought to have excluded the entire period from 23.10.2013 up to 16.01.2014 under Section 14 of the Limitation Act as the entire period was spent bona fide by the plaintiff in prosecuting suit before the Court at Mysuru, that the plaintiff was not expected to seek the actual return of the plaint on the day the impugned order was passed by the District Court at Mysuru, that the expression used in Order VII Rule 10A(2) of CPC is ‘may’ and it gives an option to the plaintiff to make an application. But in the absence of any application being made by the plaintiff, duty is cast on the Court which orders for return of the plaint, to endorse the date on which the plaint is actually returned, as well as the date on which it has to be filed before the Court of competent jurisdiction by giving an intimation about the same to the plaintiff and the defendant. In the instant case, the Court has not complied with the mandatory procedure and for that appellant- plaintiff cannot be blamed or put to a disadvantage. In support of his submissions, he placed reliance on certain decisions which shall be discussed later.
15. Per contra, learned counsel for respondent No.1 supported the impugned orders of the District Judge at Mysuru as well as the City Civil Court at Bengaluru and contended that there is no merit in these appeals. He drew our attention to Section 34(3) of the Act and contended that Section 34 of the Act prescribes the limitation period for filing of the suit seeking setting aside of the award made by an Arbitrator. No doubt, A.S. No.3/2013 was filed in time but the plaintiff filed the said suit before a Court having no jurisdiction; in the circumstances, the District Court at Mysuru, rightly held that the suit was not maintainable before the said Court for want of territorial jurisdiction and ordered for return of plaint. The said order was passed on 22.10.2013. Though the plaintiff obtained certified copy of the said order on 26.10.2013, plaintiff did not take steps by filing an application under Order VII Rule 10A(2) of CPC. If such application was filed, then the District Court would have issued an endorsement with regard to return of the plaint as well as the date on which the plaint ought to have been presented before the Court of competent jurisdiction. The same not having been complied with by the plaintiff and not taking any steps till 13.01.2014 would mean that there was delay and laches on the part of the plaintiff in taking steps for seeking actual return of the plaint and re- presenting before the competent Court of jurisdiction at Bengaluru. The City Civil Court at Bengaluru has rightly not excluded the period from 23.10.2013 up to 13.01.2014 and the order passed by the City Civil Court at Bengaluru is also just and proper.
16. Learned counsel for respondent No.1 while highlighting on the conduct of the appellant herein contended that respondent No.1 had filed execution petition seeking execution of the award before the District Court at Mysuru and also filed caveat petitions before the City Civil Court at Bengaluru, as it is the Court at Bengaluru, which had the territorial jurisdiction to adjudicate upon an application or a suit filed under Section 34 of the Act in the instant case and therefore, they were reminders to the appellant-plaintiff to take steps in accordance with law. There is no merit in the appeals filed by the appellant-plaintiff and the same may be dismissed. In support of his submissions, learned counsel for respondent No.1 has placed reliance on certain judgments, particularly touching upon the conduct of the plaintiff in the instant case.
17. By way of reply, learned senior counsel instructed by the learned counsel for the appellant-plaintiff contended that having regard to Order VII Rule 10A(5) of CPC, the plaintiff has an option to file an application under sub-rule (2); that if an application is filed by the plaintiff and an order is made therein, under sub-rule (5) the plaintiff is estopped from filing an appeal challenging the order for return of the plaint made by the Court not having the competent jurisdiction. That in order to file such an appeal, the limitation period is ninety (90) days; the plaintiff could contemplate, take legal advice and then take a decision as to whether the appeal against the order of return of the plaint made by a Court be filed or to comply with the said order by making an application under Order VII Rule 10A(2) of CPC. Even if the plaintiff does not seek to file an appeal against the order passed under sub-rule (1), it is not necessary or mandatory on the part of the plaintiff to seek such return of the plaint. It was contended that a duty is cast on the Court to intimate to the plaintiff about its decision to return the plaint and thereafter to endorse on the plaint, the date on which the plaint would be returned and the date by which it has to be re-presented before the Court of competent jurisdiction. Learned senior counsel contended that in the instant case there was neither an express intimation to the plaintiff nor was there any date indicated in the plaint by the learned District Judge at Mysuru as to on or before which date the plaint had to be re-presented before the Court of competent jurisdiction at Bengaluru. In the absence of such intimation by the learned District Judge at Mysuru, a memo was filed by the plaintiff seeking actual return of the plaint on 13.01.2014 and that the said memo was filed within a period of limitation i.e., ninety days, for filing of an appeal. The plaintiff decided to seek actual return of the plaint since at that point of time the plaintiff decided to abide by the order of return of the plaint made by the District Court at Mysuru. The plaint was returned on the same day, but again without indicating the date on which the same has to be re-presented before the competent Court at Bengaluru and in the instant case, it was re- presented within four days thereafter i.e., on 17.01.2014. Therefore, the steps taken by the plaintiff were bona fide as the plaintiff was bona fide prosecuting the matter till 17.01.2014, when the plaint was re-presented before the City Civil Court at Bengaluru and hence, the said Court ought to have excluded the entire period up to 17.01.2014.
18. Having heard learned senior counsel and learned counsel for the appellant and learned counsel for respondent No.1, the points that would arise for our consideration are:
“1. Whether the City Civil Court at Bengaluru was right in holding that A.S.No.6/2014 filed by the plaintiff was time barred under Section 34(3) of the Act?
2. Whether the District Court at Mysuru was right in holding that the suit A.S.No.3/2013 filed by the plaintiff was not maintainable for want of territorial jurisdiction and therefore, the return of the plaint was ordered?
3. What order?”
19. The detailed narration of the facts and contentions would not call for a re-iteration. However, before proceeding, it would be useful to extract Section 34(3) of the Act and Order VII Rule 10 and Order VII Rule 10A of CPC. They read as under:
Section 34 of the Arbitration and Conciliation Act, 1996:
”34. Application for setting aside arbitral award.-(1) xxx (2)xxx (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.”
Order VII Rule 10 of CPC:
“10. Return of Plaint - (1) Subject to the provisions of Rule 10A, the plaint shall at any stage of the suit be returned to be presented to the Court in which the suit should have been instituted.
Explanation – for the removal of doubts, it is hereby declared that a Court of appeal or revision may direct, after setting aside the decree passed in a suit, the return of the plaint under this sub-rule.
(2) Procedure on returning plaint – On returning a plaint, the Judge shall endorse thereon the date of its presentation and return, the name of the party presenting it, and a brief statement of the reasons for returning it.”
x x x Order VII Rule 10A of CPC:
“10A. Power of Court to fix a date of appearance in the Court where plaint is to be filed after its return.- (1) Where, in any suit, after the defendant has appeared, the Court is of opinion that the plaint should be returned, it shall, before doing so, intimate its decision to the plaintiff.
(2) Where an intimation is given to the plaintiff under sub-rule (1), the plaintiff may make an application to the Court – (a) specifying the Court in which he proposes to present the plaint after its return.
(b) praying that the Court may fix a date for the appearance of the parties in the said Court, and (c) requesting that the notice of the date so fixed may be given to him and to the defendant.
(3) Where an application is made by the plaintiff under sub-rule (2), the Court shall, before returning the plaint and notwithstanding that the order for return of plaint was made by it on the ground that it has no jurisdiction to try the suit-
(a) fix a date for the appearance of the parties in the Court in which the plaint is proposed to be presented, and (b) give to the plaintiff and to the defendant notice of such date for appearance.
(4) Where the notice of the date for appearance is given under sub-rule (3), -
(a) it shall not be necessary for the Court in which the plaint is presented after its return, to serve the defendant with a summons for appearance in the suit, unless that Court, for reasons to be recorded, otherwise directs, and (b) the said notice shall be deemed to be a summons for the appearance of the defendant in the Court in which the plaint is presented on the date so fixed by the Court by which the plaint was returned.
(5) Where the application made by the plaintiff under sub-rule (2) is allowed by the Court, the plaintiff shall not be entitled to appeal against the order returning the plaint.”
20. Section 34(3) of the Act states that an application for setting aside may not be made after three months have elapsed from the date on which the party making that application has received the arbitral award or, if a request has been made under Section 33 of the Act, from the date on which that request has been disposed by the Arbitral Tribunal. Thus, the period of limitation prescribed is three months from the date of receiving of the arbitral award. The proviso, however, extends the said limitation period by a further period of thirty days but not thereafter. In such a case, the applicant or the plaintiff would have to convince the Court that he was prevented by sufficient cause from not filing an application or the suit seeking setting aside of the award within three months and therefore, it was filed in the extended period of thirty days.
21. At this stage itself it may be mentioned that there is no controversy with regard to filing of A.S. No.3/2013 before the District Court at Mysuru, as the said suit was filed within three months from the date of receipt of arbitral award. The arbitral award was made on 15.04.2013 and the suit was filed on 20.05.2013. After the appearance of defendant No.1 in the said suit, an application was filed under Section 42 of the Act in order to contend that the District Court at Mysuru did not have the territorial jurisdiction to try the suit. The said application was considered by the District Court at Mysuru in the light of Order VII Rule 10A of CPC.
22. Order VII Rule 10(1) of CPC states that subject to the provisions of Rule 10A, the plaint shall at any stage of the suit be returned to be presented to the Court in which the suit should have been instituted. Sub-rule (2) of Rule 10 of Order VII of CPC states that on returning the plaint, the Judge shall endorse thereon the date of its presentation and return, the name of the party presenting it, and a brief statement of the reasons for returning it. Therefore, on a reading of Order VII Rule 10(2) of CPC, it becomes clear that it is a mandatory requirement for the Judge to endorse on the plaint the date of return of the plaint and the brief statement of the reasons for returning it, but Order VII Rule 10 of CPC is subject to Rule 10A.
23. Order VII Rule 10A(1) of CPC states that where, in any suit, after the defendant has appeared, the Court is of the opinion that the plaint should be returned, it shall, before doing so, intimate its decision to the plaintiff.
24. The argument of the learned senior counsel for the appellant is that before the plaint is actually returned, there must be an intimation of its decision to the plaintiff. Of course, learned counsel for respondent No.1 submitted that in the instant case, the return was ordered on an application filed by defendant No.1 and the plaintiff was aware of the same and therefore, it was unnecessary for the Court to have issued another intimation of its decision to the plaintiff as certified copy of the order of return of plaint could have been obtained by the appellant herein.
25. Sub-rule (2) of Order VII Rule 10A of CPC however, states that where an intimation is given to the plaintiff under sub-rule (1), the plaintiff may make an application to the Court-
(a) specifying the Court in which he proposes to present the plaint after its return.
(b) praying that the Court may fix a date for the appearance of the parties in the said Court, and (c) requesting that the notice of the date so fixed may be given to him and to the defendant.
26. Sub-rule (3) of Order VII Rule 10A of CPC states that where an application is made by the plaintiff under sub-rule (2), the Court shall, before returning the plaint and notwithstanding that the order for return of plaint was made by it on the ground that it has no jurisdiction to try the suit-
(a) fix a date for the appearance of the parties in the Court in which the plaint is proposed to be presented, and (b) give to the plaintiff and to the defendant notice of such date for appearance.
27. The object and purpose of sub-rule (2) and (3) of Order VII Rule 10A of CPC is in order to notify the parties and particularly, the defendant in the suit to appear before the Court of competent jurisdiction. In such an event, it would be unnecessary for the Court of competent jurisdiction before which the plaint is re-presented to once again issue notice to the defendant in the suit. The same becomes evident on a reading of sub-rule (4) of Order VII Rule 10A of CPC, which states that where the notice of the date for appearance is given under sub-rule (4), -
(a) it shall not be necessary for the Court in which the plaint is presented after its return, to serve the defendant with a summons for appearance in the suit, unless that Court, for reasons to be recorded, otherwise directs, and (b) the said notice shall be deemed to be a summons for the appearance of the defendant in the Court in which the plaint is presented on the date so fixed by the Court by which the plaint was returned.
28. Hence, on a conspectus reading of rules, sub- rules (1) to (4) of Order VII Rule 10A of CPC would make it evident that when a Court passes an order for return of plaint, a duty is cast on it to intimate its decision to the plaintiff. Order VII Rule 10A of CPC applies to a case where the return of the plaint is ordered after appearance of the defendant and not ex parte as is noted under Order VII Rule 10 of CPC. The object and purpose of Order VII Rule 10A of CPC is to bear in mind the interest of the defendant in order to give notice to the defendant about the decision taken by the Court to return the plaint and also to intimate to the defendant to appear before the Court of competent jurisdiction when the same is re- presented by the plaintiff before the competent Court. But, for implementing that purpose, a duty is cast on the Court, which orders return of the plaint, to formally intimate its decision to the plaintiff. In such an event, on receiving an intimation, the plaintiff may make an application seeking the aforesaid details. But in our view, it is not necessary or mandatory for the plaintiff to make an application as the plaintiff would have to first take a decision as to whether the plaintiff would abide by the order of the Court returning the plaint or exercise his option to file an appeal, the reason being, once an application is made under sub-
rule (2) of Order VII Rule 10A of CPC, the plaintiff’s right to file an appeal is curtailed. This is because sub-rule (5) states where an application made by the plaintiff under sub-rule (2) is allowed by the Court, the plaintiff shall not be entitled to appeal against the order returning the plaint.
29. The object and purpose of sub-rule (5) of Order VII Rule 10A of CPC is that the plaintiff cannot approbate and reprobate or blow hot and cold at the same time. On one hand, plaintiff cannot, on receiving intimation from the Court which has ordered return of the plaint, file an application under Order VII Rule 10A(2) of CPC and on the other hand, also think of filing an appeal against the order passed under sub-rule (1). The plaintiff would have a period of ninety (90) days, which is the period of limitation prescribed under the Limitation Act for filing an appeal against the order seeking return of the plaint. The plaintiff could always examine his legal options, seek advice and then take a decision regarding filling of an appeal. If the plaintiff decides to file an appeal against the order for return of plaint, obviously there would be no application filed by the plaintiff under sub-rule (2) of Rule 10A of Order VII CPC. It is only when the plaintiff decides to abide by the order of the Court, which has ordered the return of the plaint, that he may make an application seeking return of the plaint. Therefore, it is not mandatory for the plaintiff to file an application under sub-rule (2) of Rule 10A when a plaint is ordered to be returned under sub-rule (1) of Order VII Rule 10A CPC.
30. In the instant case, the position appears to be that the plaintiff did not make any application under sub- rule (2) of Rule 10A of Order VII CPC. The plaintiff was possibly weighing his option to file an appeal within the expiry of ninety days and the plaintiff sought actual return of the plaint by making a request on 13.01.2014, which is before the expiry of the aforesaid limitation period. On the said date, the District Court at Mysuru returned the plaint and while actually returning the plaint, the learned District Judge has made the following endorsement on the plaint:
“1) The date of presentation of the plaint:- 20.05.13.
2) By whom presented:- S.Shankara, Advocate.
3) The date of appearance of defts.:-14.06.13 and so on.
4) The date of decision of returning the plaint:- 22.10.13.
5) Brief statement of reasons for returning the plaint:-Territorial Jurisdiction.
6) The Name of the Court, if any to which the plaintiff proposes to present the plaint:- Nil.
7) Whether Court has given notice to the parties to appear before such Court:- No.
Sd/- (13.01.2014) I/c Prl. District and Sessions Judge, Mysore”
31. On a reading of the above, it becomes clear that the name of the Court to which the plaintiff proposed to present the plaint was not mentioned and more significantly no notice was given to the parties to appear on a particular date. Even the defendants-respondents herein were not aware as to the date on which they had to appear before the competent Court at Bengaluru City. Also, there was no specific intimation given by the Court about its decision to return the plaint. It is only when an intimation is given to the plaintiff under sub-rule (1) of Order VII Rule 10A of CPC that the plaintiff could make an application seeking to specify the Court in which he proposes to present the plaint, fixation of the date for appearance of the parties and requesting the notice of the date so fixed be given to him and the defendant so as to appear before the competent Court. When such an application is made and the date is so fixed, the notice of the same shall be given to the plaintiff as well as the defendant to enable both the parties to appear on the said date when the plaint is re-presented before the Court of competent jurisdiction. As already noted that such a procedure is necessitated since both the plaintiff as well as the defendant must be made aware as to when the plaintiff would re-present the plaint before the competent Court and in which Court, they would have to appear. Otherwise, there would be uncertainty in the matter as the plaintiff could re-present the plaint at any time he wished, and the defendant would have no information as to when the plaint has been re-presented. It is in order to bring about certainty in the entire procedure, that law contemplates that the Court, which has ordered for return of the plaint, must intimate the defendant on an application filed by the plaintiff seeking actual return of the plaint.
32. It may be that in the instant case, the plaintiff was aware about the application filed by the defendant, which was in fact opposed by the plaintiff and the impugned order for return of the plaint being made. Nevertheless, express intimation stating that the plaint had been returned had to be given by the Court to the plaintiff since it is a significant and crucial stage in the suit. In the absence of any such intimation, the plaintiff may not make an application under Order VII Rule 10A(2) of CPC. It is only when the intimation is given under sub-rule (1), the plaintiff may make an application under sub-rule (2) after weighing his option to file an appeal against the order of return of plaint or abide by the said order and seek certain specific directions, such as fixation of the date for appearance of parties before the Court of competent jurisdiction as well as the date on or before which the plaint has to be re-presented by making an application under sub-rule (2) of Rule 10A.
33. In the instant case, as already noted, there was no express intimation given by the District Court at Mysuru informing the plaintiff about the return of the plaint. Consequently, the plaintiff did not file any application under Order VII Rule 10A(2) of CPC. The plaintiff was possibly weighing his option regarding filing of an appeal or to abide by the order of the District Court, as, if he had sought for actual return of the plaint, then he would be debarred from filing an appeal.
34. In the instant case, the plaintiff sought for return of the plaint not under sub-rule (2) as there was no intimation given under sub-rule (1) by the Court so as to make application under sub-rule (2) of Rule 10A of Order VII CPC as, such an application could be made by the plaintiff only after receipt of an intimation from the Court which has ordered return of the plaint as it is a mandatory requirement. Moreover, when the plaint was actually returned, no date was fixed for re-presenting before the Court of competent jurisdiction viz., City Civil Court at Bengaluru, which is evident from the extract of the endorsement above.
35. In the instant case, the period between 23.10.2013 and 13.01.2014 has not been excluded by the City Civil Court at Bengaluru for the purpose of computing whether the plaint was filed in time before the said Court.
In the instant case, the impugned order was passed on 23.10.2013. The certified copy of the said order was applied and secured on 26.10.2013. No application was filed under sub-rule (2) of Rule 10A of Order VII CPC, as no express intimation was given by the Court below to the appellant herein with regard to the actual date on which plaint was actually to be returned. There was no communication from the Court with regard to the actual date for return of the plaint on 13.01.2014; the plaintiff sought for the actual return of the plaint and it was returned on the same date, which is indicated from the extract above. No date was given for either the presentation of the plaint or for the appearance of the parties before the City Civil Court at Bengaluru, neither the name of the Court was mentioned. Thus, there was no notice for the parties to appear before the Civil Court at Bengaluru. On actual receipt of the plaint on 13.01.2014, the plaintiff re-presented before the competent court at Bengaluru City on 17.01.2014, after the intervening holidays. Thus, the period between on 23.10.2013 till 13.01.2014 has to be excluded; and the period from 14.01.2014 to 16.01.2014 (three days) would also have to be excluded, as there was no time-line fixed by the learned District Judge at Mysuru for the re-presentation of the plaint before the competent court in Bengaluru City.
36. We find that non-exclusion of the said period is not just and proper having regard to the mandatory requirements under Order VII Rule 10A of CPC not being complied with by the District Court at Mysuru in the instant case. The appellant-plaintiff had to make a request to the District Court for the actual return of the plaint.
37. In our view, even if no application is filed by the plaintiff on receipt of intimation under sub-rule (1), it is the duty of the Court, which orders for return of the plaint, to intimate the date within which the plaint has to be re-presented before the Court of competent jurisdiction by the plaintiff and also, intimate the defendant and the plaintiff to appear before the said Court of competent jurisdiction on a particular date. As already noted, the object and purpose is to keep the plaintiff as well as the defendant informed about the date on which they would have to appear before the Court of competent jurisdiction on re-presentation of the plaint, which must be endorsed on the plaint when it is ordered to be returned. This is in order to avoid fresh summons being issued to the defendant by the Court of competent jurisdiction and thereby save the time of litigation. However, the law has also contemplated under sub-rule (4) that notice may be issued by the Court of competent jurisdiction to the defendant if it is found necessary in certain circumstances.
38. In our view, the entire scheme of Order VII Rule 10A of CPC is to give effect to the principles of natural justice, particularly keeping in mind the interest of the defendant in the suit, since the defendant must be informed about the further proceedings before the competent Court on return of the suit. If that safeguard has to be complied with, there are certain mandatory requirements to be complied by the Court, which has passed the order returning the plaint; firstly, that express intimation must be given to the plaintiff regarding return of the plaint; secondly, the date must be fixed on or before which the plaint has to be re-presented before the Court of competent jurisdiction and thirdly, the date will have to be fixed for appearance of the plaintiff and defendant before the competent Court having jurisdiction to try the suit. In such a case when the date is fixed, it is also incumbent on the Court which has ordered return of plaint to inform the defendant by an express intimation that the defendant must appear before the Court of competent jurisdiction on the particular date mentioned, otherwise the defendant would not be aware on the date on which the defendant has to appear before the Court of competent jurisdiction.
39. In the circumstances, we find that having regard to the factual aspects of the matter and in light of the law that we have discussed and particularly the scheme of Order VII Rule 10 of CPC and Order VII Rule 10A of CPC, the City Civil Court, in the instant case, ought to have excluded the period between 23.10.2013 upto 16.01.2014, having regard to Section 14 of the Limitation Act, which is applicable to the instant case.
40. In the instant case, Section 14 of the Limitation Act applies to Section 34(3) of the Act and the benefit of the same must be given in the instant case, particularly having regard to the omission made by the District Court at Mysuru, under Order VII Rule 10A of CPC.
In this regard, the following decisions of the Hon’ble Supreme Court may be adverted to.
41. In Union of India vs. Popular Construction Company, reported in 2001 (8) SCC 470 (Popular Construction Company), the question that arose for determination was whether Section 5 of the Limitation Act was applicable to an Application challenging an award under Section 34 of the Act. Interpreting the expression “but not thereafter” used in the proviso to sub-section (3) of Section 34 of the Arbitration and Conciliation Act, 1996, the Hon’ble Supreme Court held that the said phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act and would, therefore, bar the application of Section 5 of the Limitation Act. It was held that the expression “but not thereafter” clearly meant that an application to set aside the award beyond the extended period under the proviso to Section 34(3) of the Act was sufficient indication of the exclusion. In the circumstances, after going through the history and scheme of the Act, it was held that Section 5 of the Limitation Act was not applicable to an application challenging an award under Section 34 of the said Act beyond the extended period and the question was answered in the negative.
42. Consolidated Engineering Enterprises vs.
Prl. Secretary, Irrigation Department, [(2008) 7 SCC 169], (Consolidated Engineering Enterprises), is another judgment of a three Judge Bench of the Hon’ble Supreme Court on the proviso to Section 34(3) of the Arbitration and Conciliation Act, 1996. In the said case, after referring to Section 34 of the Act, and considering the same in light of Section 29(2) of the Limitation Act, it was observed that when any special statute prescribes certain period of limitation as well as provision for extension up to specified time limit, on sufficient cause being shown, the period of limitation prescribed under the special law shall prevail and to that extent, the provisions of Limitation Act shall stand excluded. This is because of the intention of the Parliament in enacting sub-section (3) of Section 34 of the Act of 1996. That, an application for setting aside the award must be made within three months and the period can be further extended, on sufficient cause being shown, by another period of thirty days, but not thereafter. Hence, Section 5 of the Limitation Act is inapplicable as it stands excluded under Section 29(2) of the Limitation Act. Further, it was also observed that even though Section 5 of the Limitation Act is not applicable to an application filed under Section 34 of the Act for setting aside the award, one need not conclude that Section 14 of the Limitation Act would also be inapplicable to an application filed under Section 34 of the Act of 1996.
(a) In the said case, His Lordship, Raveendran J. gave a separate but concurring opinion. His Lordship referred to Section 43 of the Arbitration Act to hold that Section 43 makes an express reference to the Limitation Act both in the Court and in arbitration. That there is also no express exclusion by an application of the provision of the Limitation Act to the proceedings under the Arbitration Act. But, there are some specific departures from the general provisions of Limitation Act, such as, the proviso to section 34(3) and sub-sections (2) to (4) of Section 43 of the Act. His Lordship observed that where the schedule to the Limitation Act prescribes a period of limitation for appeals or applications to any court, and the special or local law provides for filing of appeals and applications to the Court, but does not prescribe any period of limitation in regard to such appeals or applications, the period of limitation prescribed in the Schedule to the Limitation Act will apply to such appeals or applications and consequently, the provisions of Sections 4 to 24 will also apply. But, where the special or local law prescribes for any appeal or application, a period of limitation different from the period prescribed by the Schedule to the Limitation Act, then the provisions of Section 29(2) would be attracted. In that event, the provisions of Section 3 of the Limitation Act will apply, as if the period of limitation prescribed under the special law was the period prescribed by the Schedule to Limitation Act, and for the purpose of determining any period of limitation prescribed for the appeal or application by the special law, the provisions contained in Sections 4 to 24 will apply to the extent to which they are not expressly excluded by such special law. That the object of Section 29(2) is to ensure that the principles contained in Sections 4 to 24 of Limitation Act apply to suits, appeals and applications filed in a court under special or local laws also, even if it prescribes a period of limitation different from what is prescribed in the Limitation Act, except to the extent of express exclusion of the application of any or all of those provisions.
(b) In this context, it was clarified that the provisions of the Limitation Act would not apply to appeals or applications before Tribunals, unless expressly provided. This is because, the Schedule to the Limitation Act prescribes the period of limitation only to proceedings in Courts and not to any proceedings before any Tribunal or quasi-judicial authority. Therefore, it was held that the provisions of the Limitation Act could apply to all proceedings under the Arbitration Act both in Court and in arbitration, except to the extent expressly excluded by the provisions of the Arbitration Act. This was because of the express reference to applicability of the Limitation Act to the proceedings in Court and Arbitral Tribunal under Section 43 of the Arbitration Act.
(c) The next question considered by his Lordship was whether under the proviso to Section 34(3) of the Arbitration Act, Section 14 of Limitation Act was excluded. Section 14 of Limitation Act relates to exclusion of time when proceeding bona fide in a court without jurisdiction.
While considering Section 14 of Limitation Act in light of Section 34(3) of the Arbitration Act and the proviso thereto, it was observed that the use of the words “but not thereafter” in the proviso makes it clear that even if sufficient cause is made out for a longer extension, the extension cannot be beyond thirty days. Differentiating between the proviso to Section 34(3) of Arbitration Act and Section 5 of the Limitation Act, it was observed that they both vest a discretion in a Court to extend the prescribed period of limitation if the applicant satisfies the Court that he had sufficient cause for not making the application within the prescribed period. Section 5 of Limitation Act does not place any outer limit in regard to the period of extension, whereas the proviso to sub-section 3 of Section 34 of the Arbitration Act places a limit on the period of extension of the period of limitation. It differs in regard to period of extension and it has the effect of excluding Section 5 alone of the Limitation Act. Hence, it was held that having regard to Section 29(2) of the Limitation Act, Section 14 of the Limitation Act would be applicable to an application under Section 34(1) of Arbitration Act. Even when there is cause to apply Section 14 of Limitation Act, the limitation period continues to be three months and not more, but in computing the limitation period of three months for the application under section 34(1) of the Arbitration Act, the time during which the applicant was prosecuting such application before the wrong court is excluded, provided the proceeding in the wrong court was prosecuted bona fide and with due diligence. While holding so, the judgment in State of Goa vs. Western Builders [(2006) 6 SCC 239], (Western Builders) was approved.
43. In Simplex Infrastructure Limited vs.
Union of India reported in (2019) 2 SCC 455 (Simplex Infrastructure Limited) also it has been held that Section 5 of the Limitation Act has no application to a suit / application filed under Section 34 of the Arbitration Act. But Section 14 of the Limitation Act applies to Section 34 of the Arbitration Act.
44. Learned counsel for the appellant has referred to the following judgments:
(a) In Indian Mobile Distribution Private Limited vs. Datawind Innovations Private Limited and others, reported in (2017) 7 SCC 678, the Hon’ble Supreme Court has observed that any claim for a remedy as to the validity of an existing interim or final award is agreed to be made only in the courts of the place designated as the seat of arbitration. Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suits filed in courts, a reference to “seat” is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction – that is, no part of the cause of action may have arisen at the neutral venue and neither would any of the provisions of Sections 16 to 21 of the CPC be attracted. In arbitration law, the moment “seat” is determined, the fact that the seat is at Mumbai would vest Mumbai courts (as was decided in that case) with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties. It is well settled that where more than one Court has jurisdiction, it is open for the parties to exclude all other Courts.
(b) Reliance was also placed on Ram Ujarey vs.
Union of India, reported in AIR 1999 SC 309, with regard to the calculation of the period of limitation when the plaint is returned by observing that the limitation would not run from the date of the order, but would run from the date on which the plaint was returned and made available to the plaintiff, if the plaintiff was not at fault.
(c) Learned counsel for the appellant relied on another decision of the Hon’ble Supreme Court in the case of Hanamanthappa vs. Chandrashekharappa, reported in AIR 1997 SC 1307, to contend that the object of Order VII Rule 10A is, the plaintiff, on return of the plaint, can either challenge in an appellate forum or represent to the Court having territorial jurisdiction to entertain the suit. In substance, it is a suit filed afresh subject to the limitation, pecuniary jurisdiction and payment of Court fees.
(d) In Auto Engineering Works vs. Bansal Trading Company, reported in (2001) 10 SCC 630, Hon’ble Supreme Court has observed that the terms of Order VII Rule 10 of CPC are clear and specific. After having found that it had no territorial jurisdiction to entertain the plaint, the trial court ought to return the plaint to the plaintiff for presentation to the proper forum.
(e) Bindu vs. Nalinakshi and another [CRP No.16/2012 DD: 12/04/2012] decided by the High Court of Kerala, has been pressed into service by learned Senior counsel for the appellant to contend that when the Court finds that the plaint has to be returned, then the procedure under Order VII Rule 10A has to be complied with. The said provision applies after the defendant has appeared. If the Court is of the opinion that the plaint should be returned, an intimation or direction has to be given to the plaintiff to make an application with details as covered under sub-rule (2) of that Rule. Where the procedure specified in Rule 10A of Order VII of CPC has been followed on entering of a finding for return of the plaint under Order VII Rule 10 of the Code, it is a case where the plaintiff has condescended to the order of the Court for returning of the plaint. When no such intimation for returning of the plaint as under Rule 10A is give to the plaintiff and further, no steps has been taken by the plaintiff under sub-rule (2) of that Rule, challenge against the order directing return of the plaint passed under Order VII Rule 10 of the Code can be raised in appeal under Order XLIII Rule 1(a) of the Code. But, where the procedure prescribed in Rule 10A of Order VII of the Code has not been followed on the orders passed for returning of the plaint by the Court, then the benefit must be given to the plaintiff and the plaintiff cannot be put to disadvantage on account of non-compliance of the procedure by the Court which has passed the order for returning of the plaint.
45. Learned counsel for the respondent has relied upon a judgment of the Delhi High Court in the case of Honda Giken Kogyo Kabshuki vs. Riaz Ahmed Khan And Another, reported in 147 (2008) DLT 537, to contend that it is not material when the plaintiff takes back the plaint, but when the plaint is ready for handing over to the plaintiff.
46. Further, reliance has been placed on Waqf Masjid Pindain and others vs. Athar Hussain Haidri and another, reported in AIR 1985 ALL 100 wherein it has been observed that an order passed under Order VII Rule 10A of the Code of Civil Procedure, 1908 for the return of the plaint is an appealable order within the meaning of Order XLIII Rule 1(a) of CPC. Further, where the procedure specified in Rule 10A of Order VII has been followed, an appeal against the order would not lie under Order XLIII. That when an application is filed under Order VII Rule 10-A(3) of CPC, the intention is not to file an appeal, but to take back the plaint so as to present it before the competent court.
47. In the result, the impugned order of the City Civil Court at Bengaluru dated 02.03.2015 in not excluding the period between 23.10.2013 up to 13.01.2014 is incorrect. Hence, I.A.No.2 filed by the appellant-plaintiff before the said Court is liable to be allowed. The dismissal of the suit as time barred is not proper.
48. In the circumstances, the impugned order insofar it has rejected I.A.No.2 filed by the appellant- plaintiff and dismissed the suit as time barred is set-aside. Point No.1 is accordingly answered in favour of the appellant herein.
49. During the course of arguments, we have brought to the notice of the learned senior counsel for the appellant and learned counsel for the respondent, sub-rule (5) of Order VII Rule 10A of CPC. It states that where the application is made by the plaintiff under sub-rule (2) and the same is allowed by the Court, the plaintiff shall not be entitled to appeal against the order returning the plaint. If the said principle is to be applied to the present case, even though there is no application filed by the plaintiff under Order VII Rule 10A(2) of CPC, but having regard to the fact that the appellant-plaintiff sought the actual return of the plaint on 13.01.2014 and has re-presented the same before the City Civil Court at Bengaluru on 17.01.2014, would clearly indicate that the appellant has opted in favour of compliance of the order of the District Court at Mysuru, which ordered for return of the plaint. In fact, as already discussed, the plaint was re-presented on 17.01.2014. In the circumstances, the appellant-plaintiff cannot also seek to file an appeal against the order returning the plaint by the District Court at Mysuru. Hence, we hold the connected appeal MFA No.3987/2015 filed by the appellant-plaintiff as not maintainable. The said appeal is hence, dismissed as not maintainable. Point No.2 is accordingly, answered.
50. In the result, MFA No.3294/2015 is allowed to the extent stated above and MFA No.3987/2015 is dismissed as not maintainable.
Consequently I.A. No.1/2015 filed in MFA No.3294/2015 stands disposed in view of the disposal of the appeal and I.A.No.1/2015 seeking condonation of delay of 465 days in filing MFA No.3987/2015 is dismissed on account of the appeal being dismissed as not maintainable.
Parties to bear their respective costs.
Since the suit is of the year 2013, both parties are directed to co-operate with the Court below for expeditious disposal of the matter.
Sd/- JUDGE BSR / RK/-
Sd/- JUDGE