1. This petition is preferred under Article 227 of the Constitution of India challenging the order passed by Principal District Judge, Bharuch below Exh. 71 in Regular Execution Petition No. 345 of 2007 dated 7th April 2012.
2. To briefly state the facts giving rise to the present petition.
2.1 The respondent herein is the plaintiff who obtained ex parte award from Mumbai Textile Merchants Mahajan against the petitioner firm. In absence of an agreement to refer the dispute to arbitration, It is alleged that the said award dated 2nd August 2002 was a nullity.
3. The petitioner challenged this before Mumbai High Court in Arbitration Case No. 431 of 2002 under section 34 of the Arbitration and Conciliation Act 1996 which was dismissed by the High Court by an order dated 20th November 2002.
3.1 This was challenged in an appeal before Division Bench in Appeal No. 601 of 2004 and on 29th September 2004 the said appeal was dismissed by the High Court.
3.2 In 2004 Special Leave Petition was preferred before the Supreme Court which also came to be dismissed by the Supreme Court. Thereafter the respondent filed an execution Application before the Additional Senior Civil Judge, Bharuch on 14th May 2005 to execute the award dated 2nd August 2002.
4. It is the say of the petitioner that as per Section 2(e) of the Arbitration and Conciliation Act 19996 read with section 12 of the Gujarat Civil Courts Act 2005, an execution of arbitral award requires to be filed before the Court not below District Court. Therefore, the issuance of warrant under Order 21 Rule 30 of Code of Civil Procedure of the Additional Senior Civil Judge, Bharuch for recovery of Rs 16,47,583/ with interest @ 18% per annum against the petitioners, by an order dated 12th January 2007 was not sustainable and was therefore objected to by the present petitioner.
4. The Senior Civil Judge decided the objection in favour of the present petitioner on 26th June 2007 and thereby allowed such objection holding that the same was not maintainable before the Court. However, instead of dismissing the execution application, the Senior Civil Judge communicated to the District Judge, Bharuch interalia urging to withdraw the Execution Application from its file and the District Court on an administrative on dated 8th August 2008 passed an order under section 24 of the Code of Civil Procedure and ordered withdrawal of the execution application from the file of Senior Civil Judge for further proceeding.
5. Special Civil Application No. 24158 of 2007 was preferred by the present petitioner aggrieved by the order of District Court and the same was dismissed by this Court on 19th September 2007.
5.1 On challenging the said order, Special Leave Petition No. 20930 of 2007 before the Supreme Court of India along with stay application the Supreme Court as per the decision of Harshad Chimanlal Modi Vs DLF Universal Ltd reported in 2006(1) SCC 3641 stayed further proceedings vide its order dated 19th September 2007. This said petition was finally decided on 6th November 2007 and the Supreme Court disposed of the petition in the following manner :
“The entire dispute arises out of execution of award under the Arbitration & Conciliation Act, 1996.
It is not in dispute that the award of the arbitrator has become final. The only dispute is about the jurisdiction of the Court to which the award was initially filed for execution. It is common ground that the award is now before the Principal District Court which has jurisdiction in the matter.
In that view of the matter, we permit the Principal District Judge, before whom the execution is now pending, to proceed with the execution proceedings de novo from the date of this order. All parties, if advised, are at liberty to raise objections in the execution proceedings. The Principal District Judge shall proceed with the execution proceedings and decide the same expeditiously. We make it clear that we have not expressed any opinion on merits of the matter. The appeal stands disposed of in the above terms.”
6. As all the issues raised in the Execution Application before the District Court were permitted to be raised by treating the proceeding de novo, it is averred by the petitioner that the issue of limitation also could be raised before the District Court. Such application below Exh. 71 was preferred on 22nd February 2010 and the Court vide its order dated 7th April 2012 rejected the objection and held that the execution application is filed within time, however, the order impugned has been stayed upto 25th April 2012 and the same has been challenged before this Court in the present petition raising various grounds.
7. Learned advocate Mr. Devang Nanavati appearing with Mr. Mohapatra fervently argued that the District Court erred in law in not holding that the execution proceeding ought to have been filed a date anterior to 6th November 2009. He further urged that the Court erred in holding that the execution proceeding was a continous proceeding the filing of which is to be reckoned from 14th December 2005. There is an overwhelming evidence that the same was filed before the Court which had no jurisdiction to entertain such proceeding and that aspect was upheld by the very Court on 26th June 2007. Therefore, the proceedings filed before wrong forum cannot be said to have been done in good faith and hence, the benefit of Section 14 of the Limitation Act could not be made applicable to the facts of the case. It is further lamented that there could not be an order on administrative side to withdraw the execution application from the file of the Senior Civil Judge when the very Court lacked inherent jurisdiction to entertain such application.
8. Learned advocate has relied on the decision of the Supreme Court rendered in the case of Harshad Chimanlal Modi Vs DLF Universal Ltd and Anr. reported in 2006(1) SCC 364 and in Hanmanthppa's case reported in 1997(9) SCC 688 and Amar Chand Inani's case reported in 1973(1)SCC 115 wherein the Supreme Court has taken consistent view that the date of filing of a proceeding before a Court having jurisdiction to entertain the proceeding shall be the date of presentation of the proceeding.
9. It is further submitted that the limitation in filing the execution petition against the award is of three years, on dismissal of application under section 34 in the instant case, the award had attained finality on 16th August 2004 as application of the petitioner under section 34 was dismissed on that date, Article 137 of the Limitation Act enjoined upon the party to file the award on or before 17th August 2005. Such application for execution of award was preferred before a wrong forum in the year 2005 (14th December 2005), the decision of the District Court is alleged to be contrary to law for having been passed on extraneous grounds. Reliance is also placed on interpretation of word “de novo trial” which is as under :
A new trial of the entire case that is, on both questions of fact and issues of law, has been conducted as if there had been no trial in the first instance (cases: Appeal and error 892; Criminal Law 260, 1139, Federal Courts 776.CJ.S Appeal and error 756.
8. Learned advocate Mr. K. P Raval appearing for the other side has relied upon the judgment of the Supreme Court rendered in the case of Consolidated Engineering Enterprises Vs Principal Secretary, Irrigation Department and Others, reported in (2008) 7 SCC 169 and also as given in the case of State of Goa Vs Western Builders reported in (2006)6 239. Both the authorities state that Section 14 of the Limitation Act is applicable to applications preferred under Section 34 of the 1996 Act. It further says that the statute if is silent and there is no specific prohibition, then, the statute should be interpreted so as to advance cause of justice.
Learned advocate also urged that there is absolutely no ground for this Court to intervene in the well reasoned order passed by the Principal District Judge, Bharuch under supervisory jurisdiction as the case does not fall under the ambit of need to exercise writ jurisdiction.
10. On thoroughly examining the contentions raised by the learned advocates on both the sides and on close perusal of the order impugned, in the opinion of this Court, petition does not deserve entertainment.
11. At the outset, ratio laid down in the case of Surya Dev Rai v. Ram Chander Rai & Ors. reported in [(2003) 6 SCC 675], deserves consideration at this stage for the reasons followed hereinafter. “38. Such like matters frequently arise before the High Courts. We sum up our conclusions in a nutshell, even at the risk of repetition and state the same as hereunder :
(1) Amendment by Act No. 46 of 1999 with effect from 172002 in Section 115 of the Code of Civil Procedure cannot and does not affect in any manner the jurisdiction of the High Court under Articles 226 and 227 of the Constitution.
(2) Interlocutory orders, passed by the courts subordinate to the High Court, against which remedy of revision has been excluded by the CPC Amendment Act No. 46 of 1999 are nevertheless open to challenge in, and continue to be subject to, certiorari and supervisory jurisdiction of the High Court.
(3) Certiorari, under Article 226 of the Constitution, is issued for correcting gross errors of jurisdiction, i.e., when a subordinate court is found to have acted (i) without jurisdiction by assuming jurisdiction where there exists none, or (ii) in excess of its jurisdiction by overstepping or crossing the limits of jurisdiction, or (iii) acting in flagrant disregard of law or the rules of procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice.
(4) Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate Courts within the bounds of their jurisdiction. When the subordinate Court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the Court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction.
(5) Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied : (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (iii) a grave injustice or gross failure of justice has occasioned thereby.
(6) A patent error is an error which is self evident, i.e., which can be perceived or demonstrated without involving into any lengthy or complicated argument or a longdrawn process of reasoning. Where two inferences are reasonably possible and the subordinate court has chosen to take one view the error cannot be called gross or patent.
(7) The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. Care, caution and circumspection need to be exercised, when any of the abovesaid two jurisdictions is sought to be invoked during the pendency of any suit or proceedings in a subordinate court and error though calling for correction is yet capable of being corrected at the conclusion of the proceedings in an appeal or revision preferred there against and entertaining a petition invoking certiorari or supervisory jurisdiction of High Court would obstruct the smooth flow and/or early disposal of the suit or proceedings. The High Court may feel inclined to intervene where the error is such, as, if not corrected at that very moment, may become incapable of correction at a later stage and refusal to intervene would result in travesty of justice or where such refusal itself would result in prolonging of the lis.
(8) The High Court in exercise of certiorari or supervisory jurisdiction will not covert itself into a Court of Appeal and indulge in reappreciation or evaluation of evidence or correct errors in drawing inferences or correct errors of mere formal or technical character.
(9) In practice, the parameters for exercising jurisdiction to issue a writ of certiorari and those calling for exercise of supervisory jurisdiction are almost similar and the width of jurisdiction exercised by the High Courts in India unlike English courts has almost obliterated the distinction between the two jurisdictions. While exercising jurisdiction to issue a writ of certiorari the High Court may annul or set aside the act, order or proceedings of the subordinate courts but cannot substitute its own decision in place thereof. In exercise of supervisory jurisdiction the High Court may not only give suitable directions so as to guide the subordinate Court as to the manner in which it would act or proceed thereafter or afresh, the High Court may in appropriate cases itself make an order in supersession or substitution of the order of the subordinate court as the court should have made in the facts and circumstances of the case.”
11. There is neither jurisdictional error nor material illegality as the powers given under supervisory powers under Article 227 are sparingly used. This case is the one where the petitioner has left no stone unturned to ensure that the fruits of the decree is not enjoyed by the respondent herein and every possible legal contention has been raised at every stage to take benefit of cobweb of the legal proceedings.
12. Before adverting to the facts it would be necessary to discuss the ratio laid down by the Apex Court in the case of State of Goa Vs Western Builders (supra) where the question arose of interpreting the overlapping statute as far as the question of limitation was concerned. While interpreting both provisions of Limitation Act and the provision of Arbitration and Conciliation Act, 1996, the Apex Court held that in case of overlapping statutes the Court should be cautious in interpreting the provisions and it should not exceed the limit provided by the statute. The extent of exclusion however is held to be a question of construction of each particular statute and general principles applicable are subordinate to the actual words used by legislature. The Court also further held that there could be harmonious reading of both the statutes, and there is no prohibition in so doing.
12.1 While interpreting provisions of Limitation under Arbitration Act and provisions of Limitation Act which held thus :
There is no provision in the Arbitration and Conciliation Act, 1996 (“ the Act”) which excludes applicability of Section 14 of the Limitation Act to an application submitted under section 34 of the said Act. On the contrary, Section 43 makes provisions of the Limitation Act, 1963 applicable to arbitration proceedings. The proceedings under Section 34 are for the purpose of challenging the award whereas the proceeding referred to under Section 43 are the original proceedings which can be equated with a suit in a Court. Hence, Section 43 incorporating the Limitation Act will apply to the proceedings in the arbitration as it applies to the proceedings of a suit in the Court. If under sub section (4) of Section 43 of the Act period between commencement of arbitration proceedings till the awrd is set aside by the court has to be excluded in computing period of limitation provided for any proceedings with respect to the dispute, there is no good reason as to why it should not be held that the provisions of Section 14 of the Limitation Act would be applicable to an application submitted under Section 34 of the Act, more particularly where no provision is to be found in the Act of 1996, which excludes the applicability of Section 14 of the Limitation Act to an application made under Section 34 of the Act. The powers under Section 34 of the Act can be exercised by the Court only if the aggrieved party makes an application. The jurisdiction under Section 34 of the Act cannot be exercised suo motu. The total period of four months within which an application, for setting aside an arbitral award, has to be made is not unusually long. Section 34 of the Act would be unduly oppressive if it is held that the provisions of Section 14 of the Limitation Act are not applicable to it, because cases are no doubt conceivable where an aggrieved party, despite exercise of due diligence and good faith, is unable to make an application within a period of four months. From the scheme and language of Section 34 of the Act of 1996, the intention of the legislature to exclude the applicability of Section 14 of the Limitation Act is not manifest. Section 145 of the Limitation Act does not provide for a fresh period of limitation but only provides for the exclusion of a certain period. Having regard to the legislative intent, it is held that the provisions of Section 14 of the Limitation Act, 1963 would be applicable to an application submitted under section 34 of the Act of 1996 for setting aside an arbitral award.
12.2 The Apex Court also held that the general proposition of the Limitation Act by virtue of Section 43 of the Arbitration and Conciliation Act would not apply to arbitrations but still the question to extent Section 14 of the Limitation Act dealing with exclusion of time spent in prosecuting the remedy before the other forum, can be made applicable to the award of provisions of Section 34(3) of the Arbitration Act. The Apex Court therefore held as under :
“25. Therefore, in the present context also it is very clear to us that there is no two opinion in the matter that the Arbitration and Conciliation Act, 1996 do not expressly exclude the applicability of Section 14 of the Limitation Act. The prohibitory provision has to be construed strictly. It is true that the Arbitration and Conciliation Act, 1996 intended to expedite the commercial issue expeditiously. It is also clear in the statement of objects and reasons that in order to recognize economic reforms the settlement of both of domestic and international commercial disputes should be disposed of quickly so that country's economic progress be expedited. The statement of objects and reasons also nowhere indicate that Section 14 of the Limitation Act shall be excluded. But on the contrary intendment of legislature is apparent in the present case as Section 43 of the Arbitration and Conciliation Act, 1996 applies the Limitation Act, 1963 as a whole. It is only by virtue of sub section (2) of section 29 of the Limitation Act, its operation is excluded to that extent of the area which is covered under the Arbitration and Conciliation Act, 1996. Our attention was also invited to the various decisions of this Court interpreting subsection 2 of section 29 of Limitation Act with reference to other Acts like The Representation of People Act or the provisions of Criminal Procedure Code where separate period of limitation has been prescribed. We need not over burden the judgment with reference to those cases because it is very clear to us by virtue of subsection (2) of section 29 of the Limitation Act that the provisions of Limitation Act shall stand excluded in Act of 1996 to the extend area which is covered by the Act of 1996. In the present case under section 34 by virtue of subsection 3 only the application for filing and setting aside the award a period has been prescribed as 3 months and delay can be condoned to the extent of 30 days. To this extent the applicability of section 5 of Limitation will stand excluded but there is no provision in the Act of 1996 which excludes operation of section 14 of the Limitation Act. If two Acts can be read harmoniously without doing violation to the words used therein, then there is no prohibition in doing so.
26. As the result of the above discussion we are of the opinion that the view taken by the court below excluding the applicability of Section 14 in this proceeding is not correct. We hold that section 14 of the Limitation Act, 1963 is applicable in the Arbitration and Conciliation Act, 1996. We set aside all the judgments/Order and remand all these cases back to the Trial Court/District Court for deciding the application under Section 14 of Limitation Act on merit after hearing both the parties and in case the delay is condoned then the case should be decided on merits after hearing all the concerned parties. All the appeals are allowed. No order as to costs.”
13. Yet another decision which requires consideration at this stage is of Consolidated Engineering Enterprises Vs Principal Secretary, Irrigation Department and Others (supra). The three judges Bench relied upon the decision of State of Goa Vs Western Builders and distinguished the case of Union of India Vs. Popular Construction Co reported in (2001)8SCC 470 “When any special statute prescribes certain period of limitation as well as provision for extension upto specified time limit on sufficient cause being shown, then the period of Limitation prescribed under the special law shall prevail and to that extent provisions of the Limitation Act shall stand excluded. As the intention of the legislature in enacting sub section (3) of Section 34 of the Act is that the application for setting aside the award should be made within three months and the period of can be further extended on sufficient cause being shown by another period of 30 days but not thereafter, provisions of Section 5 of the Limitation Act would not be applicable because applicability of Section 5 of the Limitation Act stands excluded because of the provisions of Section 29(2) of the Limitation Act. However, merely because Section 5 of the Limitation Act is not applicable to an application filed under section 34 of the Act for setting aside an award, one need not conclude that provisions of section 14 of the Limitation Act would also not be applicable to an application submitted under Section 34 of the Act of 1996.
The record does not indicate that there was pretended mistake intentionally made by the appellant with a view to delaying the proceeding or harassing the respondent. There was an honest doubt about the Court competent to entertain the application for setting aside the award made by the arbitrator. Mere fact that the question of jurisdiction is an arguable one would not negative good faith because the appellant believed bona fide that the Court in which it had instituted the proceeding had jurisdiction in the matter. By filing the application in the Courts which had no jurisdiction to entertain the same, the appellant did not achieve anything, more particularly when the lis was never given up. The Division Bench of the High Court was not justified in concluding that appellant had not prosecuted the matter in other courts with due diligence and in good faith. The said finding being against the weight of evidence on record, is liable to be set aside and is hereby set aside. It is therefore held that appellant had prosecuted the matter in other courts with due diligence and in good faith and, therefore, is entitled to claim exclusion of time in prosecuting the matter in wrong courts.
Therefore, the appeal arising from SLP © No. 15619 of 2005 will have to be allowed.
Subsection (1) of S. 43 of the 1996 Act provides that the Limitation Act shall apply to arbitrations as it applies to proceedings in Court. The purpose of S. 43 of 1996 Act is not to make Limitation Act inapplicable to proceedings before Court, but on the other hand, make Limitation Act applicable to arbitrations. S. 43 of the 1996 Act, apart from making the provisions of Limitation Act, 1963 applicable to arbitrations, reiterates that Limitation Act applies to proceedings in Court. Therefore, the provisions of Limitation Act, 1963 apply to all proceedings under the 1996 Act, both in Court and in arbitration, except to the extent expressly excluded by the provisions of the AC Act.
The purpose of proviso to Section 34(3) of the AC Act like Section 5 of the Limitation Act vests 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. While Section 5 of the Limitation Act does not place any outer limit in regard to the period of extension, the proviso to subsection (3) of Section 34 of the AC Act places a limit on the period of extension of the period of limitation evident by the words “but not thereafter” occurring therein. Thus the proviso to Section 34(3) of the AC Act is also a provision relating to extension of period of limitation,but differs from Section 5 of the Limitation Act, in regard to period of extension, and has the effect of excluding Section 5 of the Limitation Act.
On the other hand, Section 14 contained in Part III of the Limitation Act does not relate to extension of the period of limitation, but relates to exclusion of certain period while computing the period of limitation. Neither subsection (3) of Section 34 of the AC Act nor any other provision of the AC Act exclude applicability of Section 14 of the Limitation Act to applications under section 34(1) of the AC Act. Nor will the proviso to Section 34(3) exclude application of Section 14, as Section 14 is not a provision for extension of period of limitation, but for exclusion of certain period while computing period of limitation. Having regard to Section 29(2) of the Limitation Act, Section 14 of that Act will be applicable to an application under Section 34 (1) of the AC Act. Even when there is cause to apply Section 14, 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 AC Act, the time during which the applicant was prosecuting such application before wrong court is excluded, provided the proceeding in the wrong court was prosecuted bona fide, with due diligence. It has, therefore, to be held that Section 14(2) of the Limitation Act, 1963 is applicable to proceedings under section 34(1) of the Arbitration and Conciliation Act, 1996.”
Learned District Judge has rightly held in wake of above mentioned decisions that the time spent on pursuing remedies before the forum which had no jurisdiction would need to be excluded in as much as applicability of section 14 of Limitation Act is not excluded by incorporation of Section 34(3) of Arbitration Act. As further laid down by the Apex Court in Consolidate Engineering Enterprises (supra), this respondent would achieve nothing by delaying execution when it never gave up active litigation all through out.
The conduct of this petitioner can be noted from the record that it has attempted to defeat the right of otherside to enjoy fruits of the award at every stage and jurisdiction of District Court, Anand was also accepted only after the Apex Court relegated the parties to it. In such circumstances, serious objection raised of period of limitation to bar the present proceedings has rightly been not sustained by the trial court, by sufficiently well reasoned order.
It can be thus concluded that benefit of Section 14 of limitation Act cannot be denied to the persons who bonafide had chosen the wrong forum and provisions of Section 14 laid down in the above authority can be made applicable to the application made under Section 34 of Arbitration Act.
Execution Petition being continuity of suit and selection of wrong forum bonafide since, would permit condonation of such period, District Court committed no error, much less illegality in rejecting plea of petitioner judgment debtor warranting interference by way of extraordinary jurisdiction under Article 227 of Constitution of India. Resultantly, this petition is dismissed.
(Ms. Sonia Gokani,J.) mary//