1 IN THE HIGH COURT OF BOMBAY AT GOA APPEAL UNDER ARBITRATION ACT NO. 1/2006 WITH CROSS OBJECTION NO. 14/2006 1. Airport Authority of India, National Airports Division, R. G. Bhawan, Safdarjung Airport, New Delhi – 110 003. 2. The Airport Director, Airports Authority of India, National Airports Division, Civil Enclave, Dabolim Airport, Dabolim, Goa. .......... Appellants. V/s. M/s. Alcon Resort Holdings Pvt. Ltd., having its Head Office at Velho Building, Panaji, Goa. ........... Respondents. Mr. S. K. Kakodkar, Senior Advocate with Mr. S. D. Padiyar, Mr. Rama Rivonkar and Mr. Prashil Arolkar, Advocates for the appellants. Mr. V. B. Nadkarni, Senior Advocate with Mr. M. S. Sonak and Mr. N. Vaze, Advocate for the Respondent. 2 CORAM : B.P. DHARMADHIKARI & U.D. SALVI, JJ. Date of reserving the Judgment : 26th June, 2009. Date of pronouncing the Judgment : 18th July, 2009 J U D G M E N T : (Per B.P. DHARMADHIKARI, J.) 1. In this Appeal under Section 39 of the Arbitration Act,1940; the Employer challenges the order dated 18/1/2006 passed by Civil Judge, Senior Division, Vasco-da-Gama in Special Civil Suit No. 51/97/A setting aside the Award dated 20/12/1996 of Arbitrator appointed by the parties as per agreement dated 30/9/1993 between them. Basic finding by said Court is that Award filed before it for making rule of court was not a suo motu act of arbitrator and it upheld the objection of contractor/ present Respondent that it was barred under Art. 119(a) of the Limitation Act. The Respondent has also filed a cross-objection as its prayer to set aside that award on the ground of lack of jurisdiction in appointed arbitrator and his misconduct has been rejected. We have been assisted by Senior Advocate Shri Kakodkar for 3 Appellant and Senior Advocate Nadkarni for the Respondent. Looking to the arguments and nature of controversy, we find that mentioning of the questions arising before us in the light of arguments of parties at the beginning itself is necessary to save the prolixity as the facts can very well be appreciated while examining the issues. 2. Following points or issues arise for determination before us:- A. Whether Award as filed before the Trail Court was suo motu action of the Arbitrator and therefore within limitation? B. Whether Cross-objection as filed by the present Respondent is maintainable? C. If answer to "B" above is in affirmative, whether lack of jurisdiction or invalid appointment of the arbitrator can be the ground for setting aside of the award?Whether appointment of Shri Saraswati as Arbitrator is void? Whether Respondents have waived their objection in this respect by their unqualified participation in Arbitration proceedings before him? 4 D. If answer to "B" above is in affirmative, whether Shri Saraswati as Arbitrator was duty bound to assign reasons for his findings. Whether Shri Saraswati as Arbitrator has given any reasons and those reasons are legally sufficient in eye of law to sustain his Award? E. Whether impugned judgment warrants any interference? We proceed to examine the points or issues below. 3. In so far as issue of limitation is concerned, the learned trial Court i.e. Court of Civil Judge, Sr. Division, Vasco-Da-Gama, Goa, has recorded that Award presented to it for making Rule of Court under Section 14 of Arbitration Act, 1940 was at the instance of present applicant i.e. Airport Authority and not suo motu and hence, barred by limitation as prescribed in Article 119(a) of the Limitation Act,1963. It has held that there was no application made by Appellants to make the award Rule of Court and it relied upon full bench judgment of Hon'ble Kerla High Court in case of Government of Kerala vs. V.J. Chacko -1995 AIHC 2100 in support thereof. 5 4. It is not in dispute that Arbitrator made the award on 20/12/1996 and on 26/12/1996, the Airports Authority received communication from him regarding it. On 2/1/1997 Arbitrator made corrigendum to his Award. Letter dated 19/3/1997 was sent by the Appellants to Arbitrator on 20/3/1997 and he was requested to file it in the Court. This letter dated 19/3/1997 is written by the Airport Director and at top after mentioning the arbitration proceedings, the names of claimant and respondent are given. In the main text, the respondents i.e. present Appellants have called upon the Arbitrator under S.14(2) to file award in the Court with depositions, documents in order to make it the rule of the court. The forwarding letter is in correspondence like form, but the purpose of making the award the Rule of Court is reflected in it also. The letter dated 19/3/1997 is, thus, more like an application for making the Award the Rule of Court. Thereafter, the Arbitrator has written to one Advocate C.R. Rodrigues on 2/4/1997 informing him that he was forwarding all documents and deposition with request to him to file it in proper forum u/s 14(2) for making it Rule of Court. This Advocate vide his application dated 30/6/1997 filed said Award in trial Court. In first paragraph he has pointed out the request made to him by the Arbitrator. In second paragraph, he states that award and 6 documents have been filed under S.14(2) of Arbitration Act and index, original award dated 25/12/1996 and original letter addressed to him by Shri Saraswati are mentioned as its enclosures. By order upon it CJSD,Vasco then issues notice to parties returnable on 13/11/1997. 5. Both the learned Senior Advocates have relied upon various judgments. But then apart from the two modes of filing award in Court specified in Section 14(2), the power with the arbitrator of suo motu filing Award in Court is not in dispute. The learned Single Judge of this Court has in, Hede Navigation Ltd. vs. Union of India reported at 1996(2) Mah.L.J. 7, after distinguishing the judgment of Hon'ble Apex Court in Patel Motibhai vs. Dinabhai Motibhai [JT 1996 (1) SC 265=(1996) 2 SCC 585] observed that:- "6.Since the said Award made on 26th September, 1989 was filed by the Arbitrators in this Court on 23rd December, 1993, Mr. Popat, learned Counsel appearing for the petitioner, submitted that the said Award was filed in this Court beyond the period of limitation and as such, no cognisance thereof can be taken by this Court. In support of his submission, Mr. Popat has put reliance on the judgment of the Supreme Court in the case of Patel Motibhai Nanabhai & another v. Dinabhai Motibhai Patel & others, reported in J.T. 1996 (1) S.C. 265. I find no merit in the submission made on behalf of the petitioner. Article 119(a) of The Limitation Act, 1963 prescribes period of limitation for the parties to 7 arbitration to file an award in Court. According to Article 119(a) an award can be filed in Court within 30 days of service of the notice of making of the award. In the instant case, it is an admitted position that the Arbitrators had filed the said Award in this Court. Under section 14(2) of the Act the Arbitrators or Umpire at the request of any party to arbitration agreement or if so directed by the Court cause the award or a signed copy of it filed in Court. This section does not prevent the Arbitrators or Umpire to file the award in Court suo motu, though it specifically provides for Arbitrators or Umpire to file the award in Court on an application being made by a party to the arbitration agreement. In the case of Patel Motibhai Nanabhai & another on which reliance was placed by Mr. Popat, the arbitrator had moved an application for filing the award in Court and to make the award the rule of the Court. In para 7 of the judgment, the Supreme Court, has in terms stated as under:- "In the instant case, the arbitrator has not merely filed the award in Court, he has also made an application (Misc. Civil Application No. 19/92 in the Court of the Civil Judge (SD) Anand under section 14 of The Arbitration Act and has engaged lawyer G.B. Shah to obtain orders as prayed". In the facts of that case and in context thereof, the Supreme Court took the view that the application made after lapse of 30 days was barred by limitation. However, the Supreme Court has not laid down the law that an Arbitrator or Umpire, as the case may be, suo motu without making application as contemplated under section 14(2) of the Act cannot file an award in Court after lapse of 30 days of service of notice of making of the award. In the instant case no such application was made by the 8 Arbitrators as contemplated under section 14(2) of the Act nor there was an application by the Arbitrators for making the said Award as Rule of the Court. Hence, on the facts of the case, the judgment on which the reliance has been placed by Mr. Popat does not apply. " Thus arbitrator can of his own file the award without moving any application. Question before us is whether in present facts it can be said that arbitrator moved any application as such for making it the Rule of Court. 6. Before considering this aspect, we find it proper to consider certain other precedents in the matter. Senior Advocate Shri Nadkarni has pointed out that cases decided under old Limitation Act, 1908 will not be relevant for considering the current position. Preamble of Indian Limitation Act, 1908 read "Whereas it is expedient to consolidate and amend law relating to limitation of suits, appeals and certain applications to Courts; and whereas it is also expedient to provide rules for acquiring by possession the ownership of easements and other property; It is hereby enacted as follows:-". According to him, as arbitrator is not the "Court", a particular view has been taken in judgments delivered under said old Act. The Limitation Act, 1963 9 states that it is an Act to consolidate and amend the law for limitation of suits and other proceedings and for purposes connected therewith. Except for this, the language of the article prescribing the period of limitation has not undergone any change. Under 1908 Act, it was Article 178; while under 1963 Act it is Article 119. Senior Advocate Shri Kakodkar has, however, invited our attention to the recommendation of Law Commission and urged that said report has not been implemented so far. Third Report of Law Commission of India dated 21/7/1956 on Limitation Act,1908 in para 172 states the position that arbitrator can file the award even after party's application therefor has become time-barred and even after a suit on original cause has been instituted as there is no limitation. Report mentions judgment in case of Gendalal Motilal vs. Mathura Das in AIR 1951 Nag. 32 and states that a provision is therefore required fixing time within which arbitrator should file his award. Shri M.C. Setalvad was the Chairman of this commission while Hon'ble Ex. J. Shri Chagla who himself had taken identical view in AIR 1945 Bom. 417-Jayantilal Jamnadas vs. Chhaganlal Nathoobhai was one of its members. Inspite of this express recommendation, learned Senior Advocates states that the position in 1963 Limitation Act remains same and has not been improved. He, 10 therefore, argues that legislative mandate is clear and must be honoured. 7. In Jayantilal Jamnadas vs. Chhaganlal Nathoobhai (supra) learned Single Judge of this Court accepts the contention that limitation in Article 178 of 1908 Limitation Act is attracted when party applies to Court as per S.14(2) of Arbitration Act and when arbitrator files the award suo motu in Court, as he is not making any application to the court, art. 178 does not apply. It is found that Limitation Act would apply to a party to a proceeding and not to a person who has no interest in its result. This court has realised the the incongruous situation arising therefrom but found that arbitrator would definatelly be filing award within reasonable time and it was for legislature to take care of such inconsistencies. As the language of statute was clear and statute deprived party of a valuable right, court was bound to give effect to it. In Gendalal Motilal vs. Mathura Das, learned Single Judge of Nagpur High Court reiterated same view and made reference to this Bombay view. In Air 1960 SC 629--Champalal vs. Mst. Samarthabai, Hon.Apex Court holds as under:-- "3. In appeal before us counsel 11 for the appellant, raised six points: (1) the filing of the award was not within time as no application was made under S. 14 within the time allowed by the Limitation Act; (2) that the award required registration and was not registered in accordance with law and the mere fact that it was registered does not clothe it with legality; (3) the First Additional District Judge had no jurisdiction to grant three months' extension of time to the arbitrators for making the award which was granted on July 26, 1946; (4) that the arbitrators were guilty of misconduct; (5) that the award is in excess of the power given to the arbitrators under the agreement of arbitration and (6) even if the award was proper and legal the respondent had refused to adopt the appellant and therefore the decree should have been as provided by the award on the happening of that contingency and in the alternative the First Additional District Judge who passed the decree had no jurisdiction to take subsequent events into consideration. 4. In our opinion points nos. 1, 2 and 3 are wholly without substance. The award was made on October 18, 1946, and the arbitrators filed it in the court of the First Additional District Judge and they also gave notice to the parties by registered post informing them of the making of the award. It has not been shown as to how the filing of the award is barred by limitation. Article 178 of the Limitation Act which was relied upon by the appellant applies to applications made by the parties and not to the filing of the award by the arbitrators." Thus this larger Bench of Hon. Apex Court states that art. 178 applies to parties and does not apply to arbitrators. The Bombay view again shows same line of reasoning. Law Commission had suggested 12 amendment to provide limitation for arbitrators also and it has not been acted upon. Thus point of distinction sought to be made by learned adv. for Respondent does not exist at all. 8. The judgment of Hon. Apex Court in Patel Motibhai vs. Dinabhai Motibhai [JT 1996 (1) SC 265=(1996) 2 SCC 585] heavily relied upon by Adv. Nadkarni shows that after arbitrator gave intimation of his award dated 26/2/1986 to all parties, on 24/4/1986 objection was raised before him and award was not filed in court. There appeared to be some understanding & parties also did not take steps as per S.14(2). On 31/1/1992 a suit claiming right as per that award came to be instituted by Jayantibhai- the 4th respondent before Apex Court and its filing was objected on the ground that it was for enforcement of award which was neither registered nor made rule of court. On 8/2/1992 Jayantibhai asked arbitrator to file award. Arbitrator Dinubhai filed award with application to make it rule of court and also engaged advocate to prosecute it. Hon. Apex Court found this action incomprehensible and biased. The observations of Hon. Apex court in Para 9 are in this background and it is observed that arbitrator is not required to apply to court and application under S.14(2) is to be made 13 within 30 days from notice of award. Even if Art. 119 is held not applicable to arbitrator, Art. 137 will come into way of arbitrators making such application. Art. 137 is residuary article prescribing time limit of 3 years. In para 10 Hon. Apex Court finds that Jayantbhai induced the arbitrator in the matter. It is held that the court should have declined to entertain such application moved after 6 years. It is important to note that the arbitrator there filed an express application by engaging a lawyer and he had given up his neutral mantle. The provisions of Art. 137 are pointed out by Hon. Apex Court as it provides outer time limit in all residuary matters and period of 6 years is found to be unreasonable. It has not been held that Art. 119 was applicable to arbitrator. Its consideration shows that Jayntilal could not have achieved indirectly what was prohibited to him by law directly. The larger bench of Hon. Apex Court in Champalal vs. Mst. Samarthabai-AIR 1960 SC 629 has already concluded that Art. 119 of Limitation Act does not apply to an arbitrator. We find that learned Single Judge of this Court has rightly distinguished this ruling in Hede Navigation Ltd. vs. Union of India (supra). In facts before us, the provisions of art. 137 are not relevant at all. 14 9. Now the judgment of full bench of Hon. Krela High Court needs to be considered. Government of Kerla vs. V.J. Chacko--1995 AIHC 2100 is relied upon by the trial court to hold the filing of award to be timebarred. The Hon. Full Bench holds that when arbitrator files the award in court at the instance of a party, the party must approach him within period of limitation prescribed in art. 119(a). After expiry of such time arbitrator can not at the instance of a party approaching belatedly, file the award relying upon the legal position that of his own he can file the award at any time. These observations are preceded by finding that arbitrator who delivered award did not file it and it was field by his successor upon written application of a respondent. Hon. Full Bench holds that what a party is directly not permitted by law, can not be allowed to be done indirectly by it through such approach to arbitrator. Earlier paragraph no.6 notes the third report of law commission and the fact that legislature did not fill in the loop-hole. It also notices that law of limitation need to be construed as it is. In paragraph 8, the Hon. Full Bench declines to usurp legislative function. But then in para 9 finds the filing of award at the instance of respondent and extends application of art. 119(a) to that application also. The 15 award was dated 28/2/1978 and its notice was served on parties. Respondent moved arbitrator on 4/2/1984 i.e. near about 6 years with necessary stamp papers and prayer to condone the delay. Successor arbitrator then filed the award on 18/2/1984. In somewhat similar situation, the Hon. Apex Court has pointed out art. 137 in Patel Motibhai vs. Dinabhai Motibhai (supra). 10. Thus in both these cases, awards were held filed only due to inducement and otherwise were never filed for long period and but for such inducement, would not have been filed. The normal civil remedy for recovery or other relief in the matter had already gone timebarred and such stale cause was sought to be revived by the parties by influencing the arbitrators. The question arises whether present filing which is within less than 7 months of the award can be viewed in similar light. The findings of the trial court therefore need scrutiny. The Appellant's letter dated 19/3/1997 expressly mentions S.14(2) and calls the arbitrator to file award in the court to make it rule of court. Arbitrator in turn requested Adv. Rodriques vide his letter dated 2/4/1997 to file it in appropriate forum for that purpose. Said letter 16 again mentions S. 14(2) and all records were also made over to him. Advocate Rodriques does this on 30/6/1997. Said advocate mentions request made to him and also that filing was under S.14(2) of the Arbitration Act. He however does not make any express prayer for making the award the rule of court. Advocate Rodroques has at the end added "For which in duty bound I shall ever pray". The original letter dated 2/4/1997 is also filed along-with records of arbitrator by said Advocate Rodriques. Though it is nobody's case that Advocate Rodriques filed any power for arbitrator or prosecuted the matter, still the letter of arbitrator contained desire to make the award rule of court with reference to S. 14(2). This letter uses the words "Award alongwith deposition and all documents which have been taken and proved before me" which is the language of S.14(2). Letter dated 19/3/1997 also contains same words. Thus the desire of Appellant to seek filing of award under section 14(2) and similar intention of arbitrator is amply demonstrated by this correspondence. The arbitrator has not of his own sent the award to the court and merely because award has been filed within short period after expiry of limitation, it can not be seen as a voluntary action on part of the arbitrator. This arbitrator Shri Saraswati was in employment of the appellant & has acted as required of him by 17 his employer. Thus finding in this respect by the trial court can not be labeled as perverse and We can not in present appeal interfere with it. Though Adv. Kakodkar has urged that filing is voluntary and the reference to S.14(2) or to making of award the rule of court is unwarranted which needs to be ignored, We can not, in above backdrop, accept such arguments. The reliance upon the judgment of hon. Apex Court in case of Oil & Natural Gas Corp. vs. Nippon Steel Corpn. -- (2007) 2 SCC 382 is also misconceived because in that case the M/s Little & Co. filed the award as per request of the arbitrator and not upon any request by their clients who were the appellants in Apex Court. The Hon. Apex Court has recorded a finding that though M/s Little & Co. were panel advocates of appellant, they were not standing counsels and acted on behalf of arbitrators while filing award in court. It is noticed in paragraph 21 that appellants had no intention to file the award in court and they did not engage M/s Little & Co. to coordinate with the arbitrators. Thus this factual matrix is contrary to one available here and said judgment, therefore, has no application. Similarly in Food Corp. Of India vs. E. Kuttappan--(1993) 3 SCC 445 though the Hon. Apex Court holds that when upon request of party, the arbitrator handed over entire papers to its counsel for filing in court, it was filing authorised by 18 and therefore by the arbitrator himself. The observations appear in totally different background because the question whether objections filed by the respondents were time-barred or not was being looked into and Art. 119(a) of Limitation Act was not in issue. Judgment of Hon. Apex Court in Kumbha Mawji vs. Dominion of India –AIR 1953 SC 313 relied upon by the Appellants is also considered in said judgment. All these judgments therefore clearly show that answer to the question whether filing of award is voluntary or induced by the party needs to be searched in facts & circumstances of each case. 11. Advocate Kakodkar has argued that filing of award beyond limitation is not ground for invalidation under Section 30, but prayer has to be to take the award off the file as in Jayantilal Jamnadas vs. Chhaganlal Nathoobhai (supra). It is true that Section 30 in its last part while using the words "is otherwise invalid" contemplates invalidity within award itself i.e. in the discharge of obligations cast upon the arbitrator by Arbitration Act. The objection of expiry of period of limitation arises after the award is made and that aspect is regulated by Limitation Act. It can not be disputed that after expiry of limitation, the Court will not be in position to exercise the jurisdiction to make that 19 award a Rule of Court. Law permits the Respondents to oppose the