Case: Wazirchand Mahajan And Anr Vs. Union Of India

be exercised by a Court entertaining an application, the application could not be deemed to be one under the Code. It is true that in the Limitation Act originally enacted in 1908, by the group of Arts. 158 to 180 only applications under the Code of Civil Procedure were dealt with.By the amendment made by the Arbitration Act 10 of 1940, Arts. 158 and 178 were modified and in the articles for the expression "under the Code of Civil Procedure, 1908" the words "under the Arbitration Act 1940" were substituted. The reason which persuaded the Courts from time to time to hold that the expression under the Code" must be deemed to be added in Art. 181 did not continue to apply after the amendment of Arts. 158 and 178. It may be recalled that the law relating to consensual arbitration, except in respect of cases governed by Arbitration Act, 1899, was enacted in Sch. II of the Code of Civil Procedure, 1908. By the enactment of Act 10 of 1940, Sch II of the Code of Civil Procedure and the Indian Arbitration Act, 1899, were repealed and an Act dealing with all arbitration was enacted, and it was found necessary on that account to amend Arts. 158 and 178 so as to make them consistent with the legislative changes. The reason which persuaded the Courts to hold that the expression "under the Code" was deemed added to Art. 181 has now disappeared, but on that account the expression "applications for which no period of limitation is provided elsewhere in this Schedule" in Art. 181 cannot be given a connotation different from the one which prevailed for nearly 60 years before 1940. 5. If Art. 181 of the Limitation Act only governs applications under the Code of Civil Procedure for which no period of limitation is provided under the Schedule, an application under the Arbitration Act, 1940 not being an application under the Code of Civil Procedure, unless there is some provision, which by express enactment or plain intendment to the contrary in the Arbitration Act, will not be governed by that Article. 6. Counsel for the Union of India contended that S. 37 (1) of the Arbitration Act, 1940, indicates a contrary intention. That sub-section provides:"All the provisions of the Indian Limitation Act, 1908 shall apply to arbitration as they apply to proceedings in Court." In our judgment, this clause does not govern an application for filing an arbitration agreement under S. 20 of the Arbitration Act. In terms, it provides, that the provisions of the Indian Limitation Act are to apply to arbitrations as they apply to proceedings in Court. In other words, an arbitrator in dealing with a matter submitted to him is bound to apply the provisions of the Limitation Act: S. 37 (1) has no refer" once to an application under the Arbitration Act for effectuating a reference to the arbitrator, such as an application for filing an arbitration agreement. The genesis of this sub-section is to be found in the judgment of the Judicial Committee of the Privy Council in Ramdutt Ramkissendass v. E. D. Sassoon and Co., 56 Ind App 128: (AIR 1929 PC 103). In that case the Judicial Committee observed that even though S. 3 of the Limitation Act deals primarily with suits, appeals and applications made in law courts and makes no reference to arbitration proceedings and, therefore, the Limitation Act does not in terms apply to arbitrations in mercantile reference, it would be"an implied term of the contract that the arbitrator must decide the dispute according to the existing law of contract, and that every defence which would have been open in a Court of law can be equally proponed for the arbitrators decision unless the parties have agreed to exclude that defence. Were it otherwise, a claim for breach of a contract containing a reference clause could be brought at any time, it might be twenty or thirty years after the cause of action had arisen although the Legislature had prescribed a limit of three years for the enforcement of such a claim in any application that might be made to the law courts." In enacting the Arbitration Act, 1940 the Legislature incorporated, with some modification, the rule which was regarded by the Judicial Committee as implicit in a commercial reference under an arbitration agreement. The legislature provided that all the provisions of the Limitation Act, 1908 shall apply to arbitrations as they apply to proceedings in Court. 7. There is no doubt that Cl. (1) of S. 37 of the Arbitration Act deals only with the authority of the arbitrator to dead with and decide any dispute referred to him: it has no concern with an application made to the Court to file an arbitration agreement and to refer a dispute to the arbitrator. After an agreement is filed in Court and the matter is referred to the arbitrator, it is for the arbitrator to decide by the application of the law contained in the Limitation Act, whether the claim is barred. But S. 37 (1) does not confer authority upon the Court to reject the application for filing of an arbitration agreement under S. 20 of the Arbitration Act because the claim is not made within three years from the date on which the right to apply arose. In dealing with an application for filing an arbitration agreement, the Court must satisfy itself about the existence of a written agreement which is valid and subsisting and which has been executed before the institution of any suit, and also that a dispute has arisen with regard to the subject-matter of the agreement which is within the jurisdiction of the Court. But the Court is not concerned in dealing that application to deal with the question whether the claim of a party to the arbitration agreement is barred by the law of limitation: that question falls within the province of the arbitrator to whom the dispute is referred.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It is true that in Hansraj Guptas case, 60 Ind App 13: (AIR 1933 PC 63  ), the Judicial Committee was dealing with the period of limitation for filing an application under S. 186 (1) of the Indian Companies Act 1913, to order a contributory in a winding-up to pay a debt; and Sha Mulchands case, 1953 SCR 351  : (AIR 1953 SC 98  ), related to an application under the Indian Companies Act, 1913, for rectification of the share-register and restoration of the name of a member whose shares were forfeited for non-payment of calls. In the Bombay Gas Co.s case, (1964) 3 SCR 709  : (AIR 1964 SC 752  ), this Court was dealing with an application for enforcement of an order under S. 33C (2) of the Industrial Disputes Act, 14 of 1947 for computation of benefit in terms of money and for a direction to the employers to pay the same. But in each case the decision of the Court proceeded upon the general ground that Art. 181 of the Limitation Act, 1908, governed applications under the Code of Civil Procedure. This Court impliedly rejected in each case the argument that merely because powers under the Code of Civil Procedure may be exercised by a Court entertaining an application, the application could not be deemed to be one under the Code. It is true that in the Limitation Act originally enacted in 1908, by the group of Arts. 158 to 180 only applications under the Code of Civil Procedure were dealt with.By the amendment made by the Arbitration Act 10 of 1940, Arts. 158 and 178 were modified and in the articles for the expression "under the Code of Civil Procedure, 1908" the words "under the Arbitration Act 1940" were substituted. The reason which persuaded the Courts from time to time to hold that the expression under the Code" must be deemed to be added in Art. 181 did not continue to apply after the amendment of Arts. 158 and 178. It may be recalled that the law relating to consensual arbitration, except in respect of cases governed by Arbitration Act, 1899, was enacted in Sch. II of the Code of Civil Procedure, 1908. By the enactment of Act 10 of 1940, Sch II of the Code of Civil Procedure and the Indian Arbitration Act, 1899, were repealed and an Act dealing with all arbitration was enacted, and it was found necessary on that account to amend Arts. 158 and 178 so as to make them consistent with the legislative changes. The reason which persuaded the Courts to hold that the expression "under the Code" was deemed added to Art. 181 has now disappeared, but on that account the expression "applications for which no period of limitation is provided elsewhere in this Schedule" in Art. 181 cannot be given a connotation different from the one which prevailed for nearly 60 years before 19405. If Art. 181 of the Limitation Act only governs applications under the Code of Civil Procedure for which no period of limitation is provided under the Schedule, an application under the Arbitration Act, 1940 not being an application under the Code of Civil Procedure, unless there is some provision, which by express enactment or plain intendment to the contrary in the Arbitration Act, will not be governed by that ArticleIn our judgment, this clause does not govern an application for filing an arbitration agreement under S. 20 of the Arbitration Act. In terms, it provides, that the provisions of the Indian Limitation Act are to apply to arbitrations as they apply to proceedings in Court. In other words, an arbitrator in dealing with a matter submitted to him is bound to apply the provisions of the Limitation Act: S. 37 (1) has no refer" once to an application under the Arbitration Act for effectuating a reference to the arbitrator, such as an application for filing an arbitration agreement. The genesis of this sub-section is to be found in the judgment of the Judicial Committee of the Privy Council in Ramdutt Ramkissendass v. E. D. Sassoon and Co., 56 Ind App 128: (AIR 1929 PC 103). In that case the Judicial Committee observed that even though S. 3 of the Limitation Act deals primarily with suits, appeals and applications made in law courts and makes no reference to arbitration proceedings and, therefore, the Limitation Act does not in terms apply to arbitrations in mercantile reference, it would beIn enacting the Arbitration Act, 1940 the Legislature incorporated, with some modification, the rule which was regarded by the Judicial Committee as implicit in a commercial reference under an arbitration agreement. The legislature provided that all the provisions of the Limitation Act, 1908 shall apply to arbitrations as they apply to proceedings in Court7. There is no doubt that Cl. (1) of S. 37 of the Arbitration Act deals only with the authority of the arbitrator to dead with and decide any dispute referred to him: it has no concern with an application made to the Court to file an arbitration agreement and to refer a dispute to the arbitrator. After an agreement is filed in Court and the matter is referred to the arbitrator, it is for the arbitrator to decide by the application of the law contained in the Limitation Act, whether the claim is barred. But S. 37 (1) does not confer authority upon the Court to reject the application for filing of an arbitration agreement under S. 20 of the Arbitration Act because the claim is not made within three years from the date on which the right to apply arose. In dealing with an application for filing an arbitration agreement, the Court must satisfy itself about the existence of a written agreement which is valid and subsisting and which has been executed before the institution of any suit, and also that a dispute has arisen with regard to the subject-matter of the agreement which is within the jurisdiction of the Court. But the Court is not concerned in dealing that application to deal with the question whether the claim of a party to the arbitration agreement is barred by the law of limitation: that question falls within the province of the arbitrator to whom the dispute is referred3. The terms of Art. 181 are general, and are apparently not restricted to applications under the Code of Civil Procedure. But that Article is included in the group of articles which fall under the head "Third Division Applications". As originally enacted all applications contemplated to be made under Arts. 158 to 180, were applications made under the Code of Civil Procedure and there was a catena of authorities holding that in Art. 181 the expression under the Code of Civil Procedure" must be deemed to be necessarily implicit.