Case: Madan Lal Vs. Sunderlal &amp; Another

of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection As in the present case the objection was filed more than 30 days after the notice it could not be treated as an application for setting the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to Set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Bom 243 and Saha and Co. v. Isharsingh Kripalsingh AIR 1956 Cal 321 (FB).11. Assuming that the Court has power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Bom 243 , it was observed that"if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise".These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co.s case , AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgement is against the appellant. The minority judgement certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority Judges in Saha and Co.s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co.s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant.12. Learned counsel for the appellant also relies on Mohan Das v. Kessumal, AIR 1955 Ajmer 47. In that case the objection which was made more than 30 days after the service of notice was that the award had been filed by a person not authorised by the arbitrator to do so . The Court held that such an objection did not fall within S. 30 of the Act, and, therefore, Art. 158 of the Limitation Act did not apply. On these facts the decision in that case may be right. But the Court seems to have made a general observation that Art. 158 cannot apply to a written-statement by a defendant in reply to an application to have the award made a rule of the Court. If by that general observation the Court means that even if the objection is of the nature falling within S. 30 and is filed more than 30 days after service of notice, it would be open to the Court to set aside the award on such objection, we are of the opinion that the view is incorrect.13.

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

Explanation:
0[ds]5. We are of opinion that this appeal must fail. The Act was passed in 1940 and as the long title shows it is an Act to consolidate and amend the law relating to arbitration. Before 1940, the 1aw relating to arbitration was mainly contained in the Second Schedule to theCode of Civil Procedure which was repealed by the Act which is now self-contained code in the matter of arbitration. The scheme of the Act is to divide arbitration into three classes. The first consists of arbitration without intervention of a Court and is contained in Chap. II of the Act which has 17 sections from S. 3 to S. 19. The second consists of arbitration with intervention of a Court where there is no suit pending, which is in Chap. III of the Act, and there is only one section (S. 20) therein, as sub-s. (5) thereof applies the other provisions contained in the Act to this type of arbitration also so far as they can be made applicable. The third type of arbitration is contained in Chap. IV, namely arbitration in suits. This chapter contains 5 sections and S. 25 thereof applies the other provisions of the Act so far they can be made applicable.This analysis of the relevant provisions of the Act contained in Chap. II which apply mutatis mutandis to arbitrations of the other two types shows that the Court has to pronounce judgment in accordance with the award if it sees no cause to remit the award or any of the matters referred to arbitration for reconsideration, or if it sees no cause to set aside the award. The Court has to wait for the time given to a party to make an application for setting aside the award and where such an application has been made the Court has to decide it first and if it rejects it the Court proceeds to pronounce judgment according to the award. It is clear, therefore, from S. 17 that an application to set aside the award is contemplated therein and it is only when no such application has been made within the time allowed or if such an application has been filed and has been rejected that the Court proceeds to pronounce judgment in terms of the award.It is clear therefore form from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection As in the present case the objection was filed more than 30 days after the notice it could not be treated as an application for setting the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside thethat the Court has power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion supportis not necessary in the present case to resolve the conflict between the majority and the minority Judges in Saha and Co.s case, AIR 1956 Cal. 321   (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co.s case, AIR 1956 Cal 321   (FB), therefore, also does not help thethese facts the decision in that case may be right. But the Court seems to have made a general observation that Art. 158 cannot apply to a written-statement by a defendant in reply to an application to have the award made a rule of the Court. If by that general observation the Court means that even if the objection is of the nature falling within S. 30 and is filed more than 30 days after service of notice, it would be open to the Court to set aside the award on such objection, we are of the opinion that the view is incorrect.