Case: Union Of India  Vs. M/S Neelam Engineering &amp; Contruction Co

2. An Agreement No.GE/CHD-61/88-89 was entered into between the Appellant, Union of India, and the Respondent, M/s Neelam Engineering & Construction Company, for providing additional security lighting arrangement in various zones at TBRL Range, Ramgarh, near Chandigarh. Certain disputes arose between the Appellants and the Respondent which were referred to the arbitration of Col. T.S. Plaha, appointed as the sole Arbitrator for adjudication of the said disputes between the parties. The sole Arbitrator made his Award on 27th January, 1996, for a sum of Rs.1,70,020/-, together with interest at the rate of 18% per annum from 31st December, 1991, till the date of decree or payment, whichever was earlier, in favour of the Respondent. On 27th February, 1996, the Respondent filed a petition in the Civil Court under Sections 14(2), 17 and 29 of the Arbitration Act, 1940, for making the Award dated 27th January, 1996, a Rule of Court3. After an interval of about two years, on 3rd January, 1998, the Appellants filed an objection petition under Sections 30 and 33 of the Arbitration Act, 1940, for setting aside the Award published by the sole Arbitrator, on the ground that the Arbitrator had misconducted himself while giving his finding on the claims of the parties4. On 18th February, 1998, the Court directed the Arbitrator to file the Award in Court. When the matter was listed for hearing on 27th May, 1998, the Court recorded that reply had been received to the objection petition which had been filed and that the original arbitration file had been received from the Arbitrator. The case was, therefore, adjourned till 27th July, 1998, for filing rejoinder. After considering the application made by the Respondent under Sections 14(2), 17 and 29 of the Arbitration Act, 1940, and the objection filed by the Appellant, the Civil Court rejected the said objection by holding that since the objection had been filed prior to filing of the Award, the same was premature and could not be taken note of and further that the objection had been filed beyond the period of limitation as prescribed under Article 119 of the Limitation Act. The Civil Court accordingly allowed the Appellants application under Sections 14(2), 17 and 29 of the Arbitration Act, 1940, and ordered that the Award dated 27th January, 1996, be made a Rule of Court, and granted interest at the rate of 18% per annum thereupon from the date of order till realization5. Aggrieved by the said order of the learned Civil Judge, Junior Division, Chandigarh, the Appellants herein filed an appeal against the same before the learned Additional District Judge, Chandigarh, being C.R. No.52 dated 8th August, 2003, under Section 39 of the aforesaid Act6. The submissions which had been made before the learned Civil Judge, Junior Division, Chandigarh, were reiterated in the Appeal. It was contended that while the Award was passed by the Arbitrator on 22nd January, 1996, the petition under Sections 14(2), 17 and 29 of the Arbitration Act, 1940, was filed by the Respondent Company on 27th February, 1996. Directions were, thereafter, given by the Trial Court to the Arbitrator to produce the Award in Court and the same appears to have been sent by the learned Arbitrator by post and was received by the Trial Court on 18th February, 1998. It also appears that notice was issued to both the parties, but ultimately on account of inadvertence, on subsequent dates it was recorded that the Award had not been received. Ultimately, on 27th May, 1998, the Trial Court recorded that the original arbitration file had been received and the case was adjourned till 27th July, 1998, for filing rejoinder. The Appeal Court, therefore, held that legally and technically both the parties came to know about the filing of the Award in Court for the first time on 27th May, 1998, although, the Award had been received through the post in the Court on 18th February, 1998. Having regard to the above, 27th May, 1998, was held to be the date when the parties had notice of filing of the Award. It was also observed that under Article 119 of the Limitation Act, 1963, a party to an Arbitration Award could file objection, with a prayer to set aside or modify the Award, within 30 days from the date of notice of filing of the Award in Court. The Appeal Court also recorded the fact that in this case without waiting for the filing of the Award in Court, the Appellants herein filed their objections to the Award on 3rd January, 1998, before the Award had been received in the Court and the parties had notice thereof. It was accordingly held that it could not be said that the objections were barred by limitation, but they were in fact pre-mature and could not, therefore, be taken note of. In fact, during the course of arguments, it was also the case of the Respondent Company that the objection filed on behalf of the Appellants could not be held to be barred by limitation, but was pre-mature and the Appellants were not competent to file the said objection before the Award was received in the Court7. Aggrieved by the order of the Appeal Court, the Appellants filed a Civil Revision in the High Court. However, the said Civil Revision was dismissed by the High Court as per the order impugned in this appeal

Reasoning:
18. It is unfortunate that although the Appellants filed their objection under Sections 30 and 33 of the Arbitration Act, 1940, the same was done prematurely even before the filing of the Award and such objection could not be treated as a valid objection under Sections 30 and 33 of the Act in view of the provisions of Article 119 of the Limitation Act, 1963