Oil & Natural Gas Corporation Ltd vs M/S Nippon Steel Corporation Ltd

On 23.3.1996, M/s Little & Co., the advocates, as per the request of the Arbitrator filed an award in the Court on behalf of the Arbitrator. The Court, on 9.5.1996, issued a notice to the parties about the filing of the award which was received by the appellant on 14.6.1996. The appellant, on the receipt of the notice from the Court, moved an application for setting aside the award on 12.7.1996. The learned single Judge rejected the petition of the appellant solely on the ground that the same was time barred as the appellant had knowledge of the filing of the award much prior to the date of notice to them by the Court.

Aggrieved by the judgment and order as passed by the learned single Judge, the appellant filed an appeal before the Division Bench of the High Court which also dismissed the appeal reaffirming the judgment of the learned single Judge holding that the application of the appellant was barred by limitation as the same was moved after a span of 30 days from the knowledge of the filing of the award in Court. The Division Bench also directed the appellant to deposit with the office of the Prothonotary & Senior Master, High Court, Bombay, a sum of Rs.2,36,29,954/-. The appellant deposited the above said amount as per the said order. Thereupon the respondent moved a Notice of Motion No. 206 of 2006 in Appeal No. 321 of 1997 in Arbitration No. 260/96 in Award No. 98/96 praying the Court to direct the office of the Prothonotary & Senior Master, High Court, Bombay to pay and hand over the sum of Rs.2,36,29,954/- with accrued interest due thereon to the respondent. The appellant filed an affidavit in reply to the notice of motion. The respondent again moved a Notice of Motion No. 1082 of 2006 praying the Court to pass a judgment and decree in terms of the Award dated 2.3.1996. Hence the present appeal by way of special leave petition has come up. We have heard Mr. Gopal Subramanium, learned Additional Solicitor General of India, appearing for the appellant and Mr. Ashok H. Desai, learned senior counsel appearing for the respondent.

Our attention was drawn to paragraph 5 of the counter affidavit filed by the respondent in this appeal. We have perused the same. It is seen from the averments that the respondent has admitted in paragraph 5 of the counter affidavit that an act of the Court is necessary to foist awareness of filing of the award. The averments made in the said paragraph itself indicates that by the letter dated 24.4.1996, the Prothonotary and Senior Master directed M/s Little & Co. to furnish detailed address of the parties for the purpose of serving them the notice of filing the award. The fact that M/s Little & Co. was directed to furnish address of the parties for service of notice indicates that the Court itself did not consider the act of filing of the award by M/s Little & Co. as notice or even constructive notice. The letter dated 24.4.1996 is a letter directing the counsel for the appellant to furnish address for service of notice on the parties. Therefore, the said letter cannot be treated as an act of Court sufficient to foist knowledge of filing of award. On the other hand, the said letter induces and triggers the belief that the Court shall, notwithstanding the filing of the award, serve notice on the parties including the appellants of filing of the award. Vide the communication dated 26.4.1996 M/s Little & Co. only complied with the aforesaid direction and accordingly furnished the address for service of notice on the parties. By furnishing the addresses, even M/s Little & Co. though the knowledge they have about the filing the award is not notice to ONGC and the Court ought to service notice separately. Therefore, it was submitted that the period of limitation cannot be computed w.e.f. 26.4.1996. We see merit and substance in the above submission.

For the foregoing reasons, we hold that objections to the Award filed by the appellant on 12.06.1996 was not barred by time. We, therefore, allow the appeal and set aside the order passed by the High Court in Appeal No. 321 of 1997 affirming the judgment passed by the learned single Judge dismissing the arbitration petition under Sections 30 and 33 of the Act, 1940 on the ground of limitation under Article 119 of the Limitation Act.

During the pendency of the special leave petition in this court on 05.05.2006, this Court directed the Prothonotary and Senior Master, High Court, Bombay to invest the sum of Rs. 2,36,29,954/- in fixed deposit in a Nationalized Bank. The Prothonotary and Senior Master is directed to keep the said fixed deposit in force till the disposal of the arbitration petition No. 260 of 1996 in Award No. 98 of 1996 by the High Court. The appellant is at liberty to file his objections to the award passed by the arbitrator and the High Court. The High Court is requested to dispose off the arbitration petition which was filed in the year 1996 within 3 months from today. No costs.