Case: Secretary to Government of Karnataka and another Vs. V. Harishbabu

3. The question arises in the following circumstances :The respondent was entrusted with contract work by the appellant for construction of a canal and cross drainage work from channel 0.8 k.m. of Ravathanalla - Irrigation Project in Kanakpura Taluk. The cost of the project was Rs. 4.22 lakhs and the work was required to be completed within a period of nine months commencing from 4-5-87, the date on which the work order was issued. During execution of the contract, certain disputes arose between the parties which were referred to an arbitrator in terms of an arbitration agreement entered into between the parties. Sh. K. N. Venkatesh, Superintending Engineer PWD was appointed as the arbitrator who entered upon the reference and made an award on 22-4-93. The respondent filed a petition under Section 14 read with Section 17 of the Indian Arbitration Act (hereinafter the Act) before Civil Judge, Ramanagram on 23-4-93 praying for making the award a rule of the Court. According to the respondent a signed copy of the award which had been given to him by the arbitrator was also filed along with the petition. Notice of that petition was issued by the Court to the appellant and other respondents on 24-4-93 and was made returnable by 22-6-93. The appellant was not served and on 22-6-1993 the service of notice was directed to await till 13-7-93. On 24-6-93, the learned Arbitrator himself filed the original award in the Court of learned Civil Judge, Ramanagram along with certain connected documents. Before filing the award in the Court, the arbitrator had procured an endorsement from the Government Pleader to the effect "Seen, subject to objections". The Court directed the award and the documents filed by the arbitrator to be taken on record. On 13-7-1993 a memo was filed on behalf of the respondent for final disposal of his petition filed under Section 14/17 of the Act on the ground that the appellant had not filed any objections to the award within the prescribed period and therefore the award be made a rule of the Court. Notice of the said memo was issued to the appellant and the case was adjourned till 31-7-93 for objections, if any . The A. G. P. representing the appellant was present in the Court of the learned Civil Judge on 13-7-93. The appellant, however, did not file any objections to the memo till 31-7-93. On 31-7-93, the trial Court accepted the plea raised on behalf of the respondent in his memo that since the appellant State had not filed any objections to the award within a period of 30 days as prescribed under the Act read with the relevant provisions ofthe Limitation Act,, the award be made a rule of the Court. A decree in terms of the award was directed to follow the appellant, thereupon, filed a Misc. First Appeal in the High Court against the order of the trial Court. The High Court, however held, that the Misc. First Appeal was not maintainable but permitted the appellant to convert the said appeal into a Civil Revision Petition which was accordingly done. By an order dated 12th July, 1995, the High Court, after hearing submissions on behalf of the parties, dismissed the Civil Revision Petition observing that the Additional Government Pleader representing respondents 1 and 2 before the Court below had taken notice of the filing of the award by the arbitrator on 24-6-93 and as such it could not be accepted that the State had no knowledge of filing of the award into Court "prior to 13-7-93" and since the State had not filed its objections within 30 days, the trial Court was justified in making the award a rule of the Court. The High Court observed "moreover the addl. Government Pleader representing respondents 1 and 2 before the Court below had taken notice of the filing of the award by the arbitrator on 24-6-1993. In the light of these facts it cannot be stated that the Government had no knowledge of filing of the award into Court prior to 13-7-1993. Notice under Section 14(2) contemplates either notice to the parties or to the counsel of such filing of the copy of the award by any one of the parties or by the arbitrator himself and dismissed the revision petition filed by the appellant. Aggrieved, the appellant has filed this appeal by special leave against the order of the High Court dated 12-7-1995.

Court's reasoning:
15. In view of the settled law and our discussion above, our answer to the question posed in the opening part of the judgment is that the period of limitation for filing objections seeking the setting aside of an arbitration award commences from the date of service of the notice issued by the Court upon the parties regarding the filing of the award under Section14(2) of the Act. Such a notice need not be in writing but what is essential is that the notice or intimation or communication of the filing of the award must be issued by the Court to the parties and served upon the parties concerned. Date of service of a notice issued by the arbitrator under Section 14(1) of the Act or the date of obtaining an endorsement on the award by the arbitrator from the party concerned is irrelevant for determining the question of Limitation for filing objections under Article 119(b) of. It is not disputed that after the learned arbitrator filed the original award in the court on 24-6-93, no notice of the filing of that award was issued by the court for service upon the appellant or the other respondents20. From the aforesaid facts it unmistakably follows that no notice, whether in writing or orally, was ever issued by the Court to the appellant regarding the filing of the award in the Court to the appellant regarding the filing of the ward in the Court so as to enable it to file objections, if any, seeking the setting aside of the award. Notice of the petition filed by the respondent under Section 14/17 of the Act with the prayers as noticed above, cannot be construed as a notice of the filing of the award. We are unable to agree with the learned Counsel for the respondent that the filing of the copy of the signed award along with the petition should be deemed to be by an implied authority of the arbitrator and notice of that petition be deemed to be a notice issued by the Court under Section 14(2) of the Act. Neither there is a factual foundation for such an argument nor is it even otherwise tenable in law in the established facts of this case when the notice of the petition did not even indicate that a signed copy of the award had been filed in the court and in the petition also there is not a whisper that a copy of the award was being filed along with the petition let alone under the authority of the arbitrator. Keeping in view the nature of the prayers made in the petition (supra), it is futile to argue that the notice of the petition be deemed to be a notice from the court to the effect that the award had been filed in the Court21. The maximum that can be said in favour of the respondent is that on 13-7-1993, after the original award had been filed by the arbitrator on 24-6-1993 in the Court and the additional Government Pleader who was present on behalf of the appellant was directed to file his objections to the memo filed by the respondent seeking the award to be made a rule of the court, that a notice of the filing of the award would be deemed to have been issued to him by the court on that date. Therefore, the date of communication of the information about the filing of the award from the court could only be 13-7-1993 and no earlier date. The appellant was directed, through the Additional Government Pleader, to file his objections to the memo filed by the respondent by 31-7-1993 but the appellant did not file ay objections by the due date. The omission of by the due date. The omission of the appellant to file objections to the memo filed by the respondent by 31-7-1993 but the appellant did not file any objections to the memo, however, could not justify the order of the trial Court making the award a rule of the court and directing a decree to be drawn up in terms of the award, when admittedly the period of 30 days as envisaged by Article 119(b) ofthe Limitation Act,which had commenced on 13-7-1993 had not expired on 31-7-1993. We also do not find any merit in the submission of the learned Counsel for the respondent that the endorsement made by the Government Pleader on 24-6-1993 on the award which was then filed by the arbitrator in the court would amount to a notice under section 14(2) of the Act. The endorsement made by the Additional Government Pleader on 24-6-1993 can at best be construed as a notice issued by the arbitrator under Section 14(1) of the Act and such a notice, as we have already observed, is not a substitute for a notice which is mandatorily required to be issued by the Court and served upon the parties regarding the filing of the award under Section 14(2) of the Act. The trial Court, therefore, fell in error in opining that "admittedly he has not filed any objections within 30 days from the date of the filing of award by the respondent No. 3 before this Court and there are no other impediments as such to deny the relief sought for by the petitioner". The period of limitation, for filing objections to the award as we have already noticed, does not commence from the date of filing of the award by the arbitrator in the court and that period would only commence from the date of service of the notice issued by the court under Section 14(2) of the Act. The High Court also fell in error in observing that the appellant could not be heard to say that he had no knowledge of the filing of the award in the Court prior to 13-7-1993 on the ground that "the Additional Government Pleader representing respondents 1 and 2 before the Court below had taken notice of the filing of the award by the arbitrator on 24-6-1993". There is nothing on the record to show that any such notice was issued by the Court regarding the filing of the award. The endorsement made by the Additional Government Pleader on the award which was later on filed by the arbitrator in the court, did not relieve the court of its mandatory obligation to issue the notice, orally or in writing, to the appellant or its counsel to file the objections, if any, to the award. The endorsement made by the Additional Government Pleader is of no consequence insofar as the issuance of notice by the Court under Section 14(2) is concerned. Computing the period of 30 days with effect from 13-7-93, no award could be made a rule of the Court before the expiry of the period of 30 days from that date. Not filing of any objections to the memo by 31-7-93, could not take away the statutory right of the appellants to file objections to the award within a period of 30 days commencing from 13-7-1993.