Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6524 OF 2009
Oriental Insurance Co. Ltd. .…Appellant(s)
Versus
M/s Tejparas Associates ….Respondent(s)
& Exports Pvt. Ltd.
J U D G M E N T
A.S. Bopanna,J.
1. The appellant insurance company had issued fire
insurance policy in respect of the plant and machinery of the
respondent company. The sum for which it was insured was
a sum of Rs.70,00,000/ (Rupees Seventy Lakhs only). In
respect of the policy issued on 01.12.1999, the claim arose
on 23.04.2000 when fire accident took place in the premises
Signature Not Verified
Digitally signed by
MAHABIR SINGH
Date: 2019.10.03
14:23:04 IST
Reason:
of the respondent. In respect of the claim, the appellant
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insurance company offered a sum of Rs.7,98,019/ (Rupees
Seven Lakhs NinetyEight Thousand Nineteen only) to the
respondent on 06.12.2000. The respondent having refused
to accept the same, a meeting was thereafter convened on
20.09.2001 wherein Vijaya Bank at whose instance the
policy was issued was also present. In the said meeting, the
appellant insurance company revised the offer to pay the
respondent a sum of Rs.33,80,925/ (Rupees ThirtyThree
Lakhs Eighty Thousand Nine Hundred TwentyFive only).
The said sum was also not acceptable to the respondent but
a sum of Rs.25,00,000/ (Rupees TwentyFive Lakhs only)
was paid to the respondent through Vijaya Bank. The
respondent therefore being aggrieved that the claim for
insurance reimbursement was not satisfied, had approached
the National Consumer Disputes Redressal Commission,
New Delhi (“NCDRC” for short) by filing OP No. 146 of 2002.
The said complaint came to be dismissed on the ground that
the claim involves complicated questions of law and the Civil
Court would have jurisdiction to decide the matter.
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2. The matter was, however, ultimately referred to
arbitration by an Arbitral Tribunal consisting of three
learned Arbitrators. In the arbitral proceedings, an award
dated 28.06.2004 was passed, whereunder two out of three
arbitrators awarded the sum of Rs.44,90,000/ (Rupees
FortyFour Lakh Ninety Thousand only) with interest at 18%
per annum also the costs as indicated therein. Since, a sum
of Rs.25,00,000/ had already been paid by the appellant on
20.09.2001, the award constituted the entire sum of Rs.
70,00,000/ (Rupees Seventy Lakhs only) for which it was
insured. The third learned arbitrator, however, dissented
from the majority award and held that the sum of Rs.
33,80,925/ offered by the appellant insurance company
was fair and proper. Subsequent thereto the appellant
herein filed an application under Section 33 of the
Arbitration and Conciliation Act, 1996 (“Act, 1996” for short)
seeking for clarification relating to the award dated
28.06.2004 and also with regard to the venue of arbitration
as indicated in the award. The said application filed under
Section 33 of the Act was dismissed through the order dated
17.12.2004. Pursuant thereto the appellant insurance
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company, in order to assail the award dated 28.06.2004 and
the order dated 17.12.2004 filed the petition under Section
34 of the Act, 1996 on 24.02.2005. Since, the award
indicated that the same was passed at Jaipur and the third
learned arbitrator in his order had declared the venue of the
arbitral tribunal to be at Jaipur, the appellant insurance
company filed the petition on 24.02.2005 before the learned
District Judge, Jaipur.
3. The respondent on appearing in the said proceedings
had objected to the proceedings being held at Jaipur, since
according to the respondent the entire cause of action had
arisen at Jodhpur. The learned District Judge at Jaipur on
considering the rival contentions had through the order
dated 12.03.2008 held the petition as not maintainable
before that Court but exercised the power under Order 7
Rule 10 and 10 A of the Civil Procedure Code and returned
the petition to the appellant insurance company and
directed that the parties shall be present before the learned
District Judge, Jodhpur, on 02.04.2008 for presentation of
the petition therein and proceed with the matter. The
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appellant insurance company however presented the petition
before the learned District Judge, Jodhpur, only on
10.04.2008, instead of the specified date of 02.04.2008. In
that circumstance, the respondent herein filed an
application under Section 3 of the Limitation Act, before the
learned District Judge, Jodhpur, in the represented petition
under Section 34 of the Act, 1996 which was numbered as
arbitration application number 18A of 2008. Through the
said application the respondent had sought rejection of the
petition on the ground of the limitation.
4. At this stage, the appellant insurance company filed an
application dated 03.05.2008 under Section 14 of the
Limitation Act, seeking that the time spent in the
proceedings before the learned District Judge, Jaipur, be
excluded and the petition be entertained on its merits. The
respondent herein opposed the said application. The
learned District Judge, Jodhpur, through the order dated
15.07.2008 had considered the applications under Section
14 and 3 of the Limitation Act and dismissed the application
filed by the appellant insurance company under Section 14
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of the Limitation Act and allowed the application filed by the
respondent herein under Section 3 of the Limitation Act.
Consequently, the petition filed under Section 34 of the Act,
1996 was dismissed. The appellant insurance company
therefore claiming to be aggrieved filed the appeal under
Section 37 of the Act, 1996 before the High Court of
judicature for Rajasthan at Jodhpur. The High Court after
taking note of the order passed by the learned District
Judge, Jodhpur, while disposing of the application under
Section 3 & 14 of the Limitation Act has dismissed the
appeal through the order dated 06.02.2009. The appellant
insurance company therefore claiming to be aggrieved by the
said order dated 06.02.2009 passed by the High Court in SP
(C) Misc. Appeal No. 1103/2008 is before this Court in this
appeal.
5. We have heard Dr. Meera Aggarwal, learned advocate
for the appellant, Mr. Puneet Jain, learned advocate for the
respondent and perused the appeal papers.
6. As noted in the sequence of events that flowed from the
point the policy was issued on 01.12.1999 and a claim
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relating to the same being made in view of the fire accident,
the dispute essentially is with regard to the quantum of
compensation which had led to the dispute between the
parties. The present proceeding has however arisen in the
background of the petition under Section 34 of the Act, 1996
being dismissed on the ground of limitation. In that
circumstance, though the appellant had also filed the appeal
under Section 37 of the Act, 1996 and had raised the
contentions with regard to correctness or otherwise of the
award dated 28.06.2004 and the order dated 17.12.2004 on
the application under Section 33 of the Act, 1996, the merits
of the rival contentions relating to the claim would not arise
for consideration at this stage. This is for the reason that in
the proceedings under Section 34 of the Act, which is the
remedy available to assail the award, the contentions on
merits of the claim relating to the insurance policy has not
been gone into to consider the correctness or otherwise of
the arbitral award and the proceedings has been concluded
on the ground of limitation. Consequently, in the appeal
filed under Section 37 of the Act, 1996 also it is on
examination of that aspect the appeal has been dismissed.
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In that view, the limited consideration to be made in this
appeal is to determine whether the dismissal of the petition
under Section 34 of the Act, 1996 on the ground of
limitation is justified. In that regard, if the conclusion to be
reached by us is to the effect that in the present
circumstance the petition under Section 34 of the Act, 1996
was to be considered on merits, the matter would thereafter
have to be gone into on merits before the learned District
Judge, Jodhpur, to advert to the merits limited to the
consideration permissible under Section 34 of the Act, 1996.
7. While taking note of these aspects the fact that the
award was initially passed on 28.06.2004 and the third
learned arbitrator disposed of the application under Section
33 of the Act, 1996 on 07.12.2004 is the position which
emerges from the record. In that view, the petition filed
under Section 34 of the Act, 1996 before the learned District
Judge, Jaipur, on 24.02.2005 is within the time frame as
stipulated under Section 34 (3) of the Act, 1996. The
position is also that the learned District Judge, Jaipur,
returned the original application through the order dated
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12.03.2008 permitting the appellant to present it before the
learned District Judge, Jodhpur, on 02.04.2008. If the
petition was presented on the said date in terms of the order
the need for consideration on delay would not have arisen.
However, as noticed the appellant insurance company re
presented the petition before the learned District Judge,
Jodhpur only on 10.04.2008. In view of the application filed
by the respondent under Section 3 of the Limitation Act
seeking dismissal in that context, the appellant herein filed
the application under Section 14 of the Limitation Act. The
issue that would therefore arise is as to whether the
presentation of the petition before the learned Judge,
Jodhpur, should be considered as a fresh petition and the
explanation for the entire period from the original limitation
period i.e., from the date of the award is to be considered for
the purpose of condonation of delay for prosecuting in an
alternate jurisdiction, while considering the application
under Section 14 of the Act or in the present circumstance
since the earlier Court had exercised the power under Order
7 Rule 10 and 10A of the Civil Procedure Code, the
consideration should be for the delay condonation between
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the period 02.04.2008 to 10.04.2008 merely being the delay
in representation.
8. The learned counsel for respondent in that regard has
contended that when a plaint is returned under Order 7
Rule 10 CPC to be filed before the Court having jurisdiction
and in that circumstance when the plaint is presented in the
Court having jurisdiction the petition can be deemed to be
instituted in the proper Court as a fresh petition when the
plaint is presented in such Court. To buttress such
contention, the learned counsel has relied on the decision in
the case of
Shri Amar Chand Inami vs. Union of India
(1973) 1 SCC 115 with reference to para 9 thereof. We have
carefully perused the said decision in the background of the
said contention. Though such decision was rendered in the
facts arising therein and the decision was rendered on
13.10.1972 in the context of the provision contained in
Order 7 Rule 10 CPC as it existed, it is to be noted that
amendment was made on 01.02.1977 whereunder Rule 10A
was substituted under Order 7 Rule 10 of CPC. A perusal of
the same will indicate that after amendment the matter is
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not left in a limbo after the plaint is returned in terms of
Rule 10(2) which existed earlier. Presently through Rule
10A to Order 7 of CPC on an application being made a date
is to be specified for its presentation so as to enable the
appearance before the Court in which it would be re
presented. Therefore, the representation of the petition in
the Court which is indicated in the order for return cannot
be considered as a fresh filing in all circumstances when, it
is returned to the plaintiff for such rerepresentation. This
Court in the case of
Joginder Tuli vs. S.L. Bhatia and
another (1997) 1 SCC 502 has held that normally, when the
plaint is directed to be returned for presentation to the
proper court perhaps it has to start from the beginning but
in the cited case, since the evidence was already adduced by
the parties, the matter was tried accordingly. The High
Court had in that case directed to proceed from the stage at
which the suit stood transferred and this Court did not find
any illegality in such order passed by High Court to treat the
same as a continuation of the proceedings.
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9. In the instant case though the appellant herein had not
filed the application indicating the Court to which the
petition would be represented and did not seek for fixing
the date of hearing, the Court at Jaipur while ordering
return of the petition after consideration of the application of
the respondent under Order 7 Rule 11 CPC had indicated
the Court to which it was to be presented and the date for
appearance on 02.04.2008 for that purpose. Hence, it is not
as if the proceeding came to an abrupt end when the petition
was returned so as to consider the next filing as a fresh
petition. In that circumstance when the time had been
granted and date was fixed by the learned District Judge at
Jaipur and if for any reason the representation was not
possible on that date, the course open to the appellant was
to file an application under Section 148 of CPC before the
Court at Jaipur which ordered for return and fixed the time
for presentation in the Court at Jodhpur, seeking extension
of time granted earlier. However, since the same was not
resorted to by the appellant and the petition was re
presented before the District Court at Jodhpur with a delay
of about 8 days from the date fixed for presentation and as
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no extension was also sought as indicated above,
condonation of such delay ought to have been sought. Since
the petition was filed with delay and no other application
had accompanied the petition, the respondent filed the
application under Section 3 of Limitation Act which
prompted a knee jerk reaction by the appellant in filing the
application under Section 14 of the Limitation Act. Though
the said application has invoked Section 14 of Limitation Act
and thereafter supported by an additional affidavit, the
averments in the application is in the nature of an
application seeking condonation of delay in representation
of the petition as against the date fixed by the Court for
presentation in Jodhpur.
10. The learned counsel for the appellant has relied on the
decision in the case of S. Ganesharaju (dead) through
LRs. and Anr. vs. Narsamma (dead) through LRs. and
Ors. (2013) 11 SCC 341 to contend that the expression
“sufficient cause” as contemplated under Section 5 of the
Limitation Act should be given liberal construction so as to
advance substantial justice and the delay should be
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condoned unless the opposite party is able to show malafide
in not approaching the Court within time. It is further
contended that it is held therein that the rules of limitation
are not meant to destroy or foreclose the right of parties.
The learned counsel for the respondent on the other hand
would contend that the said decision rendered is in the
context of consideration of “sufficient cause” as
contemplated under Section 5 of the Limitation Act which
would not be applicable to proceedings under Section 34 of
the Act, 1996. In that regard, the learned counsel for the
respondent has relied on the decision in the case of
Union
of India vs. Popular Construction Company , (2001) 8
SCC 470 wherein it is held that Section 5 of the Limitation
Act is not applicable to the proceedings under Section 34 of
the Act, 1996 for setting aside the arbitral award. Further
the decision in the case of Simplex Infrastructure Ltd. vs.
, (2019) 2 SCC 455 is also relied upon to
Union of India
contend that Section 5 of the Limitation Act has no
application to a petition challenging the arbitral award
under Section 34 of the Act, 1996. The said decision would
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however indicate that Section 14 of the Limitation Act is
applicable to an application submitted under Section 34 of
the Act, 1996 seeking for exclusion of certain period if the
application under Section 34 of the Act, 1996 is at the first
instance filed within the limitation period provided under
Section 34(3) of the Act, 1996. The position of law that
Section 5 of the Limitation Act is not applicable to condone
the statutory period under Section 34(3) of Act, 1996 is well
established and needs no reiteration.
11. Having noticed the said decisions, in the instant case
as already indicated above the condonation of delay sought
is not for filing the petition under Section 34 of the Act, 1996
for the first time. The petition filed under Section 34 of the
Act, 1996 at Jaipur was within the period of limitation and
the delay regarding which explanation is put forth is for the
period of 8 days in representing the petition beyond the
date fixed after it was returned under Order 7 Rule 10 of the
Civil Procedure Code. Therefore, in that circumstance even
if the term “sufficient cause” as contained under Section 5 of
the Limitation Act is taken note, in the present facts the
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same is not with reference to petition under Section 34 of
Act, 1996 for condonation of delay beyond the period
prescribed under Section 34(3) of the Act, 1996. Though
that be the position what is necessary to be taken note
herein is that the application filed for excluding the time is
under Section 14 of the Limitation Act. In addition to the
very decisions cited above indicating that Section 14 of the
Limitation Act would be applicable to the proceedings under
Section 34 of the Act, 1996 subject to the petition under
Section 34 being filed within time, the learned counsel for
the appellant has also relied upon the decision in the case of
M/s Consolidated Engineering Enterprises vs. The
Principal Secretary, Irrigation Department & Ors.
(2008) 7 SCC 169 wherein the same position is reiterated.
12. The learned counsel for the respondent would however,
refer to the very same decision and contend that even if
Section 14 of the Limitation Act is applicable, the exclusion
of time can only be of the proceedings which is bonafide
initiated in a Court without jurisdiction. It is contended that
in the instant case the entire cause of action had occurred at
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Jodhpur and despite the same the appellant had deliberately
initiated the proceedings at Jaipur which cannot be
considered as a bonafide mistake. Though such contention
is put forth, what cannot be lost sight in the instant facts is
that the learned Judge of the Additional District Court,
Jaipur while considering the maintainability of the
proceedings before that Court, through the order dated
12.03.2008 has taken note of the very rival contentions with
regard to the cause of action as contended and also the
Court before which the proceedings was required to be
initiated. Though at this point of time the position of law
has been enunciated through several decisions, and there is
clarity, at that juncture the consideration with regard to the
definition of Court as contained in the Act was required to
be interpreted and on taking note of various decision of the
Supreme Court had arrived at the conclusion that keeping
in view the fact situation the petition is to be returned for
presentation in the appropriate Court. The very nature of
consideration made by the Court at Jaipur would indicate
that the matter required a detail consideration before
exercising the power under Order 7 Rule 10 and 10A of the
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Civil Procedure Code and the Court during the said
proceedings has not arrived at a conclusion that the
proceedings had been initiated malafide before that Court.
However, keeping in view the overall facts and circumstance
of the present case the Court had ordered return of the
petition for appropriate presentation and the date had been
fixed. The correctness of the said order had not been
assailed by the respondent herein seeking absolute rejection
of the petition by raising grounds on the nature of findings
rendered therein since that Court had not held the petition
to be malafide.
13. In such circumstance, in the fact situation wherein the
issue of delay had arisen only in the context of the delay of 8
days in representation as permitted by the Court at Jaipur,
reexamination of the matter to consider the entire period
spent before the Court at Jaipur as malafide so as to
nonsuit the appellant and deny consideration of proceedings
under Section 34 of Act, 1996 which was initiated within the
period of limitation at the first instance, on its merits will
not be justified.
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14. In that view, the order dated 15.07.2008 passed on the
application filed under Section 14 and Section 3 of the
Limitation Act passed by the Additional District and
Sessions Judge S.No.3, Jodhpur and the order dated
06.02.2009 passed by the High Court in S.B. (Civil) Misc.
Appeal No.1103/2008 are not sustainable. They are
accordingly, set aside. Consequently, the proceedings in
Arbitration Application No.18A of 2008 is restored to the file
of the Additional District Judge S.No.3, Jodhpur.
15. The parties shall appear before the said Court on
15.10.2019 as the first date for appearance without issue of
notice/summons from that Court. The proceedings thereto
shall be considered on merits in an expeditious manner. All
contentions in that regard are left open.
16. The appeal is, accordingly allowed with no order as to
costs. All pending applications shall stand disposed of.
……………………….J.
(R. BANUMATHI)
……………………….J.
(A.S. BOPANNA)
New Delhi,
October 03, 2019
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