Full Judgment Text
2018:BHC-OS:6338
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION PETITION NO. 453 OF 2017
ALONGWITH
NOTICE OF MOTION NO. 536 OF 2017
IN
COMMERCIAL ARBITRATION PETITION NO. 453 OF 2017
Maharashtra State Road Development )
Corporation Ltd., )
A Government of Maharashtra Undertaking)
having its registered office at )
Nepean SeaRoad, Priyadarshini Park, )
Mumbai 400 036 ) ….. Petitioner/
Applicant
VERSUS
1. Simplex Gayatri Consortium, )
a joint venture having its office at )
Simplex Infrastructure Ltd., 502-A, )
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5 Floor, A Wing, Poonam Chambers, )
Dr.A.B.Road, Worli, Mumbai 400 018 )
2. Simplex Infrastructure Ltd., )
a company incorporated under the )
Companies Act, 1956 having its registered)
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office at 5 Floor, A Wing, Poonam )
Chambers, Dr.A.B.Road, Worli, )
Mumbai 400 018 )
3. Gayatri Projects Ltd., )
a company incorporated under the )
Companies Act, 1956 having its registered)
office at B-1, TSR Towers, Rajbhavan Road,)
Somajiguda, Hyderabad – 500 082 ) ..… Respondents
Mr.F.De'vetre, Senior Advocate, a/w. Mr.Arun Siwach, Mr.Aditya
Sikka, Ms.Priyanka Mitra, Ms.Neelakshi, i/b. M/s.Cyril Amarchand
Mangaldas for the Petitioner/Applicant.
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Mr.Kishore Jawle, a/w. Mr.Raviraj Chilumuri, Ms.Shobhana Narayan,
i/b. M/s.Khaitan & Co. for the Respondents.
CORAM : R.D. DHANUKA, J.
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DATE : 19 APRIL, 2018
JUDGMENT
By this petition filed under section 34 of the Arbitration &
Conciliation Act, 1996, the petitioner has impugned the arbitral award
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dated 28 April, 2017 passed by the learned arbitrator allowing certain
claims made by the respondents.
2. The respondents have raised an issue of limitation in the
petitioner's filing this petition allegedly beyond the period of limitation
prescribed under section 34(3) of the Arbitration & Conciliation Act,
1996. This Court has thus heard the learned counsel for the parties on
the issue of limitation raised by the respondents first. Some of the
relevant facts for the purpose of deciding the issue of limitation raised
by the respondents are as under :
3. The petitioner lodged the Commercial Arbitration Petition
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(Lodging) 334 of 2017 in this Court on 26 July, 2017 inter-alia
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praying for setting aside the impugned award dated 28 April, 2017 i.e.
within a period of three months from the date of service of the signed
copy of the award from the learned arbitrator. By an Arbitration &
Conciliation (Amendment) Act, 2015, section 34(5) of the Arbitration
& Conciliation Act, 1996 was inserted, which reads thus:
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(5) An application under this section shall be filed
by a party only after issuing a prior notice to the
other party and such application shall be
accompanied by an affidavit by the applicant
endorsing compliance with the said requirement.
4. The petitioner did not issue any prior notice to the respondents
before filing the said Commercial Arbitration Petition (Lodging) 334
of 2017. The petitioner however, issued a notice under section 34(5)
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upon the respondents on 27 July, 2017. The petitioner also filed an
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affidavit proving the service of the said notice dated 27 July, 2017 on
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28 July, 2017.
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5. On 27 August,2017 the respondents filed an affidavit in reply in
the said arbitration petition (L) No.334 of 2017 which was numbered
as 400 of 2017 opposing the submissions and the averments in the said
arbitration petition. The respondents also raised an issue in the said
affidavit in reply that since the petitioner had not complied with the
requirement under section 34(5) of the Arbitration and Conciliation
Act, 1996 by not issuing prior notice to the respondents, the said
petition was not maintainable.
6. The said Arbitration Petition No.400 of 2017 appeared before
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this court on 18 August,2017. The respondents made oral
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submissions in that petition on 18 August,2017 that the petition was
not maintainable in view of the amended Act having come into force.
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This court recorded the said submission in the said order dated 18
August,2017 and directed that the point raised by the respondents that
the petition itself was not maintainable would be considered by this
court on the next date. The said arbitration petition was adjourned to
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31 August,2017.
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7. On 31 August,2017 this court granted liberty to the petitioner to
withdraw the said Arbitration Petition No.400 of 2017 with liberty to
file a fresh petition. The petitioner thereafter issued a notice to the
respondents under section 34(5) of the Arbitration and Conciliation
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Act, 1996 on 1 September,2017. The petitioner lodged this arbitration
petition (Commercial Arbitration Petition No.453 of 2017) inter alia
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impugning the said arbitral award on 1 September,2017. The
petitioner also filed an affidavit in compliance with section 34(5) of the
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Arbitration and Conciliation Act, 1996 on 1 September, 2017.
8. Mr. De'vetre, learned senior counsel for the petitioner invited my
attention to some of the annexures to the petition. It is submitted that
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the petitioner had received a signed copy of the award dated 28 April
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2017 from the learned arbitrator on 30 April,2017. Before expiry of
three months from the date of service of copy of the award, the
petitioner lodged the said arbitration petition bearing No.400 of 2017
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on 26 July, 2017. The petitioner however had issued a notice under
section 34(5) and had filed an affidavit proving service of the said
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notice dated 28 July, 2017 i.e. after lodging of the said arbitration
petition. He submits that the respondents however raised an objection
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before this court on 18 August,2017 alleging non compliance of
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section 34(5) of the Arbitration and Conciliation Act, 1996. The matter
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was adjourned by this court to 31 August,2017.
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9. On 31 August,2017, the petitioner sought liberty to withdraw
the said arbitration petition bearing no. 400 of 2017 [(L) No.334 of
2017] with liberty to file a fresh arbitration petition. The respondents
did not oppose the application made by the petitioner for withdrawal of
the said arbitration petition with liberty to file a fresh arbitration
petition. This court granted liberty to the petitioner to withdraw the
said arbitration petition with liberty to file a fresh petition by an order
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dated 31 August,2017. On 1 September,2017 the petitioner lodged
this arbitration petition impugning the said arbitral petition. The
petitioner also complied with the notice under section 34(5) by issuing
a notice upon the respondents prior to the date of lodging this petition
and also filed an affidavit proving service of notice along with this
petition.
10. It is submitted by the learned senior counsel that the question
regarding the mandatory/directory nature of the notice under section
34(5) of the Act was open to doubt. The petitioner had immediately on
the next date of the lodging of the earlier arbitration petition had served
a notice upon the respondents and had filed an affidavit of service on
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28 July, 2017. No sooner the respondents raised an objection before
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this court in the hearing held on 18 August,2017, when the matter
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appeared before this court on 31 August,2017, the petitioner obtained
leave to withdraw the said arbitration petition with liberty to file a
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fresh petition. The arbitration petition was already affirmed on 31
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August,2017 on the very same date of the order passed by this court
granting leave to withdraw the said arbitration petition with liberty to
file a fresh arbitration petition. The petitioner issued notice under
section 34(5) before lodging the second arbitration petition and
complied with section 34(5) of the said Act.
11. It is submitted by the learned senior counsel that large number of
such arbitration petitions were filed by various parties under section 34
who were aggrieved by the arbitral awards without issuing such notice
under section 34(5). It is submitted that this court ultimately decided
the said issue in a group of petitions by an order and judgment
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delivered on 21 February,2018 in case of Global Aviation Services
Private Limited vs Airport Authority of India in Commercial
Arbitration Petition No.434 of 2017 alongwith companion matters and
holding that even in those cases where the notice invoking arbitration
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agreement under section 21 was received by other party after 23
October, 2015, the provisions under section 34(5) and 34(6) are
directory and not mandatory. The Court has ample power to direct the
petitioner to issue notice along with papers and proceedings upon the
respondent after the petitioner files the arbitration application under
section 34(1) and before such petition is heard by the Court at the stage
of admission.
12. It is submitted that the doubt of the petitioner about the nature of
the notice contemplated under section 34(5) was whether directory or
mandatory was ultimately removed by this court in case of Global
Aviation Services Private Limited (supra).
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13. It is submitted by the learned senior counsel that the petitioner
was thus prosecuting the earlier arbitration petition in good faith and
with due diligence and thus the time taken by the petitioner in pursuing
the Arbitration Petition No.400 of 2017 i.e. during the period between
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26 July, 2017 and 31 August,2017 shall be excluded under section
14(2) of the Limitation Act, 1963. It is submitted that under section 14
of the Limitation Act, 1963 applies to the application under section
34(1) and can be considered while computing the period of limitation
under section 34(3) of the Arbitration and Conciliation Act, 1996. He
submits that the expression “other cause of a like nature” described in
section 14(1) of the Limitation Act, 1963 should be read as ejusdem
generis to the words “defects of jurisdiction”.
14. It is submitted by the learned senior counsel that the petitioner
has not taken any undue advantage of not giving any prior notice under
section 34(5) or not having filed any affidavit of compliance in respect
of such notice. The petitioner had given such notice under section
34(5) on the very next date of lodging the earlier arbitration petition
and had filed affidavit of compliance on the next day of issuing such
notice.
15. Learned senior counsel placed reliance on the following
judgments :-
(a) India Electric Works Ltd. vs. James
Mantosh and another, 1971(1) SCC 24
(paragraphs to 10)
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(b) Consolidated Engineering Enterprises vs.
Principal Secretary, Irrigation Department and
others, (2008) 7 SCC 169 , (Paragraphs 22, 24, 28,
31 and 32)
(c) Judgment of Himachal Pradesh High
Court in case of Madhava Hytech Engineers Pvt.
Ltd. vs. The Executive Engineers and ors.
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decided on 24 August,2017 in OMP (M) No.48 of
2016.
16. Mr.Jawle, learned counsel for the respondents on the other hand
submits that though section 34(5) of the Arbitration and Conciliation
Act, 1996 clearly provided that a prior notice before filing arbitration
petition under section 34 was required to be issued and an affidavit of
compliance of notice was required to be filed along with the
Arbitration Petition No.400 of 2017, no prior notice under section
34(5) was issued by the petitioner and the arbitration petition was not
accompanied by an affidavit by the petitioner endorsing compliance
with the said requirement.
17. It is submitted by the learned counsel that when the said
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arbitration petition (400 of 2017) appeared before this court on 18
August,2017, the respondents had raised an objection about the
maintainability of the arbitration petition in view of the non
compliance of the provisions of section 34(5) of the Act. The said
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objection was recorded by this court in the said order dated 18
August,2017. Inspite of the said specific objection raised by the
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respondents before this court and also in the affidavit in reply, the
petitioner did not seek liberty to withdraw the said arbitration petition
(400 of 2017) with liberty to file a fresh arbitration petition after
complying with the provisions of section 34(5) of the Act immediately.
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He submits that the petitioner sought such liberty only on 31
August,2017 when the matter again appeared on board and obtained
such liberty to withdraw the said arbitration petition with liberty to file
a fresh petition.
18. It is submitted that since the petitioner continued to prosecute
the said arbitration petition (400 of 2017), inspite of such specific
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objection raised by the respondent on 18 August,2017, the petitioner
cannot be said to be have prosecuted the said arbitration petition in
good faith and with due diligence. The petitioner thus cannot be
granted any benefit of section 14(2) of the Limitation Act, 1963 and
the time taken in prosecuting the said arbitration petition (400 of 2017)
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between 26 July,2017 and 1 September,2017 cannot be excluded. He
submits that if the said time is not excluded, this arbitration petition
having been filed after expiry of three months from the date of service
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of the signed copy of the award on 30 April, 2017, the petition lodged
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on 1 September,2017 is ex-facie barred by limitation prescribed under
section 34(3) of the Act.
19. Learned counsel placed reliance on the following judgments :-
(a) Deena (dead) Through LRs. vs. Bharat
Singh (Dead) through LRs. And others, (2002) 6
SCC 336 (Paragraphs 4, 14 to 17)
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(b) Rabindra Nath Samuel Dawson vs.
Sivakasi and others , (1973) 3 SCC 381
(Paragraphs 4 and 5)
(c) Judgment of Allahabad High Court in case
of Jagannath Prasad vs. Sri Sant Hardassram
Sevashram and others, AIR 1978 All 250 ,
(Paragraph 6)
20. It is submitted by the learned counsel for the respondents that
this is not a case of bonafide mistake. The petitioner cannot be
allowed to urge that the petitioner was not aware of the provisions of
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section 34(5) brought into effect from 23 October,2015. He submits
that there cannot be a bonafide mistake in respect of the express
provisions of law. The respondents had already filed an affidavit in
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reply on 17 August,2017 raising an objection of the maintainability of
the arbitration petition for non compliance of the provisions of section
34(5) of the Act.
21. Mr.De'vetre, learned senior counsel for the petitioner
distinguished the judgments relied upon by Mr.Jawle, learned counsel
for the respondents on the ground that the facts of those judgments are
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totally different. He submits that on 18 August 2017, this court had
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adjourned the matter to 31 August,2017 for the purpose of deciding
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the objection raised by the respondents. On 31 August,2017 itself the
petitioner had already kept the arbitration petition ready duly affirmed.
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No sooner the liberty was granted by this court on 31 August,2017 for
withdrawal of the said arbitration petition (400 of 2017) with liberty to
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file a fresh petition, the petitioner issued a notice under section 34(5) to
the respondents and also filed an affidavit in compliance with section
34(5). It is submitted that section 14(2) has to be construed liberally.
The petitioner has placed bonafide construction of section 34(5). The
petitioner has not taken any advantage of any situation.
REASONS AND CONCLUSIONS
22. It is not in dispute that section 34(5) was inserted by Act 3 of
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2016 w.e.f. 23 October,2015 in the Arbitration and Conciliation Act,
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1996. The petitioner had received a signed copy of the award on 30
April, 2017 from the learned arbitrator. Before expiry of three months
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from the date of service of the signed copy of the award i.e. on 26
July,2017, the petitioner lodged the said arbitration petition which was
numbered as Arbitration Petition No.400 of 2017. The petitioner
however issued notice of lodging of such arbitration petition upon the
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respondents only on 27 July, 2017 and filed an affidavit on 28
July,2017. The papers and proceedings were served upon the
respondents by the petitioner at the earliest. The respondents filed an
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affidavit on 17 August,2017 raising various issues including issue of
maintainability of the arbitration petition on the ground of non
compliance of the provisions of section 34(5).
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23. On 18 August,2017, when the matter appeared for the first time,
this court recorded the said objection raised by the respondents and
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adjourned the matter to 31 August,2017 for deciding the said issue. A
perusal of the papers and proceedings in this arbitration petition clearly
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indicates that the petition was already affirmed on 31 August,2017
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when the matter appeared before this court. The petitioner obtained
liberty from this court to withdraw the said arbitration petition (400 of
2017) with liberty to file a fresh petition. The respondents did not raise
any objection to the said application made by the petitioner for
withdrawal of the said arbitration petition with liberty to file a fresh
petition nor raised an issue of limitation when liberty was granted to
the petitioner. The respondents also did not challenge the said order
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passed by this court on 31 August,2017.
24. It is not in dispute that the petitioner issued a notice under
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section 34(5) on the respondents on 1 September,2017 and also filed
an affidavit of compliance along with this arbitration petition. The said
notice under section 34(5) was issued upon the respondents before this
petition was lodged. If the cause of action for filing arbitration petition
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under section 34(1) is considered from 30 April,2017, three months
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period would expire on 31 July,2017.
25. A question that arises for consideration of this court is whether
non compliance of notice contemplated under section 34(5) by the
petitioner before lodging the Arbitration Petition No.400 of 2017 and
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withdrawal of the said arbitration petition on 31 August,2017 in view
of the objections raised by the respondents would fall within the
expression “other cause of a like nature” prescribed under section
14(1) of the Limitation Act, 1963 and if so, whether the petitioner was
prosecuting the said arbitration petition (400 of 2017) bonafide, in
good faith and with due diligent.
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26. It was the case of the petitioner that the question regarding
mandatory/directory notice under section 34(5) of the Arbitration and
Conciliation Act was open to doubt. The petitioner had relied upon the
judgment of Patna and Kerala High Court taking a view that such
notice was not mandatory but was directory. No sooner the
respondents raised an objection about the maintainability of the
petition on the ground that the petitioner had not issued any such notice
under section 34(5) and had not complied with the said procedure, the
petitioner prepared another petition and applied with liberty to
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withdraw when the matter appeared before this court on 31
August,2017.
27. Large number of petitions were filed in this court without issuing
prior notice as contemplated under section 34(5) and without
accompanying with an affidavit of compliance as contemplated under
the provisions. A group of such petitions were heard together by this
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court. By a detailed order and judgment delivered by this court on 21
February,2018 in case of Global Aviation Services Private Limited
(supra) it is held by this court that the provisions under section 34(5)
and 34(6) are directory and not mandatory. In some of the petitions,
the parties had complied with such provision. In some of the petitions,
the petitioner had filed notice of motion for a declaration that no such
notice was mandatory. In my view, Mr.De'vetre, learned senior
counsel for the petitioner is thus right in his submission that there was
a reasonable and bonafide doubt as to whether the said notice
contemplated under section 34(5) of the Arbitration and Conciliation
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Act, 1996 was directory or mandatory. The parties had interpreted the
said provision differently.
28. Supreme Court in case of India Electric Works Ltd. (supra) has
considered the expression “other cause of a like nature” prescribed in
section 14(2) of the Limitation Act, 1963. Supreme Court held that if
those words “other cause of a like nature” were read along with the
expression "is unable to entertain", they would denote that the defect
must be of such a character as to make it impossible for the court to
entertain the suit or application in its inception or at all events as to
prevent it from deciding it on the merits. It is held that if the defects
were of such a nature that they had to be decided before the case could
be disposed of on merits or if they did not necessitated an examination
of the merits of the case they would be defects of a "like nature".
Supreme Court held that in each one of these cases the court did not
lack jurisdiction in its inception but the suit could not be proceeded
with and disposed of until the statutory conditions laid down had been
satisfied or fulfilled.
29. In paragraph (7) of the said judgment, it is held that although all
questions of limitation must be decided by the provisions of the Act
and the courts cannot travel beyond them the words "or other cause of
a like nature" must be construed liberally. In my view, the principles
laid down by the Supreme Court in case of India Electric Works Ltd.
(supra) applies to the facts of this case. The respondents themselves
had raised an objection in the affidavit in reply that the Arbitration
Petition No.400 of 2017 was not maintainable on the ground that there
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was non compliance of section 34(5). This court thus could not have
proceeded with the hearing of the matter on merits without first
deciding the issue of maintainability raised by the respondents.
30. In my view, the expression "or other cause of a like nature" has
to be construed liberally and a situation of this nature where the notice
under section 34(5) was contemplated before filing of the arbitration
application under section 34, the same must be read as ejusdem
generis or analogous to the word relating to the defect of jurisdiction.
This court thus would have unable to entertain such petition unless
such notice would have complied with. The doubt in the mind of large
number of parties was cleared by virtue of pronouncement of the
judgment of this court. Thus even if the objection of the respondents
would have been considered, the said objection would fall under the
expression "or other cause of a like nature".
31. Supreme Court in case of Consolidated Engineering
Enterprises (supra) has held that section 14(2) of the Limitation Act
applies to the application filed under section 34(1) and can be
considered if the conditions are satisfied for the purpose of
computation of limitation under section 34(3) and benefit of exclusion
can be granted. Supreme Court in the said judgment has held that due
diligence cannot be measured by any absolute standards but is
measured of prudence or activity expected from and ordinarily
exercised by a reasonable and prudent person under the particular
circumstances. It is held that section 14 will not help a party who is
guilty of negligence, lapse or inaction. However, there can be no hard
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and fast rule as to what amounts to good faith. It is a matter to be
decided on the facts of each case. It will, in almost every case be more
or less a question of degree. The mere filing of an application in wrong
court would not prima facie show want of good faith. There must be no
pretended mistake intentionally made with a view to delaying the
proceedings or harassing the opposite party. In my view, the principles
of law laid down by the Supreme Court would squarely applies to the
facts of this case.
32. It is not the case of the respondents that the petitioner had
intentionally and deliberately not issued notice under section 34(5) of
the Arbitration and Conciliation Act,1996 with a view to delay the
proceedings or to harass the respondents or that the petitioner has
received any benefit due to non service of notice. In my view there
was a honest and bonafide doubt in the mind of the large number of
litigants whether such notice contemplated under section 34(5) was
mandatory or directory. A perusal of the record clearly indicates that
the petitioner has not taken any advantage of not giving notice under
section 34(5) prior to the date of lodging such arbitration petition (400
of 2017). The respondents however made a statement from time to
time in the petition filed by the petitioner not to execute the impugned
award.
33. In my view, since the petitioner had under the bonafide doubt as
to whether the said notice contemplated under section 34(5) was
mandatory or directory as is apparent from the conduct of the petitioner
and in view of the petitioner having withdrawn the Arbitration Petition
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No.400 of 2017 at the earliest opportunity available, I am of the view
that it cannot be said that the petitioner had not prosecuted the petition
bonafide , in good faith and with due diligence. The petitioner thus has
made out a case for exclusion of time under section 14(2) of the
Limitation Act, 1963 in view of the petitioner having prosecuting the
said arbitration petition (400 of 2017) bonafide in good faith and with
due diligence.
34. Himachal Pradesh in case of Madhava Hytech Engineers Pvt.
Ltd. (supra) construed section 34(5) and also the expression “other
cause of a like nature” described in section 14(1) of the Limitation At,
1963 and held that such defect falls within the scope of “other cause of
a like nature” which is equivalent to the defect of jurisdiction. I am in
agreement with the view expressed by the Himachal Pradesh High
Court in case of Madhava Hytech Engineers Pvt. Ltd. (supra).
35. Supreme Court in case of Union of India and others vs. West
Coast Paper Mills Ltd. and another (III), (2004) 3 SCC 458 has
construed the expression “other cause of a like nature” stated in section
14(1) of the Limitation Act, 1963 and has held that section 14 of the
Limitation Act is wide in its application, inasmuch it is not confined in
its applicability only to cases of defect of jurisdiction. It is also
applicable to cases where the prior proceedings have failed on account
of other causes of like nature. Supreme Court in the said judgment
adverted to the earlier judgment in case of Roshanlal Kuthalia and
Ors. v. R.B. Mohan Singh Oberai, (1975) 4 SCC 628 in which it was
held that Section 14 of the Limitation Act is wide enough to cover such
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cases where the defects are not merely jurisdictional strictly so called
but others more or less neighbours to such deficiencies. Any
circumstances, legal or factual, which inhibits entertainment or
consideration by the Court of the dispute on the merits comes within
the scope of the Section and a liberal touch must inform the
interpretation of the Limitation Act which deprives the remedy of one
who has a right. In my view the principles laid down by the Supreme
Court in case of Union of India and others vs. West Coast Paper Mills
Ltd. and another (supra) and in case of Roshanlal Kuthalia and Ors.
(supra) squarely applies to the facts of this case.
36. The respondents themselves had raised an objection across the
bar as well as in their affidavit in reply that without prior notice under
section 34(5) of the Arbitration and Conciliation Act, 1996, the said
arbitration petition (400 of 2017) was not maintainable. In my view,
this objection thus would fall under the expression “other cause of a
like nature”.
37. Insofar as the judgment of Supreme Court in case of Rabindra
Nath Samuel Dawson (supra) relied upon by Mr.Jawle, learned
counsel for the respondent is concerned, in the said judgment, the
Supreme Court has considered the fact where the defendants had raised
an objection to the non-joinder of the Government as a party at the
earliest possible opportunity. The plaintiffs however pursued the said
suit and agreed to bear the risk of non-joinder of the State Government.
In these circumstances, the Supreme Court held that the plaintiffs in
that case were not prosecuting the suit in good faith and with due
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diligent and benefit of section 14(2) could not be thus given to such
litigant.
38. The facts however in this case are totally different. Not only the
petitioner but large number of other litigants were under the bonafide
doubt that the notice under section 34(5) was not mandatory but was
directory. In this case, the petitioner had already kept the petition
ready along with notice under section 34(5) when the matter was on
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board on 31 August,2017. The day on which this court granted liberty
to the petitioner to withdraw the said arbitration petition (400 of 2017),
on the very next day of the said order, the petitioner filed this
arbitration petition after complying with section 34(5). In my view the
judgment of Supreme Court in case of Rabindra Nath Samuel
Dawson (supra) relied upon by the learned counsel for the respondent
thus is clearly distinguishable in the facts of this case and would not
assist the case of the respondents.
39. Insofar as judgment of Supreme Court in case of Deena (dead)
Through LRs. (supra) relied upon by Mr.Jawle, learned counsel for the
respondents is concerned, in that matter before the Supreme Court,
inspite of the objections raised by the defendants about the
maintainability of the suit, the plaintiffs continued to prosecute the said
proceedings and applied for withdrawal of the suit with liberty to file a
fresh suit much later. The trial court as well as the appellate court in
those circumstances rendered a finding that the plaintiffs were not
entitled to the exclusion of time under section 14(2) of the Limitation
Act, 1963. Those findings were confirmed by the Supreme Court in
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the said judgment. The said judgment of Deena (dead) Through LRs.
(supra) is distinguishable in the facts of this case and would not assist
the case of the respondents.
40. Insofar as judgment of Allahabad High Court in case of
Jagannath Prasad (supra) relied upon by Mr.Jawle is concerned, a
perusal of the said judgment indicates that the appellant in that matter
though, on the basis of the higher valuation of the appeal was required
to file an appeal in High Court, filed the said appeal before the District
Judge. An objection was immediately raised by the respondents in that
appeal about the lack of jurisdiction of High Court. The appellant
however continued to prosecute the said appeal before the High Court.
The Allahabad High Court held that where the law is plain and does
not admit of any doubt and the appellant or his agent could not
possibly have any illusion as to the appropriate forum for presenting
appeal, it would be a case of palpable negligence and would not be
covered by the provisions of Section 14 of the Limitation Act. In the
facts of this case however as already referred to aforesaid, large
number of litigants filed application under section 34 without issuing
prior notice under section 34(5) having bonafide doubt as to whether
notice under section 34(5) was mandatory or directory. The judgment
delivered by the this court in case of Global Aviation Services Private
Limited (supra) has ultimately settled the issue and held that notice
under section 34(5) is not mandatory but is directory. In this case the
petitioner cannot be held guilty of negligence for not giving prior
notice under section 34(5). The facts before the Allahabad High Court
in case of Jagannath Prasad (supra) are totally different and are
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distinguishable in the facts of this case and thus would not assist the
case of the respondents.
41. In my view the petitioner has made out a case for exclusion of
time under section 14(2) of the Limitation Act, 1963 for a period from
th st
26 July, 2017 to 31 August,2017. There is thus no delay in filing
arbitration petition by the petitioner. The preliminary objection raised
by the respondents that the petition is barred by limitation has thus no
merit and is accordingly rejected. The parties are directed to make
submissions on the merits of the arbitration petition.
R.D. DHANUKA
[ , J.]
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