Case Note & Summary
This case involved a property dispute between two branches of a family. Motibhai Naranbhai Patel and Chandrakant Motibhai Patel were the appellants, while Pravinbhai Ishwarbhai Patel, Mahendrakumar Ishwarbhai Patel, and Jayantikumar Ishwarbhai Patel were the respondents. The dispute was referred to arbitration by mutual consent on 21 May 1985, and Dinubhai Motibhai Patel, an advocate, was appointed as the sole arbitrator. The arbitrator made his award on 26 February 1986 and gave intimation of the award to all parties. On 24 April 1986, the appellants' advocate wrote to the arbitrator objecting to the award being filed, but the award was not filed in court. Neither party filed the award within thirty days as required under Article 119 of the Limitation Act, 1963, nor applied for setting aside the award. On 31 January 1992, one of the respondents, Jayantibhai Ishwarbhai Patel, instituted a suit in the City Civil Court at Bombay seeking a permanent injunction based on the award. The appellant raised the maintainability of the suit on the ground that the award had not been registered or made rule of court. On 8 February 1992, Jayantikumar Ishwarbhai Patel requested the arbitrator to file the award in court. After a lapse of nearly six years, the arbitrator filed an application under Section 14 of the Arbitration Act, 1940, and also applied for a decree in terms of the award, engaging a lawyer for that purpose. The Civil Judge (S.D.) at Anand allowed the applications and passed a decree on 5 October 1994. The appellants' appeal against the decree was dismissed by the High Court on 30 September 1994. The key legal issue was whether the arbitrator could file the award after such a long delay and seek a decree in terms of the award when neither party had applied within the limitation period. The Court held that under Section 14(2) of the Arbitration Act, the arbitrator had no duty to file the award suo motu, and that the application for filing the award had to be made within thirty days under Article 119 of the Limitation Act. Even if Article 137 applied to the arbitrator's application, it was barred after three years from the date of making the award. The Court observed that the arbitrator had appeared to shed his mantle and join forces with a party, and that the law could not be allowed to be circumvented in this fashion. The Court concluded that the respondents could not indirectly obtain an order under Section 17 of the Arbitration Act, which they could not have obtained directly due to limitation. Accordingly, the Supreme Court allowed the appeal, set aside the High Court's order and the decree passed by the Civil Judge, and directed no order as to costs.
Headnote
A) Arbitration - Filing of Award - Limitation - Arbitration Act, 1940, Sections 14(2) and 17; Limitation Act, 1963, Articles 119 and 137 - An award must be filed in court within thirty days from service of notice of making it; arbitrator has no duty to file award suo motu; application by arbitrator after six years is barred; even if Article 137 applies to arbitrator, period is three years from date of making award. Held that the arbitrator's application filed after nearly six years was not maintainable and the court should have declined to entertain it. (Paras Not mentioned) B) Arbitration - Circumvention of Limitation - Section 14(2) Arbitration Act, 1940; Article 119 Limitation Act, 1963 - A party cannot indirectly obtain filing of an award by inducing the arbitrator to file it after the limitation period for the party's own application has expired; courts should not aid such circumvention; remedy must be sought with reasonable promptitude. Held that the respondents could not be allowed to circumvent the law with the help of the arbitrator. (Paras Not mentioned) C) Arbitration - Decree in Terms of Award - Section 17 Arbitration Act, 1940 - No decree can be passed under Section 17 unless the award is validly filed in court within limitation; without valid filing, the award cannot be made rule of court. Held that the decree passed by the Civil Judge was invalid and set aside. (Paras Not mentioned)
Issue of Consideration
Whether the arbitrator could after a long lapse of nearly six years from the date of the award file his award and ask for a decree in terms of the award, especially when neither of the two parties made any application for filing of the award in court even after receiving intimation of making of the award.
Final Decision
Appeal allowed; order of High Court dated 30 September 1994 and decree of Civil Judge (S.D.), Anand dated 5 October 1994 set aside; no order as to costs
Law Points
- Arbitration award must be filed within 30 days under Article 119 Limitation Act
- 1963
- no duty on arbitrator to file suo motu
- Article 137 applies to arbitrator's application
- court should not aid circumvention of limitation
- remedy must be sought with reasonable promptitude
