UNION OF INDIA & ANR.versusM/S DEEPAK ELECTRIC & TRADING COMPANY & ANR.

                        [2011] 12 S.C.R. 1198


A                      UNION OF INDIA & ANR.
                                    v.
    M/S DEEPAK ELECTRIC & TRADING COMPANY & ANR.
              (Civil Appeal No. 1734 of 2006)

                         OCTOBER 20, 2011.
B
            [P. SATHASIVAM AND A.K. PATNAIK, JJ.]

          Liml1ation Act, 1963 - Article 119(b) of the Schedule -
    Period of limitation for filing applications under the Arbitration
C . Act, 1940 for setting aside an arbitral award - Starting point
    of - Held: An application for setting aside an award has to bf'
    filed within 30 days from "the date of service of the notice of
    the filing of the award" - The starting point of limitation is the
    date of service of the notice of the filing of the award and not
D the date of knowledge of the filing of the award - Arbitration
    Act, 1940.

         The appellants and respondent No.1 had entered into
    a contract for construction of a Complex. The contract
E contained an arbitration clause. As disputes arose
     between the parties, respondent No.1 invoked the
    arbitration clause and an arbitrator was appointed. The
    arbitrator published his award whereupon the
    respondents filed a petition in the High Court under
    Sections 14 and 17 of the Arbitration Act, 1940 for filing
F · the award and for making the award a rule of the court
    and for passing a decree in terms of the award. After the
    award was filed, notice of the filing of the award was
    directed to be issued to the parties. Notice was served
    on the Union of India, but notice could not be served on
G the Executive Engineer, C.P.W.D. A letter was addressed
    by the Executive Engineer to the Registrar of the High
    Court saying that he had not received a formal notice
    from the court. Fresh notice was again directed to be
    issued to the Executive Engineer. While service of notice
H                             1198
   UNION OF INDIA & ANR. v. DEEPAK ELECTRIC & 1199
           TRADING COMPANY & ANR.

 on the Executive Engineer was awaited, Union of India         A
 filed objections to the award of the arbitrator.

       Respondent No.1 contended that the objections filed
 by the Union of India to the award of the arbitrator were
 not within the period of limitation, i.e. 30 days from the
                                                               8
 date of service of the notice of filing of the award. The
 appellants, on the other hand, contended that th.e
 Executive Engineer had not been served with the notice
 of filing of award and, therefore, limitation had not been
 begun to run.
                                                               c
       The Single Judge of the High Court held that under
  Section 79 of CPC when suits are filed against the Central
  Government, only the Union of India has to be arrayed .
  as a party and the Executive Engineer by no stretch of
  imagination can be taken to be a party in such 0
  proceedings; that the objections of Union of India to the
• award were time barred and accordingly made the award
  a rule of the court.
                                   I
                                   I

      Aggrieved, the appellants filed appeal before the        E
 Division Bench of the High Court. The Division Bench
 held that as the counsel on behalf of the Executive
 Engineer had inspected the record of the case in the
 court on 21.05.1997, the Executive Engineer will be
 deemed to have acquired knowledge of the filing of the
 award on 21.05.1997 and the period of 30 days counted         F
 from 21.05.1997 had expired by the time objections were
 filed by the Union of India and the objections to the award
 were time barred. Accordingly, the Division Bench of the
 High Court dismissed the appeal of the appellants.
                                                               G
      The question which arose for consideration in the
 present appeal was whether the Division Bench of the
 High Court took a correct view in the impugned order
 that the objections to the award were time barred.
                                                               H
    1200    SUPREME COURT REPORTS               [2011] 12 S.C.R


A       Allowing the appeal, the Court
        HELD:1.1. Article 119 of the Schedule to the
  Limitation Act, 1963, prescribes the period of limitation for
  filing applications under the Arbitration Act, 1940. It is
  clear from clause (b) of Article 119 of the Schedule to the
8 Limitation Act, 1963 that an application for setting aside
  of an award has to be filed within 30 days from "the date
  of service of the notice of the filing of the award". Thus,
  the starting point of limitation is the date of service of the
  notice of the filing of the award and not the date of
C knowledge of the filing of the award. [Para 6] [1203-F-G]
        Deo Narain Choudhury vs. Shree Narain Choudhaury
    [(2008) 8 sec 626] - relied on.
        Union of India vs. Surinder Kumar [61 (1996) DLT 42
D (0.8.)] - referred to.
       1.2. The Division Bench of the High Court was not
  right in coming to the conclusion that as the Executive
  Engineer had knowledge of the filing of the award on
E 21.05.1997 and as the objections were filed beyond the
  period of 30 days counted from 21.05.1997, the
  objections to the award were barred by time. [Para 8]
  [1204-0-F]
      1.3. The matter is remanded to the Single Judge of
F the High Court for fresh decision in accordance with law.
  [Para 9] [1204-G]
                        Case Law Reference:
        [61 (1996) DLT 42 (0.8.)] referred to          Para 4
G
        [(2008) 8 sec 626]         relied on           Para 7.
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    1734 of 2006.
        From the Judgment & Order dated 3.1.2003 of the High
H
   UNION OF INDIA & ANR. v. DEEPAK ELECTRIC & 1201
           TRADING COMPANY & ANR.

 Court of Delhi at New Delhi in F.A.O. (O.S.) No. 551 of 2001.          A
     A.S. Chandhiok, ASG, Sadhana Sandhu, Sumit Sharma,
 Sarabjeet Sharma, Bhagat Singh, V.K. Verma for the
 Appellants.
      The Judgment of the Court was delivered                           B
      A. K. PATNAIK, J. 1. This is an appeal against the order
 dated 03.01.2003 of the Division Bench of the High Court of
 Delhi in FAO(OS) No. 551 of 2001 (for short 'the impugned
 order').
    .   2. The facts very briefly are that the appellants and the       C
   respondent No.1 entered into a contract for construction of PMT
  Complex for NSG at Manesar. The contract contained an
  arbitration clause for resolving disputes between the parties.
  As disputes arose between the parties, the respondent No.1
  invoked the arbitration clause and an arbitrator was appointed.       D
  The arbitrator published his award on 17.06.1996 and on
  08.07.1996, the respondents filed a petition in the High Court
  of Delhi under Sections 14 and 17 of the Arbitration Act, 1940
  (for short 'the Act') for filing the award and for making the award   -
. a rule of the court and for passing a decree in terms of the          E
  award. The. petition was registered as Suit No.1673-A/1996.
  After the award was filed, notice of the filing of the award was
  directed to be issued to the parties on 13.01.1997. Notice was
  served on the Union of India, but notice could not be served on
  the Executive Engineer, C.P.W.D. A letter dated 21.03.1997            F
  was addressed by the Executive Engineer to the Registrar of
  the Delhi High Court saying that he had not received a formal
  notice from the court. On 17.07.1997, fresh notice was again
  directed to be issued to the Executive Engineer.          ·
       3. While service of notice on the Executive Engineer was         G
 awaited, Union of India filed objections to the award of the
 arbitrator numbered as IA 9423 of 1997. The respondent No.1
 contended that the objections filed by the Union of India to the
 award of the arbitrator were not within the period of limitation,
 i.e. 30 days from the date of service of the notice of filing of       H
    1202     SUPREME COURT REPORTS              (2011] 12 S.C.R


A the award. The appellants, on the other hand, contended tha
  the Executive Engineer had not been served with the notice o.
  filing of award and, therefore, limitation had not been begun-tc
  run. The learned Single Judge of the High Court held that under
  Section 79 of the Code of Civil Procedure (for short 'the CPC')
B when suits are filed against the Central Government, only the
  Union of India has to be arrayed as a party and the Executive
  Engineer by no stretch of imagination can be taken to be a party
  in such proceedings. The learned Single Judge further held that
  as the Union of India had filed objections, the Court was only
c considering the objections of the Union of India and the Union
  of India had been served with a notice of filing of the award in
  November, 1996. The learned Single Judge, therefore, held
  that the objections of the Union of India to the award were time
  barred and made the award a rule of the court.
D      4. Aggrieved, the appellants .filed FAO(OS) No. 551 of
  2001 before the Division Bench of the High Court. After hearing
  learned counsel for the parties, the Division Bench held in the
  impugned order that in Union of India vs. Surinder Kumar [61
  (1996) DLT 42 (D.B.)], the Delhi High Court has already taken
E a view that it was necessary that a notice of filing of the award
  has to be served on the Executive Engineer as it was the
  Executive Engineer who on behalf of the Union of India was
  looking after the proceedings before the arbitrator. The Division
  Bench, however, held that as the learned counsel on behalf of
F the Executive Engineer had inspected the record of the case
  in the court on 21.05.1997, the Executive Engineer will be
  deemed to have acquired knowledge of the filing of the award
  on 21.05.1997 and the period of 30 days counted from
  21.05.1997 had expired by the time objections were filed by
G the Union of India and the objections to the award were time
  barred. Accordingly, the Division Bench of the High Court
  dismissed the appeal of the appellants by the impugned order.
       5. We have heard Mr. A.S. Chandhiok, learned Additional
  Solicitor General for the appellants. No one has appeared for
H the respondents despite notice.
  UNION OF INDIA & ANR. v. DEEPAK ELECTRIC & 1203
   TRADING COMPANY & ANR. [A.K. PATNAIK, J.]

       6. The only question, which we have to decide in this case,       A
is whether the Division Bench of the High Court has taken a
correct view in the impugned order that the objections to the
award were time barred. Article 119 of the Schedule to the
Limitation Act, 1963, which prescribes the period of limitation
for filing applications under the Arbitration Act, 1940, is quoted       B
hereinbelow:

     "Description of              Period of     Time from which
     application                  of            period begins to
                                  limitation    run                      c
119. Under the Arbitration
     Act, 1940 (10 of 1940)-
     (a) for the filing in   Thirty             The date of service
          court of an award. days               of the notice of the     0
                                                making of the
                                               _award.        '
      (b) for setting aside       Thirty        The date of service
          an award or             days          of the notice of the
          getting an award                      filing of the award."    E
          remitted for
          reconsiooration

     It will be clear from clause (b) of article 119 of the Schedule
to the Limitation Act, 1963 that an application for setting aside
of an award has to be filed within 30 days from "the date of             F
service of the notice of the filing of the award". Thus, the starting
point of limitation is the date of service of the notice of the filing
of the award and not the date of knowledge of the filing of the
award.
                                                                         G
      7. In support of this view that the starting point of limitation
for filing objections to an award under the Act is the date of
service of notice of the filing of the award, we may cite an
authority. In Deo Narain Choudhury vs. Shree Narain
Choudhaury [(2008) 8 sec 626], the facts were that on
16.07.1996 the Court sent a notice to the parties about filing           H
    1204     SUPREME COURT REPORTS               [2011] 12 S.C.R.


A   of the award and the notice was received by the responden'
    on 25.07 .1996 and the respondent filed his objections to the
    award on 21.08.1996. The appellant contended that the
    objections had been filed beyond the period of limitation as the
    respondent had received the notice from the arbitrator that the
8   award had been filed and the respondent had also filed a caveat
    on 11.06.1996. This Court held that mere filing of the caveat
    did not start the period of limitation and as the notice was
    received by the respondent on 25.07.1996, the period of
    limitation started running from that date and, therefore, the
c   objections filed on 21.08.1996 were within the period of 30
    days as provided by article 119 of the Limitation Act, 1963.
        8. The Division Bench of the High Court has taken a view
  in the impugned order that as the Executive Engineer was
  looking after the arbitratfon proceedings, he was the one who
D could have filed the objections to the award on behalf of the
  Union of India and thus notice of the filing of the award on the
  Executive Engineer was mandatory and the starting point of
  limitation for filing the application for setting aside the award
  would be the date of service of notice on the Executive Engineer
E as provided in article 119(b) of the Schedule to the Limitation
  Act, 1963. The High Court, therefore, was not right in coming
  to the conclusion that as the Executive Engineer had
  knowledge of the filing of the award on 21.05.1997 and as the
  objections were filed beyond the period of 30 days counted
F from 21.05.1997, the objections to the award were barred by
  time.
       9. We, accordingly, set aside the order of the learned
  Single Judge as well as the impugned order of the Division
  Bench of the High Court and remand the matter to the Single
G Judge of the High Court for fresh decision in accordance with.
  law. The appeal is allowed with no order as to costs.
    8.8.8.                                        Appeal allowed.