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Judgment
Anoop V. Mohta, J.—The petitioner-bank has challenged the award passed by the Arbitrator (Office of Banking Ombudsman, Maharashtra and Goa) as the matter was referred by consent of the parties to settle the dispute with respondent-Bank of Baroda. The respondent-claimant had agency agreement with M/s. U.A.E. Exchange Centre, Abu Dhabi (UEC) under which UEC issued draft payable by the Petitioner. The Petitioner paid draft through clearing which were presented by the Respondent totalling amount to Rs. 1,75,000/- all between period 29.6.1995 to 5.7.1995. Later on, it was found that the drafts were counterfeit, therefore, requested to refund the amount vide letter dated 21st July, 1995, therefore, dispute arose, which by consent of the parties decided to resolve as per the provisions of clause 21(2) of the Banking Ombudsman Scheme, 2002 (BOS-2002). The arbitrator based upon the same heard both the parties and passed the impugned order in following terms:
The opposite party shall pay to the Claimant a sum of Rs. 1,75,000/- (Rupees one lakh seventy-five thousand only), being the amount the disputed drafts, along with interest from the respective dates of payment till the date of refund of the amounts, calculated at the Repo rate in force from time to time during the period.
Therefore, the present petition to challenge the same. Learned counsel appearing for the Petitioner basically contended that the award so passed based upon the transaction of 1995 is beyond period of limitation of three years which is available normally in such type of transactions. Admittedly, the demand was raised by letter dated 21st July, 1995 which was opposed by the respondent and, therefore, the matter proceeded before the tribunal for adjudication. Learned counsel appearing for the respondent, however, submitted that no such objection was made any time before the arbitrator and, therefore, it is improbable to raise for the first time in section 34 petition.
Learned counsel appearing for the Petitioner has pointed out various grounds about jurisdiction including the ground of limitation. Considering undisputed position on record where there is no question of any evidence required and as on face of record that the claim so raised and awarded, is beyond period of limitation. I have already observed in Sealand Shipping & Exports Pvt. Ltd. v. Kin-Ship Services (India) Pvt. Ltd. and Others 2011 Vol. 113 (4) Bom. L.R. 2142 which read thus:
The Apex Court, while dealing with Section 3 of the Limitation Act, in Kamlesh Babu and ors. v. Lajpat Rai Sharma and ors., observed as under :
Having considered the submissions made on behalf of the respective parties, the decisions cited by them and the relevant law on the subject, we are unable to accept Ms Srivastava''s submissions mainly on two counts. Firstly, the facts disclosed clearly indicate that neither the first appellate court nor the High Court took notice of Section 3(1) of the Limitation Act, 1963, which reads as follows:
Bar of limitation.-(1) subject to the provisions contained in Sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed although limitation has not been set up as a defence.
Even in the decision of this Court in State of Punjab Vs. Darshan Singh, , the said provision does not appear to have been brought to the notice of the Hon''ble Judges who decided the matter.
It is well settled that Section 3(1) of the Limitation Act casts a duty upon the court to dismiss a suit or an appeal application, if made after the prescribed 1 (2008) 12 SCC 577 period, although, limitation is not set up a defence.
In the instant case, such a defence has been set up in the written statement though no issue was framed in that regard. However, when the trial court had in terms of the mandate of Section 3(1) come to a finding that the suit was barred by limitation, it was the duty of the first appellate court and also of the High Court to go into the said question and to decide the same before reversing the judgment of the trial court on the various issues framed in the suit. Even though the various issues were decided in favour of the plaintiff, both by the first appellate court and the High Court, the same were of no avail since the suit continued to remain barred under Article 59 of the Limitation Act, 1963.
It is already observed that point of limitation goes to the root of the matter can be agitated in section 34 petition. In the present case, admittedly, the ground was raised alongwith other grounds of jurisdiction. In view of undisputed position on record of the facts as well as of law, the award so passed is without jurisdiction.
Learned counsel appearing for the Respondent submitted that as there is dispute between two Nationalised Banks, let the matter be decided by adjudicatory mechanism declared by the Supreme Court for settlement of inter/intra governmental disputes by referring the matter to CoD (Committee on Disputes) and he has strongly relied on the order dated 18th June, 2009 passed by the Single Bench of this Court in the said matter whereby it is observed that "unless and until the petitioner produces clearance from high power committee proceedings shall not proceeded further". This order was based upon the judgments in Oil and Natural Gas Commission and Another Vs. Collector of Central Excise, ; Oil and Natural Gas Commission Vs. Collector of Central Excise, and Oil and Natural Gas Corporation Ltd. Vs. City and Indust. Dev. Corpn., Maharashtra and Others, .
The Apex Court recently in Electronics Corporation of India Ltd. Vs. Union of India (UOI) and Others, has dealt with same subject of reference of matter to such committee and observed that "though mechanism was set up with a laudable object but it led to delay in filing of appearance and causing loss of revenue, and ultimately observed that mechanism has outlived its utility and thereby recalled the direction given by the Supreme Court in the judgments referred above (supra). Therefore, the submission raised by learned counsel appearing for the Respondents are unacceptable as there exists no such mechanism.
In the present case, the Respondents having once agreed to settle the dispute through arbitration and once the arbitrator has awarded, the claim was raised, there is no point now referring the matter back as contended for any other settlement mechanism.
Taking, therefore, overall view of the matter and in view of above as there is apparent illegality and the award so passed as contrary to law, therefore, I am inclined to set aside the same.
The petitioner was directed by order dated 5th January, 2011 deposited a sum of Rs. 175000/- in the Registry of this Court. As I am inclined to set aside the award, it is directed that an amount be returned to the Petitioner with accrued interest, if any. In the result following award is passed:
The impugned order dated 28.9.2006 is quashed and set aside. There shall be no order as to costs.
The amount so deposited by the Petitioner to be refunded to the Petitioner with accrued interest.