Megha Enterprises and vs The State and Others

B.A. Khan, J.—What is the ambit and scope of Article 181 of the J&K Limitation Act? Does it prescribe limitation for all types of applications under all special enactments including applications u/s 20 of the Arbitration Act or for applications under the CPC only?

These questions arise out of the applications filed by the appellants u/s 20 of the Arbitration Act seeking reference of some disputes to the arbitrator. The applications were resisted by the respondent-State on the plea of limitation and eventually rejected by the learned single Judge as time barred vide judgment dated 29-12-1989. The matter went in appeal to the Division Bench which has referred the following question ""for authoritative pronouncement by the Full Bench :

Whet her Article 181 of the Limitation Act is applicable to applications filed u/s 20 of the Arbitration Act?

Before we proceed to formulate our answer, we deem it appropriate to bring out the close similarity between the State Act of 1938 and the Central Act of 1908. One is the true copy of the other. Their preamble is identical and their other provisions similar. The preamble of both the Acts reads thus :

Whereas it is expedient to consolidate and amend the law relating to limitation of suits, appeals and certain applications to courts; and xx xx xx xx The same holds true about Section 3 which provides that every suit and application made after the period of limitation prescribed therefore in the first schedule, shall be dismissed, although limitation has not been set up as a defence. The first schedule in both comprises of three Divisions. The first Division deals with suits, the second with appeals and the third with applications. The third Division comprises of Articles 158 to 183. Article 181 figures in this Division and stands thus:

Description of application Period of Time from which period Limitation begins to run

Applications for which no Three years When the right to apply period of limitation is accrues provided elsewhere in this schedule or by Section 48 of the Code of Civil Procedure.

Article 181 of the Central Act has received considerable attention by the courts over a period of time. Therefore, it has a mass of precedent behind it and we have a lot to draw from. To that extent we are not traversing any virgin field and it becomes rather easy to approach the issue in the context of the meaning already attached to the provision by a long line of judgments. We deem it proper to refer to these judgments first for better appreciation of the controversy and for proper construction to be placed on Article 181.

Article 181 of the Central Act fell for consideration first time in Manek Bai's case ILR (1883) 7 Bom 213, wherein the Court ruled that Article 181 was limited to applications under the CPC (CPC) only. Westropp C.J., after referring to the corresponding Article 178 in the Limitation Act of 1877, observed :

An examination of all ohter Articles in the second schedule "relating to applications" that is to say; of the third Division of that schedule, shows that the applications therein contemplated are such as are made under the Code of Civil Procedure. Hence it is natural to conclude that applications referred to in Article 178 arc application ejusdem generis, i.e., applications under the Code of Civil Procedure. The preamble of the Act purports to deal with "certain applications" only and not with all applications.

Two reasons were advanced by the learned Judge in support of the view viz. (i) that since applications referred to in the 3rd Division of the schedule happened to be applications under the CPC, the word "applications" in Article 178 (corresponding to Article 181 of the 1908 Central Act and the State Act) should be considered ejusdem generis; and (ii) because the preamble of the Act dealt with "certain applications" and not with all types of applications. This was followed by decisions of the Privy Council in Ram Dutta's case AIR 1929 PC 103 and Abdullah Ashgar Ali

v. Ganesh Das, AIR (20) 1933 PC 63 . A Full Bench of the Allahabad High Court also fell in line in Shiam Lal J. Dewan Vs. Official Liquidators of the U.P. Oil Mills Co., Ltd. .

This position stood ground till the Central Legislature enacted the Indian Arbitration Act, 1940 and amended Articles 158 and 178 of the Limitation Act, 1908. The amendment re-opened the controversy and it came to be canvassed once again that Article 181 was wide enough to lake all types of applications within its fold. This view found favour in Union of India (UOI) Vs. Firm Kiroo Mal Nawal Kishore and Another, and Shah and Co. Vs. Ishar Singh Kirpal Singh and Co., . The Allahabad High Court also followed it in L. Amarnath Vs. The Union of India (UOI) and Others, . These High Courts were impressed by the amendments in Articles 158 and 178 in the 3rd Division of the Limitation Act 1908 and it was felt that since these had encroached upon the exclusiveness of the 3rd Division, the earlier reasoning based on the principle of ejusdem generis was no longer available and the applications contained therein could no longer be limited to C.P.C. only. This was however, negated by the Supreme Court in Shah Mul Chand's case AIR 1913 SC 98, holding thus (at p. 104 of AIR):

It does not appear to us quite convincing, for further argument, that amendment of Articles 158 and 178 can ipso facto alter the meaning which, as a result of long series of judicial decisions of different High Courts in India came to be attached to the language used in Article 181. This long catena of decisions may well be said to have, as it were, added the words "under the Code" in the first column of that Article. If those words had actually been used in that column that a subsequent amendment of Articles 158 and 178 certainly would not have affected the meaning of that Article. If however,' as a result of judicial consideration, those words have come to be read into the first column as if those words actually occurred therein, we are not of opinion, as at present advised, that the subsequent amendment of Articles 158 and 178 must necessarily and automatically have the effect of altering the long acquired meaning of Article 181 on the sole and simple ground that after the amendment, reason on which the old construction was founded is no longer available.

The Apex Court consistently stuck to this position thereafter and reiterated it in Bombay Gas Co. Ltd. Vs. Gopal Bhiva and Others, , Prativa Bose

Vs. Kumar Rupendra Deb Raikat and Others, and in Wazirchand Mahajan and Another Vs. Union of India (UOI), . It finally ruled in Mohd.

Usman Military Contractor, Jhansi Vs. Union of India (UOI), Ministry of Defence, , thus (at p. 477 of AIR): -

In amending Articles 158 and 178 the Legislature acted upon the view that reference to the Code of Civil Procedure. 1908 in the second schedule to the Limitation Act, could not in the absence of amendment be construed as a reference to the Arbitration Act, 1940. At the same time the legislature refrained from amending Article 181 and providing that Article will apply to other applications under the Arbitration Act, 1940. It is manifest that the Legislature intended that save as provided in Articles 158 and 178 there would not be any limitation for other applications under the Act.

While all this was going on the Parliament enacted the Central Limitation Act, 1963, repealing the old Act of 1908. It effected certain changes here and there and its long title read : "An Act to consolidate and amend the law for the limitation of suits and other proceedings for the purposes connected Therewith". It enlarged the definition of the applicant in Section 2(a) and added the definition of 'application' to include a petition under Section2(a)(b). Article 181 of the old Act was substituted by new Article 137 which was placed in Part II of the third Division which deals with the "other applications" in the schedule. The schedule was in turn divided into three Divisions. The first Division related to suits and consists often parts and Article 113 and the second to appeals consisting of Articles 114 to 117 and the third to applications and is divided into two parts. Part I speaks of applications in specified cases and Part II of "other applications". Article 137 which figures in Part II is extracted hereunder:

Part 11 - Other Applications.

Description of application Period of Time from which Limitation period begins to run

Any other application for Three years When the right to which no period of limitation is apply accrues' provided elsewhere in this Division.

The new provision brought about three major changes in Article 181. It deleted the words ""or by Section48 of the Code of Civil Procedure, 1908"" and introduced words "any other application" instead of "applications" and "Division" instead of "schedule". The new Article fell for interpretation of the Supreme Court first time in Town Municipal, Council, Athani Vs. The Presiding Officer, Labour Courts, Hubli and Others etc., , and was perceived in the following terms :

Alteration of Article 137, namely, the inclusion of words "other proceedings" in the long title of the 1963 Limitation Act, the omission of the preamble and the change in the definition so as to include petitions in the words "application" do not show any intention to make Article 137 applicable to proceedings before bodies other than the courts such as quasi-judicial tribunals and executive bodies. The word "other" in the first column of the Article giving the description of the application "any other application" for which no period of limitation is prescribed elsewhere in this Division, indicates that the interpretation of Article 181 in the 1908 Limitation Act on the basis of ejusdem generis should apply to Article 137"".

The Apex Court thus maintained the earlier position irrespective of the changes effected by Article 137. Dissenting voices were, however, raised by some High Courts and the Gauhati High Court was the first to raise the banner of revolt in Union of India v. Bimal Kumar AIR 1973 Gau 100 .

A Division Bench of the Court took notice of the changes in Article 137 and interpreting it in the background of the recommendations of the Law Commission declared it to be applicable to applications under the special Acts also. This received some support in Nityananda, M. Joshi and Others Vs. Life Insurance Corporation of India and Others, , though not in categorical terms when the Apex Court expressed doubts at its earlier view taken in Town Municipal, Council, Athani Vs. The Presiding Officer, Labour Courts, Hubli and Others etc., and observed :

It seems to us that it may require serious consideration whether applications to courts under other provisions, apart from CPC are included within Article 137 of the Limitation Act, 1963, or not?

The controversy was finally set at rest by the Court in The Kerala State Electricity Board, Trivandrum Vs. T.P. Kunhaliumma, , by ruling that Article 137 of the 1963 Limitation Act was not confined to applications contemplated by or under the CPC and would apply to any petition or application filed under any Act to a civil Court. It gave the following reasoning in support :

Alteration of the Divisions as well as change in the collocation of words in Article 137 of the Limitation Act, 1963, compared with Article 181 of the 1908 Limitation Act, shows that the applications contemplated under Article 137 are not applications confined to the Code of Civil Procedure.

In 1908 Limitation Act, there was no Division between applications in specified cases and other applications as in the 1963 Limitation Act. The words "any other application" under Article 137 cannot be said on the principle of ejusdem generis to be applications under the CPC other than those mentioned in Part I of the Division. Any other application under Article 137 would be petition or any application under any Act. But it has to be an application to a Court for the reason that Sections 4 and 5 of the 1963 Limitation Act speak of expiry of prescribed period and when Court is closed and extension of prescribed period if applicant or the appellant satisfies the court that he had sufficient cause for not preferring the appeal or making the application during such period ....... The changed definition of the words 'applicant' and 'application' contained in Section 2(a) and 2(b) of the 1963 Limitation Act indicates the object of the Limitation Act to include petitions, original or otherwise under special laws. The interpretation which was given to Article 181 of the 1908 Limitation Act on the principle of ejusdem generis is not applicable with regard to Article 137 which stands in isolation from all other Articles in Part 1 of the third Division.

The ratio of the judgment (supra) was followed in Municipal Corporation of Greater Bombay Vs. Nagpal Printing Mills and Anr, and S. Rajan Vs.

State of Kerala and another, .

We have traced the historical background only to indicate the state of law on the subject. There is no confusion or ambiguity about the legal position till Mohd. Usman Military Contractor, Jhansi Vs. Union of India (UOI), Ministry of Defence, . The question that confronts is : whether the law laid down in The Kerala State Electricity Board, Trivandrum Vs. T.P. Kunhaliumma, , has changed the position in any manner? Before we attempt to answer, it would be advantageous to briefly refer to submissions made by the rival counsel.

Mr. Bakhshi, learned counsel for appellants argued on the expected lines placing whole-hog reliance on the decisions of various courts interpreting Article 181 of the old Central Act. He pleaded that there was no reason or scope to depart from his interpretation and to adopt a new

one. He was also at pains to point out the changes in Article 137 of the new Central Limitation Act of 1963 which had persuaded the Supreme Court to broaden the parameters of the provision and make it applicable to all applications under the special Acts and urged that learned single Judge had fallen in error in importing this into the State Act.

Mr. Nazki, learned Advocate General, made three-fold submissions to persuade us to fall in line with the view taken by the learned Judge.

According to him Article 181 of the State Act is applicable to all applications filed before a court irrespective of whether such application lies under the C.P.C. or under any other statute. He sought support for this from the judgment of the Supreme Court in The Kerala State Electricity Board, Trivandrum Vs. T.P. Kunhaliumma, . He pleaded alternatively that since an application u/s 20 of the Arbitration Act is required to be registered as a suit and tried under the procedure laid down by the C.P.C. it should be treated as an application under the C.P.C. and Article 181 held applicable to it. He lastly argued that the reasoning adopted by the Courts on the principle of ejusdem generis while interpreting Article 181 of the old Central Act of 1908, was no longer available for interpreting Article 181 of the State Act after introduction of Articles 158 and 175 in the State Act way back in 2002 (Bikrami).

Mr. Kotwal placed a novel interpretation on the provisions of Article 181. He laid great stress on the word "schedule" occurring in the provision and submitted that the word "applications" in it referred to all applications that can be made under all Acts mentioned in the schedule. So interpreted, the Article would cover other applications besides applications under the C.P.C. He contended that the word "application" must be given its ordinary meaning to include all types of applications. He also referred to Section 37 of the Arbitration Act of 1945 which applies provisions of the J&K Limitation Act to "arbitrations as they apply to proceedings in court" and submitted that the word "arbitrations" should be interpreted to include an application made to the court u/s 20 of the Arbitration Act.

It appears to us that there is much ado about nothing. As already noticed, the Central Limitation Act of 1908 is in pari materia with the State

Act. Their preamble is the same and their provisions identical. Article 181 is also not different. Its text and tenor and its placement is similar in both the Acts. It figures in the third Division and co-exists with Articles 158 and 178 in either statute. Article 181 of the old Central Act has already received interpretation by various courts and above all by the Apex Court. The only question that arises is : whether there is any hitch or hurdle in placing the same construction on Article 181 of the State Act and whether there is any reason to depart from this?

It may be recalled that the construction of Article 181 of the old Central Act had proceeded on the reasoning that it is limited to applications under the C.P.C. only because it was placed under the third Division which contained applications under the C.P.C. only and because the preamble of the Act related to "certain applications" only. The subsequent addition of Articles 158 and 178 in third Division was considered of no consequence by the Supreme Court in Sha Mulchand and Co. Ltd. (In Liquidation) Vs. Jawahar Mills Ltd., . This reasoning holds good in the case of State Act also which is on all fours with the old Central Act. It is not correct to contend that this reasoning is no more available in the case of State Act in the face of Articles 158 and 178 in its third Division. This contention stands negated by the law laid down by the Supreme Court in Sham Chand's case (supra). Even if it be assumed that Articles in third Division should not be considered ejusdem generis consequent upon the induction of Articles 158 and 178, this by itself does not change the position of Article 181 which remains intact. Nothing has been added or deducted from it to warrant a different interpretation. Nor can it be said that its scope has been widened to include applications under the special enactments also. Had that been so, nothing prevented the legislature to amend it suitably at the time Articles 158 and 178 were added in the schedule. The very fact that it was left untouched shows that the legislature never intended to extent its boundaries and to bring all types of applications under its umbrella.

Mr. Nazki's contention that Article 181 of the State Act shall be held applicable to all such applications which arc filed in the court, seems to emanate from misreading of the ratio of The Kerala State Electricity Board, Trivandrum Vs. T.P. Kunhaliumma, . Accepting it would amount to laying down that the limitation of an application is dependent on the Forum which position is unknown to the world of law and the statutes of limitation. His next contention that an application u/s 20 of the Arbitration Act should be treated an application under the C.P.C. merely because it was required to be registered as a suit is again an argument in desparation. Registration of an application as a suit does not clothe it with the status of an application under the C.P.C. In any case an application u/s 20 is neither a suit in the fullest sense of its term as no obligation is cast upon courts to issue summonses to the defendants or to frame issues or to call for the written statement nor an application under C.P.C. as it is not covered under the provisions of the C.P.C, it would be overstretching the matters to categorise such application as an application under the C.P.C. only to bring it within the parameters of Article 181 of the Limitation Act.

The arguments advanced by Mr. Kotwal also fall in the same bracket. His emphasis on the word "schedule" in Article 181 and his submission that word "applications" in Article 181 of the State Act refers to all such applications which relate to various Acts mentioned in the schedule is fanciful. An examination of the schedule to the State Act shows that it is divided into three Divisions. First Division relates to suits, second to appeals and third to applications. The first Division comprises of Articles 1 to 149 and Article 119 is a residuary Article which prescribes limitation for all other suits for which no limitation has elsewhere been prescribed in the schedule. Similarly, third Division relating to applications also contains a residuary clause in Article 181 which provides for limitation for applications for which no limitation is provided elsewhere in the schedule. In other words, each of the two Divisions have their own residuary Articles which cater to their respective categories. Therefore, Article 181 cannot be so read or interpreted as to be made a residuary clause for first and second Divisions (i.e., for suits and appeals) also.

Mr. Kotwal's other contention that since Section 37 of the Arbitration Act makes the Limitation Act applicable to all arbitrations, Article 181 of the Limitation Act should be deemed to apply to applications under the Arbitration Act is misdirected. Section 37 of the Arbitration Act provides :

All provisions of the Jammu and Kashmir Limitation Act shall apply to arbitrations as they apply to proceedings in the court.

All that this section stipulates is that an arbitrator in dealing with the matter submitted to him is bound to apply the provisions of Limitation Act. It has no reference to an application under the Arbitration Act for seeking a reference to the arbitrator. The point stands clinched by a judgment of the Supreme Court in Wazirchand Mahajan and Another Vs. Union of India (UOI), .

16A. Thejudgment of the Supreme Court in The Kerala State Electricity Board, Trivandrum Vs. T.P. Kunhaliumma, followed by the judgments in Municipal Corporation of Greater Bombay Vs. Nagpal Printing Mills and Anr, and S. Rajan Vs. State of Kerala and another, holding that Article 137 of the new Limitation Act of 1963 (corresponding to Article 181 of the State Act) applies to applications under the Special Acts also, arc distinguishable and do not change the position in any manner. Nor do these lend any support to the proposition that Article 181 of the State Act or for that matter, the old Central Act should be interpreted to prescribe limitation for all types of applications. These judgments stand on a different fooling and take a contrary view on the basis of the legislative changes effected in the Central Limitation Act, 1963. A perusal of the judgment in Kerala Electricity Board's case would show the pains taken by the Apex Court to highlight the changes in the new legislation. It has, in fact, based its judgment on these changes while holding that the new provision of Article 137 (substitute of Article 181) would be applicable to applications under Special Acts also. In our view the reasoning of this judgment cannot be imported to interpret the terms of Article 181 of the State Act which is identical to Article 181 of the Central Act of 1908 because doing so would be overturning the apple cart for no reason and on no basis. We feel that the learned single Judge has overlooked this aspect and has fallen in error in the process. Therefore, so long as Article 181 of the State Act remains on the statute book, as it is, it should receive the same meaning, interpretation and treatment as given to Article 181 of the old Central Act by a long series of judgments of various High Courts and the Supreme Court. We have no other choice also as we are bound by the law laid down by the Apex Court.

In the premises we hold that Article 181 of the State Limitation Act, 1938, does not govern and is not applicable to applications filed under the Special Acts including the applications u/s 20 of the Arbitration Act and is limited to application under the CPC only. In other words, it does not prescribe any time limitation for an application u/s 20 of the Arbitration Act or for any application under the Special Act. We answer the reference accordingly but hasten to add that it will be the duty of the arbitrator to consider the plea of limitation and to decide whether or not the claims of the appellants are time barred.