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Judgment
Sudhanshu Dhulia, J
This appeal from order has been filed by the appellant under Section 37 of the Arbitration and Conciliation Act, 1996 (from hereinafter referred to as the "Act") against the order dated 08.05.2018 passed by the learned Principal Civil Court, District Udham Singh Nagar.
Brief facts of the case are that the appellant had entered into a contract with Govind Ballabh Pant University of Agriculture and Technology for supply of work force in the University. Meanwhile, a dispute arose between the parties as to the amount of Employee Provident Fund (in short "EPF") to be given and since there was a delay on the part of the appellant, a penalty was imposed upon the appellant by the University and the University deducted this amount from the security deposited by the appellant. Since there was a dispute as to the amount to be paid as an EPF and there was an arbitration clause in the agreement, the appellant invoked the arbitration clause and consequently the learned Arbitrator vide its order dated 31.12.2015 gave an award of Rs.6,84,842/- (Rupees Six Lakh Eighty Four Thousand Eight Hundred Forty Two Only) in favour of the appellant. The appellant perhaps was not satisfied with this amount and consequently filed an appeal before the Principal Civil Court on 29.03.2016, under Section 34 of the Act for setting aside the award. The application was filed within time.
Section 34 of the Act reads as under:-
"34. Application for setting aside arbitral award.- (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if-
(a) the party making the application furnishes proof that-
(i) a party was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation 1.- For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-
(i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.- For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2-A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the court, if the court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.
(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.
(6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party."
Sub-section (3) of Section 34 of the Act prescribes the limited space within which an application for setting aside the award can be made. It is not in dispute that the application to set aside the award was filed before the appropriate court within time by the appellant, but thereafter for certain reasons, the application was withdrawn by the appellant with the liberty to file a fresh application with better particulars. The withdrawal order is dated 15.03.2018. Another application for setting aside the award was filed by the appellant on 16.04.2018. This application was filed along with Section 5 application of the Limitation Act for condonation of delay. The learned Principal Civil Court, however, was of the opinion that the Arbitration and Conciliation Act, 1996 is a complete Code and limitation would be governed by sub-section (3) of Section 34 of the Act and since at the time when the application was filed it was beyond the period of 120 days, further he came to the conclusion that the application cannot be considered under the provisions of the Limitation Act and relying upon the decision of the Hon'ble Apex Court in the case of State of Goa vs. Western Builders, reported in (2006) 6 SCC 239, dismissed the application of the appellant vide order dated 08.05.2018.
However, a bare perusal of the decision of the Hon'ble Apex Court in the case of State of Goa vs. Western Builders, reported in (2006) 6 SCC 239 shows that the Hon'ble Apex Court has not specifically given a finding that the Limitation Act is totally excluded from the purview of the Arbitration and Conciliation Act, 1996. The relevant paragraphs of the aforesaid decision of the Hon'ble Apex Court read as under:-
"25. Therefore, in the present context also it is very clear to us that there are no two opinions in the matter that the Arbitration and Conciliation Act, 1996 does not expressly exclude the applicability of Section 14 of the Limitation Act. The prohibitory provision has to be construed strictly. It is true that the Arbitration and Conciliation Act, 1996 intended to expedite commercial issues expeditiously. It is also clear in the Statement of Objects and Reasons that in order to recognise economic reforms the settlement of both domestic and international commercial disputes should be disposed of quickly so that the country's economic progress be expedited. The Statement of Objects and Reasons also nowhere indicates that Section 14 of the Limitation Act shall be excluded. But on the contrary, intendment of the legislature is apparent in the present case as Section 43 of the Arbitration and Conciliation Act, 1996 applies the Limitation Act, 1963 as a whole. It is only by virtue of sub-section (2) of Section 29 of the Limitation Act that its operation is excluded to that extent of the area which is covered under the Arbitration and Conciliation Act, 1996. Our attention was also invited to the various decisions of this Court interpreting sub-section (2) of Section 29 of the Limitation Act with reference to other Acts like the Representation of the People Act or the provisions of the Criminal Procedure Code where separate period of limitation has been prescribed. We need not overburden the judgment with reference to those cases because it is very clear to us by virtue of sub-section (2) of Section 29 of the Limitation Act that the provisions of the Limitation Act shall stand excluded in the Act of 1996 to the extent of area which is covered by the Act of 1996. In the present case under Section 34 by virtue of sub-section (3) only the application for filing and setting aside the award a period has been prescribed as 3 months and delay can be condoned to the extent of 30 days. To this extent the applicability of Section 5 of the Limitation Act will stand excluded but there is no provision in the Act of 1996 which excludes operation of Section 14 of the Limitation Act. If two Acts can be read harmoniously without doing violation to the words used therein, then there is no prohibition in doing so.
As a result of the above discussion we are of the opinion that the view taken by the court below excluding the applicability of Section 14 in this proceeding is not correct. We hold that Section 14 of the Limitation Act, 1963 is applicable in (sic to) the Arbitration and Conciliation Act, 1996. We set aside all the judgments/orders and remand all these cases back to the trial court/ District Court for deciding the application under Section 14 of the Limitation Act on merit after hearing both the parties and in case the delay is condoned then the case should be decided on merits after hearing all the parties concerned. All the appeals are allowed. No order as to costs."
Under Section 14 of the Limitation Act, 1963, there are certain contingencies when the period of time for computation of limitation is excluded and one of the contingencies is given in sub-section (1) of Section 14 of the Limitation Act, 1963 which is that where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or "other cause of a like nature, is unable to entertain it". The application under Section 34 of the Arbitration and Conciliation Act, 1996 was filed within time.
In the present case, it is an admitted case that the application for setting aside the award was filed within time under Section 34 of the Arbitration and Conciliation Act, 1996 but later on was withdrawn on 15.03.2018 as the applicant noticed certain defects in his petition. Thereafter promptly the application was filed after a period of 31 days on 16.04.2018. Under these circumstances a benefit was liable to be given to the appellant.
In view of the above, the appeal from order is allowed. The order dated 08.05.2018 passed by the learned District Judge, Udham Singh Nagar is hereby set aside. Matter is remanded to the court below to decide afresh as expeditiously as possible, in accordance with law, treating the application under Section 34 of the Arbitration and Conciliation Act, 1996 having been filed within time.