State of Goa vs Laxmikant D. Naik Karmali

A.P. Lavande, J.—With the consent of the Advocates appearing for the parties, the matter was taken up for final disposal.

This appeal is preferred against the order dated 1st July, 2009 passed by District Judge, South Goa, Margao in Arbitration Application No. 30/2008 dismissing the application u/s 34 of the Arbitration and Conciliation Act, 1996 (''The Act'' for short) on the ground that the same was barred by limitation.

Briefly, the facts relevant for disposal of the present appeal are as follows:

Arbitral award was passed in relation to the dispute between the appellant and the respondent by the Arbitrator. An application u/s 34 of the Act was submitted by the appellant in the Court of Principal District Judge, North Goa, Panaji on 24th July, 2002. The same was returned to the appellant by the order dated 20th October, 2008 passed by the District Judge, North Goa, Panaji. By the said order, the District Judge held that cause of action has arisen in the South Goa and as such, the District Judge, North Goa had no jurisdiction to entertain the application. Consequently, the District Judge returned the application to the appellant for presenting the same before the appropriate Court having jurisdiction. The appellant was directed to collect the application on or before 24th October, 2008 in order to file the same before the Court having jurisdiction. Pursuant to the said order, the appellant presented the application in the Court of District Judge, South Goa, Margao on 23th October, 2008.

The respondent raised the preliminary objection to the application on the ground that the application filed was barred by limitation. The respondent contended that the application filed was more than 6 years later by not making application for exclusion of time, was not maintainable. The appellant contended before the District Judge that it was not necessary for the appellant to file an application seeking exclusion of time since the original application before the District Judge, North Goa, Panaji was filed within limitation. The appellant contended that the doctrine of relation back was applicable. The District Judge negatived the contentions of the appellant and consequently, dismissed the application as barred by limitation and consequently, upheld objection raised by the respondent. The appellant, aggrieved by the said order, has filed the present appeal.

Mr. Salkar, learned Additional Government Advocate for the appellant fairly conceded that the application u/s 14 of the Limitation Act ought to have been filed before the District Judge, South Goa, Margao. He further submitted that on account of wrong advice, the application was filed without filing an application seeking exclusion of time. He, therefore, sought leave to file an application for exclusion of time. He further submitted that the impugned order be set aside with liberty to the appellant to file an application seeking exclusion of time taken before the District Judge, North Goa, Panaji, which had no jurisdiction to entertain the application. Mr. Salkar submitted that serious prejudice would be caused to the appellant in as much as the appellant has very good case on merits and in the event the impugned order is upheld, serious prejudice will be caused to the appellant-State of Goa.

Mr. Kholkar, learned Counsel for the respondent submitted that no case has been made out for interference with the impugned order since no application seeking exclusion of time was filed u/s 14 of the Limitation Act. The appellant insisted that such an application was not necessary and invited the impugned order. He, therefore, submitted that this is not a fit case in which liberty to file an application u/s 14 of the Limitation Act deserves to be given to the appellant in as much as in the event the impugned order is set aside, serious prejudice would be caused to the respondent. In support of his submissions, Mr. Kholkar relied upon the following judgments:

(i) Rabindra Nath Samuel Dawson Vs. Sivakasi and Others, .

(ii) Deena (Dead) through LRs. Vs. Bharat Singh (Dead) thr. LRs. and Others, .

I have considered the rival submissions and perused the record.

As stated above, in terms of the order dated 20th October, 2008, the appellant filed an application u/s 34 of the Act in the Court of District Judge, South Goa, Margao on the ground that that Court was competent Court to deal with the application. The appellant insisted that it was not necessary for the appellant to file an application seeking exclusion of time before the District Judge, North Goa, Panaji, which had no jurisdiction to entertain the application. As stated above, Mr. Salkar has sought liberty to file such an application before the District Judge, South Goa, Margao also with a prayer to set aside the impugned order.

No doubt, the District Judge, South Goa, Margao was right in dismissing the application i.e. Arbitration Application No. 30/2008 on the ground that no application for exclusion of time was filed u/s 14 of the Limitation Act. However, the fact remains that the same was done on the basis of wrong advice as contended by Mr. Salkar, learned Additional Government Advocate. The fact also remains that the appellant is the State of Goa, which functions through its functionaries. I find merit in the submission of Mr. Salkar that serious prejudice would be caused to the appellant in the event the appellant is not granted liberty to file an application u/s 14 of the Limitation Act and if such an application is permitted to be filed, no serious prejudice would be caused to the respondent in as much as the respondent can be compensated by imposing appropriate costs in his favour.

In so far as the authorities sought by Mr. Kholkar on behalf of respondent are concerned, the same do not advance the case of the respondent. In the case of Rabindra Nath Samuel Dawson (supra), the Apex Court held that benefit of Section 14 was not available to the plaintiff, who persisted in his earlier suit and appeal inspite of repeated objection of the parties. In the case of Deena (supra), the Apex Court held that time taken for proceeding with suit without impleading necessary party would not be excluded u/s 14(3) and it was a clear case of laches and the party could not be said to be acting in good faith. In the present case, I am not inclined to decide the issue whether the appellant has made out good case for exclusion of time u/s 14 of the Act, but I am inclined to grant liberty to the appellant to file such an application before the District Court subject to certain conditions. In my opinion, not granting leave to the appellant to file such an application would cause serious prejudice to the appellant and whatever prejudice caused to the respondent can be compensated by imposition of costs in his favour.

In the result, therefore, the impugned order dated 1st July, 2009 passed by the District Judge, South Goa, in Arbitration Application No. 30/2008 is quashed and set aside subject to the appellant paying costs of Rs. 10,000/- to the respondent. The appellant shall deposit the costs of Rs. 10,000/- in the Court of District Judge, South Goa, Margao. The appellant is permitted to file an application u/s 14 of the Limitation Act within a period of four weeks, after depositing the costs. If the application is filed after deposit of costs, the District Judge shall deal with the application after giving opportunity to the respondent of being heard, in accordance with law. The respondent shall be entitled to withdraw the costs deposited by the appellant. In case the costs are not deposited and the application is not filed within four weeks, the impugned order shall stand revived.

Initially, the costs shall be deposited by the appellant -State of Goa. The costs shall be recovered from the person/persons responsible for not filing the application u/s 14 of the Limitation Act. Enquiry as to the person/persons responsible for the same shall be conducted by an officer not below the rank of Under Secretary to the Government of Goa, who shall fix the responsibility for the same and recover the costs from such person/ persons within a period of three months from today. The appellant shall file compliance report in this Court regarding the recovery of the costs within a period of four months from today.

The appeal stands allowed in aforesaid terms. It is made clear that I have not expressed any opinion on the rival contentions on merits of the matter and all the contentions of the parties are kept open.