The Kollegal Silk Filatures Limited vs The Province of Madras by the Director of Industries and Commerce

Patanjali Sastri, J.—This appeal arises put of an award of compensation made by art arbitrator appointed u/s 19 of the Defence of India

Act, 1939, which provides for the payment of compensation in accordance with certain principles for compulsory acquisition of Immovable

property, etc. The appeal was filed admittedly beyond the time prescribed by Article 156 of the Limitation Act for an appeal to this Court. The

appellant, while maintaining that the said article is not applicable to the case, also applied u/s 5 of that Act for admission of the appeal even if it was

considered as presented after time, but that application was rejected on the ground that no sufficient cause was shown for not presenting it within

the prescribed period. The appeal is now posted before us for determining whether, as contended by the appellant, no time limit has been provided

for an appeal of this kind and it must accordingly be deemed to have been duly filed.

The contention is based on two grounds : first, that clause {g) of Section 19 of the Defence of India Act, 1939, has the effect of excluding the

application of the law of limitation to arbitration proceedings under that section, and, secondly, this is neither an appeal ""under the CPC "" nor ""an

appeal from a decree or order"" and consequently does not fall under Article 156. We are of opinion that the contention must be accepted on the

first ground, and that it is unnecessary to consider the second which the Government Pleader for the respondent seeks to repel on the strength of

A. Ramaswami Pillai Vs. The Thasildar of Madura and Another, .

Sub-section (1) of Section 19 provides, inter alia that when no agreement can be reached regarding the amount of compensation the Central

Government shall appoint as ""arbitrator"" a person qualified for appointment as a Judge of a High Court [clause (b)]. The arbitrator ""in making his

award"" shall have regard to certain provisions of the Land Acquisition Act so far as they can be made applicable [Clause (c)]. An appeal shall lie

to the High Court against an award of an arbitrator except in certain cases [clause (f)]. Clause (g) on the true construction , of which the question

turns reads as follows:

Save as provided in this section and in any rules made thereunder, nothing in any law for the time being in force shall apply to arbitrations under this

section.

Sub-sections (2) and (3) confer on the Central Government the power to make rules prescribing, inter alia, the principles to be followed in

apportioning the costs of ""proceedings before the arbitrator and on appeal"" [Clause (b)].

It is manifest that the words of exclusion in Clause (g) are very wide and must cover the Limitation Act as to which no saving provision is to be

found in the section and none has been brought to our notice in any of the rules. It is, however,, urged by the Government Pleader that the

exclusion operates only in respect of proceedings before the arbitrator and that an appeal to the High Court cannot be regarded as an "" arbitration

within the meaning of the clause.,. Reliance is placed on Clause (b) of Sub-section (3) where "" Proceedings before the arbitrator "" are referred to

as being something distinct from proceedings "" on appeal"". We are unable to accept the argument. In our opinion ""arbitration"" in Clause (g) covers

the entire proceedings from their commencement before the arbitrator to their termination in the High Court on appeal where an appeal has been

preferred. Although the appeal is given to the ""High Court"" under Clause (f), the appeal is against the ""award"" of the arbitrator, and it seems to us

that the High Court in hearing and deciding the appeal acts essentially as an arbitration tribunal, no less bound than the arbitrator under Clause (e)

to have regard to the considerations referred to therein. We find nothing in Clause (b) of Sub-section (3) militating against this view. As that clause

contemplates provisions being made by rules for the apportionment of costs incurred before the arbitrator and on appeal reference had to be made

to the proceedings in the two separate stages but such reference cannot in our view import any distinction in the nature of the proceedings. in their

different stages.

In the analogous case of an award of compensation by the Collector under the Land Acquisition Act from which an appeal lies to the District

Court in the first instance and then to the High Court, the entire proceedings from beginning to end were regarded by the Privy Council as

arbitration proceedings Distinguishing their decision in Rangoon Botatoung Company, Limited v. The Collector, Rangoon (1912) 23 M.L.J. 276 :

L.R. 39 IndAp 197 : ILR 40 Cal. 21 (P.C.) their Lordships observed in the (1916) L.R. 43 I.A. 192 (Privy Council) as follows:

In the Rangoon case a certain award had been made by the Collector under the Land Acquisition Act. This award was affirmed by the Court,

which under the Act meant '' a principal Civil Court of Original Jurisdiction''. Two, Judges sat as ''the Court'' and also as the High Court to which

the appeal is given from the award of the Court.'' The proceedings were, however, from beginning to end ostensibly and actually arbitration

proceedings.

These observations support the view which we have expressed above.

It follows that no bar of limitation is applicable to the appeal which is accordingly in time.