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Judgment
Manak Mohta, J.—Heard
The instant civil misc. appeal u/s 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ''the Arbitration Act'') has been filed by the Oriental Insurance Co. Limited against the judgment and order dt. 15.07.2008 passed by learned Additional District Judge No. 3, Jodhpur by which he has dismissed the application filed u/s 34 of the Act as being held time-barred while rejecting the application u/s 14 of the Limitation Act.
The brief facts of case as revealed from the record are that respondent-firm M/s. Tej Paras Associated and Exports (P) Limited was engaged in the business of cold storage having its godown at E-92 (B) Mandore Industrial Area, Jodhpur. The respondent-firm was having dealings with Vijaya Bank, which insisted to take fire insurance policy. The respondent-firm obtained a fire insurance policy vide policy No. 2000/660 for the period 01.12.1999 to 30.11.2000. It is further revealed from record that a fire broke out in the cold storage on 23.04.2000 due to which the cold storage reduced in ash and in that respect the respondent-firm claimed damages from the Insurance Company but the Insurance Company did not settle the dispute, thereupon, as per the terms of the policy, the matter was referred for arbitral proceedings. Shri S.C. Sikka was appointed as arbitrator on behalf of the Insurance Company and Shri D.M. Lodha was appointed as arbitrator on behalf of the respondent-firm. Both the arbitrators with the consent of each others, appointed Justice Shri D.C. Dalela, former Judge of this Court as Presiding Arbitrator. They proceeded with the matter and finally pronounced the award on 28.06.2004. It reveals from the record that the applicant-Insurance Company being aggrieved of the said award, moved an application u/s 33 of the Act for clarification of the venue on 13.07.2004. The learned Arbitrators vide order dt. 17.12.2004 passed order in that respect. Being aggrieved by the said award and order, the Insurance Company the appellant further moved the Court. Against the main award as well as the order passed u/s 33 of the Act on 17.12.2004, an application u/s 34 of the Arbitration Act, 1996 was filed on 03.03.2005 before the learned District Judge, Jaipur City, Jaipur challenging the said award on different ground with the averments that part of the cause of action to file this application arose at Jaipur, therefore, the Jaipur Court was having jurisdiction. In this respect form teh perusal of record it reveals that on 23.03.2005 i.e. on the first day of hearing, the respondent firm moved an application with regard to jurisdiction stating there in that no cause of action arose at Jaipur, the subject matter i.e. the property is situated at Jodhpur, the fire policy was taken from Jodhpur Insurance Office and the venue of arbitration was also at Jodhpur, therefore, the Jaipur Court is not having any jurisdiction. The case was thereafter transferred to the Court of Additional District and Sessions Judge (Fast Track) No. 7 Jaipur City, Jaipur. The appellant-Insurance Company contested that application. The application remained pending for disposal for a considerable period and ultimately on 12.03.2008 while holding that no cause of action or part cause of action arose at Jaipur, the learned Court, Jaipur under Order 7 Rule 10 and 10A C.P.C. returned the application with a direction to file before the concerned District Judge, Jodhpur and the parties were directed to remain present before the learned District Judge, Jodhpur on 02.04.2008.
It is pertinent to note that the original application was taken by appellant from Jaipur Court on 29.03.2008 but that was not filed on or before 02.04.2008 before the District Judge, Jodhpur but later, on 10.04.2008 on application u/s 34 of the Arbitration Act was filed before the learned District Judge, Jodhpur wherefrom the application was again transferred to the Court of learned Additional District Judge No. 3, Jodhpur. It is also pertinent to note that alongwith the application u/s 34 of the Arbitration Act no application u/s 14 of the Limitation Act for exclusion of time was filed. On the basis of knowledge of proceedings, from the side of respondent an application was moved on 10.04.2008 u/s 3 of the Limitation Act stating therein that petition u/s 34 of the Act has been filed after an inordinate delay, that should be dismissed summarily. After his objection, an application u/s 14 of the Limitation Act alongwith affidavit was filed on 03.05.2008 by the appellant. The respondent contested the application. He also filed a reply.
The learned Additional District Judge No. 3 Jodhpur after hearing both the parties reject the application filed u/s 14 of the Limitation Act of the appellant and allowed the application u/s 3 of the Limitation Act filed by the respondent and on that basis, the learned Judge dismissed the application u/s 34 as holding said application time-barred vide impugned judgment and order dt. 15.07.2008. Being aggrieved by the said judgment and order the present appeal has been filed by the Insurance Company. Notice of this appeal was issued. Record of the case was called and the arguments were heard.
During the course of arguments learned Counsel for the applicant-appellant submitted that the learned Court without considering and appreciating the material available on record has wrongly rejected his application filed u/s 14 of the Limitation Act resulting in dismissal of the main application filed u/s 34 of the Limitation Act. It was further contended by the learned Counsel that the appellant preferred application u/s 34 of the Arbitration Act at Jaipur Court with due diligence as well as in good faith on the advise of his counsel with a belief that the part cause of action arose at Jaipur as the proceedings and the award as well as the all the communications were addressed to the regional office at Jaipur, thus, there was a bonafide ground for filing the said application at Jaipur. The learned Counsel for the appellant reiterated his submissions on the strength of the grounds with regard to cause of action mentioned in the main application u/s 34 of the Arbitration Act and again submitted that considering these grounds cannot be termed as malafide or as conducted not in good faith. The same prayer was made before the learned District Court at Jodhpur. The learned Court ought to have taken a lenient view with regard to the point of limitation taking into consideration that there was no malafide intention in conducting the case at Jaipur but the learned Court has taken an erroneous view in not considering the grounds for proceedings the case at Jaipur with due diligence and good faith.
During the course of arguments learned Counsel for the appellant drew my attention towards the records of the case and again submitted that the application u/s 34 of the Arbitration Act was filed within time before the Jiapur Court that remained pending for a considerable time. Thereafter vide order dt. 12.03.2008 the application was ordered to returned with a direction to file it before the learned District Court at Jodhpur on or before 02.04.2008 but again due to some mis-understanding the application could not be filed on 02.04.2008, thereafter the application was immediately filed on 10.04.2008. It was urged that the delay caused in filing the application was bonafide, that deserves to be condoned in the interest of justice. The learned Counsel for the appellant placed reliance on the decision given in the cases of 1. [M/s. consolidt. Engineering Enterprises v. Principal Secretary (Irrigation Department) and Ors. 2008 AIR SCW 4182, 2]- State of Goa v. Westem Builders 2006 AIR SCW 2436, 3]- Union of India v. Shring Construction Co,. Pvt. Ltd., 2006 AIR SCW 6123, 4]-State of Nagaland v. Lipok Ao and Ors. 2005 AIR SCW 1748, 5]-Divisional Manager, Plantation Division, Andaman and Nicobar Islands v. Munnu Barrick and Ors. 2005 AIR SCW 109, 6]-Deena (dead) thought LRs. v. Bharat Singh (dead) through LRs. and Ors. 2002 AIR SCW 3130, 7]-Devendra Swamy v. Karnataka State Road Transport Corporation, 2002 AIR SCW 2777 and 8]-Union of India v. Tecco Tirchy Engineers and Contractors AIR 2005 SCW 1635 and again on the basis of the aforesaid submission a prayer was made to set aside the impugned order, allow the appeal and the time taken in prosecuting the case at Jiapur be excluded and the time taken in filing the application before the learned Court at Jodhpur be condoned and the matter be heard on merits.
On the contrary learned Counsel for the respondent refuted the contentions and submitted that from the perusal of the facts of this case there was no bonafide ground for filing the application u/s 34 of the Arbitration Act at Jaipur because that Court was not having jurisdiction to entertain the same. In this case the main award was pronounced on 28.06.2004. The appellant before moving application u/s 34 of the Arbitration Act moved on application before the arbitrators for clarification of the venue of arbitration proceedings, though, that application was filed malafidely as with regard to venue, that was already decided on 12.12.2003 when arbitration proceedings started, even then it sought clarification, that was cleared vide order dt. 17.12.2004. Thus, there was no slightest doubt with regard to venue of arbitration proceedings. The learned arbitrators made the position clear with regard to the same. It was submitted that after passing of this order dt. 17.12.2004 on application u/s 34 was moved on 03.03.2005 at Jaipur. It was urged that the appellant has mentioned three grounds with regard to territorial jurisdiction of District Court at Jaipur. He drew my attention towards the grounds raised in that respect and again submitted that the first ground which was taken by the appellant was that the appellant''s main Head Office (Regional Office) is situated at Jaipur. It was submitted in this respect that being the Head Office of non-claimant appellant-Insurance Company at Jaipur, could not be a cause for filing the petition at Jaipur. The learned Counsel further submitted that the jurisdiction of the case arises from the place where the defendant resides or carries the business. In this case the respondent-firm was admittedly not resides or carries the business. In this case the respondent-firm was admittedly not residing or carrying business at Jaipur. Thus, this ground was not tenable. The learned Counsel further submitted that the second ground taken for filing the application at Jaipur Court as mentioned was the correspondence made by the respondents to Regional Office but it was urged that it cannot be a ground for having jurisdiction to file application at Jaipur. In this respect it was submitted that the property in dispute was situated at Jodhpur, the fire policy was taken from Jodhpur and all the matters, suits etc., were to be filed and tried at Jodhpur, therefore, on the basis of exchange of correspondence between the parties, the Jaipur Court was not having jurisdiction. Learned Counsel further submitted that the third and the last ground mentioned in for the purpose of showing the jurisdiction of Jaipur Court as shown in the petition was that the proceedings and sitting of the Arbitration Tribunal were held at Jaipur. The learned Counsel again stressed that this ground was not available at all to the applicant in filing the application before the Jaipur Court, as the appellant-Company itself has sought clarification from the learned Arbitrator by filing application on 13.07.2004 much before the filing of the application u/s 34 of the Arbitration Act and that application was decided on 17.12.2004 and the application u/s 34 was filed on 03.03.2005 much prior to the filing of the application u/s 34. Thus, there was no doubt with regard to jurisdiction and the present application u/s 34 of the Arbitrator Act was filed absolutely without due care and in good faith. Learned Counsel for the respondent drew my attention towards Section 42 of the Arbitration Act and submitted that looking to the positing of law down in the said section where admittedly the fire policy was obtained at Jodhpur, thus, any matter/dispute arising out of the contract should have been raised at Jodhpur Court, therefore, the Jodhpur Court was only having the jurisdiction to entertain any sort of dispute. All these facts were within the knowledge of the appellant but the appellant acted in whimsical and in an arbitrary manner. Thus, the appellant has filed the application u/s 34 at Jaipur Court, that conduct cannot be treated to be taken in good faith the due diligence. Learned Counsel for the respondent drew my attention towards the provisions of General Clauses Act where in Section 3 (22) the word ''good faith'' has been defined. Likewise in the Limitation Act, 1963 u/s 2(h), "good faith" has been defined. Looking to the definition of ''good faith''. It was urged that it was necessary for the appellant to establish that the conduct of filing application in Jaipur Court was done with due care and attention but the appellant has failed to establish due care and good faith in conducting the proceedings at Jaipur despite objection taken by the respondent at earliest stage, therefore, the learned Court at Jodhpur has rightly rejected the application as time-barred. It was submitted that the learned Court at Jaipur vide order dt. 12.03.2008 while accepting the contentions of the respondent returned the application with a direction to file at District Court, Jodhpur on or before 02.04.2008 but despite receipt back of the main application, no application was filed on the scheduled date and after a lapse of considerable time, that was filed on 10.04.2008. Learned Counsel further submitted that thus there was a delay in filing the application before the Jodhpur Court that period does not cover in the time consumed in prosecuting the case at Jaipur and by the time the limitation prescribed for filing the application u/s 34 has expired long back. In this respect he drew my attention towards Section 34 of the Arbitration Act and submitted that the time prescribed for filing the application was three months and further on showing sufficient cause, a maximum period of 30 days has been provided to condone delay but no further time can be extended as the present petition has been filed after a delay of near about 31/2 years, thus, the time consumed by the appellant in prosecuting the present case at Jaipur cannot be excluded u/s 14 of the Limitation Act and further the delay in filing the application cannot be condoned in law. The impugned order has been passed after a detailed discussion by the learned Court. It was contended that on merits also the appellant has no case to file application against the award. The applicant himself had made submission before the arbitrators for the payment of compensation amount and as per their admission the amount has not been paid or tendered, therefore, the appellant does deserve any sympathy. There is no infirmity or illegality in the impugned order, that should be maintained. Learned Counsel for the respondent placed reliance on the judgment given in case of [1.- Madhavrao Narayanrao Patwardhan Vs. Ramkrishna Govind Bhanu and Others, 2.- Rabindra Nath Samuel Dawson Vs. Sivakasi and Others, 3.- Deena (Dead) through LRs. Vs. Bharat Singh (Dead) thr. LRs. and Others, 4.- Mac-N-Hom Systems Vs. P.S. Varrier, , 5.- P.K. Kutty Anuj Raja v. State of Kerala, 1996 (1) CCC 696 (SC), 6.-Smt. Phefa Bai and Ors. v. State of Rajasthan and Anr., RLW 1999 (3) Raj. 1821, 7.-Hatti Gold Mines Limited v. Vinay Heavy Equipment''s, 2005 (2) RAJ 324 (Kar.) , 8.- B.S. Virdi Electric Works Vs. Union of India and Another, 9.-Gnanadurai v. Suseelammai, AIR 1995 Mad 133 , 10.- Secretary to the Government of Orissa, Public Works Department Vs. Ramkrishna Mohapatra, 11.- Sam Narain Singh and Others Vs. Raghubans Mani Prasad, 12.- Banwarilal and Sons Pvt. Ltd. Vs. Union of India and Others, 13.-Hussan Bhat v. Haji Mohammed Sultan Bhat, AIR 1967 J&K 18, 14.-Money Transports, Tirchiraplli v. The Tanjore Co-operative Marketing Federation Ltd., AIR 1979 Mad 196 , 15.- Islam Shah Vs. Wali Mohammad Khan, 16.-Videocon International Ltd. v. Logos Traders, 2008 (3) CCC 88 (Ker.) and 17.- Jafar Uddin Vs. Debi Prasad and Another, in support of his contentions and again on the strength of the aforesaid submissions, a prayer was made to dismiss the appeal.
Is have considered the trial submission and perused the impugned judgment and the material available on record and the judgments cited by the learned Counsel for the parties. The main question which remains for consideration in this case is whether the appellant has been able to establish that due care and diligence was taken in filing the application and conducting the case before the Jaipur Court, therefore, he was entitled to exclusion of time u/s 14 of the Limitation Act and further the delay caused in filing the application u/s 34 before the Jodhpur Court was entitled to be condoned?
I have perused the record. It reveals from the record that against the award dt. 28.06.2004 an amended order was passed by the arbitrator on 17.12.2004. The appellant-Insurance Company filed an application u/s 34 of the Arbitration Act before the District Court at Jaipur City, Jaipur on 03.03.2005. Undisputedly the unit for which the fire policy was taken was situated at Jodhpur. The fire policy has been obtained from Chandshah Takiya Marg. Insurance Branch office at Jodhpur. The incident took place at Jodhpur and the demand of compensation was made at Jodhpur. The incident took place at Jodhpur and the demand of compensation was made at Jodhpur. The appellant while challenging the award in para-21 of the application submitted the grounds for filing the said application before the Jaipur Court in which the appellant asserted that the Regional Office is situated at Jaipur, correspondence took place with the said office and the sittings of arbitrators were held at Jaipur. On the basis of these reasoning it was asserted that the Jaipur Court has the jurisdiction. In this respect Section 43 of the Arbitration Act is relevant, which deals with jurisdiction. In the section it has been mentioned that where an arbitration agreement came into existence, the concerned Court will have the jurisdiction to entertain further applications. Thus, taking into consideration the point that the fire policy was obtained from Jodhpur Office and the present arbitral proceeding is concerned with that policy, the property-in-question is situated at Jodhpur and the incident of fire occurred at Jodhpur, the dispute arose between the parties at Jodhpur, therefore, the Jodhpur Court only was having the jurisdiction. The appellant filed applications showing the jurisdiction on the basis of aforementioned grounds were having no force. Merely because the Regional Office of the appellant-Insurance Company is at Jaipur and the exchange of correspondence between the parties took place at Jaipur, that will not give cause to file application u/s 34 of the Arbitration Act at Jaipur. The other cause that has been assigned is that most of the sitting of arbitrators were held at Jaipur, thus, the Jaipur Court attains jurisdiction. In this respect, it is pertinent to note that the appellant itself has moved an application seeking clarification of venue before the arbitrators on 13.07.2004 and the arbitrator after hearing the parties vide order dt. 17.12.2004 cleared the position. Thereafter nothing sort of doubt remained to be made clear. It is clear from the record that application u/s 34 of the Limitation Act has been filed thereafter, thus, in these circumstances the filing of the application u/s 34 of the Act at Jaipur, cannot be treated that the application was moved with due diligence and in good faith. During the course of arguments much stress was laid regarding the conduct of the appellant in moving in good faith and after taking proper care but on the basis of the material available on record, the appellant has not been able to establish that proper, due diligence and good faith. The application was filed and prosecuted at Jaipur. The burden of proving this fact was on the applicant.
On the contrary, it reveals that on the first date of hearing i.e. 23.03.2005 at Jaipur the respondent moved an application that the Jaipur Court was not having jurisdiction. The appellant-Insurance Company contested that application. Thus, it is clearly established that the conduct of the appellant in pursing the matter at Jaipur was not at all in good faith and thereafter vide order dt. 12.03.2008, it was directed by the learned Jaipur Court that the application be placed before the Jodhpur Court and a specific dt. 02.04.2008 was given in this respect but the appellant-Insurance Company has not filed any application despite receipt of the original application from the Jaipur and it was kept with it upto 10.04.2008. Thus, again the appellant committed inordinate delay in filing the said application. Further no application before the Jodhpur Court u/s 14 of the Limitation Act was filed by the appellant alongwith the main application u/s 34 before the Jodhpur Court but on the objection of the respondent, an application was filed u/s 14 on 03.05.2008. Even in that application, the appellant has not mentioned in detail with regard to its bonafides or good faith. It has further been mentioned in that application that due to some administrative mis-understanding, the application could not be filed on the scheduled date and, thus, a prayer was made to condone the delay. Thus, from the above narration, it is clear that there was no due diligence or good faith in filing and prosecuting the application before the Jaipur Court and taking into consideration the aforesaid factual position, the appellant was not entitled to exclusion of time consumed in prosecuting the application at Jaipur Court. Further the appellant has not complied with the direction and has filed the application after a considerable delay and it is settled law that Section 5 of the Limitation Act is not applicable and the limitation is to be seen from Section 34 Arbitration Act itself. Thus, the appellant is not get condonation u/s 34(3) as prescribed in Limitation Act as the limitation has already expired and further the appellant-Insurance Company was not entitled to get the delay condoned. The learned trial Court after a detailed discussion has rightly dismissed the application field u/s 14 resulting is dismissed the application filed u/s 34. The order impugned does not suffer from any illegality or irregularity and the appellant is not entitled for any relief.
I have also perused the authorised cited by the learned Counsel for the parties. Front the side of appellant in the decision given in the cases of M/s. consolidt. Engineering v. Principal Secretary (Irrigation Department) (supra), State of Goa v. M/s Western Builders (supra) and Union of India v. Shring Construction Co. Pvt. Ltd. (supra) it has been observed that Section 14 of the Limitation Act will apply. No dispute has been raised by the opposite party in that respect but the question still remains for consideration is that before application u/s 14 of Limitation Act, the appellant is require to prove his bonafide and good faith in filing and prosecuting the application in wrong Court. To that extent the appellant has not been able to prove its case. I have also perused the other authorities cited by the appellant''s side. The case Divisional Manager, Plantation Division, Andaman and Nicobar Islands v. Munnu Barrick and Ors. (supra) relates to Workman''s Compensation Act wherein it has been observed that on the point of limitation liberal view should be taken but as discussed above, the bonafides of the appellant is to be seen first and in that respect appellant was lacking. State of Negaland v. Lipok Ao and Ors. (supra) is related to criminal case where there was a delay of 57 days in filing appeal. Considering the facts, the Court has condoned the delay. In Union of India v. Tecco Trichy Engineers and Contractors (supra) there was a delay of 27 days in filing application. Looking to the legal position u/s 34 (3), the Court has condoned the delay. Thus, on the basis of the aforesaid discussion, none of the authorities helps the contention of the appellant.
On the contrary the authorities cited by the learned Counsel for the respondent are much relevant. In Madhavrao v. Ram Krishna (supra), it has been held that the burden of bringing the case within Section 14 is on the applicant who sought exclusion from limitation. He has to satisfy that the action was taken with due diligence. In Rabindra Nath v. Sivakami (supra) it has been held that the opposite party has raised objection with regard to non-joinder of the parties at the initial stage but no care was taken by the applicant. In that reference it was held that a person is not entitled to take benefit of Section 14 for excluding the time spent by him. Likewise, in the present case the respondent raised the objection with regard to jurisdiction at the initial stage and the appellant contested the issue. In Deena v. Bharat Singh Same position has been dealt with. In M/s. Mac-N-Hom Systems v. R.P.S. Varrier''s Aryavaidaysala (supra) it has been held that wrong advise by a counsel to the party acting on it, was not treated as a ground to get benefit of Section 14 of the Limitation Act. In P.K. Kutty Anuja Raja v. State of Kerala (supra), it has been held that once limitation starts running, it runs its full course. In Smt. Phefa Bai v. State of Rajasthan and Anr. (supra), it has been observed by this Court that the delay should be explained satisfactorily and on mere assumption and presumption it cannot be condoned. In the present case the delay has not been properly explained, as discussed aforesaid. In Hatti Gold Mines Limited v. Vinay Heavy Equipments (supra), it has been observed that for taking advantage of Section 14 of Limitation Act can be taken only when the proceedings are prosecuted in good faith and bonafide in a Court having no jurisdiction. In M/s. B.S. Virdi Electric works v. Union of India (supra), it has been held that merely because the sole arbitrator conducted the proceedings in Delhi where the principal office was situated would not clothe Delhi High Court with jurisdiction. I have also perused the other authorities cited by the learned Counsel for the respondent. They are also stating the same thing that before taking exemption u/s 14, the concerned party should satisfy that the action was taken in due diligence and good faith otherwise he is not entitled for the benefit of exclusion. Thus, the decisions also support the aforesaid conclusion.
Thus, on the basis of the aforesaid discussion the appeal is liable to be dismissed and is hereby dismissed. The impugned judgment passed by the trial Court is maintained. There shall be no order as to costs.