The learned Counsel for the appellant however made a
persuasive attempt to contend that the mistake was more
committed by the lawyer, for which the party might not be
penalized. We are very much aware of the declaration of law by
the Apex Court in this regard that the mistake, if any, committed
by the lawyer shall not place any hurdle in the way of prosecuting
the proceedings by the parties concerned. But here, the
proceedings stand on a different footing. Ignorance of law is no
excuse for anybody, which is equally applicable to the litigant as
well as the lawyer and it cannot be branded as a mistake
simpliciter. When the statute specifically bars the proceedings in
a civil court, (which provision was incorporated in the statute
way back in the year 1996), a lawyer who was representing the
party before this Court at the time of filing the Arbitration
Request, thereafter before the Arbitrator, when the proceedings
of Arbitration was going on and who represented party in the
subsequent proceedings as well, ought not to have ventured
into filing of any proceedings contrary to the provisions of law
before a wrong Forum, by way of wrong proceedings and
subsequently crave for indulgence saying that the party is
innocent. There is a contention for the respondents that such a
course was pursued with a wilful intent to protract the
proceedings. But we do not intend to make any observation in
this regard as it is not necessary, but for considering the legal
issue as to whether the proceedings are maintainable or not.
15. After hearing both the sides and after going through the
materials on record, we are of the considered view that the
proceedings were never being pursued with 'due diligence' and
would fail, as asserted and underlined by the Apex Court in
paragraph 31 of the decision in Consolidated Engineering
Enterprises vs. Principal Secretary, Irrigation Department
and others ((2008) 7 SCC 169). As such, the appellants are
not entitled to have any benefit.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
MR.JUSTICE P.R.RAMACHANDRA MENON
&
MR. JUSTICE SHAJI P.CHALY
2ND DAY OF DECEMBER 2015/
Arb.A.No. 65 of 2014
M/S HINDUSTAN HARDWARE STORES
Vs
V.UMESH KAMATH,
Citation:AIR 2016 (NOC)635 Kerala
Dismissal of the Arbitration O.P., pursuant to dismissal of
the application to condone the delay in filing the same, made the
appellants to approach this Court by way of this appeal. The first
appellant partnership firm, joining hands with two other persons,
who were partners , had approached the Court below by filing an
O.P. (Arbitration). During the pendency of the proceedings, the
second petitioner bid farewell to this world, pursuant to which,
the legal heirs were impleaded as additional petitioners, who in
turn are shown as the appellants 3 and 4 herein.
2. The dispute is mainly with regard to the return of
money, to the extent the deceased partner was having interest in
the firm. Pursuant to the demise of the concerned partner, the
due amount was demanded by the respondents herein, which
was refused to be acted upon. After several rounds of
negotiations, on finding that there was no other alternative, the
respondents approached the District Court, Ernakulam by filing
O.P.(Arbitration Request) seeking for appointment of an
arbitrator. Pursuant to the orders passed therein, a sufficiently
senior lawyer was appointed as Arbitrator, who pursued further
steps, leading to award dated 22.06.2009, whereby a sum of
Rs.28,88,316.88/- was directed to be paid with interest at the
rate of 12% per annum. Some mistakes were noted in the award,
which were brought to the notice of the Arbitrator and
accordingly, the award was corrected on 26.11.2009. The
corrected copy of the award was obtained to the appellants
herein on 01.12.2009. Since they were stated as aggrieved of the
award, the proceedings challenging the award ought to have
been filed before 01.03.2010, to be within 90 days as stipulated
under Section 34(2) of the Act. It is said that the concerned
appellants filed O.S.134 of 2010 before the Sub Court,
Ernakulam seeking to set aside the award on 24.02.2010, which
was well within the stipulated time of 'three months' under
Section 34(2). Subsequently, the Sub Court found, based on the
objection raised by the opposite side, that the suit was not
maintainable and accordingly, the proceedings were returned on
09.11.2010, to be presented before the appropriate Forum, of
course, after making necessary endorsement in this regard.
3. Met with the situation, the appellants applied for a
certified copy of the order whereby the plaint was returned. The
said copy application was filed on the very next date, i.e. on
10.11.2010. It is stated that such an application was filed as the
learned lawyer, who was prosecuting the matter on behalf of the
party was under the impression that the proceedings had to be
filed before the District Court as an 'O.P', along with the order
showing the return of the plaint for want of jurisdiction to
sustain the proceedings, without the bar of limitation. It is
pointed out that, since the copy application was filed for serving
copy of the order returning the plaint, the proceedings/plaint
were not returned till the certified copy was ready and finally, the
certified copy was issued along with the plaint returned on
24.01.2011. Thereafter OP (Arbitration)No.232 of 2011 was filed
before the District Court, along with the said proceedings.
Pursuant to the notice issued, the respondents herein entered
appearance. It is incidentally to be noted that while re-
presenting the proceedings as above, there occurred a delay of
22 days in obtaining certified copy of the order returning the
plaint, which was sought to be condoned by filing I.A.No.126 of
2013. The prayer was opposed by the respondents herein and
ultimately, allegedly without any regard to the relevant
provisions of law or the actual facts and circumstances, I.A.
seeking to condone the delay was dismissed holding that the
proceedings were barred by limitation and as a natural
consequence, the Arbitration O.P. as well. This in turn is sought
to be challenged by filing this appeal.
4. Heard the learned Counsel appearing for the appellants
as well as the learned Counsel appearing for the respondents.
5. The learned Counsel for the appellants points out that,
by virtue of the mandate under Section 43 of the Arbitration Act,
the Limitation Act is applicable to Arbitration proceedings as
well. Reliance is sought to be placed on Section 14 of the Act,
whereby the time taken in prosecuting the matter with due
diligence before a wrong Court/Forum is liable to be excluded
for computing the period of limitation. It is also stated by the
learned Counsel that, time to obtain the certified copy is also
liable to be excluded by virtue of Section 12 of the Act; and if
this is considered, the delay sought to be condoned is well
within the limits of the statutory mandate and as such, the I.A.
ought not to have been dismissed by the court below. The
learned Counsel also places reliance on the judgment rendered by
the Apex court in Consolidated Engineering Enterprises vs.
Principal Secretary, Irrigation Department and others[(2008)
7 SCC 169], wherein clear distinction was made between Section
5 and Section 14 of the Limitation Act, holding that Section 14
would be applicable to the Arbitration proceedings as well. The
learned Counsel further submits that, almost a similar situation
was considered by a learned Judge of this Court with reference
to Section 3 and Section 14 of the Act. It was held in paragraph
16 of the decision reported in 2015 (1) KLJ 755 (Ayisu & ors
vs. Saidu & ors) that such period, (as sought to be condoned
by the appellant in the instant case) is liable to be condoned.
6. The learned Counsel appearing for the respondents
submits that the idea and understanding of the appellant is
thoroughly wrong and misconceived. It is asserted that there
was absolutely no move on the part of the appellants in
prosecuting the matter with due diligence and good faith. The
Statute does never envisage filing of 'civil suit', by virtue of the
statutory bar and if at all the award passed by the Arbitrator is
to be challenged, the only course available is under Section 34
of the Act by filing an O.P.
7. The Act is a special statute with regard to the period of
limitation. Such period, as mentioned under Section 34 of the Act
is 'three months' with a grace period of one month as stipulated
under the proviso. Going by the admitted facts and figures, the
proceedings were not filed within that time, and it was
accordingly that the delay was sought to be condoned, also in
respect of the time taken for issuance of certified copy. The
learned Counsel for the respondents submits that certified copy
of the order returning the plaint was not at all necessary for
having the proceedings re-presented before appropriate court, as
'endorsement' is to be made on the plaint/proceedings while
returning the same; more so in view of the mandate of Order VII
Rule 10/Rule 10A of the Code of Civil Procedure. The course
pursued by the appellant was only to protract things and that
same was the position right from the beginning, which involves
different rounds of litigations at different levels, including the
unfruitful steps for settlement of the issue with the involvement
of mediators. The learned Counsel further submits that the
appeal itself was belated, involving delay of 377 days, which was
sought to be condoned by filing an application as C.M.Application
No.2657 of 2014.
8. A detailed statement of objection was filed by the
respondents. It is stated that there is no dispute with regard to
the principal amount payable at any point of time and the
dispute was more in relation to 'interest'. Making a reference to
Clause 14 of the Arbitration Agreement, copy of which has been
produced along with the statement of objection in the said
C.M.Application, the learned Counsel submits that by virtue of
the agreed terms, the respondents were entitled to get interest
at the rate of 18% per annum. But on conclusion of the
proceedings, the Arbitrator has awarded interest only at the rate
of 12% per annum. By this time, because of pendency of the
issue for more than 12 years, the money value/purchasing power
of the respondents has come down to a quite sizable extent
and the respondents are finding it extremely difficult to make
both ends meet. It is also asserted that the way in which the
portrait is attempted to be projected from the part of the
appellants does not deserve any sympathy or significance in so
far as the very same learned counsel, who was representing the
parties in the Arbitration Request filed by the respondents before
this Court, was representing the parties before the Arbitrator as
well, who himself was appearing for them in the suit filed before
the Sub Court and also in the Arbitration O.P filed before the
District Court.
9. The stipulation barring the jurisdiction of civil court was
incorporated as a part of the statute, way back in the year 1996.
It cannot be taken without a pinch of salt, if it is said that the
lawyer was totally unaware of the provision of law as to the bar
of civil court. The matter was being pursued by filing a civil suit
before the Sub Court, later, getting it returned to be re-presented
before the appropriate Forum and still, inviting delay in this
regard. Even thereafter, in approaching this Court there is a
delay of more than one year. This is a clear instance as to the
manner in which the proceedings were being pursued, which
could never be certified as part of 'due diligence', so as to attract
the provisions under Section 14 of the Limitation Act or to extend
any relief as sought for in the appeal.
10. Coming to the decision of the Apex Court sought to be
relied on behalf of the appellants-i.e.[(2008) 7 SCC 169)
(Consolidated Engineering Enterprises vs. Principal
Secretary, Irrigation Department and others), it was a case
where an application was filed by the appellant on 06.06.2002 in
the concerned court to set aside the award made by the
Arbitrator. This was subsequently sought to be returned by filing
an application under Order VII Rule 10A, to be presented before
the concerned District Court. The circumstances under which
Section 14 could be attracted were referred to by the Apex Court
in paragraph 21 of the verdict, which reads as follows:
"21. Section 14 of the Limitation Act deals with exclusion
of time of proceeding bona fide in a court without
jurisdiction . On analysis of the said section, it becomes
evident that the following conditions must be satisfied
before Section 14 can be pressed into service:
(1) Both the prior and subsequent proceedings are
civil proceedings prosecuted by the same party;
(2) The prior proceedings had been prosecuted with
due diligence and in good faith;
(3) The failure of the prior proceeding was due to
defect of jurisdiction or other cause of like nature;
(4) The earlier proceeding and the latter proceeding
must relate to the same matter in issue and
(5) Both the proceedings are in a court."
The observation of the Supreme Court as contained in
paragraph 31 are also relevant which hence is reproduced below:
"31. To attract the provisions of Section 14 of the
Limitation Act, five conditions enumerated in the earlier
part of this judgment have to co-exist. There is no manner
of doubt that the section deserves to be construed liberally.
Due diligence and caution are essential prerequisites for
attracting Section 14. Due diligence cannot be measured
by any absolute standards . Due diligence is a measure of
prudence or activity expected from and ordinarily
exercised by a reasonable and prudent person under the
particular circumstances. The time during which a court
holds up a case while it is discovering that it ought to have
been presented in another court, must be excluded , as the
delay of the court cannot affect the due diligence of the
party. Section 14 requires that the prior proceeding should
have been prosecuted in good faith and with due diligence.
The definition of good faith as found in Section 2(h) of the
Limitation Act would indicate that nothing shall be
deemed to be in good faith which is not done with due
care and attention. It is true that Section 14 will not help
a party who is guilty of negligence, lapse or inaction.
However, there can be no hard-and-fast rule as to what
amounts to good faith. It is a matter to be decided on the
facts of each case. It will , in almost every case be more or
less a question of degree. The mere filing of an
application in wrong court would not prima facie show
want of good faith. There must be no pretended mistake
intentionally made with a view to delaying the proceedings
or harassing the opposite party. In the light of these
principles, the question will have to be considered whether
the appellant had prosecuted the matter in other courts
with due diligence and in good faith."
11. Applying the law laid down by the Apex Court to the
given set of facts and circumstances in the instant case, it is to
be noted that the proceedings filed by the appellants herein were
entirely different from the type of proceedings/application which
was filed by the party/appellant in the case dealt with by the
Apex Court. In the instant case, inspite of the fact that no
'original suit' could have been filed, by virtue of the mandate of
the statute stipulating the course of challenge only by filing O.P.,
as stipulated under Section 34 of the Arbitration and Conciliation
Act, 1996, the appellants sought to challenge the award by filing
an O.S. It was after the objection raised from the part of the
respondents/defendants, as to the maintainability, that the
proceedings were got returned. In fact, the same was returned
after making the endorsement on the plaint itself on 09.11.2010.
So as to proceed with further steps, causing re-presentation of
the proceedings before the appropriate court, certified copy of
the order, as applied for from the part of the plaintiffs/appellants
herein, was not at all necessary, as the circumstance under which
the plaint was returned for want of jurisdiction was very much
endorsed upon the plaint itself.
12. Coming to the case decided by the learned Single
Judge of this Court in 2015 (1) KLJ 755 (cited supra), apart
from paragraph 16 sought to be relied on by the appellants,
paragraph 13 is also relevant, and as such both the paragraphs
are reproduced below:
"13. The learned counsel for the appellant would argue
that in computing the time during which the plaintiff has
been prosecuting another civil proceedings in a Court of
Appeal with due diligence, the time requisite for obtaining
certified copies under Section 12 has to be excluded. It was
argued that the certified copy alone would show the result
of judgment and only after getting the certified copy, one
can decide whether he should take up further steps or to file
a fresh suit. Therefore, it was argued that the suit filed on
24.08.1985 is in time. "
"16. It is crucial to note that Section 14(1) of the
Limitation Act makes no reference to the pendency of
suit or appeal or other proceedings in a court of law.
The Legislature had used the words of general import
and of widest amplitude. If only pendency of a
proceeding in a court would be deducted in
computing the period of limitation, the time taken for
issuing certified copies of the judgment which is
essential to decide further course of action, has to be
disregarded for the purpose of Section 14. It would
certainly result in an anomaly. That time covered for
taking steps absolutely necessary for initiating
proceedings in a court should be included in
calculating the period of limitation. The section does
not make any distinction between the steps which a
litigant has to take to initiate proceedings in a court
and the actual pendency of those proceedings in the
court. In other words, Section 14 of the Limitation
Act excludes not only the period of pendency of
infructuous proceedings in a court of law, but also
the time occupied for taking indispensable and
preparatory steps to institute further proceedings like
obtaining certified copies of the judgments and
orders."
In paragraph 13, the arguments raised from the part of the
appellant are referred to, which is to the effect that only on
receipt of certified copy, would the party know about the result
of the judgment so as to decide whether he should take up the
matter for further steps or to file a fresh suit. Again, in
paragraph 16, the necessity to obtain certified copy of the order
is referred to, in so far as it is essential to decide the future
course of action. In the last sentence of the very same
paragraph, it is stated that Section 14 of the Limitation Act
excludes, not only the period of pendency of infructuous
proceedings in a court of law, but also the time occupied for
taking indispensable and preparatory steps to institute further
proceedings like obtaining certified copy of the judgments and
orders. In short, the purpose of obtaining certified copies
should be such that, the further course of action, without
obtaining certified copy would be obscure/ambiguous and only on
receipt of certified copy, would the party be in a position to know
as to the such/appropriate further course of action.
13. The position is not similar, when it comes to the factual
position in the instant case. The order returning the plaint was
for want of jurisdiction and that the same was endorsed on the
plaint itself. The course and proceedings under such
circumstance, (if a proceedings is filed in a wrong Forum, to be
got returned and presented before a proper Forum) are taken
care of by virtue of the Order VII Rule 10 and Rule 10A of the
CPC, which are extracted below:
"10. Return of plaint: (1) Subject to the provisions of
Rule 10-A, the plaint shall at any stage of the suit be
returned to be presented to the Court in which the suit
should have been instituted.
[Explanation: For the removal of doubts, it is hereby
declared that a Court of appeal or revision may direct ,
after setting aside the decree passed in a suit, the return
of the plaint under this sub-rule;
(2) Procedure on returning plaint: On returning a
plaint the Judge shall endorse thereon the date of its
presentation and return, the name of the party presenting
it, and a brief statement of the reasons for returning it. "
10-A: Power of Court to fix a date of appearance in the
Court where plaint is to be filed after its return:(1)
Where, in any suit, after the defendant has appeared, the
Court is of opinion that the plaint should be returned, it
shall, before doing so, intimate its decision to the
plaintiff.
(2)Where an intimation is given to the plaintiff under
sub-rule(1), the plaintiff may make an application to the
Court-
(a) specifying the Court in which he proposes to present
the plaint after its return,
(b) praying that the Court may fix a date for the
appearance of the parties in the said Court, and
) requesting that the notice of the date so fixed may be
given to him and to the defendant.
(3) Where an application is made by the plaintiff under
sub-rule (2), the Court shall, before returning the plaint
and notwithstanding that the order for return of plaint
was made by it on the ground that it has no jurisdiction to
try the suit-
(a) fix a date for the appearance of the parties in the
court in which the plaint is proposed to be presented, and
(b) give to the plaintiff and to the defendant notice of
such date for appearance.
(4) Where the notice of the date for appearance is given
under sub-rule (3)-
(a) it shall not be necessary for the Court in which the
plaint is presented after its return, to serve the defendant
with a summons for appearance in the suit, unless that
Court, for reasons to be recorded, otherwise directs, and
(b) the said notice shall be deemed to be a summons for
the appearance of the defendant in the Court in which the
plaint is presented on the date so fixed by the Court by
which the plaint was returned.
(5) Where the application made by the plaintiff under
sub-rule (2)is allowed by the Court, the plaintiff shall not
be entitled to appeal against the order returning the
plaint.
In the case of Order VII Rule 10, it is stipulated that the
proceedings could be returned at any stage of the proceedings
and the parties are at liberty to have the same re-presented
before the appropriate Court having jurisdiction, whereupon such
period could be caused to be exempted from computing the
period of limitation. Coming to Order VII, Rule 10-A, it is made
applicable with reference to the appearance of the defendant and
once the defendant appears, the further course of action for
returning the proceedings is stipulated therein, making it open for
the party/plaintiff to file an application to get the proceedings
returned, upon which an order will be passed making an
endorsement as to the Court to which it is to be presented and
the time within which it is to be presented. If the proceedings
are caused to be returned based on an application preferred by a
party, then no further proceedings will lie by way of appeal
against such order or proceedings. It is seen that no diligent
steps as envisaged by the provisions of law have been pursued
by the appellant in the instant case.
14. The learned Counsel for the appellant however made a
persuasive attempt to contend that the mistake was more
committed by the lawyer, for which the party might not be
penalized. We are very much aware of the declaration of law by
the Apex Court in this regard that the mistake, if any, committed
by the lawyer shall not place any hurdle in the way of prosecuting
the proceedings by the parties concerned. But here, the
proceedings stand on a different footing. Ignorance of law is no
excuse for anybody, which is equally applicable to the litigant as
well as the lawyer and it cannot be branded as a mistake
simpliciter. When the statute specifically bars the proceedings in
a civil court, (which provision was incorporated in the statute
way back in the year 1996), a lawyer who was representing the
party before this Court at the time of filing the Arbitration
Request, thereafter before the Arbitrator, when the proceedings
of Arbitration was going on and who represented party in the
subsequent proceedings as well, ought not to have ventured
into filing of any proceedings contrary to the provisions of law
before a wrong Forum, by way of wrong proceedings and
subsequently crave for indulgence saying that the party is
innocent. There is a contention for the respondents that such a
course was pursued with a wilful intent to protract the
proceedings. But we do not intend to make any observation in
this regard as it is not necessary, but for considering the legal
issue as to whether the proceedings are maintainable or not.
15. After hearing both the sides and after going through the
materials on record, we are of the considered view that the
proceedings were never being pursued with 'due diligence' and
would fail, as asserted and underlined by the Apex Court in
paragraph 31 of the decision in Consolidated Engineering
Enterprises vs. Principal Secretary, Irrigation Department
and others ((2008) 7 SCC 169). As such, the appellants are
not entitled to have any benefit. It is seen that when the matter
was pending before this Court, by virtue of various interim orders
passed, the entire liability towards 'principal amount' came to be
discharged and the remaining liability is only with regard to the
interest payable. It is open for the respondents to pursue
appropriate proceedings in accordance with law for realisation of
the balance amount if any. The appeal is devoid of any merit
and none of the grounds raised in support of the same could be
held as tenable. Interference is declined. Appeal stands
dismissed.
P.R. RAMACHANDRA MENON,
JUDGE
SHAJI P. CHALY,
JUDGE
Print Page
persuasive attempt to contend that the mistake was more
committed by the lawyer, for which the party might not be
penalized. We are very much aware of the declaration of law by
the Apex Court in this regard that the mistake, if any, committed
by the lawyer shall not place any hurdle in the way of prosecuting
the proceedings by the parties concerned. But here, the
proceedings stand on a different footing. Ignorance of law is no
excuse for anybody, which is equally applicable to the litigant as
well as the lawyer and it cannot be branded as a mistake
simpliciter. When the statute specifically bars the proceedings in
a civil court, (which provision was incorporated in the statute
way back in the year 1996), a lawyer who was representing the
party before this Court at the time of filing the Arbitration
Request, thereafter before the Arbitrator, when the proceedings
of Arbitration was going on and who represented party in the
subsequent proceedings as well, ought not to have ventured
into filing of any proceedings contrary to the provisions of law
before a wrong Forum, by way of wrong proceedings and
subsequently crave for indulgence saying that the party is
innocent. There is a contention for the respondents that such a
course was pursued with a wilful intent to protract the
proceedings. But we do not intend to make any observation in
this regard as it is not necessary, but for considering the legal
issue as to whether the proceedings are maintainable or not.
15. After hearing both the sides and after going through the
materials on record, we are of the considered view that the
proceedings were never being pursued with 'due diligence' and
would fail, as asserted and underlined by the Apex Court in
paragraph 31 of the decision in Consolidated Engineering
Enterprises vs. Principal Secretary, Irrigation Department
and others ((2008) 7 SCC 169). As such, the appellants are
not entitled to have any benefit.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
MR.JUSTICE P.R.RAMACHANDRA MENON
&
MR. JUSTICE SHAJI P.CHALY
2ND DAY OF DECEMBER 2015/
Arb.A.No. 65 of 2014
M/S HINDUSTAN HARDWARE STORES
Vs
V.UMESH KAMATH,
Citation:AIR 2016 (NOC)635 Kerala
Dismissal of the Arbitration O.P., pursuant to dismissal of
the application to condone the delay in filing the same, made the
appellants to approach this Court by way of this appeal. The first
appellant partnership firm, joining hands with two other persons,
who were partners , had approached the Court below by filing an
O.P. (Arbitration). During the pendency of the proceedings, the
second petitioner bid farewell to this world, pursuant to which,
the legal heirs were impleaded as additional petitioners, who in
turn are shown as the appellants 3 and 4 herein.
2. The dispute is mainly with regard to the return of
money, to the extent the deceased partner was having interest in
the firm. Pursuant to the demise of the concerned partner, the
due amount was demanded by the respondents herein, which
was refused to be acted upon. After several rounds of
negotiations, on finding that there was no other alternative, the
respondents approached the District Court, Ernakulam by filing
O.P.(Arbitration Request) seeking for appointment of an
arbitrator. Pursuant to the orders passed therein, a sufficiently
senior lawyer was appointed as Arbitrator, who pursued further
steps, leading to award dated 22.06.2009, whereby a sum of
Rs.28,88,316.88/- was directed to be paid with interest at the
rate of 12% per annum. Some mistakes were noted in the award,
which were brought to the notice of the Arbitrator and
accordingly, the award was corrected on 26.11.2009. The
corrected copy of the award was obtained to the appellants
herein on 01.12.2009. Since they were stated as aggrieved of the
award, the proceedings challenging the award ought to have
been filed before 01.03.2010, to be within 90 days as stipulated
under Section 34(2) of the Act. It is said that the concerned
appellants filed O.S.134 of 2010 before the Sub Court,
Ernakulam seeking to set aside the award on 24.02.2010, which
was well within the stipulated time of 'three months' under
Section 34(2). Subsequently, the Sub Court found, based on the
objection raised by the opposite side, that the suit was not
maintainable and accordingly, the proceedings were returned on
09.11.2010, to be presented before the appropriate Forum, of
course, after making necessary endorsement in this regard.
3. Met with the situation, the appellants applied for a
certified copy of the order whereby the plaint was returned. The
said copy application was filed on the very next date, i.e. on
10.11.2010. It is stated that such an application was filed as the
learned lawyer, who was prosecuting the matter on behalf of the
party was under the impression that the proceedings had to be
filed before the District Court as an 'O.P', along with the order
showing the return of the plaint for want of jurisdiction to
sustain the proceedings, without the bar of limitation. It is
pointed out that, since the copy application was filed for serving
copy of the order returning the plaint, the proceedings/plaint
were not returned till the certified copy was ready and finally, the
certified copy was issued along with the plaint returned on
24.01.2011. Thereafter OP (Arbitration)No.232 of 2011 was filed
before the District Court, along with the said proceedings.
Pursuant to the notice issued, the respondents herein entered
appearance. It is incidentally to be noted that while re-
presenting the proceedings as above, there occurred a delay of
22 days in obtaining certified copy of the order returning the
plaint, which was sought to be condoned by filing I.A.No.126 of
2013. The prayer was opposed by the respondents herein and
ultimately, allegedly without any regard to the relevant
provisions of law or the actual facts and circumstances, I.A.
seeking to condone the delay was dismissed holding that the
proceedings were barred by limitation and as a natural
consequence, the Arbitration O.P. as well. This in turn is sought
to be challenged by filing this appeal.
4. Heard the learned Counsel appearing for the appellants
as well as the learned Counsel appearing for the respondents.
5. The learned Counsel for the appellants points out that,
by virtue of the mandate under Section 43 of the Arbitration Act,
the Limitation Act is applicable to Arbitration proceedings as
well. Reliance is sought to be placed on Section 14 of the Act,
whereby the time taken in prosecuting the matter with due
diligence before a wrong Court/Forum is liable to be excluded
for computing the period of limitation. It is also stated by the
learned Counsel that, time to obtain the certified copy is also
liable to be excluded by virtue of Section 12 of the Act; and if
this is considered, the delay sought to be condoned is well
within the limits of the statutory mandate and as such, the I.A.
ought not to have been dismissed by the court below. The
learned Counsel also places reliance on the judgment rendered by
the Apex court in Consolidated Engineering Enterprises vs.
Principal Secretary, Irrigation Department and others[(2008)
7 SCC 169], wherein clear distinction was made between Section
5 and Section 14 of the Limitation Act, holding that Section 14
would be applicable to the Arbitration proceedings as well. The
learned Counsel further submits that, almost a similar situation
was considered by a learned Judge of this Court with reference
to Section 3 and Section 14 of the Act. It was held in paragraph
16 of the decision reported in 2015 (1) KLJ 755 (Ayisu & ors
vs. Saidu & ors) that such period, (as sought to be condoned
by the appellant in the instant case) is liable to be condoned.
6. The learned Counsel appearing for the respondents
submits that the idea and understanding of the appellant is
thoroughly wrong and misconceived. It is asserted that there
was absolutely no move on the part of the appellants in
prosecuting the matter with due diligence and good faith. The
Statute does never envisage filing of 'civil suit', by virtue of the
statutory bar and if at all the award passed by the Arbitrator is
to be challenged, the only course available is under Section 34
of the Act by filing an O.P.
7. The Act is a special statute with regard to the period of
limitation. Such period, as mentioned under Section 34 of the Act
is 'three months' with a grace period of one month as stipulated
under the proviso. Going by the admitted facts and figures, the
proceedings were not filed within that time, and it was
accordingly that the delay was sought to be condoned, also in
respect of the time taken for issuance of certified copy. The
learned Counsel for the respondents submits that certified copy
of the order returning the plaint was not at all necessary for
having the proceedings re-presented before appropriate court, as
'endorsement' is to be made on the plaint/proceedings while
returning the same; more so in view of the mandate of Order VII
Rule 10/Rule 10A of the Code of Civil Procedure. The course
pursued by the appellant was only to protract things and that
same was the position right from the beginning, which involves
different rounds of litigations at different levels, including the
unfruitful steps for settlement of the issue with the involvement
of mediators. The learned Counsel further submits that the
appeal itself was belated, involving delay of 377 days, which was
sought to be condoned by filing an application as C.M.Application
No.2657 of 2014.
8. A detailed statement of objection was filed by the
respondents. It is stated that there is no dispute with regard to
the principal amount payable at any point of time and the
dispute was more in relation to 'interest'. Making a reference to
Clause 14 of the Arbitration Agreement, copy of which has been
produced along with the statement of objection in the said
C.M.Application, the learned Counsel submits that by virtue of
the agreed terms, the respondents were entitled to get interest
at the rate of 18% per annum. But on conclusion of the
proceedings, the Arbitrator has awarded interest only at the rate
of 12% per annum. By this time, because of pendency of the
issue for more than 12 years, the money value/purchasing power
of the respondents has come down to a quite sizable extent
and the respondents are finding it extremely difficult to make
both ends meet. It is also asserted that the way in which the
portrait is attempted to be projected from the part of the
appellants does not deserve any sympathy or significance in so
far as the very same learned counsel, who was representing the
parties in the Arbitration Request filed by the respondents before
this Court, was representing the parties before the Arbitrator as
well, who himself was appearing for them in the suit filed before
the Sub Court and also in the Arbitration O.P filed before the
District Court.
9. The stipulation barring the jurisdiction of civil court was
incorporated as a part of the statute, way back in the year 1996.
It cannot be taken without a pinch of salt, if it is said that the
lawyer was totally unaware of the provision of law as to the bar
of civil court. The matter was being pursued by filing a civil suit
before the Sub Court, later, getting it returned to be re-presented
before the appropriate Forum and still, inviting delay in this
regard. Even thereafter, in approaching this Court there is a
delay of more than one year. This is a clear instance as to the
manner in which the proceedings were being pursued, which
could never be certified as part of 'due diligence', so as to attract
the provisions under Section 14 of the Limitation Act or to extend
any relief as sought for in the appeal.
10. Coming to the decision of the Apex Court sought to be
relied on behalf of the appellants-i.e.[(2008) 7 SCC 169)
(Consolidated Engineering Enterprises vs. Principal
Secretary, Irrigation Department and others), it was a case
where an application was filed by the appellant on 06.06.2002 in
the concerned court to set aside the award made by the
Arbitrator. This was subsequently sought to be returned by filing
an application under Order VII Rule 10A, to be presented before
the concerned District Court. The circumstances under which
Section 14 could be attracted were referred to by the Apex Court
in paragraph 21 of the verdict, which reads as follows:
"21. Section 14 of the Limitation Act deals with exclusion
of time of proceeding bona fide in a court without
jurisdiction . On analysis of the said section, it becomes
evident that the following conditions must be satisfied
before Section 14 can be pressed into service:
(1) Both the prior and subsequent proceedings are
civil proceedings prosecuted by the same party;
(2) The prior proceedings had been prosecuted with
due diligence and in good faith;
(3) The failure of the prior proceeding was due to
defect of jurisdiction or other cause of like nature;
(4) The earlier proceeding and the latter proceeding
must relate to the same matter in issue and
(5) Both the proceedings are in a court."
The observation of the Supreme Court as contained in
paragraph 31 are also relevant which hence is reproduced below:
"31. To attract the provisions of Section 14 of the
Limitation Act, five conditions enumerated in the earlier
part of this judgment have to co-exist. There is no manner
of doubt that the section deserves to be construed liberally.
Due diligence and caution are essential prerequisites for
attracting Section 14. Due diligence cannot be measured
by any absolute standards . Due diligence is a measure of
prudence or activity expected from and ordinarily
exercised by a reasonable and prudent person under the
particular circumstances. The time during which a court
holds up a case while it is discovering that it ought to have
been presented in another court, must be excluded , as the
delay of the court cannot affect the due diligence of the
party. Section 14 requires that the prior proceeding should
have been prosecuted in good faith and with due diligence.
The definition of good faith as found in Section 2(h) of the
Limitation Act would indicate that nothing shall be
deemed to be in good faith which is not done with due
care and attention. It is true that Section 14 will not help
a party who is guilty of negligence, lapse or inaction.
However, there can be no hard-and-fast rule as to what
amounts to good faith. It is a matter to be decided on the
facts of each case. It will , in almost every case be more or
less a question of degree. The mere filing of an
application in wrong court would not prima facie show
want of good faith. There must be no pretended mistake
intentionally made with a view to delaying the proceedings
or harassing the opposite party. In the light of these
principles, the question will have to be considered whether
the appellant had prosecuted the matter in other courts
with due diligence and in good faith."
11. Applying the law laid down by the Apex Court to the
given set of facts and circumstances in the instant case, it is to
be noted that the proceedings filed by the appellants herein were
entirely different from the type of proceedings/application which
was filed by the party/appellant in the case dealt with by the
Apex Court. In the instant case, inspite of the fact that no
'original suit' could have been filed, by virtue of the mandate of
the statute stipulating the course of challenge only by filing O.P.,
as stipulated under Section 34 of the Arbitration and Conciliation
Act, 1996, the appellants sought to challenge the award by filing
an O.S. It was after the objection raised from the part of the
respondents/defendants, as to the maintainability, that the
proceedings were got returned. In fact, the same was returned
after making the endorsement on the plaint itself on 09.11.2010.
So as to proceed with further steps, causing re-presentation of
the proceedings before the appropriate court, certified copy of
the order, as applied for from the part of the plaintiffs/appellants
herein, was not at all necessary, as the circumstance under which
the plaint was returned for want of jurisdiction was very much
endorsed upon the plaint itself.
12. Coming to the case decided by the learned Single
Judge of this Court in 2015 (1) KLJ 755 (cited supra), apart
from paragraph 16 sought to be relied on by the appellants,
paragraph 13 is also relevant, and as such both the paragraphs
are reproduced below:
"13. The learned counsel for the appellant would argue
that in computing the time during which the plaintiff has
been prosecuting another civil proceedings in a Court of
Appeal with due diligence, the time requisite for obtaining
certified copies under Section 12 has to be excluded. It was
argued that the certified copy alone would show the result
of judgment and only after getting the certified copy, one
can decide whether he should take up further steps or to file
a fresh suit. Therefore, it was argued that the suit filed on
24.08.1985 is in time. "
"16. It is crucial to note that Section 14(1) of the
Limitation Act makes no reference to the pendency of
suit or appeal or other proceedings in a court of law.
The Legislature had used the words of general import
and of widest amplitude. If only pendency of a
proceeding in a court would be deducted in
computing the period of limitation, the time taken for
issuing certified copies of the judgment which is
essential to decide further course of action, has to be
disregarded for the purpose of Section 14. It would
certainly result in an anomaly. That time covered for
taking steps absolutely necessary for initiating
proceedings in a court should be included in
calculating the period of limitation. The section does
not make any distinction between the steps which a
litigant has to take to initiate proceedings in a court
and the actual pendency of those proceedings in the
court. In other words, Section 14 of the Limitation
Act excludes not only the period of pendency of
infructuous proceedings in a court of law, but also
the time occupied for taking indispensable and
preparatory steps to institute further proceedings like
obtaining certified copies of the judgments and
orders."
In paragraph 13, the arguments raised from the part of the
appellant are referred to, which is to the effect that only on
receipt of certified copy, would the party know about the result
of the judgment so as to decide whether he should take up the
matter for further steps or to file a fresh suit. Again, in
paragraph 16, the necessity to obtain certified copy of the order
is referred to, in so far as it is essential to decide the future
course of action. In the last sentence of the very same
paragraph, it is stated that Section 14 of the Limitation Act
excludes, not only the period of pendency of infructuous
proceedings in a court of law, but also the time occupied for
taking indispensable and preparatory steps to institute further
proceedings like obtaining certified copy of the judgments and
orders. In short, the purpose of obtaining certified copies
should be such that, the further course of action, without
obtaining certified copy would be obscure/ambiguous and only on
receipt of certified copy, would the party be in a position to know
as to the such/appropriate further course of action.
13. The position is not similar, when it comes to the factual
position in the instant case. The order returning the plaint was
for want of jurisdiction and that the same was endorsed on the
plaint itself. The course and proceedings under such
circumstance, (if a proceedings is filed in a wrong Forum, to be
got returned and presented before a proper Forum) are taken
care of by virtue of the Order VII Rule 10 and Rule 10A of the
CPC, which are extracted below:
"10. Return of plaint: (1) Subject to the provisions of
Rule 10-A, the plaint shall at any stage of the suit be
returned to be presented to the Court in which the suit
should have been instituted.
[Explanation: For the removal of doubts, it is hereby
declared that a Court of appeal or revision may direct ,
after setting aside the decree passed in a suit, the return
of the plaint under this sub-rule;
(2) Procedure on returning plaint: On returning a
plaint the Judge shall endorse thereon the date of its
presentation and return, the name of the party presenting
it, and a brief statement of the reasons for returning it. "
10-A: Power of Court to fix a date of appearance in the
Court where plaint is to be filed after its return:(1)
Where, in any suit, after the defendant has appeared, the
Court is of opinion that the plaint should be returned, it
shall, before doing so, intimate its decision to the
plaintiff.
(2)Where an intimation is given to the plaintiff under
sub-rule(1), the plaintiff may make an application to the
Court-
(a) specifying the Court in which he proposes to present
the plaint after its return,
(b) praying that the Court may fix a date for the
appearance of the parties in the said Court, and
) requesting that the notice of the date so fixed may be
given to him and to the defendant.
(3) Where an application is made by the plaintiff under
sub-rule (2), the Court shall, before returning the plaint
and notwithstanding that the order for return of plaint
was made by it on the ground that it has no jurisdiction to
try the suit-
(a) fix a date for the appearance of the parties in the
court in which the plaint is proposed to be presented, and
(b) give to the plaintiff and to the defendant notice of
such date for appearance.
(4) Where the notice of the date for appearance is given
under sub-rule (3)-
(a) it shall not be necessary for the Court in which the
plaint is presented after its return, to serve the defendant
with a summons for appearance in the suit, unless that
Court, for reasons to be recorded, otherwise directs, and
(b) the said notice shall be deemed to be a summons for
the appearance of the defendant in the Court in which the
plaint is presented on the date so fixed by the Court by
which the plaint was returned.
(5) Where the application made by the plaintiff under
sub-rule (2)is allowed by the Court, the plaintiff shall not
be entitled to appeal against the order returning the
plaint.
In the case of Order VII Rule 10, it is stipulated that the
proceedings could be returned at any stage of the proceedings
and the parties are at liberty to have the same re-presented
before the appropriate Court having jurisdiction, whereupon such
period could be caused to be exempted from computing the
period of limitation. Coming to Order VII, Rule 10-A, it is made
applicable with reference to the appearance of the defendant and
once the defendant appears, the further course of action for
returning the proceedings is stipulated therein, making it open for
the party/plaintiff to file an application to get the proceedings
returned, upon which an order will be passed making an
endorsement as to the Court to which it is to be presented and
the time within which it is to be presented. If the proceedings
are caused to be returned based on an application preferred by a
party, then no further proceedings will lie by way of appeal
against such order or proceedings. It is seen that no diligent
steps as envisaged by the provisions of law have been pursued
by the appellant in the instant case.
14. The learned Counsel for the appellant however made a
persuasive attempt to contend that the mistake was more
committed by the lawyer, for which the party might not be
penalized. We are very much aware of the declaration of law by
the Apex Court in this regard that the mistake, if any, committed
by the lawyer shall not place any hurdle in the way of prosecuting
the proceedings by the parties concerned. But here, the
proceedings stand on a different footing. Ignorance of law is no
excuse for anybody, which is equally applicable to the litigant as
well as the lawyer and it cannot be branded as a mistake
simpliciter. When the statute specifically bars the proceedings in
a civil court, (which provision was incorporated in the statute
way back in the year 1996), a lawyer who was representing the
party before this Court at the time of filing the Arbitration
Request, thereafter before the Arbitrator, when the proceedings
of Arbitration was going on and who represented party in the
subsequent proceedings as well, ought not to have ventured
into filing of any proceedings contrary to the provisions of law
before a wrong Forum, by way of wrong proceedings and
subsequently crave for indulgence saying that the party is
innocent. There is a contention for the respondents that such a
course was pursued with a wilful intent to protract the
proceedings. But we do not intend to make any observation in
this regard as it is not necessary, but for considering the legal
issue as to whether the proceedings are maintainable or not.
15. After hearing both the sides and after going through the
materials on record, we are of the considered view that the
proceedings were never being pursued with 'due diligence' and
would fail, as asserted and underlined by the Apex Court in
paragraph 31 of the decision in Consolidated Engineering
Enterprises vs. Principal Secretary, Irrigation Department
and others ((2008) 7 SCC 169). As such, the appellants are
not entitled to have any benefit. It is seen that when the matter
was pending before this Court, by virtue of various interim orders
passed, the entire liability towards 'principal amount' came to be
discharged and the remaining liability is only with regard to the
interest payable. It is open for the respondents to pursue
appropriate proceedings in accordance with law for realisation of
the balance amount if any. The appeal is devoid of any merit
and none of the grounds raised in support of the same could be
held as tenable. Interference is declined. Appeal stands
dismissed.
P.R. RAMACHANDRA MENON,
JUDGE
SHAJI P. CHALY,
JUDGE
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