Judgment:
Sunil Kumar Sinha, J.
(1) The appellants concern was awarded a civil contract for widening and strengthening of Gevra-Katghora Road. An agreement was executed and work order was issued on 11/16-3- 1998. The date of commencement of work was 26-3-1998 and period of completion was 6 months, i.e. upto 25-9-1998, from the date of commencement. The time granted for completion was extended, however the work could not be completed and ultimately the contract was terminated on 6-5-1999. According to the appellant/plaintiff, he sustained various losses which were on account of breach of contract by the defendant/respondent. Thereafter, many correspondence took place. According to the appellant, discussions were held on 30-5-2000 with SO(C), Gevra, in which it was suggested that it was not feasible to settle the dispute through discussion and the later will take action for appointment of Arbitrator by the C.M.D., S.E.C.L.. A communication dated 25-5- 2000 agreeing for settlement of dispute through arbitration was sent by the appellant. When the C.M.D. did not respond to the said communication, an application u/S 11 (6) of the Arbitration and Reconciliation Act, 1996 (Act 1996) was filed by the appellant in the Court of District Judge Bilaspur on 5-5-2001. It was registered as Civil Suit No. 5-A/2001. An objection was taken by the respondent in the said arbitration matter that the arbitration clause having been struck out in the agreement, the appellant had no reason whatsoever for filing the application u/S 11 (6) of the Act 1996. The said application filed by the appellant for appointment of Arbitrator was dismissed by the concerned District Judge on 16-8-2002 holding that there was no arbitration clause in the agreement, therefore, question of appointment of arbitrator does not arise. Thereafter the appellant/plaintiff filed the instant suit on 16-8-2002 before the District Judge Bilaspur claiming an amount of Rs.12,00,246/-. In the civil suit, Para-45, the time spent by the appellant/plaintiff, in the above manner, was explained. However by way of abundant caution, the appellant/plaintiff also filed an application u/S 14 of the Limitation Act. The said civil suit was registered as MJC No. 6/2002. The District Judge, firstly took application u/S 14 of the Limitation Act for decision. The said application was dismissed and consequently it was held that the civil suit was barred by limitation. Thus on the decision of the said application on 4-3-2003, the entire civil suit of the appellant/plaintiff was dismissed as barred by limitation. Hence this appeal.
(2) The District Judge (trial Court) has held that proceeding u/S 11 of the Act 1996 was not a proceeding of civil nature and the appellant/plaintiff was not prosecuting the said proceeding bonafidely, therefore, the time spent in the proceeding for appointment of arbitrator was not liable to be excluded for computing the period of limitation for the civil suit. It was held that the appellant/plaintiff, knowing fully well that there was no arbitration clause in the agreement, filed the above proceeding for appointment of arbitrator. Thus it was not a case of prosecuting the said proceeding with due diligence. The trial Court relied on the decision of Konkan Railway Corporation Ltd. and Another “Vs- Rani Construction Pvt. Ltd., (2002) 2 SCC 388.
(3) Mr. Arvind Dubey, learned counsel appearing on behalf of the appellant/plaintiff, firstly contended that Konkan Railway (supra) has been overruled by a Seven Judges Bench in SBP and Co. “Vs- Patel Engineering Ltd. and Another, (2005) 8 SCC 618. Thus the first ground taken for not condoning the delay u/S 14 stands unfounded. About the other grounds, he submitted that the appellant/plaintiff on the assurance of the officers of the respondent in a discussion before them and thereafter on non appointment of the arbitrator on his letter to C.M.D., had filed the arbitration proceeding. Therefore, it was a case in which the appellant/plaintiff prosecuted the proceeding with due diligence and all bonafides, and the time spent in the arbitration proceeding was required to be condoned.
(4) On the other hand, learned counsel for the respondent have opposed these arguments and supported the order passed by the trial Court.
(5) We have heard counsel for the parties.
(6) The decision rendered in the Konkan Railway (supra) has been overruled, (per majority) by a Seven Judges Bench in SBP and Co. (supra) and it has been held that the power exercised by the Chief Justice of the High Court or the Chief Justice of India under Section 11 (6) of the Act 1996 is not an administrative power. It is a judicial power. Thus, in the later view of the Supreme Court in SBP and Co., the view taken by the trial Court based on Konkan Railway cannot be accepted.
(7) Section 14 of the Limitation Act, 1963 provides for exclusion of the time of proceeding bona fide in court without jurisdiction. It provides that in computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(8) In Zafar Khan and others “Vs- Board of Revenue, U.P., and others, AIR 1985 SC 39, it was held that œIn order to attract the application of S. 14 (1), the parties seeking its benefit must satisfy the Court that : (i) the party as the plaintiff was prosecuting another civil proceeding with due diligence; (ii) that the earlier proceeding and the later proceeding relate to the same matter in issue and (iii) the former proceeding was being prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. When the expression in S. 14 as a whole reads œfrom defect of jurisdiction or other cause of a like nature is unable to entertain it?, the expression œcause of a like nature? will have to be read ejusdem generis with the expression œdefect of jurisdiction?. So construed the expression œother cause of a like nature? must be so interpreted as to convey something analogous to the preceding words œfrom defect of jurisdiction?. Prima facie it appears that there must be some preliminary objection which if it succeeds, the Court would be incompetent to entertain the proceeding on merits, such defect could be said to be œof the like nature? as defect of jurisdiction. Conversely if the party seeking benefit of the provision of S. 14 failed in the earlier proceeding on merits and not on defect of jurisdiction or other cause of a like nature, it would not be entitled to the benefit of S.14.?
(9) Good faith has been defined in the Limitation Act itself. Section 2 (h) of the Limitation Act says that nothing shall be deemed to be done in good faith which is not done with due care and attention.
(10) In the instant case, the appellant/plaintiff was having full knowledge that there was no arbitration clause in the agreement and even after that proceeding for appointment of the arbitrator was filed. Mr. Dubey has argued that SO(C) Gevra area, in a meeting, had assured that the said matter may go in arbitration, therefore, the plaintiff firstly gave an application to the C.M.D. for appointment of an arbitrator and when the said application was not responded, then the above proceeding was filed. This is the self same statement of the appellant/plaintiff. There is not a single document of the defendant which may show that either such discussion had taken place between the appellant/plaintiff and SO(C) Gevra or that SO(C) Gevra had assured the appellant/plaintiff that there may be an arbitration on the orders passed by the C.M.D.. That apart SO(C) Gevra was not a competent authority to give such advise or to take such a decision in the matter on behalf of the respondent.
(11) We also note that as soon as the arbitration proceeding was filed, the defendant had taken an objection about non-existence of the arbitration agreement between the parties, but the same was not accepted by the appellant, who continued the above proceeding and took a chance till its final rejection on merits.
(12) In Jagdish Chander “Vs- Ramesh Chander and Others, (2007) 5 SCC 719, it was held that œThe existence of an arbitration agreement as defined under Section 7 of the Act 1996 is a condition precedent for exercise of power to appoint an arbitrator/Arbitral Tribunal, under Section 11 of the Act by the Chief Justice or his designate. It is not permissible to appoint an arbitrator to adjudicate the disputes between the parties in the absence of an arbitration agreement or mutual consent.?
(13) In the instant case, neither there was an arbitration agreement nor a mutual consent between the competent parties to the agreement. Thus it cannot be said that in the above fact situation the appellant/plaintiff was prosecuting the arbitration proceeding with due diligence. On the contrary it would appear from the conduct of the appellant/plaintiff, as per pleadings taken in the plaint vide Para-45 and other paragraphs, that the appellant/plaintiff did not do things with due care and attention and the arbitration proceeding was not prosecuted in good faith.
(14) For the foregoing reasons, we do not find any infirmity in the impugned order dated 4-3-2003 passed by the trial Court. The appeal is liable to be dismissed and is hereby dismissed.
(15) There shall be no order as to cost.