M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment

Judgment:

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
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			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
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			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
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		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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Ramachandra Menon, J.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.

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			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
			'casesref' => null,
			'citingcases' => null,
			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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			'respondent' => 'T.C. Mukunda and Others',
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$title_for_layout = 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | '
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		'id' => '1181763',
		'acts' => null,
		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
		'authreffered' => null,
		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
		'caseanalysis' => null,
		'casesref' => null,
		'citingcases' => null,
		'counselplain' => null,
		'counseldef' => null,
		'court' => 'Kerala',
		'court_type' => 'HC',
		'decidedon' => '2015-10-14',
		'deposition' => null,
		'favorof' => null,
		'findings' => null,
		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
			'casesref' => null,
			'citingcases' => null,
			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'decidedon' => '2015-10-14',
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
			'casesref' => null,
			'citingcases' => null,
			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'respondent' => 'T.C. Mukunda and Others',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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$title_for_layout = 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | '
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		'id' => '1181763',
		'acts' => null,
		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
		'authreffered' => null,
		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
		'caseanalysis' => null,
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		'counselplain' => null,
		'counseldef' => null,
		'court' => 'Kerala',
		'court_type' => 'HC',
		'decidedon' => '2015-10-14',
		'deposition' => null,
		'favorof' => null,
		'findings' => null,
		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to condonation of delay and the further course of action.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
			'casesref' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'court' => 'Kerala',
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			'decidedon' => '2015-10-14',
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'acts' => null,
		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
		'authreffered' => null,
		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'respondent' => 'T.C. Mukunda and Others',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
			'casesref' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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13. Section 85(2)(a) of the new Act reads as follows:

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
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			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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(2) Notwithstanding such repeal,-

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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(a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force.

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			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
			'casesref' => null,
			'citingcases' => null,
			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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			'respondent' => 'T.C. Mukunda and Others',
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$title_for_layout = 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | '
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		'id' => '1181763',
		'acts' => null,
		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
		'authreffered' => null,
		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
		'caseanalysis' => null,
		'casesref' => null,
		'citingcases' => null,
		'counselplain' => null,
		'counseldef' => null,
		'court' => 'Kerala',
		'court_type' => 'HC',
		'decidedon' => '2015-10-14',
		'deposition' => null,
		'favorof' => null,
		'findings' => null,
		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
			'casesref' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'acts' => null,
		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
		'authreffered' => null,
		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].

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			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'court' => 'Kerala',
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			'decidedon' => '2015-10-14',
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'acts' => null,
		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
		'authreffered' => null,
		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'respondent' => 'T.C. Mukunda and Others',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
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10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant.

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
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			'court' => 'Kerala',
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			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'acts' => null,
		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
		'court_type' => 'HC',
		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'respondent' => 'T.C. Mukunda and Others',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.

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			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
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			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'authreffered' => null,
		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
		'caseanalysis' => null,
		'casesref' => null,
		'citingcases' => null,
		'counselplain' => null,
		'counseldef' => null,
		'court' => 'Kerala',
		'court_type' => 'HC',
		'decidedon' => '2015-10-14',
		'deposition' => null,
		'favorof' => null,
		'findings' => null,
		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
)
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31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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$title_for_layout = 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | '
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		'id' => '1181763',
		'acts' => null,
		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
		'authreffered' => null,
		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'counselplain' => null,
		'counseldef' => null,
		'court' => 'Kerala',
		'court_type' => 'HC',
		'decidedon' => '2015-10-14',
		'deposition' => null,
		'favorof' => null,
		'findings' => null,
		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'decidedon' => '2015-10-14',
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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$title_for_layout = 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | '
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		'id' => '1181763',
		'acts' => null,
		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
		'authreffered' => null,
		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'counselplain' => null,
		'counseldef' => null,
		'court' => 'Kerala',
		'court_type' => 'HC',
		'decidedon' => '2015-10-14',
		'deposition' => null,
		'favorof' => null,
		'findings' => null,
		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'court' => 'Kerala',
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			'decidedon' => '2015-10-14',
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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$title_for_layout = 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | '
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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			'counselplain' => null,
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			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
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			'favorof' => null,
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			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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$title_for_layout = 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | '
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
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The appeals and the C.R.P. are disposed of accordingly.

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	'title_for_layout' => 'M Nanikutty Vs T C Mukunda and Others - Citation 1181763 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '1181763',
			'acts' => null,
			'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
			'appellant' => 'M. Nanikutty ',
			'authreffered' => null,
			'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
			'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
			'caseanalysis' => null,
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Kerala',
			'court_type' => 'HC',
			'decidedon' => '2015-10-14',
			'deposition' => null,
			'favorof' => null,
			'findings' => null,
			'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
			'judgement' => '<p style="text-align: justify;">Ramachandra Menon, J.</p><p style="text-align: justify;"> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p style="text-align: justify;"> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p style="text-align: justify;"> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p style="text-align: justify;"> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p style="text-align: justify;"> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p style="text-align: justify;"> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p style="text-align: justify;"> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p style="text-align: justify;"> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p style="text-align: justify;"> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p style="text-align: justify;"> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p style="text-align: justify;"> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p style="text-align: justify;"> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p style="text-align: justify;"> 13. Section 85(2)(a) of the new Act reads as follows:</p><p style="text-align: justify;"> (2) Notwithstanding such repeal,-</p><p style="text-align: justify;"> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p style="text-align: justify;"> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p style="text-align: justify;"> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p style="text-align: justify;"> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p style="text-align: justify;"> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p style="text-align: justify;"> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p style="text-align: justify;"> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p style="text-align: justify;"> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p style="text-align: justify;"> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p style="text-align: justify;"> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p style="text-align: justify;"> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p style="text-align: justify;"> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p style="text-align: justify;"> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p style="text-align: justify;"> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p style="text-align: justify;"> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p style="text-align: justify;"> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p style="text-align: justify;"> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p style="text-align: justify;"> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p style="text-align: justify;"> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p style="text-align: justify;"> The appeals and the C.R.P. are disposed of accordingly.</p>',
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		'appealno' => 'Arb.A.No. 9, 15, 30 &amp; 31 of 2004 &amp; C.R.P. No.739 of 2004 ',
		'appellant' => 'M. Nanikutty ',
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		'casename' => 'M. Nanikutty Vs. T.C. Mukunda and Others',
		'casenote' => 'Arbitration Act, 1940   Arbitration and Conciliation Act, 1996 - Section 37 - Limitation Act, 1908 - Section 5 - Appellants filed separate Petitions to set aside Arbitration Award which are accompanied with a petition to condone the delay in filing same -

Court held - relevant provision was introduced under Act, 1940, stipulating period of limitation under Section 37 of Amending act, whereby provisions of 1908 Act, shall apply to arbitration as they apply to proceedings in Court - all provisions of 1908 Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963 - matter finalised by Court below leading to orders is not with reference to correct provisions of law which were to be applied and hence it requires to be reconsidered - With regard to the question of delay as well, if any, point for consideration is not more with regard to  extent of delay , but  explanation  - orders stand set aside - Appeals disposed of.

(Paras:18, 21)

Cases Referred:
Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923]
Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535].
State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].
Madan Lal v. Sunder Lal [AIR 1967 SC 1233].
Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242]
Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].
Hastimal Dalichand v. Hiralal Motichand AIR 1954
Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).
Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94]
State of Kerala v. Sivan Pillai [1997 (1) KLT 556] State of Kerala v. Sivan Pillai [1997 (1) KLT 556].

Comparative Citation:
2016 (2) KLJ 157,
',
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		'court' => 'Kerala',
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		'decidedon' => '2015-10-14',
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		'judge' => 'P.R. Ramachandra Menon &Amp; K. Harilal',
		'judgement' => '<p>Ramachandra Menon, J.</p><p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.</p><p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.</p><p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.</p><p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.</p><p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.</p><p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.</p><p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.</p><p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.</p><p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.</p><p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.</p><p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.</p><p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.</p><p> 13. Section 85(2)(a) of the new Act reads as follows:</p><p> (2) Notwithstanding such repeal,-</p><p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. </p><p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.</p><p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.</p><p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].</p><p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].</p><p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-</p><p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.</p><p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.</p><p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. </p><p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the</p><p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.</p><p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-</p><p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.</p><p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .</p><p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. </p><p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.</p><p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.</p><p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.</p><p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.</p><p> The appeals and the C.R.P. are disposed of accordingly.</p>',
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	(int) 0 => '<p>Ramachandra Menon, J.',
	(int) 1 => '<p> These appeals/revision arise from a common order dated 20.03.2003 passed by the Subordinate Judges Court, Thalassery in I.A.Nos.1503, 1504, 1505 and 1506 of 1999 preferred in O.P.No.72/1992. The issue relates to the affairs of a partnership firm and the course and proceedings pursued with regard to the determination of rights and liberties.',
	(int) 2 => '<p> 2. It is stated that the firm was originally constituted with two partners. Huge financial assistance was availed by the firm from the Kerala Financial Corporation and also the State Bank of India, creating mortgage of the property having an extent of 18 cents. Pursuant to the coercive steps taken by the financial institutions, steps were taken to see that private sale was arranged in some or other manner to save the property and further assets. It was in the course of the said proceedings, that the partnership was sought to be widened by inducting two more partners and a Deed was executed accordingly. As per the agreement executed among the parties, by name Nanikutty, Janardhanan, Mukundan and Krishnakumar, it is stated that the entire liability was to be taken over by Mukundan upon which, the property and the building would stand conveyed to the name of Mr. Mukundan. It was also stated as agreed by Mukundan to give some additional monetary consideration to the other partners, in relation to their rights and interests and that the matter could be pursued accordingly.',
	(int) 3 => '<p> 3. The contention of the party, who filed the Arbitration O.P. before the court below, appears to be that he had satisfied the requirements in terms of the agreement enshouldering the entire liability and also by effecting payment to the concerned partners, despite which the conveyance was not effected in his name transferring the rights over the property and the building. The stand taken by the above petitioner was rebutted by the other persons concerned and this led to a dispute. Under the said circumstance, the party to the Arbitration O.P. approached the court below by filing O.P No.72/1992, as mentioned above.',
	(int) 4 => '<p> 4. In the course of further proceedings, an Arbitrator was appointed, who submitted a report before the court below. As per the said report, the property and the building were to be conveyed to the name of Mr. Mukundan and the amounts to the specified extent were to be given to the concerned partners. This was to the chagrin of the appellants by name Nanikutty and Janardhanan, who filed separate petitions to set aside the Award which are accompanied with a petition to condone the delay in filing the same. I.A. Nos.1503 and 1504 of 1999 were the petitions filed by Nanikutty; while I.A.Nos.1505 and 1506 of 1999 were filed by Janardhanan.',
	(int) 5 => '<p> 5. The petition to condone the delay was vehemently opposed from the opposite side and same was the position with regard to the petition to set aside the Award. The objections filed by the opposite side in the concerned interlocutory applications to set aside the Award was mainly with reference to non applicability of Section 16 of the old Act and the non existence of the grounds under the said Act (The Arbitration Act, 1940). Genuineness of the reasons stated in the affidavit was also attacked. In the course of further proceedings, evidence was adduced from the part of the applicants by examining P.Ws.1 and 2. The contention was that no copy of the Award was served to them and they came to know about passing of the Award only in the second week of December 1998.',
	(int) 6 => '<p> 6. The Award was in fact passed on 5.11.1998 and the same was filed before the court only on 13.11.1998. It was stated that the appellants got a copy of the Award only on 23.12.1998 and thereafter, instructions were given to the concerned lawyer to have it challenged by the first week of January 1999. The parties contended that the concerned lawyer was out of station for the period from 7.2.1999 to 10.3.1999 and hence the proceedings could be filed only by 12.3.1999. It was in the said circumstance that the delay was sought to be condoned. The concerned Advocate was also caused to be examined as P.W.2, who deposed in terms of the said version. This was sought to be controverted by the other side by producing certified copy of the vakalath accepted by the concerned lawyer during the period during when he was stated as out of station. Appreciating the evidence on record, the court below arrived at a finding that there was an attempt of foul play and that some fraud was attempted to be played upon the court. It was accordingly, that the application to condone the delay was dismissed. As a natural consequence, the other petitions as well. This made the appellants to approach this Court by filing the four different appeals.',
	(int) 7 => '<p> 7. Arb. Appeal Nos.15/2004 and 9/2004 have been preferred by Nanikutty, which arise from the order in I.A. No.1503 and 1504 of 1999; whereas, Arb. Appeal Nos.30/2004 and 31/2004 have been preferred by Janardhanan, arising from the order in I.A. No. 1505 and 1506 of 1999, respectively. In the course of further proceedings, judgment was passed in terms of the Award by the court below, which has been sought to be challenged by filing C.R.P. No.739/2004. All these matters have been taken up and heard together.',
	(int) 8 => '<p> 8. Heard Sri.Kaleeswaram Raj, the learned counsel appearing for the appellants/petitioner as well as Sri.N.M.Madhu, the learned counsel appearing for the respondents, at length.',
	(int) 9 => '<p> 9. After hearing both the sides and also after going through the reasoning given by the court below, we find that the court below cannot be blamed with regard to the finding rendered as to the version put up from the part of the concerned lawyer. But a further question may arise as to whether the lapse, if any, from the part of the lawyer could be pressed into service for denying the relief to the party, if there was no fault on the part of the litigant concerned. That apart, it has also to be considered whether the proceedings finalised by the court below were in conformity with the relevant provisions of law. It may also arise for consideration as to which Act is to be applied: whether the old Act (The Arbitration Act, 1940) or the new Act (The Arbitration and Conciliation Act, 1996), because there is substantial difference between the provisions and as to the applicability.',
	(int) 10 => '<p> 10. During the course of hearing, the learned counsel for the appellants referred to the huge loss and adverse circumstances resulted because of the Award passed by the Arbitrator, followed the judgment/decree, by virtue of the subsequent proceedings and that the property having present worth of several crores of rupees has passed on to the hands of the petitioner in the Arbitration O.P. We are not impressed with the said argument, as the merit of the case is not proposed to be examined and we confine our scrutiny only with regard to the course and proceedings in relation to <u>condonation of delay</u> and the further course of action.',
	(int) 11 => '<p> 11. In this context, it is relevant to note that, by virtue of the new Act, the necessity to submit an Award before the court has been taken away and so is the position, with regard to the passing of a judgment in terms of the Award by the civil court. As per the new Act, the Award as such can be challenged, as if it were a decree and the requirement to be satisfied under the new Act is only to sign and serve a copy of the Award to the party directly, by virtue of the mandate of Section 31(5). The right to file an appeal or an application to set aside the Award as envisaged under Section 34(3) is within three months from the date of receipt of a copy of the Award. There is a contention for the appellants that the copy of the Award was never served to the appellants before 23.12.1998 and as such, the applications filed were well within time, even though interlocutory applications were filed seeking to condone the delay; as a measure of caution. If the appeals are within the time of three months, dismissal of the applications seeking condonation of delay is of no consequence and the merit has to be considered by the court below; submits the learned counsel.',
	(int) 12 => '<p> 12. The learned counsel for the respondents, however, submits that the proceedings can never be considered under the new Act . As a matter of fact, even though the interlocutory applications were filed before the court below with reference to the provisions under the new Act , objections were filed referring to the provisions of the old Act and the matter was being considered accordingly. The learned counsel further submits that, by virtue of the mandate of Section 85(2)(a)of the new Act , the arbitration proceedings initiated under the old Act will have to continue under the said Act itself; unless the parties agree to the contrary. In the instant case, there is no such agreement as evident from the objections filed, referring to the provisions of the old Act and further that an application was filed to pass a judgment in terms of the Award under Section 17 of the old Act , which has been allowed by the court below. This, in turn, has been sought to be challenged by filing the CRP . The learned counsel submits that, the CRP itself is not maintainable for the reason that, the remedy of the aggrieved party as provided under Section 39(1)(vi) of the old Act is only by way of appeal and hence no interference is warranted in the CRP.',
	(int) 13 => '<p> 13. Section 85(2)(a) of the new Act reads as follows:',
	(int) 14 => '<p> (2) Notwithstanding such repeal,-',
	(int) 15 => '<p> (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties; but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force. ',
	(int) 16 => '<p> The question to be considered is, whether there is an agreement among the parties to have the proceedings pursued in terms of the new Act . It is true that the interlocutory applications were filed with reference to the provisions of the new Act . But, that by itself is not sufficient to hold that there was an agreement from the other side to have the matter pursued under the new Act . Had it not been the case, there would not have been any need, necessity or occasion for the respondents to have filed the objections with reference to the provisions of the old Act and also to have filed a petition under Section 17 of the old Act . If at all any agreement is there to be governed by the provisions of the new Act , it is a positive aspect which has to be pleaded and established by the party who is attempting for the same. This being the position, we find it difficult to accept the proposition in this regard mooted by the learned counsel for the appellants.',
	(int) 17 => '<p> 14. A question came up for consideration before the Apex Court as to the scope of Section 85{2)(a) of the new Act . After detailed discussion, it was held by the Apex Court as per the decision reported in Thyssen Stahiunion GMBH v. Steel Authority of India Ltd. [AIR 1999 SC 3923] that, if the arbitration proceedings were commenced under the old Act , it has to be finalised in accordance with the old Act itself, unless agreed by the parties. The position was reiterated by the Apex Court in another decision as well, in the same year, in Shetty s Constructions Co. Pvt. Ltd. v. M/s.Konkan Railway Construction [1999 SC 1535]. This being the position, this Court does not require any second thought to hold that the proceedings ought to have been considered and finalised by the court below under the old Act itself and it is held accordingly.',
	(int) 18 => '<p> 15. Now comes the question of limitation. The learned counsel for the respondents submits that, under the old Act , the grounds of challenge against an Award are mentioned under Section 30 of the Arbitration Act, 1940. If at all, any Award is to be challenged, the application in this regard had to be filed within a period of 30 days in terms of Article 119(b) of the Limitation Act. Section 5 of the Limitation Act is not at all applicable under such circumstance and the application to set aside the Award has to be taken as a suit , for which the delay cannot be condoned. Reliance is sought to be placed on the decision rendered by a Division Bench of this Court in State of Kerala v. Sivan Pillai reported in [1997 (1) KLT 556].',
	(int) 19 => '<p> 16. We have gone through the verdict passed by the Bench in the aforesaid case. It is true that a declaration of law has been made by the Division Bench as per the above verdict, holding that in respect of a proceeding by way of a petition to set aside an Award, as envisaged under Section 30 of the old Act , it has to be treated as a suit, for which Section 5 of the Limitation Act could not be made applicable. For making such declaration, it is seen that the learned Judges of the Division Bench have sought to rely on the verdict passed by the Apex Court in Madan Lal v. Sunder Lal [AIR 1967 SC 1233]. A small paragraph of the Supreme Court judgment has been extracted therein, which also makes a reference to the decisions rendered by the Mumbai High Court in Siba Dyes Ltd., Bombay v. Commissioner of Income Tax, Bombay [AIR 1954 Bombay 242] and Nagpur High Court in Kawalsingh Akbar v. Baldeosingh Akbar [AIR 1957 Nagpur 57].',
	(int) 20 => '<p> 17. Since we had our own doubts with regard to the proposition, as dealt with and declared by the division Bench, we called for the full text of the verdict passed by the Apex Court in Madan Lal s case (Supra). The relevant portions of the judgment passed by the Supreme Court in the said case as given in paragraphs 8, 9 and 10 are in the following terms:-',
	(int) 21 => '<p> 8. It is clear therefore from the scheme of the Act that if a party wants an award to be set aside on any of the grounds mentioned in S.30 it must apply within 30 days of the date of service of notice of filing of the award as provided in Art 158 of the Limitation Act. If no such application is made the award cannot be set aside on any of the grounds specified in S.30 of the Act. It may be conceded that there is no special form prescribed for making such an application and in an appropriate case an objection of the type made in this case may be treated as such an application, if it is filed within the period of limitation. But if an objection like this has been filed after the period of limitation it cannot be treated an application to set aside the award for if it is so treated it will be barred by limitation.',
	(int) 22 => '<p> 9. It is not in dispute in the present case that the objections raised by the appellant were covered by S. 30 of the Act, and though the appellant did not pray for setting aside the award in his objection that was what he really wanted the Court to do after hearing his objection as in the present case the -objection was filed more than 30 days after the notice it could not be treated as an application for setting aside the award, for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in S. 30 within the period of limitation and, therefore, the Court could not set aside the award on those grounds. There can be no -doubt on the scheme of the Act that any objection even in the nature of a written-statement which falls under S. 30 cannot be considered by the Court unless such an objection is made within the period of limitation (namely, 30 days), though if such an objection is made within limitation that objection may in appropriate cases be treated as an application for setting aside the award.',
	(int) 23 => '<p> 10. Learned counsel for the appellant, however, urges that S. 17 gives power to the Court to set aside the award and that such power can be exercised even where an objection in the form of a written-statement has been made more than 30 days after the service of the notice of the filing of the award as the Court can do so suo motu. He relies in this connection on Hastimal Dalichand v. Hiralal Motichand AIR 1954 Born 243 and Saha and Co. v. lsharsingh Kripalsingh AIR 1956 Cal 321 (FB).Assuming that the Court has. power to set aside the award suo motu, we are of opinion that, that power cannot be exercised to set aside an award on grounds which fall under S. 30 of the Act, if taken in an objection petition filed more than 30 days after service of notice of filing of the award, for if that were so the limitation provided under Art. 158 of the Limitation Act would be completely negatived. The two cases on which the appellant relies do not in our opinion support him. In Hastimals case, AIR 1954 Born 243, it was observed that if the award directs a party to do an act which is prohibited by law or if it is otherwise patently illegal or void it would be open to the Court to consider this patent defect in the award suo motu, and when the Court acts suo motu no question of limitation prescribed by Art. 158 can arise . These observations only show that the Court can act suo motu in certain circumstances which do not fall within S. 30 of the Act. Saha and Co. s case, AIR 1956 Cal 321 (FB) , was a decision of five Judges by a majority of 3:2 and the majority judgment is against the appellant. The minority judgment certainly takes the view that the non-existence or invalidity of an arbitration agreement and an order of reference to arbitration may be raised after the period of limitation for the purpose of setting aside an award because they are not grounds for setting aside the award under S. 30. It is not necessary in the present case to resolve the conflict between the majority and the minority judges in Saha and Co. s case, AIR 1956 Cal. 321 (FB), for even the minority judgment shows that it is only where the grounds are not those falling within S. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within the period of limitation. Clearly, therefore, where an objection as in the present case raises grounds which fall squarely within S. 30 of the Act that objection cannot be heard by the Court and cannot be treated as an application for setting, aside the award unless it is made within the period of limitation. Saha and Co. s case, AIR 1956 Cal 321 (FB), therefore, also does not help the appellant. ',
	(int) 24 => '<p> 18. The factual position reflected from the above judgment reveals that the cause of action arose much ago, i.e., prior to the commencement of the Limitation Act, 1963. The provision dealt with and the reference made by the Supreme Court (and also by the Division Bench of this Court as mentioned above) is Article 158 of the Limitation Act. Our doubt arose because of the reason that, as on date Article 158 does not exist under the present Limitation Act. This required further probe, when it was revealed that under the relevant provision as it existed then, i.e., under the',
	(int) 25 => '<p> Limitation Act of 1908, the time stipulated was 30 days and nothing more. It is relevant to note that, under the Arbitration Act, 1940 (old Act), there was no enabling provision to have the delay condoned. This is discernible from the fact that the relevant provision was introduced under the Arbitration Act, 1940, stipulating the period of limitation under Section 37, whereby it was stipulated under sub-section (1) that all the provisions of the Limitation Act, 1908 shall apply to arbitration as they apply to the proceedings in court. This was introduced as per Act 36 of 1963. This means, all the provisions of the Limitation Act, which include Section 5 were not applicable to arbitration proceedings prior to 1963. The position considered by the Apex Court in Madan Lal s case (supra) was in respect of a cause of action prior to 1963 and as such, Section 5 of the Limitation Act was not applicable.',
	(int) 26 => '<p> 19. The position in this regard has been made clear by the Apex Court in a subsequent decision in Essar Constructions v. N.P. Rama Krishna Reddy ((2000) 6 SCC 94], paragraph 31 of which will be relevant and hence extracted below:-',
	(int) 27 => '<p> 31. Besides Madan Lal case was decided in the context of the Indian Limitation Act, 1908 when the provisions of Section 5 were inapplicable to applications under Section 30 of the Arbitration Act. The period prescribed under Article 158 of the 1908 Act for challenging an award was absolute. It was therefore held that an objection filed more than 30 days after the notice.',
	(int) 28 => '<p> could not be treated as an application for setting (aside) (sic), the award for it would then be barred by limitation. The position thus is that in the present case there was no application to set aside the award on grounds mentioned in Section 30 within the period of limitation .',
	(int) 29 => '<p> It was also observed that even the court could not set aside an award suo motu under Section 30 beyond the period of limitation for if that were so the limitation provided under Article 158 of the Limitation Act would be completely negatived. ',
	(int) 30 => '<p> 20. It was without noticing this fundamental difference, that the decision rendered by the Apex Court in Madan Lal s case (supra) happened to be relied on by the Division Bench of this Court while passing the verdict in State of Kerala v. Sivan Pillai [1997 (1) KLT 556]. The correct factual position was never brought to the notice of the Bench by either side. In view of the black and white difference in the factual position, to be governed by the different provisions of law at the relevant point of time, we do not find it necessary to have the issue referred to a Full Bench, as the provision is crystal clear and the scope of the judgment passed by the Supreme Court is very much discernible as clarified by the Apex Court in the subsequent decision in Essar Constructions case (supra). We respectfully disagree with the proposition in State of Kerala v. Sivan Pillai [1997 (1) KLT 556] and hold that Section 5 is very much applicable to the proceedings under the Arbitration Act, 1940, after the Amendment as mentioned hereinbefore.',
	(int) 31 => '<p> 21. In the above circumstances, we hold that the matter finalised by the court below leading to the impugned orders is not with reference to the correct provisions of law which were to be applied and hence it requires to be reconsidered. With regard to the question of delay as well, if any, the point for consideration is not more with regard to the extent of delay , but the explanation . The impugned orders stand set aside and we direct the court below to have the matter reconsidered in accordance with law. The parties are at liberty to adduce evidence in support of their contentions including on the question of delay. We also make it clear that we leave not expressed anything with regard to the merits of the case, but for the discussion as of the sequence of events. It is open for the court below to arrive at an independent finding on the basis of the actual facts and figures. Since the dispute is of the year 1992 and since the matters are pending before this Court for quite long, we direct the court below to finalise the proceedings, at the earliest, at any rate, within four months from the date of receipt of a copy of this judgment.',
	(int) 32 => '<p> 22. It is brought to the notice of this Court by the learned counsel for the appellants that, when the matter was admitted on 7.4.2004, an interim order of status quo was passed by this Court and as such, no further proceedings have taken place, adding that no prejudice will be caused to either side, till the matter is got reconsidered. As such, the status quo will continue till the disposal of the matter by the court below.',
	(int) 33 => '<p> 23. With regard to the challenge raised by the respondents as to the maintainability of the C.R.P., the learned counsel for the appellants submits that Section 17 of the old Act stipulates that, if a judgment is passed in terms of the Award, followed by a decree, no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the Award. It is also stated that the present C.R.P. was originally filed as an appeal. But then, defect was noted by the Registry of this Court that no appeal would lie, but for revision : and it was accordingly, that the same has been caused to be re-numbered as C.R.P. Since the interlocutory applications seeking to set aside the Award have already been dismissed and since the appeal is provided against those orders by virtue of Section 39(1)(vi) of the old Act , (under which provision the present appeals have been preferred) and further since we have already interfered with the impugned orders, further proceedings pursuant to the applications filed by the respondents under Section 17 of the old Act leading to the judgment and decree are also of no consequence and the matter has to be reconsidered in accordance with law.',
	(int) 34 => '<p> The appeals and the C.R.P. are disposed of accordingly.',
	(int) 35 => ''
)
$paragraphAfter = (int) 1
$cnt = (int) 36
$i = (int) 35
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Court	Kerala High Court
Decided On	Oct-14-2015
Case Number	Arb.A.No. 9, 15, 30 & 31 of 2004 & C.R.P. No.739 of 2004
Judge	P.R. Ramachandra Menon &Amp; K. Harilal
Appellant	M. Nanikutty
Respondent	T.C. Mukunda and Others

M. Nanikutty Vs. T.C. Mukunda and Others - Court Judgment