Durga Construction Vs. State of Andhra Pradesh - Court Judgment

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arbitration - limitation period - sections 14 and 20 of arbitration act, 1940, section 17 of andhra pradesh arbitration (amendment) act, 1990 and section 148 of code of civil procedure, 1908 - in dispute arose between parties notice to pass reasoned award as per the provisions of sections 14 and 17 issued by court to arbitrator - reasoned award given by arbitrator with application for seeking extension of 15 days for filing the same - application was dismissed by court on ground that same was received after expiry of period stipulated for filing award - dismissal was challenged - court after considering facts observed that application send within prescribed period and same was delayed due to negligence of postal department - while calculating period of limitation time taken by postal department must be excluded - in present case if that time excluded application was found within the time period prescribed - appeal accordingly allowed. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed to contest the claim of the injured or heirs of the deceased on other grounds, which are available to the insured. if insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer and will be negation of the intention of the legislature and annihilate mandate of the provisions of sections 170 and 149 of the act. the insured can pursue appeal only after giving up the insurer as the appellant and not otherwise. in the instant case, the insurer has not withdrawn from party array but has remained prosecuting the appeal with the insured on the grounds which are available only to the insured. therefore, the joint appeal as filed by the insured and the insurer is not maintainable. section 166: [v. gopala gowda & jawad rahim, jj] claim for compensation accident due to mechanical defect in the vehicle held, it is not in dispute that the claimant suffered injuries in an accident, which occurred during the course of his employment, albeit due to his negligence but law does not render him remediless. statutory right is conferred on him, accruing by virtue of his employment under insured to claim compensation under workmens compensation act. the insurer is statutorily duty bound to discharge the liability of the owner of the vehicle, to pay such compensation to the employee, as mandated under the provisions of section 149 of the act. the right of an injured employee or his dependents as the case may be to be compensated, when injury is suffered or death occurs during his employment, is recognised not only under workmens compensation act, but also under benevolent provisions under section 166 and 167 of the m.v. act. the right of driver to seek compensation is not restricted only to the workmens compensation act, it has been enlarged to enable such person to seek just compensation (sections 166 and 168), conferring upon him the right of election engrafted under section 167 of the act to choose either of the two forum. the only defence which the insurer could take is limit of its liability as enumerated under section 147 of the act, leading to contest, inter alia, only between insured and insurer and does not impact claimants right to recover the compensation determined by the tribunal which crystallizes into enforceable right against both. in the instant case, the claimant/driver has exercised right of election under section 167 of the act to seek compensation under section 166 of the act resulting in award passed by the tribunal. therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the vehicle with mechanical defects, the owner would be the tortfeasor and the claimant can maintain a petition seeking compensation under the provisions of the act, instead of seeking compensation under the workmens compensation act. on facts, held, the material evidence on record, particularly, with regard to the income of the claimant, his age, medical evidence and the evidence relating to pecuniary loss has not been considered by the tribunal in the correct perspective, which has resulted in passing of the impugned award, disproportionate to the pecuniary loss and the loss of future income of the victim. the settled principles governing determination of compensation has been given a go-bye. compensation of rs.4,15,150/- awarded by the tribunal was enhanced to rs.8,20,000/-. - 9. in the instant case, the letter sent by the arbitrator along with the reasoned award clearly shows that the papers relating to the award were received by him on 6.9.1990 from the court and he sent the reasoned award by post on 5.10.1990 to the court which was received by the court on 9.10.1990. no doubt, the reasoned award was received by the court after the expiry of 30 days from the date of receipt of remittance order to the arbitrator.y. bhaskar rao, j. 1. this civil miscellaneous appeal is filed against the order dated 22.10.1990 passed in o.p. no. 299 of 1988 on the file of the principle subordinate judge, narasaraopet. 2. the brief facts of the case; that the appellant there in sought for reference under arbitration act; that the 3rd respondent herein is appointed as an arbitrator and he passed the award on 17.8.1988; that thereafter, the present appellant filed a petition under sections 14 and 20 of the arbitration act to make the award a rule of court; thereafter the court issued a notice to the arbitrator to give a reasoned award as per the amended provisos to sections 14 and 17 of the arbitration (a.p. amendment act 1 of 1990) act, 1940; that the same was despatched to the arbitrator on 3.9.1990 and the arbitrator received the same on 6.9.1990 by post; thereafter the arbitrator gave a reasoned award and sent the same through a letter by post 5.10.1990 which was received on 9.10.1990 by the court below; while sending the reasoned award, the arbitrator enclosed a letter dated 5.10.1990 seeking extension of time for 15 days for the reasons stated in the letter; that court below has rejected the extension of time by its letter dated 15.10.1990 and thereafter the impugned order was passed on 22.10.1990 in o.p. no. 299 of 1988. the impugned order reads as follows : 'petition is dismissed as award with reasons is not received within the 30 days granted and as no extension is given for 15 days or any petition by arbitrator within 30 days times : parties shall go to fresh arbitration according to arbitration agreement and act. no costs.' 3. aggrieved by the said order, this civil miscellaneous appeal is filed before this court. 4. the learned counsel for the appellant contended that the arbitrator has sent the reasoned award though post within 30 days from the date of receipt of the order of the court to file a reasoned award to the court below; that the same was received by the court below on 9.10.1990 and for the reason the petition cannot be dismissed; further the arbitrator sought for grant of 15 days time as provided under the second proviso to section 17 of the arbitration (a.p. amendment act 1 of 1990) act and that the court below erred in not granting extension of time. the learned counsel for the appellant further contended that even the petition for extension of time was filed after the expiry of the period of 30 days, the same can be granted and that as per section 148, c.p.c. the lower court can enlarge time after the expiry of 30 days period. 5. the learned government pleader for the respondents contended that section 148, c.p.c. is not applicable to the arbitration proceedings, that further the reasoned award is not filed within the time as contemplated under the proviso to section 17 of the arbitration act and that the court below has rightly rejected the extension of time; therefore there are no merits in the appeal. 6. in view of the above contentions, the only question that has to be decided is : whether the reasoned award filed by the arbitrator is in time as contemplated under the provisos to section 17 of the arbitration act 7. it is relevant to refer to the provisions of section 14(1) and section 17 of the arbitration act as amended. 'section 14(1) : when the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award. provided that the arbitrators or umpire shall give reasons for any award made under this section and no award shall be valid unless reasons therefor are given as aforesaid.' section 17 : where the court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and 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. provided that where an award pending in the court at the commencement of the arbitration (andhra pradesh amendment) act, 1990 or an award filed in the court, thereafter does not contain reasons therefor as required by the proviso to sub-section (1) of section 14, the court shall not proceed to pronounce the judgment according to the award, but shall remit the award to the arbitrators or umpire for giving reasons therefor as required by the said proviso and thereupon the arbitrators or umpire shall, within thirty days from the date of remittance of the award to them by the court give reasons for the award and file the same in the court. provided further that on the application of the arbitrators or the umpire and for reasons to be recorded in writing, it shall be competent for the court, to extend the period of thirty days aforesaid for a further period not exceeding fifteen days; provided also that where as award pending in the court as aforesaid does not contain any reasons and there is no possibility to remit the award to the arbitrator or panel of arbitrator or umpire due to their incapacity, negligence, refusal to act or death, the court shall set aside the award and direct the parties to initiate fresh arbitration in accordance with the terms of the agreement.' 8. by analysing the provisions of sections 14 and 17, prior to amendment and after amendment, it emerges that section 14 of the act provided for making an award and signing the award by the arbitrator or umpire and further providing for filing of the award into the court and section 17 of the act provided for passing judgment in terms of the award. it was felt that as there was no obligation on the part of the arbitrator for giving a reasoned award, the arbitrator was passing award without assigning reasons, though stakes were very high, and the matter were very complicated. therefore, it was felt necessary to bring an amendment to the act. so act 1 of 1990 was passed providing amendments to sections 14 and 17. act 1 of 1990 came into force on 19.2.1990 and one proviso was added to sub-section (1) of section 14 provided that the arbitrator or umpire shall give reasons for any award made by him or them and the award shall not be valid unless reasons therefore are given. three provisos are added to section 17 where the award is pending before the court and such award does not give reasons empowering the court to remit the award to the arbitrator directing to pass a reasoned award and file it into the court. further providing that the arbitrator after remittance of the award to him has to pass a reasoned award and to file it into the court within 30 days and in case he has not filed, he can seek extension of time not exceeding 15 days. it is further provided in the provisos that where it is not possible to the court to remit the award to the arbitrator or panel of arbitrators or umpire due to incapacity, negligence, refusal to act or death, the court shall set aside the award and direct the parties to initiate fresh arbitration in accordance with the terms of the agreement. thus, the above provisos are inducted into the act to make it obligatory on the part of the arbitrators to pass a reasoned award. 9. in the instant case, the letter sent by the arbitrator along with the reasoned award clearly shows that the papers relating to the award were received by him on 6.9.1990 from the court and he sent the reasoned award by post on 5.10.1990 to the court which was received by the court on 9.10.1990. no doubt, the reasoned award was received by the court after the expiry of 30 days from the date of receipt of remittance order to the arbitrator. under the arbitration act or the rules, there is no procedure how to file the award into the court and the practice prevailing is that the award can be sent through post and this is not disputed. admittedly in the instant case, the papers were sent to the arbitrator through post and the arbitrator sent the reasoned award through post on 5.10.1990 with 30 days from the date of receipt of remittance order from the court. there is a postal delay in receiving the reasoned award by the court and, in fact, the court received the same on 9.10.1990. the intention and object of the arbitration act is to settle the disputes quickly avoiding delays by the arbitrator selected by the parties. while deciding the cases, the court should not forget the scope of the act and merely because there is some postal delay in filing the award, the court cannot direct to seek fresh reference which will take 4 or 5 years time to complete the proceedings and if it is so, the aim and object of the arbitration act will be frustrated. therefore, while interpreting the time limit of 30 days from the date of remittance of the award, the time taken by the postal department to deliver the same to the court has to be excluded. if that time is excluded, the award was filed into the court within time as contemplated under the proviso. if the court below was of the opinion that the application of the arbitrator for extension of time was received after the expiry of time to file the award into the court, it ought to have considered to delay of postal department. 10. in view of the circumstances, the appeals is allowed, the order of the lower court is set aside and the matter is remanded back to the lower court for disposal according to law. in pursuance of impugned order, if the o.p. filed by the other side to set aside the award is disposed of, the lower court is directed to restore the same to its file and decide the matter in accordance with law after giving opportunity to both the parties. 11. appeal allowed. matter remanded.