1985 C L C 1170
Before Gul Zarin Kiani, J
PROVINCE OF WEST PAKISTAN (Punjab) through Secretary, Irrigation and Power Department and another-Appellants
Mian ABDUL HAMID & CO-Respondent
F.A.O. No.125 of 1970, decided on 1st December, 1984.
Umar Bandial for Appellants.
Riaz Karim Qureshi for Respondent.
Date of hearing: 27th November, 1984.
This civil appeal by Province of Punjab, is directed against order dated 14-3-1970 passed by Ch.Muhammad Nasim, Civil Judge, First Class, Lahore, who after disallowing objections to the award made it a rule of Court, passed a decree in accordance therewith for a sum of Rs.57,800 in favour of Mian Abdul Hamid & Co.
2. Tender submitted by Mian Abdul Hamid & Co. for the work ‘construction of Pakka road 18′ wide alongwith the left bank of Lahore Branch from Ferozepur Road crossing to Multan Road crossing’ was accepted by Superintending Engineer, Depalpur Canal Circle, Lahore on 4-1-1967. An agreement for execution of the tendered work in accordance with the terms and conditions specified therein was also executed between the parties. Agreement provided for resolution of disputes arising between the contracting parties through the medium of arbitration. During the currency of the work, Executive Engineer Incharge, ordered that bricks on end edging be provided throughout the road. This item was not included in the original contract. The contractor completed the work on this extra item also as directed. Since payment for the extra item on the rates demanded by the contractor was not released, a petition under sections 8 and,20 of the Arbitration Act, 1940, was presented in the Court of Senior Civil Judge, Lahore. Prayer in this petition was that respondents therein be directed to file original agreement in Court and matter-in-dispute then be referred to the sole arbitrator appointed by the Court. Vide order dated 8-9-1969, learned Civil Judge appointed Mr. Abdur Rehman Aziz, Superintending Engineer as sole arbitrator to decide the following dispute:-
“Whether the contractor is entitled to separate payment for brick edging,. if so, what is the due amount.”
Arbitrator was directed to make and file the award in Court before 17-12-1969. Award by the Arbitrator, however, was not filed till 17-12-1969. Case accordingly was postponed to 8-1-1970 for awaiting the award of the aribtrator. However, it appears from order dated 8-1-1970 that the award was received in Court a day earlier i.e. 7-1-1970. On 8-1-1970, the date fixed, the Court directed the parties to file objections till 31-1-1970. This order was made in presence of the counsel for the parties. Meanwhile, on 30-1-1970, an application on behalf of the contractor for making award a rule of the Court, was moved. On 31-1-1970 the Court noticing the above-noted petition again observed that objections if any should be filed within the prescribed limit of time and adjourned the proceedings to 5-3-1970. However, it was made absolutely clear in the order that the said order would not in any manner extend the period of limitation fixed by law for filing objections to the award. This order too was also passed in presence of the counsel representing the Government. Since no objections were filed by the Provincial Government within the specified period and the contractor had accepted the correctness of the amount awarded in award, the learned Civil Judge vide order dated 14-3-1970 accepted award made it a rule of Court and passed judgment and decree in accordance therewith.
3. Appeal has been filed to question order dated 14-3-1970 refusing to set aside the award of the arbitrator. This civil appeal was admitted to regular hearing on 17-7-1970 and has come up for hearing today in presence of Mr.Umar Bandial, Advocate, for appellant and Mr.Riaz Karim Qureshi, Advocate for respondents/decree-holders.
4. Learned counsel for the parties have been heard at length. Record has also been examined with their assistance. Mr. Umar Bandial, Advocate, contended that after the award was filed in Court by the sole arbitrator, notice under the mandatory provisions of section 14(2) of the Arbitration Act, 1940 must issue and be served upon the party. In the absence of a specific notice intimating the fact of filing of award and directing the parties to file objections to it, if any, within the period specified in Article 158 of the Limitation Act, the award cannot be made rule of the Court and decree passed in accordance therewith. He submitted that before an award filed in Court can be made the basis of a judgment by the Court, three essential requirements of law must be complied with:-
(a) The Court has given notice to the parties of filing of award.
(b) The time for making an application to set aside the award has expired or if such an application has been made it has been refused.
(c) Where the Court sees no reason to remit or set aside the award.
All the three conditions are cumulative and must be strictly fulfilled. Learned counsel also contended that notice has to be served on the party and not his counsel. Provisions vis-a-vis service of notice being mandatory, absence of notice, therefore, will not start the period prescribed in Article 158 of the Limitation Act against the party intending to file objections. Period of limitation starts to run from the date of the service of notice issued under section 14(2) of the Arbitration Act. Information knowledge or notice received by a party aliunde and not through the Court was not sufficient for the purposes of commencement of the limitation period. In this case, admittedly, notice has neither been issued nor served upon the Government. Therefore, the learned Civil Judge acted illegally and without jurisdiction in making the award rule of the Court and passing a judgment and decree in accordance therewith. Relied upon Punoo Ram v. Nebh Raj A I R 1930 Lah. 228; Hola Ram Verhoma v. Governor-General-in-Council A I R 1947 Sind 145; Ganeshmal Bhowar Lal v. Kesoram Cotton Mills Ltd. A I R 1952 Cal. 10; Chaturbhuj Das v. Ganesh Ram A I R 1958 Andhra Pradesh 497 and Sh. Mahboob Alam v. Mumtaz Ahmad F L D 1960 (W.P.) Lah. 601 to support the contention that unless notice under section 14(2) of the Arbitration Act in the manner and form prescribed was served upon the party concerned, limitation for filing objections to the award under Article 158 of the Limitation Act, 1908 did not start to run against the said party. On merits, he contended, that the arbitrator has not conducted himself in accordance with law. Work has been assessed at the excessive rates. Contention is that the work should have been assessed on the basis of quantum merit. Learned counsel, however, in high tradition of Bar, conceded that the dispute was covered by the Arbitration clause and could be thus referred to the arbitrator for its decision. Objection raised on this part of the controversy thus stands concluded.
5. Mr.Riaz Karim Qureshi, Advocate, learned counsel for the respondent contractor strenuously supported the order made by learned Civil Judge. It was submitted that the dispute was referred to the arbitration of Mr. Abdur Rehman Aziz, during the pendency of proceed ings under sections 8 and 20 of the Arbitration Act. Time was also fixed for the making of the award by the arbitrator and filing the same in Court. Proceedings were kept pending to enable the arbitrator to arbitrate, give his decision, file the award in Court by a particular date. Meanwhile, the parties continued appearing in the Court on the dates fixed. On 8-1-1970, the date fixed, the Court specifically directed the parties to file objections. Order was passed in the presence of the counsel for both the parties. This was sufficient notice to the parties to file objections within 30 days therefrom. Notice was again repeated on 30-1-1970. Objections, despite knowledge and direction of the Court having not been filed, the Court rightly proceeded to make award the rule of Court and passed a decree accordingly. He also submitted that ‘parties’ in Article 158 of the Limitation Act cannot be confined to parties personally and includes pleaders and other persons specially authorised by the parties to take notice. Government Pleader who represented the Provincial Government had authority to receive notice on its behalf, and, therefore, intimation given to him was as effectual as intimation of to the party whom he represented. In any case, Government had full knowledge and cannot now turn and take objection that it had not been served or had no knowledge of the award, to file objections; within time. As for merits, learned counsel contended that the arbitrator had jurisdiction and competence to award the rates on which the award proceeds. Therefore, learned Civil Judge, rightly, in the absence of objections, made award the rule of Court and proceeded to pass judgment and decree in accordance therewith. In support, placed reliance upon Gayan Singh v. Harbilas and another A I R 1930 All. 711 (DB) Judgment, Ballaram George v. Kadpuk Lingiah A I R 1961 Andh. Pra. 457 (DB) Judgment, Chhotelal v. Jamnadas A I R 1963 Madhya Pradesh 20. Apart from the above precedent case, cited by the learned counsel for the parties, I have been able to lay my hands on case of Sh.Din Muhammad v. Jan Muhammad and another PLD 1971 Quetta 30; Sh.Mahboob Alam v. Sh. Mumtaz Ahmad P L D 1956 (W.P.) Lah. 276; Messrs Shafi Corporation Ltd., Karachi v. Government of Pakistan through Director-General of Defence Purchase P L D 1981 Kar. 730.
6. In Punoo Ram v. Nebh Raj A I R 1930 Lah. 228, a case arising before the enactment of the present Arbitration Act, the Court observed:-
“It is incumbent on the Court to give a notice to the parties under clause (10) Schedule II, Civil Procedure Code and the fact that they might have received knowledge of the award having been filed in Court aliunde does not amount to such a notice.”
In Hola Ram Verhomal v. Governor-General-in-Council Thadani, J, of the Sind Chief Court observed:-
“Knowledge of the filing of an award acquired in a way other than that laid down by section 14 cannot be deemed to be proper service of a notice of the award and the statutory provisions relating to service of notice of the filing of the award upon a party cannot be dispensed with because it has been established that a party had notice of the filing of the award in some way or another, although, not in accordance with section 14. If it is the statutory right of a party to be served personally, he can ignore the fact that his Advocate has been served with a notice and if the Advocate on being so served makes applications for copies of the documents filed with the award and other documents relating to the same, the applications cannot be relied upon for holding the service good. 20 Allahabad 474 relied on.”
In Ganeshmal Bhawarlal v. Cotton Mills Ltd. Mr.Bachawat, J. on section 14 of the Arbitration Act observed:-
“Under section 14 of the Arbitration Act, on the Award being filed the Court shall give notice to the parties of such filing. Section 17 then provides as follows:–
‘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’.
(6) The following condition must be complied with before the Court may pronounce judgment upon award and before the decree can follow: (a) The Court has given notice to the parties of the filing of the award. (b) The time for making an application to set aside the award has expired or if such application has been made it has been refused. (c) Where the Court sees no cause to remit or set aside the award.
(7) All these conditions are cumulative and must be strictly fulfilled. If not, the Court may and ought to set aside the judgment and decree which follows. Even in .the exercise of its revisional powers the Court has set aside such judgment and decree (a) if no notice has been given. Rangasami v. Mutfiusami 11 Mad. 144; Ranjit v. Bissay A I R 1926 Ca1.1018, Punoo v. Nebhraj A I R 1930 Lah. 228; Venkata Ramayya v. Papayya 1943-2 Mad L.Jour 152, Mani Ram v. Ram Asray A I R (8) 1921 Oudh 148 (1); or (b) if the time for applying to set aside the award has not expired Ravibhai v. Dahya Bhai 45 Bom. 832, Srikishin v. Relumull A I R 1916 Sind 79; Udit Singh v. Ram Lakhan Singh 1933 All L.Jour 149, Valu Pillay v. Appaswami 21 Mad. L. Jour 444; Rangiah v. Govindasami 45 Mad. 466, Subbaya v. Papayya A I R 1929 Mad. 789. The Court has also set aside on revision such decree if the lower Court refuses to exercise its jurisdiction to consider on the merits and application showing cause for remitting or setting aside the award erroneouslv on the ground of limitation. Sahib Rai v. Chaitram A I R 1915 Lah. 352; Ratnam v. Ramasamy A I R 1916 Mad. 927 (D.B.), Das v. Dayalal and Sons A I R 1933 Rang. 38, or on the ground of estoppel; Kamta-Pershad v. Uman Prasad. AIR 197.4 Oudh . 344 and also where the lower Court exercised such jurisdiction with material irregularity by refusing to give to the party sufficient opportunity to adduce evidence in support of such application: Juggobundu Sahu v. Chand Moah 22 Cal. L.J. 237, Batana v. Kedar Nath A I R 1917 Oudh 240, Darbari Ram v. Bhika Ram A I R 1921 Lah. 249, Subba Rao v. Ramlingayya A I R 1934 Mad 619. Having regard to the language of section 17 of the Arbitration Act there is a conflict of opinion whether appeal from the decree passed under that section lies if one or more of these grounds have not been complied with. It was held that the decree should be set aside even on appeal in Mairamjan Bibi v . Asaraddi 43 Cal. W . N 924, if no notice was given; Ibrahim Ali v. Mohsin Ali 18. All. 422, Dawoodji and Son v. S.C.Sherman A I R 1925 Rang. 238; if the Court refused to give opportunity to the objector to produce evidence Shahadeo Singh v. Melhu Singh 49 All. 178; if the Court refused to consider the objections to the award on the merits. Najmud Din Ahmed v. Albert Puech 29 All. 584; U Ba Thein v. U Po Mya A I R 1930 Rang 307; if the time for applying to set aside the award had not expired before the passing of the decree.
(8) The notice of the filing of the award under section 14 ‘of the Arbitration Act must be given by the court. Notice received by a party aliunde and not through Court is not sufficient. Chatarbhuji Das v. Ganesh Ram 20 All. 474, and Guruditta v. Basant A I R (12) 1925 Lah. 619 (1).
(9) There is no express provision in section 14 as to how and in what manner the notice is to be given. By section 43 of the Arbitration Act the provision of the Code of Civil Procedure will apply to proceedings under section 17 for judgment onaward and such proceedings being an original matter by section 141 of the Code of Civil Procedure the procedure with regard to suits is to be followed as far as it can be made applicable. Section 142 of the Code provides that all notices given to or served under the provisions of the Code shall be in writing. By Order XLVIII, rule 2 of the Code all notices required by the Code to be given to or served on any person or to be given in the manner provided for service of summons. By O. XLIX, r.3 of the Code in a chartered High Court such notices can be served by an attorney or his clerk. This Court has framed arbitration rules under section 44 of the Arbitration, Act. Rule 14 of the Arbitration Rules provides that the Registrar shall issue notice of the filing of the award and such notice shall be served by such party as he may direct. By rule 15, the notice shall be served in the manner provided for service of notice in Chap. VIII of the Rules. By Chap. VIII, rule 26 except as provided by statute and the rules all notices required to be served on or to be given to any party shall be served in the manner provided by the Code. By rule 24 service on a party appearing in person may be made by leaving the notice at his address for service. By rule 24-A, the service may be directed to be made by registered post. By rule 25 the service to an attorney may be made by delivering or leaving the notice with his clerk at the place of business. By rule 28 where personal service is required, service shall be effected as nearly as may be in the manner prescribed for personal service of the writ of summons. In this case, the applicant firm did not appear either in person or by an attorney nor was the notice served by registered post. Section 14 of the Arbitration Act does not require personal service of the notice on the party. There is therefore, no question of service under Chap. VIII, rr.24, 24-A, 25 and 28. The service must therefore be under Chap.VIII, rule 26 and must be in the manner provided for service of summons.
(10) Our Arbitration Rules make it clear that the notice of the filing of the award must be in writing and in a prescribed form. An oral notice cannot be served like a writ of summons. It was held in Hari v. Lachman A I R 1948 E P 11 and also apparently in the cases of Valchand v. Galba A I R 1926 Bom. 312, and in Saroj’v. Jatindra 45 C L J 458, that such notice may be oral. It is not necessary to decide if these cases correctly lay down the law having regard to section 142 and Order XLVIII, rule 3 of the Code and having regard to the language of Art. 158 of the Indian Limitation Act. Under our Rules notice cannot be oral.”In Chaturbhuj Dos v. Ganesh Ram A I R 1958 Andhra Pradesh 497 High Court ruled:-
“As we have already stated the provisions relating to the making and signing of the award is mandatory and the omission to do so would vitiate the award. It is equally true that the omission by the Court to intimate the parties of filing the award, is also against the mandatory provisions because it is designed to give an opportunity to the parties to file their objections against the award, the non-compliance of which will certainly vitiate the award.”
Case of Sh.Mahboob Alam v. Sh.Mumtaz Ahmad, proceed on distinguish able facts. This closes the discussion of the cases cited by learned counsel for the appellant Government. I now proceed to consider the precedent case-law cited by the respondents in support of the contention that the appellant’s counsel had sufficient notice on 31-7-1970 in regard to the filing of the award and to prefer objections if any. In Gayan Singh v. Harbilas and another, Allahabad High Court, on Article 158 of the Limitation Act, observed:-
“It has been contended that no notice of award was given to Hakim Gian Singh plaintiff and the notice given to his pleader was not a notice given to the party concerned within the meaning of this Article. No authority has been cited in support of this proposition. ‘Parties’ in Article 158 cannot be confined to ‘parties’ personally and ‘includes pleaders and other persons specially authorised by the parties to take notice. The pleader to whom notice was given was a person so authorised.
In Ghulam Mustafa v. Mussammat Halima Bibi (Punjab Law Reporter) Volume 14, 1913-310 at page 1045 the Court observed:-
“No notice required under para. 10 of Schedule 11, Civil Procedure Code Act V of 1908, is necessary where the parties are present in the Court when the award is filed or they have otherwise come to know the date of filing of the award.”
In Bollaram George v. Kadpak Lingiah again a DB Judgment, learned Judges, after an exhaustive survey of case-law from different High Courts observed:-
“(9) An identical question had come up for decision before the East Punjab High Court in A I R 1948 E P 11 and it was there held by Tejo Singh and Achru Ram, JJ. as under:-
Under section 14(2) of the Arbitration Act after award was been filed in Court, the Court shall give notice to the party of the filing of the award. This is a statutory provision and it cannot be dispensed with. Notice, however, need not be in writing. It can be oral. It can be implied from the order o the Court. But where the order merely records the presence o the parties when the award was filed by the arbitrator but does not say that any notice of the filing of the award has given to them, no notice can be implied from this order. Nor can the notice be implied from the mere mention of the fact that the award has been filed, specially when the order passed by the Court on subsequent date make it clear that it was only on that subsequent date that the Court thought of giving notice of the filing of the award. “
In this decision reference was made to the case I L R 20 All. 474.
(10) From the above discussion, it is clear that so far as the question whether section 14(2) is mandatory, all the High Courts are uniformly of the view that it is mandatory. But as regards the question whether in the absence of notice knowledge of the filing of the award would be sufficient compliance, there is a divergence of views. Some High Courts are of the view that even though notice has not been issued under section 14(2) if the party has the knowledge of the filing of the award that is sufficient compliance. The other view is that S.14(2) being mandatory, non-compliance with it will vitiate the award and knowledge of the award having been filed in Court aliunde does not amount to such a notice.
In A I R 1958 Andh. Pro. 497 and I L R 11 Mad. 144 though it has been held that section 14(2) is mandatory, there is no discussion of the fact as to whether if the party had the knowledge that would be sufficient compliance of section 14(2). There could not be any discussion on this point there as that question was not before their Lordships in that case. In A I R 1925 Lah. 619 (1), A 1 R 1930 Lah. 228, A I R 1926 Cal. 1018 and 1 L R 20 All. 474, this point has been considered and the view taken is that the fact that the party had knowledge of the award having been filed in Court aliunde does not amount to such a notice; whereas the High Courts of Nagpur and Calcutta in the cases of A I R 1957 Nag. 57 and A I R 1952 Cal. 226 have already laid down that the terms of section 14(2) does not contemplate that notice has to be given when the parties had knowledge of the filing of the award.
“We are also of the opinion that section ’14(2) of the Arbitration Act is mandatory and notice has to be given of the filing of the award but we do not agree with the view taken by the Lahore High Court in the case of A I R 1925 Lah. 169 (1). A I R 1930 Lah. 228, the Calcutta High Court in A I R 1926 Cal. 1018, and the Allahabad High Court in I L R 20 All. 474 and accept the view taken by the Nagpur and the Calcutta High Courts in A I R 1957 Nag. 57 and A I R 1952 Cal. 226 that if a party to whom notice has to be issued has knowledge that the award has been filed, ‘that would be sufficient compliance with section 14(2) and no further notice would be necessary. The question whether a party has knowledge or not is a question of fact which has to be determined on the facts of that case.”
Chhotelal v. Jamnadas, also dealt with Article 158 of the Limitation Act in these words:-
“At any rate, the award having been filed on that date in the presence of the learned counsel for the non-applicant, objections to the award should have been filed within 30 days from March 19, 1953. As to this Shri Dwivedi, learned counsel for the appellant, raises two objections with vehemence. Firstly, he had appeared before the trial Judge on the 19th March in obedience only to the notice issued to the non-petitioner and moreover, the award appears to have been returned the same day to the arbitrators for certain formalities to be completed. We would have gone into these objections with some seriousness, but we think it unnecessary in view of the order passed by the trial Judge on July 19, 1953, which when rendered into English reads as under:-
“Order separately passed today in respect of injunction. In this case, the arbitrators have filed the award and the connected papers. The non-applicant defendant has put in appearance through counsel. Therefore, whatever objections to the award the defendant’s counsel has, should be filed on September 10, 1953.”
8. It is quite clear from the order sheets that both sides had been appearing on the dates of hearing which had been fixed earlier in connection with the petitioner’s application praying for injunction, whatever else, it may on July 15, 1953, the trial Judge made an unequivocal order calling upon the non-petitioner’s counsel to file objections to the award. It is equally clear that the award had been filed again, presumably, after completing the technical formalities. From this date, it was incumbent upon the non-petitioner to file his objection within 30 days because this was adequate service under section 14(2). But the objections were not filed within time, they were actually filed on October 5, 1953. 1t must be mentioned here that the learned trial Judge had no jurisdiction to fix a date beyond 30 days for filing of the objections but the appellant did not file them even on September 10, 1953.
9. The only question which now remained to be considered is whether the notice to the counsel appearing for the appellant was sufficient notice within the meaning of section 14(2) of the Arbitration Act. Our answer is in the affirmative. All that section 14(2) requires is that on the award having been filed in the Court it would thereupon give notice to the parties of the filing of the award. No form of notice nor procedure as to its service is prescribed in section 14. Section 41 of the Act, however, lays down that subject to the provisions of the Act and of rules made thereunder, the provisions of the Code of Civil Procedure shall apply to all proceedings before the Court. Shri Dwivedi does not say that there were any rules under the Arbitration Act framed and applicable to the present proceedings. In the absence of such rules and in the absence of any provision in the Arbitration Act itself, Order 111, of the Code of Civil Procedure becomes applicable and rule 3 of that Order enacts that processes served on the recognized agent of a party shall be as effectual as if the same had been served on the party in person unless the Court otherwise directs. This is a rule of law which imputes the knowledge of recognized agent (recognized under Order III rule 2, C.P.C.) to the principal. In this view we are supported by a decision of this Court in Kawal Singh v. Baldeo Singh, 1957 M P L J 713; A I R 1957 Nag. 57. The same view was taken in Ram Bharosey v. Pearey Lai (S) A I R 1957 All. 265. Shri Dwivedi relies on Chaturbhuj Das v. Ganeshram I L R 20 All. 474. But that decision does not apply here at all. This is not a case where a party had received information aliunde that the award had been filed. In the Allahabad case, the question with which we are dealing was not called for determination.
10. Learned counsel further relies on Holaram v. Governor-General AIR 1947 Sind 145. In that case, it seems that in a pending- suit arbitration was resorted to, if that decision goes to the extent of Holding that a notice to the counsel is no notice to the party, o the filing o the award, with respect, we do not agree. We have already stated our reasons. In the Sind case it does not appear that the attention o the learned Judge was invited to the provisions o law upon which we have relied.”
In Sheikh Mahboob Alam v. Sheikh Mumtaz Ahmed, Mr.Justice Akhlaque Hussain, J. of the West Pakistan High Court on a question of notice under section 14(2) of the Arbitration Act said:-
“The next point urged by Mr. Jaffary on behalf of the appellant was that inasmuch as the notice under section 14(2) was not served on the parties themselves but on their pleaders it was irregular and ineffective. I find no substance in this contention. It is admitted that notice of the filing of the award was given to the pleaders of both the parties on the 13th of December, 1954, and their signatures in acknowledgment of the notice were obtained.. Subsection (1) of section 14 requires the notice to be in writing, but the notice under subsection (2) need not neces sarily be in writing. The ruling reported as Hari Chand v. Lachhman Das and others .A I R 1948 E.Pb. 11 goes to the extent of laying down that such a notice may be even inferred from the order of the Court. Section 141 of the Code of Civil Procedure makes the procedure provided by that Code applicable to all proceedings in the Courts of Civil jurisdiction. According to sub-rule (1) of rule 3 of Order III of that Code, process served on the recognized agent of a party is in the absence of a direction by the Court to the contrary as effectual as if it had been served on the party in person. A division Bench ruling of this Court reported as Sham Singh and others v.Vir Bhan and others A I R 1942 Lah. 102, exactly covers the point. The ruling in Gayan Singh v. Harbilas and another A I R 1930 All. 711 is to the same effect. The observations in Ranjit Chandara v. Bissay Ram A I R 1926 Cal. 1018. “There is nothing to show that they (the pleaders) were aware that this arbitration award has been filed” also supports this conclusion.
Learned counsel for the appellant relied on a case reported as Holaram Vehoram v. Governor-General of India-in-Council A I R 1947 Sind 145. In this case notice of the filing of award was served on the parties’ pleaders and it was held that the statutory provisions relating to service of notice of the filing of the award upon a party cannot be dispensed with and that a party can ignore the fact that his Advocate has been served with the notice. The learned Judge has not given any reasons for the conclusion that the expression “Parties” under section 14 of the Arbitration Act does not include their pleaders; nor has he considered the relevant provision of the Code of Civil Procedure referred to by me. The rulings to the contrary were either not brought to the notice of the learned Judge or not referred to by him. The ruling in Chatarbuj Das v. Ganesh Ram I L R 20 All 474 relied on by the learned Judge is quite beside the proposition of law laid down by him, because in that case no notice at all had been given either to the party or to its pleaders. The distinction was pointed out to the learned Judge but he dismissed it with the observations: “I do not think that it makes any difference in principle.” With all respect I am unable to hold that the principle laid down in the Sind case is sound. I, therefore, old that the notice under subsection 2) o section 14 given to the pleader o the arty is a perfectly valid notice and satisfies the requirements o that provision.”
However in Sheikh Din Muhammad v. Jan Muhammad and others, Mr. Justice Dorab Patel (as his Lordship then was) on section 14(2) of the Arbitration Act read with Article 158 of the Limitation Act observed:-
“Finally, Mr.Mirza argued that, although the applicant had mis guidedly purported to file an application to challenge the award, limitation had not begun running against him and he was entitled, in the events that had happened, to raise this plea. As I have explained the Court had failed to send him the statutory notice required under the Act, therefore, Mr. Mirza submitted that, as a statute of limitation has to be construed strictly, the period of limitation had never begun running against the applicant. In order to appreciate this argument, I have to repeat here that when an award is filed in Court, Section 14 states that “the Court shall thereupon give notice to the parties of the filing of the award”. The use of the word “shall” is deliberate, and it is the Court’s duty to give full effect to it. Further this provision has to be read with Article 158, according to which, as I have already pointed out, limitation runs only from “the date of service of notice of the filing of the award”. As the direction for notice under section 14 is mandatory, on the plain language of the statute, it follows that limitation cannot start running against a person who wishes to object to an award unless and until he has received from the Court the notice prescribed under section 14. As the provision for notice is mandatory, it follows that limitation could not have started running against the applicant in the instant case merely because he was aware of the existence of the award against him. As observed by Thandani, J. in a judgment of the Sind Chief Court in Holaram Vernomal v. Gover noxt-General of India-in-Council AIR 1947 Sind 145:-
“I do not think, however, that knowledge of an award acquired in a way other than that laid down by section 14, Arbitration Act, can be deemed to be proper service of a notice of the award. I can conceive of a case in which a party requests an Advocate to enquire if an award has been filed against him and in due course he is informed that an award has been filed against him, whereupon he asks the Advocate to apply for copies. I do not think that the statutory provisions relating to service of a notice of the filing of the award upon a party can be dispensed with because it has been established that a party had notice of the filing of the award in some way or another although not in accordance with section 14, Arbitration Act.”
I may observe here, as pointed out by Mr. Mirza, that same view was taken by the Lahore High Court in Punoo v. Nebh Raj A I R 1930 l,ah. 228 and by the Calcutta High Court in Talukdar and others v. Mandal A I R 1926 Cal. 1018. That has also been the view of other High Courts (See C. Das v. Ganesh Ram I L R 20 All. 474 and Rangasawami v. Muthusami I L R 11 Mad. 144. I am in respectful agreement with the view which has then been taken by the High Courts of the sub-Continent for more than 75 years, and in view of the plain language of section 14, I do not think any other view is now possible. The applicant is therefore, entitled to argue in this Court that, as he did not receive the statutory notice under the Arbitration Act, limitation has not begun running against him.”
A few years later, Karachi High Court, if I am permitted to say, with deep respects, in a very lucid exhaustive, instructive and illuminating judgment taking note of number of decisions of the various High Courts including those reported in Holaram Vernomal v. Governor-General of India-in-Council A I R 1947 Sind 145, Sheikh Din Muhammad v. Jan Muhammad and others PLD 1971 Quetta 30 and Nilkantha Sidramappa Ningashetti v. Kashinath Somanna etc. A I R 1962 S C 666, in the case Messrs Shafi Corporation Ltd. , Karachi v. Government of Pakistan PLD 1981 Kar. 730 observed:-
“After considering all the cases noted above I have reached the conclusion that all the Courts are unanimous on the point that the provision with regard to service of notice in section 14(2) of the Act, is mandatory and notice has to be given to the parties of the filing of the award in Court. I am further of the view that section 14(2) of the Act contemplates a situated where the award is filed by the arbitrator or the Umpire in the Court in the absence of parties and, therefore, notice is necessary to the parties to inform them of the filing of the award in Court so that they may file objection to the award if any. There however appears to be difference of opinion between the various High Courts in India on the point whether the notice contemplated under section 14(2) of the Act should be a formal notice in writing and served in the prescribed manner or it could be an oral informal and constructive notice. In order to appreciate the true import requirement of notice under section 14(2) of the Act, I will reproduce here section 14 itself:-
“14.Award to be signed and filed.-
(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.
(2) The arbitrators or umpire shall, at the request of any party to the arbitration- agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award.
(3) Where the arbitrations, or umpire state a special case under clause (b) of section 13, the Court, after giving notice to the parties and bearing them, shall pronounce its opinion thereon and such opinion shall be added to and shall form part of the award. “
A reading of the above provision in the Act will show that whereas the notice required to be given under section 14(1) of the Act by the Arbitrator or the umpire to a party of the making and signing of the award and the fee and charges payable in respect thereto has to be a written notice; there is no such requirement in sub-clause (2) of section 14 of the Act for the notice to be issued to a party by the Court after filing of the award in Court. There appears to be a deliberate omission by the Legislature of the expression “in writing: from subsection (2) of section 14 of the Act. There is, therefore, no warrant on the plain language of the section to interpret the expression “give notice to the parties” to mean only a formal written notice served upon a party in the prescribed manner and exclude a constructive, oral or an informal notice. In its ordinary dictionary meaning the expression “given notice” will also mean an oral and informal notice by the Court which could be constructive as well. It is a cardinal rule of interpretation that words in a statute are primarily to be given their ordinary dictionary meanings. I have not been able to discover anything either in the scheme or in the language of the Act to justify a departure from this basic rule of interpretation while interpreting section 14(2) of the Act. I am, therefore, in no doubt that the notice contemplated under section 14(2) of the Act can be an oral notice to a party and compliance of this provision of law will be satisfied. If the party or a counsel appearing for him duly authorised in this behalf, is informed by the Court either in writing or orally about the filing the Court and such a notice could also be a constructive notice. Whether or not a party had such a notice will undoubtedly be a question of fact to be decided in accordance with the facts and circumstances of each case. A further question will arise in such circumstances that from what date the limitation shall start running against a party who it is alleged have the notice of filing of award in Court in a constructive or informal manner. Article 158 of the Limitation Act provides that the period of 30 days shall commence. against a party from the date of “service of notice”. As I have already reached the conclusion that the notice under section 14(2) of the Act could be an oral and informal notice as well the starting point of limitation against a party in such a case will be the date on which the information of filing of the award is received by him.”
This ends the discussion so far as precedent case-law is concerned.
Bowing to the weight of preponderant judicial view with which I find myself in complete agreement I hold that all that section 14(2) of Arbitration Act, 1940 requires is that after an award has been filed in court, it shall thereupon give notice to the respective parties about the filing of the award in Court so as to enable them to file/prefer objections to the correctness/ validity of the award, if they are so minded within the period of 30 days in Article 158 of the Limitation Act, 1908. Neither form of notice nor procedure for its service has been prescribed in the Arbitration Act. In the absence of rules, provisions of the Code of Civil Procedure subject to the provisions o the Arbitration Act, 1940, shall apply to proceeding before the Court. This is because section 41 of the Arbitration Act, so provides. Proceed ings on these legal premises, service of any process upon pleader is presumed to be as effectual as personal service on the party whom he represents. Order III, rule 5, C.P.C. fully applies to support the above statement of law. Nothing has been said at the Bar on behalf the Government that pleader incharge of proceedings before the Court had not communicated the notice received by him. Award was received in Court. The Court after the award was received, placed it on its file, then and there and in unequivocal terms asked them to file objections, the award, if so desired. Parties had been appearing before the :,ward was filed and thereafter in the Court. It is not the requirement of law that despite presence of the parties, through their counsel before the Court and the Court informing them about the award and asking them to file objections if need be, still a separate notice was required to be issued or served. I am fortified in taking this view on the strength of the observations made by the Supreme Court of India in Nikantha Sidramppa Ningashetti v. Kashinath Somanna and others AIR 1962 S C 666 It observed:–
“The notice which the Court is to give under section 14(2) to the parties of the filing of the award need not be a notice in writing. The notice can be given orally. No question of service of the notice in the formal way of delivering the notice or tendering it to the party can arise in the case of a notice given orally. The communication of the information to the Pleader of the party, that an award has been filed is sufficient compliance with the requirement of subsection (2) of section 14 with respect to the giving of the notice to the parties concerned, about the filing of the award. Notice to the Pleader is notice to the party, in view of rule 5, Order III, C.P.C.
When facts are judged in the light of the rule of law so enunciated it becomes crystal clear that the Government had sufficient notice of the filing of the award when it was asked on 8-1-1970 in presence of the Government Pleader to file objections to the award if any. Despite clear information it did not care to put forth objections within the period of 30 days as provided in Article 158 of the Limitation Act. Government when in litigation with its own citizens cannot be accorded any preferential treatment. Consequently, learned Civil Judge acting very rightly made award the rule of Court and passed a decree in accordance therewith. On merits, the arbitrator found in favour of the contractor and assessed the claim at Rs.57,800. Matter in dispute was referred to the Arbitration of the sole arbitrator and he in exercise of his jurisdiction found the above-stated amount as the price/value of the work done. No legal exception can be taken to this assessment.
For the foregoing reasons I find no force in the F.A.O , I fails and is dismissed. The decretal amount has already been received by the Contractor subject to a bank guarantee. In the circumstances) of the case, though the appeal has been dismissed, I would not like to’ burden the Government with costs.
M. Y. H. Appeal dismissed.