Summary
Under the Arbitration Act, 1940, the notice of filing of an award required by Section 14(2), from which the 30-day limitation for objections under Article 119(b) of the Limitation Act runs, needs no particular form; awareness that the award is filed and accessible suffices. The respondents knew of the award from the District Judge's order of 21.09.2022, so limitation expired on 20.10.2022 and the appellant's Section 17 application of 10.11.2022 was not premature.
Issues
- Whether limitation for objecting to an award under the Arbitration Act, 1940 runs only from a formal court notice of filing of the award, or from the date the party becomes aware that the award has been filed.
- Whether the appellant's application under Section 17 of the 1940 Act for judgment in terms of the award was premature.
Provisions considered
- Section 14(2), Arbitration Act, 1940The court must 'give notice' to the parties of the filing of the award, but no form is prescribed and, unlike sub-section (1), writing is not required; notice is satisfied once the party knows the award exists and is accessible, so that objections can be filed. (¶¶ 14, 14.2, 15, 16, 17, 18)
- Article 119(b), First Schedule, Limitation Act, 1963The 30-day period to set aside or remit an award under the 1940 Act runs from service of notice of the filing of the award; read with Section 14(2), it began when the respondents became aware of the filing on 21.09.2022 and expired on 20.10.2022. (¶¶ 14, 14.1, 15, 19)
- Section 17, Arbitration Act, 1940The court pronounces judgment in terms of the award after the time for an application to set it aside has expired; the appellant's application filed on 10.11.2022, after limitation had run out, was valid. (¶¶ 14.2, 19)
- Section 38, Arbitration Act, 1940The District Judge's order on the appellant's application under this section, directing the respondents to pay the balance of the arbitrator's fees after which the award would be furnished, was held to give the respondents clear intimation of the filing of the award. (¶¶ 5, 6, 14, 19)
Held
- Section 14(2) of the 1940 Act does not specify the form of notice of filing of an award; read reasonably, it requires only that the parties come to know of the award's existence so they can plan their objections, not an additional procedural step, and the notice need not be in writing. (¶¶ 15, 16)
- Following earlier decisions of the Court, informal intimation, including information to a party's pleader, is sufficient compliance with Section 14(2); a formal notice issued later is an act of court that cannot disturb rights already accrued, and a party aware of the award cannot sit over it and insist on technicalities of mode of notice to gain time. (¶¶ 16, 17)
- Limitation does not await receipt of a copy of the award; once a party knows the award is filed and accessible, it must take steps to scrutinise it. A contrary reading would let the award-debtor delay the arbitration despite knowing of the award, against the 1940 Act's aim of speedy resolution. (¶ 18)
- The District Judge's order dated 21.09.2022, directing the respondents to clear the arbitrator's fees after which the award would be furnished, gave them sufficient notice of the filing of the award; the formal notice of 18.11.2022 had no significance, limitation for objections expired on 20.10.2022, and the courts below erred in treating the Section 17 application of 10.11.2022 as premature. (¶¶ 14, 19)
Result
Appeal allowed; the High Court's order dated 27.03.2024 in C.R.P. No. 138 of 2022 set aside; District Judge, Sonitpur directed to dispose of Misc. (J) No. 61 of 2022 expeditiously, preferably within five months; no order as to costs.