M/s. Bharat Engineering Service Technocrats & Co vs Executive Engineer and Ors
- SCC(2008) 3 SCC 302
Ratio decidendi
The rule this decision rests on
Where an application for condonation of delay in filing objections to an arbitral award under Section 33 of the Arbitration Act, 1940 is accompanied by explanations that constitute sufficient cause, the Civil Court must entertain the objections notwithstanding the considerable delay in filing them and the absence of an initial condonation application, and must decide such objections on their merits rather than dismissing them on grounds of delay alone. A High Court errs in law when it sets aside an arbitral award in its entirety and remits the matter for fresh arbitration merely on the ground that the arbitrator erroneously decided a preliminary issue such as limitation, without first requiring the trial court to decide objections filed under Section 33 of the Arbitration Act, 1940 on the basis that the delay in filing those objections was not condonable.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1. These appeals are directed against the common final judgment and order dated 12th of September, 2003 passed by the High Court of Karnataka at Bangalore in M.F.A. Nos. 1466-1468 of 1998.
2. The common reasoned award passed by the learned Arbitrator on 23rd of May, 1996 under the Arbitration Act, 1940 (in short 'the Act') and made a rule of the court by the Civil Court on 20th of December, 1997 was set aside in its entirety by the High Court only on the ground that the arbitrator had erroneously decided the issue whether the claims preferred by the appellant were barred by limitation. It is on record that the entire matter was remitted by the High Court, despite the lapse of over 10 years since the reference was made, to a different arbitrator for a fresh decision on merits.
3. In our view, the judgment of the High Court is not sustainable in law and the objections filed by the respondent-State against the award ought to have been entertained by the Civil Court despite there being a considerable delay in filing the same and in spite of the fact that there was, in the first instance, no application for condonation of delay. For this purpose, we have looked into the explanations given in the application for condonation of delay in filing the objection under Section 5 of the Limitation Act. We are of the view that the explanations offered do constitute sufficient cause in filing the objection under Section 33 of the Act. In this view of the matter, we set aside the judgment of the High Court as well as of the trial court and the matter may be remitted back to the trial court for decision on the objection filed under Section 33 of the Act. The objection under section 33 of the Act shall be decided by the trial Court positively within six months from the date of supply of a copy of this order to it after giving hearing to the parties and after passing a reasoned order in accordance with law.
4. For the reasons aforesaid, the appeals are allowed to the extent indicated above. There will be no order as to costs.
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