Oriental Insurance Co.Ltd. Vs M/s Tejparas Associates

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6524 OF 2009

Oriental Insurance Co. Ltd. .…Appellant(s)

Versus

M/s Tejparas Associates ….Respondent(s) & Exports Pvt. Ltd.

J U D G M E N T

A.S. Bopanna,J.

1. The appellant insurance company had issued fire

insurance policy in respect of the plant and machinery of the

respondent company. The sum for which it was insured was

a sum of Rs.70,00,000/ (Rupees Seventy Lakhs only). In

respect of the policy issued on 01.12.1999, the claim arose

on 23.04.2000 when fire accident took place in the premises

of the respondent. In respect of the claim, the appellant

Page 1 of 19

insurance company offered a sum of Rs.7,98,019/ (Rupees

Seven Lakhs NinetyEight Thousand Nineteen only) to the

respondent on 06.12.2000. The respondent having refused

to accept the same, a meeting was thereafter convened on

20.09.2001 wherein Vijaya Bank at whose instance the

policy was issued was also present. In the said meeting, the

appellant insurance company revised the offer to pay the

respondent a sum of Rs.33,80,925/ (Rupees ThirtyThree

Lakhs Eighty Thousand Nine Hundred TwentyFive only).

The said sum was also not acceptable to the respondent but

a sum of Rs.25,00,000/ (Rupees TwentyFive Lakhs only)

was paid to the respondent through Vijaya Bank. The

respondent therefore being aggrieved that the claim for

insurance reimbursement was not satisfied, had approached

the National Consumer Disputes Redressal Commission,

New Delhi (“NCDRC” for short) by filing OP No. 146 of 2002.

The said complaint came to be dismissed on the ground that

the claim involves complicated questions of law and the Civil

Court would have jurisdiction to decide the matter.

Page 2 of 19

2. The matter was, however, ultimately referred to

arbitration by an Arbitral Tribunal consisting of three

learned Arbitrators. In the arbitral proceedings, an award

dated 28.06.2004 was passed, whereunder two out of three

arbitrators awarded the sum of Rs.44,90,000/ (Rupees

FortyFour Lakh Ninety Thousand only) with interest at 18%

per annum also the costs as indicated therein. Since, a sum

of Rs.25,00,000/ had already been paid by the appellant on

20.09.2001, the award constituted the entire sum of Rs.

70,00,000/ (Rupees Seventy Lakhs only) for which it was

insured. The third learned arbitrator, however, dissented

from the majority award and held that the sum of Rs.

33,80,925/ offered by the appellant insurance company

was fair and proper. Subsequent thereto the appellant

herein filed an application under Section 33 of the

Arbitration and Conciliation Act, 1996 (“Act, 1996” for short)

seeking for clarification relating to the award dated

28.06.2004 and also with regard to the venue of arbitration

as indicated in the award. The said application filed under

Section 33 of the Act was dismissed through the order dated

17.12.2004. Pursuant thereto the appellant insurance Page 3 of 19

company, in order to assail the award dated 28.06.2004 and

the order dated 17.12.2004 filed the petition under Section

34 of the Act, 1996 on 24.02.2005. Since, the award

indicated that the same was passed at Jaipur and the third

learned arbitrator in his order had declared the venue of the

arbitral tribunal to be at Jaipur, the appellant insurance

company filed the petition on 24.02.2005 before the learned

District Judge, Jaipur.

3. The respondent on appearing in the said proceedings

had objected to the proceedings being held at Jaipur, since

according to the respondent the entire cause of action had

arisen at Jodhpur. The learned District Judge at Jaipur on

considering the rival contentions had through the order

dated 12.03.2008 held the petition as not maintainable

before that Court but exercised the power under Order 7

Rule 10 and 10 A of the Civil Procedure Code and returned

the petition to the appellant insurance company and

directed that the parties shall be present before the learned

District Judge, Jodhpur, on 02.04.2008 for presentation of

the petition therein and proceed with the matter. The

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appellant insurance company however presented the petition

before the learned District Judge, Jodhpur, only on

10.04.2008, instead of the specified date of 02.04.2008. In

that circumstance, the respondent herein filed an

application under Section 3 of the Limitation Act, before the

learned District Judge, Jodhpur, in the represented petition

under Section 34 of the Act, 1996 which was numbered as

arbitration application number 18A of 2008. Through the

said application the respondent had sought rejection of the

petition on the ground of the limitation.

4. At this stage, the appellant insurance company filed an

application dated 03.05.2008 under Section 14 of the

Limitation Act, seeking that the time spent in the

proceedings before the learned District Judge, Jaipur, be

excluded and the petition be entertained on its merits. The

respondent herein opposed the said application. The

learned District Judge, Jodhpur, through the order dated

15.07.2008 had considered the applications under Section

14 and 3 of the Limitation Act and dismissed the application

filed by the appellant insurance company under Section 14

Page 5 of 19

of the Limitation Act and allowed the application filed by the

respondent herein under Section 3 of the Limitation Act.

Consequently, the petition filed under Section 34 of the Act,

1996 was dismissed. The appellant insurance company

therefore claiming to be aggrieved filed the appeal under

Section 37 of the Act, 1996 before the High Court of

judicature for Rajasthan at Jodhpur. The High Court after

taking note of the order passed by the learned District

Judge, Jodhpur, while disposing of the application under

Section 3 & 14 of the Limitation Act has dismissed the

appeal through the order dated 06.02.2009. The appellant

insurance company therefore claiming to be aggrieved by the

said order dated 06.02.2009 passed by the High Court in SP

(C) Misc. Appeal No. 1103/2008 is before this Court in this

appeal.

5. We have heard Dr. Meera Aggarwal, learned advocate

for the appellant, Mr. Puneet Jain, learned advocate for the

respondent and perused the appeal papers.

6. As noted in the sequence of events that flowed from the

point the policy was issued on 01.12.1999 and a claim

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relating to the same being made in view of the fire accident,

the dispute essentially is with regard to the quantum of

compensation which had led to the dispute between the

parties. The present proceeding has however arisen in the

background of the petition under Section 34 of the Act, 1996

being dismissed on the ground of limitation. In that

circumstance, though the appellant had also filed the appeal

under Section 37 of the Act, 1996 and had raised the

contentions with regard to correctness or otherwise of the

award dated 28.06.2004 and the order dated 17.12.2004 on

the application under Section 33 of the Act, 1996, the merits

of the rival contentions relating to the claim would not arise

for consideration at this stage. This is for the reason that in

the proceedings under Section 34 of the Act, which is the

remedy available to assail the award, the contentions on

merits of the claim relating to the insurance policy has not

been gone into to consider the correctness or otherwise of

the arbitral award and the proceedings has been concluded

on the ground of limitation. Consequently, in the appeal

filed under Section 37 of the Act, 1996 also it is on

examination of that aspect the appeal has been dismissed. Page 7 of 19

In that view, the limited consideration to be made in this

appeal is to determine whether the dismissal of the petition

under Section 34 of the Act, 1996 on the ground of

limitation is justified. In that regard, if the conclusion to be

reached by us is to the effect that in the present

circumstance the petition under Section 34 of the Act, 1996

was to be considered on merits, the matter would thereafter

have to be gone into on merits before the learned District

Judge, Jodhpur, to advert to the merits limited to the

consideration permissible under Section 34 of the Act, 1996.

7. While taking note of these aspects the fact that the

award was initially passed on 28.06.2004 and the third

learned arbitrator disposed of the application under Section

33 of the Act, 1996 on 07.12.2004 is the position which

emerges from the record. In that view, the petition filed

under Section 34 of the Act, 1996 before the learned District

Judge, Jaipur, on 24.02.2005 is within the time frame as

stipulated under Section 34 (3) of the Act, 1996. The

position is also that the learned District Judge, Jaipur,

returned the original application through the order dated

Page 8 of 19

12.03.2008 permitting the appellant to present it before the

learned District Judge, Jodhpur, on 02.04.2008. If the

petition was presented on the said date in terms of the order

the need for consideration on delay would not have arisen.

However, as noticed the appellant insurance company re

presented the petition before the learned District Judge,

Jodhpur only on 10.04.2008. In view of the application filed

by the respondent under Section 3 of the Limitation Act

seeking dismissal in that context, the appellant herein filed

the application under Section 14 of the Limitation Act. The

issue that would therefore arise is as to whether the

presentation of the petition before the learned Judge,

Jodhpur, should be considered as a fresh petition and the

explanation for the entire period from the original limitation

period i.e., from the date of the award is to be considered for

the purpose of condonation of delay for prosecuting in an

alternate jurisdiction, while considering the application

under Section 14 of the Act or in the present circumstance

since the earlier Court had exercised the power under Order

7 Rule 10 and 10A of the Civil Procedure Code, the

consideration should be for the delay condonation between Page 9 of 19

the period 02.04.2008 to 10.04.2008 merely being the delay

in representation.

8. The learned counsel for respondent in that regard has

contended that when a plaint is returned under Order 7

Rule 10 CPC to be filed before the Court having jurisdiction

and in that circumstance when the plaint is presented in the

Court having jurisdiction the petition can be deemed to be

instituted in the proper Court as a fresh petition when the

plaint is presented in such Court. To buttress such

contention, the learned counsel has relied on the decision in

the case of Shri Amar Chand Inami vs. Union of India

(1973) 1 SCC 115 with reference to para 9 thereof. We have

carefully perused the said decision in the background of the

said contention. Though such decision was rendered in the

facts arising therein and the decision was rendered on

13.10.1972 in the context of the provision contained in

Order 7 Rule 10 CPC as it existed, it is to be noted that

amendment was made on 01.02.1977 whereunder Rule 10A

was substituted under Order 7 Rule 10 of CPC. A perusal of

the same will indicate that after amendment the matter is

Page 10 of 19

not left in a limbo after the plaint is returned in terms of

Rule 10(2) which existed earlier. Presently through Rule

10A to Order 7 of CPC on an application being made a date

is to be specified for its presentation so as to enable the

appearance before the Court in which it would be re

presented. Therefore, the representation of the petition in

the Court which is indicated in the order for return cannot

be considered as a fresh filing in all circumstances when, it

is returned to the plaintiff for such rerepresentation. This

Court in the case of Joginder Tuli vs. S.L. Bhatia and

another (1997) 1 SCC 502 has held that normally, when the

plaint is directed to be returned for presentation to the

proper court perhaps it has to start from the beginning but

in the cited case, since the evidence was already adduced by

the parties, the matter was tried accordingly. The High

Court had in that case directed to proceed from the stage at

which the suit stood transferred and this Court did not find

any illegality in such order passed by High Court to treat the

same as a continuation of the proceedings.

Page 11 of 19

9. In the instant case though the appellant herein had not

filed the application indicating the Court to which the

petition would be represented and did not seek for fixing

the date of hearing, the Court at Jaipur while ordering

return of the petition after consideration of the application of

the respondent under Order 7 Rule 11 CPC had indicated

the Court to which it was to be presented and the date for

appearance on 02.04.2008 for that purpose. Hence, it is not

as if the proceeding came to an abrupt end when the petition

was returned so as to consider the next filing as a fresh

petition. In that circumstance when the time had been

granted and date was fixed by the learned District Judge at

Jaipur and if for any reason the representation was not

possible on that date, the course open to the appellant was

to file an application under Section 148 of CPC before the

Court at Jaipur which ordered for return and fixed the time

for presentation in the Court at Jodhpur, seeking extension

of time granted earlier. However, since the same was not

resorted to by the appellant and the petition was re

presented before the District Court at Jodhpur with a delay

of about 8 days from the date fixed for presentation and as Page 12 of 19

no extension was also sought as indicated above,

condonation of such delay ought to have been sought. Since

the petition was filed with delay and no other application

had accompanied the petition, the respondent filed the

application under Section 3 of Limitation Act which

prompted a knee jerk reaction by the appellant in filing the

application under Section 14 of the Limitation Act. Though

the said application has invoked Section 14 of Limitation Act

and thereafter supported by an additional affidavit, the

averments in the application is in the nature of an

application seeking condonation of delay in representation

of the petition as against the date fixed by the Court for

presentation in Jodhpur.

10. The learned counsel for the appellant has relied on the

decision in the case of S. Ganesharaju (dead) through

LRs. and Anr. vs. Narsamma (dead) through LRs. and

Ors. (2013) 11 SCC 341 to contend that the expression

“sufficient cause” as contemplated under Section 5 of the

Limitation Act should be given liberal construction so as to

advance substantial justice and the delay should be

Page 13 of 19

condoned unless the opposite party is able to show malafide

in not approaching the Court within time. It is further

contended that it is held therein that the rules of limitation

are not meant to destroy or foreclose the right of parties.

The learned counsel for the respondent on the other hand

would contend that the said decision rendered is in the

context of consideration of “sufficient cause” as

contemplated under Section 5 of the Limitation Act which

would not be applicable to proceedings under Section 34 of

the Act, 1996. In that regard, the learned counsel for the

respondent has relied on the decision in the case of Union

of India vs. Popular Construction Company, (2001) 8

SCC 470 wherein it is held that Section 5 of the Limitation

Act is not applicable to the proceedings under Section 34 of

the Act, 1996 for setting aside the arbitral award. Further

the decision in the case of Simplex Infrastructure Ltd. vs.

Union of India, (2019) 2 SCC 455 is also relied upon to

contend that Section 5 of the Limitation Act has no

application to a petition challenging the arbitral award

under Section 34 of the Act, 1996. The said decision would

Page 14 of 19

however indicate that Section 14 of the Limitation Act is

applicable to an application submitted under Section 34 of

the Act, 1996 seeking for exclusion of certain period if the

application under Section 34 of the Act, 1996 is at the first

instance filed within the limitation period provided under

Section 34(3) of the Act, 1996. The position of law that

Section 5 of the Limitation Act is not applicable to condone

the statutory period under Section 34(3) of Act, 1996 is well

established and needs no reiteration.

11. Having noticed the said decisions, in the instant case

as already indicated above the condonation of delay sought

is not for filing the petition under Section 34 of the Act, 1996

for the first time. The petition filed under Section 34 of the

Act, 1996 at Jaipur was within the period of limitation and

the delay regarding which explanation is put forth is for the

period of 8 days in representing the petition beyond the

date fixed after it was returned under Order 7 Rule 10 of the

Civil Procedure Code. Therefore, in that circumstance even

if the term “sufficient cause” as contained under Section 5 of

the Limitation Act is taken note, in the present facts the

Page 15 of 19

same is not with reference to petition under Section 34 of

Act, 1996 for condonation of delay beyond the period

prescribed under Section 34(3) of the Act, 1996. Though

that be the position what is necessary to be taken note

herein is that the application filed for excluding the time is

under Section 14 of the Limitation Act. In addition to the

very decisions cited above indicating that Section 14 of the

Limitation Act would be applicable to the proceedings under

Section 34 of the Act, 1996 subject to the petition under

Section 34 being filed within time, the learned counsel for

the appellant has also relied upon the decision in the case of

M/s Consolidated Engineering Enterprises vs. The

Principal Secretary, Irrigation Department & Ors.

(2008) 7 SCC 169 wherein the same position is reiterated.

12. The learned counsel for the respondent would however,

refer to the very same decision and contend that even if

Section 14 of the Limitation Act is applicable, the exclusion

of time can only be of the proceedings which is bonafide

initiated in a Court without jurisdiction. It is contended that

in the instant case the entire cause of action had occurred at

Page 16 of 19

Jodhpur and despite the same the appellant had deliberately

initiated the proceedings at Jaipur which cannot be

considered as a bonafide mistake. Though such contention

is put forth, what cannot be lost sight in the instant facts is

that the learned Judge of the Additional District Court,

Jaipur while considering the maintainability of the

proceedings before that Court, through the order dated

12.03.2008 has taken note of the very rival contentions with

regard to the cause of action as contended and also the

Court before which the proceedings was required to be

initiated. Though at this point of time the position of law

has been enunciated through several decisions, and there is

clarity, at that juncture the consideration with regard to the

definition of Court as contained in the Act was required to

be interpreted and on taking note of various decision of the

Supreme Court had arrived at the conclusion that keeping

in view the fact situation the petition is to be returned for

presentation in the appropriate Court. The very nature of

consideration made by the Court at Jaipur would indicate

that the matter required a detail consideration before

exercising the power under Order 7 Rule 10 and 10A of the Page 17 of 19

Civil Procedure Code and the Court during the said

proceedings has not arrived at a conclusion that the

proceedings had been initiated malafide before that Court.

However, keeping in view the overall facts and circumstance

of the present case the Court had ordered return of the

petition for appropriate presentation and the date had been

fixed. The correctness of the said order had not been

assailed by the respondent herein seeking absolute rejection

of the petition by raising grounds on the nature of findings

rendered therein since that Court had not held the petition

to be malafide.

13. In such circumstance, in the fact situation wherein the

issue of delay had arisen only in the context of the delay of 8

days in representation as permitted by the Court at Jaipur,

reexamination of the matter to consider the entire period

spent before the Court at Jaipur as malafide so as to

nonsuit the appellant and deny consideration of proceedings

under Section 34 of Act, 1996 which was initiated within the

period of limitation at the first instance, on its merits will

not be justified.

Page 18 of 19

14. In that view, the order dated 15.07.2008 passed on the

application filed under Section 14 and Section 3 of the

Limitation Act passed by the Additional District and

Sessions Judge S.No.3, Jodhpur and the order dated

06.02.2009 passed by the High Court in S.B. (Civil) Misc.

Appeal No.1103/2008 are not sustainable. They are

accordingly, set aside. Consequently, the proceedings in

Arbitration Application No.18A of 2008 is restored to the file

of the Additional District Judge S.No.3, Jodhpur.

15. The parties shall appear before the said Court on

15.10.2019 as the first date for appearance without issue of

notice/summons from that Court. The proceedings thereto

shall be considered on merits in an expeditious manner. All

contentions in that regard are left open.

16. The appeal is, accordingly allowed with no order as to

costs. All pending applications shall stand disposed of.

……………………….J. (R. BANUMATHI)

……………………….J. (A.S. BOPANNA)

New Delhi, October 03, 2019

Page 19 of 19

ORIENTAL INSURANCE CO.LTD. Vs M/S TEJPARAS ASSOCIATES

ORIENTAL INSURANCE CO.LTD. Vs M/S TEJPARAS ASSOCIATES