Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1734 OF 2006

Union of India & Anr.                        …     Appellants

Versus

M/s Deepak Electric & Trading Company  & Anr.         … Respondents

J U D G M E N T

A. K. PATNAIK, J.

This is an appeal against the order dated 03.01.2003 of  

the Division Bench of the High Court of Delhi in FAO(OS) No.  

551 of 2001 (for short ‘the impugned order’).

2. The  facts  very  briefly  are  that  the  appellants  and  the  

respondent  No.1 entered into  a contract  for  construction of  

PMT Complex for NSG at Manesar.  The contract contained an  

arbitration clause for resolving disputes between the parties.  

As disputes arose between the parties,  the respondent No.1  

invoked  the  arbitration  clause  and  an  arbitrator  was  

appointed.  The arbitrator published his award on 17.06.1996

and  on  08.07.1996,  the  respondents  filed  a  petition  in  the  

High  Court  of  Delhi  under  Sections  14  and  17  of  the  

Arbitration Act, 1940 (for short ‘the Act’) for filing the award  

and for making the award a rule of the court and for passing a  

decree in terms of the award.  The petition was registered as  

Suit No.1673-A/1996.  After the award was filed, notice of the  

filing of the award was directed to be issued to the parties on  

13.01.1997.   Notice  was  served on the  Union of  India,  but  

notice  could  not  be  served  on  the  Executive  Engineer,  

C.P.W.D.   A  letter  dated  21.03.1997 was  addressed  by  the  

Executive Engineer to the Registrar of the Delhi High Court  

saying that he had not received a formal notice from the court.  

On 17.07.1997, fresh notice was again directed to be issued to  

the Executive Engineer.

3. While  service  of  notice  on the  Executive  Engineer  was  

awaited,  Union of  India filed objections to the award of  the  

arbitrator numbered as IA 9423 of 1997.  The respondent No.1  

contended that the objections filed by the Union of India to the  

award of the arbitrator were not within the period of limitation,  

i.e. 30 days from the date of service of the notice of filing of the  

award.  The appellants, on the other hand, contended that the  

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Executive  Engineer  had  not  been served with  the  notice  of  

filing of award and, therefore, limitation had not been begun to  

run.  The learned Single Judge of  the High Court held that  

under Section 79 of the Code of Civil Procedure (for short ‘the  

CPC’)  when suits  are  filed  against  the  Central  Government,  

only the Union of India has to be arrayed as a party and the  

Executive Engineer by no stretch of imagination can be taken  

to be a party in such proceedings.  The learned Single Judge  

further held that as the Union of India had filed objections, the  

Court  was  only  considering  the  objections  of  the  Union  of  

India and the Union of India had been served with a notice of  

filing of  the  award in November,  1996.   The learned Single  

Judge, therefore, held that the objections of the Union of India  

to the award were time barred and made the award a rule of  

the court.  

4. Aggrieved, the appellants filed FAO(OS) No. 551 of 2001  

before the Division Bench of the High Court.   After hearing  

learned counsel for the parties, the Division Bench held in the  

impugned order that in Union of India vs. Surinder Kumar [61  

(1996) DLT 42 (D.B.)], the Delhi High Court has already taken  

a view that it was necessary that a notice of filing of the award  

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has  to  be  served  on  the  Executive  Engineer  as  it  was  the  

Executive Engineer who on behalf of the Union of India was  

looking  after  the  proceedings  before  the  arbitrator.   The  

Division Bench, however, held that as the learned counsel on  

behalf of the Executive Engineer had inspected the record of  

the case in the court on 21.05.1997, the Executive Engineer  

will be deemed to have acquired knowledge of the filing of the  

award on 21.05.1997 and the period of 30 days counted from  

21.05.1997 had expired by the time objections were filed by  

the Union of India and the objections to the award were time  

barred.   Accordingly,  the  Division Bench of  the  High Court  

dismissed the appeal of the appellants by the impugned order.

5. We have heard Mr. A.S. Chandhiok, learned Additional  

Solicitor General for the appellants.  No one has appeared for  

the respondents despite notice.

6. The only question, which we have to decide in this case,  

is whether the Division Bench of the High Court has taken a  

correct view in the impugned order that the objections to the  

award were time barred.  Article 119 of the Schedule to the  

Limitation Act, 1963, which prescribes the period of limitation  

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for  filing  applications  under  the  Arbitration  Act,  1940,  is  

quoted hereinbelow:  

“ Description  of  of  application

Period of of  limitation

Time  from  which  period begins to run

119. Under the Arbitration  Act, 1940 (10 of  1940)-

(a) for the filing in  court of an award.

(b) for setting aside  an award or getting an  award remitted for  reconsideration

Thirty  days

Thirty  days

The  date  of  service  of  the notice  of  the  making  of  the  award.

The  date  of  service  of  the notice  of  the  filing of the award.”

It will be clear from clause (b) of article 119 of the Schedule to  

the Limitation Act, 1963 that an application for setting aside of  

an award has to  be  filed  within  30 days  from “the  date  of  

service  of  the  notice  of  the  filing of  the  award”.   Thus,  the  

starting point of limitation is the date of service of the notice of  

the filing of the award and not the date of knowledge of the  

filing of the award.

7. In  support  of  this  view  that  the  starting  point  of  

limitation for filing objections to an award under the Act is the  

date of service of notice of the filing of the award, we may cite  

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an  authority.   In  Deo  Narain  Choudhury vs.  Shree  Narain   

Choudhaury [(2008)  8  SCC  626],  the  facts  were  that  on  

16.07.1996 the Court sent a notice to the parties about filing  

of the award and the notice was received by the respondent on  

25.07.1996  and  the  respondent  filed  his  objections  to  the  

award  on  21.08.1996.   The  appellant  contended  that  the  

objections had been filed beyond the period of limitation as the  

respondent had received the notice from the arbitrator that the  

award  had  been  filed  and  the  respondent  had  also  filed  a  

caveat on 11.06.1996.  This Court held that mere filing of the  

caveat did not start the period of limitation and as the notice  

was received by the respondent on 25.07.1996, the period of  

limitation started running from that date and, therefore, the  

objections filed on 21.08.1996 were within the period of  30  

days as provided by article 119 of the Limitation Act, 1963.

8. The Division Bench of the High Court has taken a view in  

the  impugned  order  that  as  the  Executive  Engineer  was  

looking after the arbitration proceedings,  he was the one who  

could have filed the objections to the award on behalf of the  

Union of India and thus notice of the filing of the award on the  

Executive Engineer was mandatory and the starting point of  

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limitation for filing the application for setting aside the award  

would  be  the  date  of  service  of  notice  on  the  Executive  

Engineer as provided in article 119(b) of the Schedule to the  

Limitation Act, 1963.  The High Court, therefore, was not right  

in coming to the conclusion that as the Executive Engineer  

had knowledge of the filing of the award on 21.05.1997 and as  

the objections were filed beyond the period of 30 days counted  

from 21.05.1997, the objections to the award were barred by  

time.

9. We, accordingly, set aside the order of the learned Single  

Judge as well as the impugned order of the Division Bench of  

the High Court and remand the matter to the Single Judge of  

the High Court for fresh decision in accordance with law.  The  

appeal is allowed with no order as to costs.

.……………………….J.                                                            (P. Sathasivam)

………………………..J.                                                            (A. K. Patnaik) New Delhi, October 20, 2011.    

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