PETITIONER:
MOHD. USMAN MILITARY CONTRACTOR, JHANSI
Vs.
RESPONDENT:
UNION OF INDIA, MINISTRY OF DEFENCE
DATE OF JUDGMENT:
26/09/1968
BENCH:
BACHAWAT, R.S.
BENCH:
BACHAWAT, R.S.
SIKRI, S.M.
CITATION:
1969 AIR 474 1969 SCR (2) 232
CITATOR INFO :
D 1988 SC1172 (5)
ACT:
Indian Arbitration Act, 1940, ss. 8 and
20–Applications under–Whether subject to limitation laid
down, in Art. 181–Limitation Act, 1908–Effect of–General
Clauses Act, 1897, s. 8(1).
HEADNOTE:
The appellant entered into a contract with the
Government of India. The contract contained an arbitration
clause.For certain supplies made under the contract the
appellant made representations to the Government or
payment and for arbitration of disputes.On or
about July 10, 1958 Government refused to refer
the matter for arbitration. On July 11, 1961 the appellant
flied an application in the Court of the District Judge
under ss. 8 and 20 of the Arbitration Act, 1940, for filing
the arbitration agreement and for an order of reference of
the disputes to an arbitrator appointed by the court. The
respondent contended that the application was barred by
Limitation. The District Judge allowed the application,
holding that there was no limitation for making an
application under ss. 8 and 20. The defendant’s appeal was
dismissed by the High Court as incompetent in so far as
it challenged the order under s. 8 but was allowed in so
far as it challenged the order under s. 20. The High Court
held that an application under s. 20 is governed ‘by Art.
181 of the Indian Limitation Act, 1908. In coming to this
conclusion the High Court took into account the settled
judicial view that the. operation of Art. 181 is limited to
applications under the Code of Civil Procedure. and reasoned
as follows: Article 181 should be construed as if the words
‘under the Code’ were added in it. The Arbitration Act,
1940 repealed paragraph 17 of the second schedule to the
Code and re-enacted it in s. 70 with minor modifications.
That being so s. 8(1) of the General Clauses Act, 1897
applied and the implied reference in Art. 181 to paragraph
17 of the second schedule to the Code should be construed as
a reference to s. 20 of the Arbitration Act, 1940. Appeal
against the High Court’s judgment was filed with
certificate.
HELD: The ‘appeal must be allowed.
By the Arbitration Act, 1940 the Legislature amended
Arts. 158 and 178 of the Limitation Act and made them
applicable to the relevant proceedings under the Arbitration
Act but no similar change was made in Art. 181. It is
manifest that save as provided in Arts. 158 and 178 there
would not be any limitation for other applications under the
Act. Further there is nothing to indicate that for the
purpose of limitation s. 20 of the 1940 Act should be
regarded as a re-enactment of the corresponding provision of
the Code and not of the Indian Arbitration Act, 1899. [236
D-G]
In the circumstances it is not possible to construe the
implied reference in Art. 181 to the Code of Civil Procedure
as a reference to the Arbitration Act, 1940 or to hold that
Art. 181 applies to applications under that Act. The rule
of construction given in s. 8(1)of the General Clauses Act
cannot be applied, as it appears that the legislature had a
233
different intention. It follows that an application under
ss. 8 and 20 of the Arbitration Act, 1940 is not governed by
Art. 181. The Limitation Act does not prescribe any period
of limitation for such an application. [236 G-H]
The present application under ss. 8 and 20 was therefore
not barred by limitation. [237 A]
Bai Manekbai v. Manekji Kavasji, [1880] I.L.R. 7 Born.
213, 214 Hansraj Gupta v. Official Liquidator Dehra Dun
Mussourie Electric Tramway Company, (1933) L.R. 60 I.A. 13,
20, Shah Mulchand & Co. v. Jawahar Mills Ltd. [1953]
S.C.R. 351, 371, Bombay Gas Co. v. Gopal Bhiva, [1964] 3
S.C.R. 709 and Wazirchand Mahajan & Anr. v. Union of India,
[1967] 1 S.C.R. 303, referred
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14 of
1968.
Appeal from the judgment and decree, dated December 12,
1964 of the Allahabad High Court in F.A.F.O. No. 401 of
1963.
R.M. Hazarnavis, K.L. Hathi and Atiqur Rehman, for the
respondent.
The Judgment of the Court was delivered by
Bachawat, J. By a contract, dated March 8, 1945, the
appellant agreed to supply meat to the Government of India.
The contract contained an arbitration clause for reference
of disputes arising out of the contract to the officer named
in the contract. The appellant claims that a sum of Rs.
8,38,994/10/6/- is due to him in respect of the supplies of
meat made by him during the period between April 1, 1945 and
March 31, 1946. He made representations to. the Government
for payment and for arbitration of the disputes. On or
about July 10, 1958 the Government refused to. refer the
matter to. arbitration. On July 11, 1961 the appellant
filed an application in the Court of the District Judge,
Jhansi, under ss. 8 and 20 of the Arbitration Act, 1940 for
filing the arbitration agreement and for an order of
reference of the disputes to an arbitrator appointed by the
Court. The respondent contended that the application was
barred by limitation. The District Judge allowed the
application. He held that there was no period of limitation
for making an application under ss. 8 and 20. The defendant
filed an appeal against the order. The High Court dismissed
the appeal as incompetent in so far as it challenged the
order under s. 8, and allowed it in so far as it challenged
the order under s. 20. The High Court held that the
application was governed by Art. 181 of the Indian
Limitation Act, 1908 and was barred by limitation as it was
made more than three years after the disputes had arisen.
The appellant has filed this appeal after obtaining a
certificate from the High Court.
The point in issue is whether an application under s.
20 of the Arbitration Act, 1940 is governed by Art. 181 of
the Indian
L2Sup. CI 69–16
234
Limitation Act. Since the decision in Bai Manekbai v.
Manekli Kavasji(1) it is well settled that the operation of
Art. 181 is limited to applications under the Code of
Civil Procedure. In that case Westropp, C.J. after
referring to the corresponding Art. 178 in the second
schedule to the Limitation Act of 1877 observed:
“An examination of all the other articles
in the second schedule relating to
“applications”, that is to say of the Third
division of that schedule, shows that the
applications therein contemplated are such as
are made under the Code of Civil Procedure.
Hence it is natural to conclude that the
applications referred to in Article 178 are
applications ejusdem generis, i.e.,
applications under the Code of Civil
Procedure. The preamble of the Act, moreover,
purports to deal with ‘certain applications’
only, and not with all applications.”
This decision was followed in numerous cases and was
approved in Hansraj Gupta v. Official Liquidator Dehra Dun,
Mussourie Electric Tramway Company(2). Having regard to
these decisions, Das, J. said in Shah Mulchand & Co., v.
Jawahar Mills Ltd. (3): “This long catena of decisions may
well be said to have as it were, added the word ‘under the
Code’ in the first column of that Article=.” The Court held
that the amendment of Arts. 15 8 and 178 and the insertion
of the words “under the Arbitration Act, 1940″ in place of
the words “under the Code of Civil Procedure, 1908″ did not
alter the settled meaning of Art. 181. To the same effect
is the decision in Bombay Gas Ca.: v. Gopal Bhiva.(4)
Following these decisions the Court held in Wazirchand
Mahajan & Anr. v. Union of India(5) that an application
under s. 20 of the Arbitration Act, 1940 not being an
application under the Code of Civil Procedure was not
governed by Art. 181.
The High Court has come to the conclusion that an
application under s. 20 of the Arbitration Act is governed
by Art. 181 for the following reasons: Article 181 should be
construed as if the words “under the Code” were added in it.
The Arbitration Act, 1940 repealed paragraph 17 of the
second schedule to the Code and re-enacted it in s. 20 with
minor modifications. That being so, s. 8(1) of the General
Clauses Act. 1897 applied and the implied reference in Art.
181 to paragraph 17 of the second schedule to the Code
should be construed as a reference to s. 20 of the
Arbitration Act, 1940. No different intention is to be
found in the Arbitration Act, 1940 and there is nothing to
indi-
(1) [1880] I.L.R. 7 Bom. 213, 214.
(2) [1933] L.R. 60 I.A.13, 20.
(3) [1953] S.C.R. 351,371.
(4) [1964] 3 S.C.R. 709.
(5) [1967] 1 S.C.R. 303.
235
cate that an application under s. 20 can be made at any time
without any limitation.
The argument that the implied reference in Art. 181
to paragraph 17 of the second schedule to the Code should be
construed as a reference to s. 20 of the Arbitration Act and
not raised and considered in Wazirchand Mahalan’s case(1).
It is, therefore, our duty to examine this contention.
Section 8 (1) of the General Clauses Act corresponds to
the Interpretation Act, 1889 (52 & 53 vict. c. 63) and
runs as follows: “Where this Act, or any Central Act or
Regulation made after the commencement of this Act, repeals
and re-enacts, with or without modification, any provision
of a former enactment, then references in any other
enactment or in any instrument to the provision so repealed,
shall, unless a different intention appears, be construed as
references to the provision so reenacted.” The section
embodies the rule of construction that where the provision
of an Act is repealed and re-enacted with or without
modification, a reference to the repealed provision in any
other enactment should be regarded as a reference to the
provision re-enacted in the new form unless it appears that
the legislature had a different intention.
The Arbitration Act, 1940 was passed with a view to
consolidate and amend the law relating to arbitration.
Formerly the general law relating to arbitration was to be
found in the Indian Arbitration Act, 1899 and the Code of
Civil Procedure, 1908. Paragraphs 1 to 16 of the second
schedule to the Code applied to all arbitrations in suits.
As to arbitrations otherwise than in suits, the Indian
Arbitration Act, 1899 applied to cases where, if the
subject-matter submitted to arbitration were the subject of
a suit, the suit could be instituted in a Presidency town;
in other cases, the Code of Civil Procedure, 1908 applied
The Arbitration Act, 1940 repealed both the enactments. It
extends to the whole of India except the State of Jammu and
Kashmir, and save as provided in s. 47 applies to all
arbitrations. As to the provisions of the new Act under
which applications can be made to Court, ss. 8, 14, 16, 28
and 30, correspond to provisions which are found in both the
repealed enactments, ss. 5 and 9 correspond to similar
provisions in the Indian Arbitration Act, 1899, and ss. 15
and 20 correspond to similar provisions in the second
schedule to the Code and some sections such as sec. 11, are
entirely new. In the circumstances, a question may arise
whether the provisions of the new Act can be regarded as
reenactments of the repeated provisions of the Indian
Arbitration Act, 1899 or of the Code. But for the purpose
of this case we shall ,assume that s. 20 of the new Act is a
re-enactment with
(1) [1967] 1 S.C.R. 303.
236
modification of paragraph 17 of the second schedule to the
Code.We shall also assume that Art. 181 of the Limitation
Act as construed by the Courts should be regarded as
containing a reference to the Code of Civil procedure
including paragraph 17 of the second schedule thereof. Even
after making those two assumptions it appears to us that the
implied reference in Art. 181 to the Code of Civil Procedure
cannot be construed as a reference to the Arbitration Act,
1940.
Before their amendment by the Indian Arbitration Act, 1940,
Art. 158 of the Limitation Act applied to applications
“under the Code of Civil Procedure, 1908 to set aside an
award” and Art. 178 applied to applications. “under the same
Code for the filing in Court of an award”.The Arbitration
Act, 1940 amended Arts. 158 and 178. The amended Art. 158
applies to applications “under the Arbitration Act, 1940 to
set aside an award or to get an award remitted for
consideration”, that is to say, to application under ss. 16
and 30 of the Act. The amended Art. 178 applies to
applications “under the Arbitration Act, 1940 for the filing
in Court of an award”, that is to say to applications under
s. 14 of the Act. In amending Arts. 158 and 178 the
legislature acted upon the view that the references to the
Code of Civil Procedure, 1908 in the second schedule t9 the
Limitation Act could not in the absence of the amendment be
construed as references to. the Arbitration Act, 1940. At
the same time the legislature refrained from amending Art.
181 and providing that the article will apply to other
applications under the Arbitration Act, 1940. It is
manifest that the legislature intended that save as provided
in articles 158 and 178 there would not be any limitation
for other applications under the Act, Take the case of an
application under s. 28 of the Act for enlargement of the
time for making the award. A similar application under
paragraph 8 of the second schedule to the Code was governed
by Art. 181,but a like application under s. 12 of the Indian
Arbitration Act,1899 was not subject to any period of
limitation. There is nothing to indicate that for the
purpose of limitation s. 20 of the new Act should be
regarded as a re-enactment of the corresponding provision of
the. Code and not of the Indian Arbitration Act, 1899. An
application under s. 8 of the new Act corresponding to
paragraph 5 of the second schedule to the Code and s. 8 of
the Indian Arbitration Act, 1899 stand on the same footing.
In the circumstances, it is not possible to construe the
implied reference in Art. 181 to the Code of Civil Procedure
as a reference to the Arbitration Act, 1940, or to hold that
Art. 181 applies to applications under that Act. The rule of
construction given in s. 8 (1) of the General Clauses Act
cannot be applied, as it appears that the legislature had a
different intention. It follows that an application under
ss. 8 and 20 of the Arbitration Act, 1940 is not
237
governed by Art. 181. The Limitation Act does not prescribe
any period of limitation for such an application. It
follows that the present application under ss. 8 and 20 is
not barred by limitation.
In conclusion we must observe that the appellant’s claim
relates to supplies during the period between April 1, 1945
and March 31, 1946. There is a serious contention whether
the claim is barred by limitation. It will be the duty of
the arbitrator to consider this matter carefully and to
decide whether or not the claim is so barred.
In the result, the appeal is allowed, the order of the
High Court is set aside and the order of the District.
Judge, Jhansi, is restored. In the circumstances of the
case, there will be no order as to costs in this Court.
G.C. Appeal allowed.
238