IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 12.11.2010 CORAM: THE HON'BLE MR.JUSTICE V.PERIYA KARUPPIAH C.R.P.NPD.No.2766 of 2010 and M.P.No.1 of 2010 Sri Nallathal Spinning Mills represented by its Managing Director P.Murugesan No.4-129, Mekkadu Tiruchengode Main Road, Almpalayam Post, Tiruchengode Taluk, Namakkal District. ... Petitioner Vs. 1. Sri Constructions, Rep. by its Proprietor S.R.Rajendran, No.3/10-E, Sri Venkatachalapathy Street, New Fair Lands Extention, Salem-16. 2.The Arbitrator Mr.Justice A.K.Rajan, Block-S, 16th Street, Anna Nagar, Chennai-600 040. ... Respondents PRAYER : This Civil Revision Petition has been filed by the petitioner under Article 227 of Constitution of India praying to set aside the order dated 09.07.2010 made in I.A.No.61 of 2007 in unnumbered Arb.O.P.No....... of 2007 by the learned Principal District Judge, Namakkal. For Petitioner : Mr.M.S.Krishnan, Sr.Counsel for M/s.Sarvabhauman Associates For Respondents : Mr.R.Subramanian for M/s.A.Usha Tholgappian for R1. O R D E R
This Revision Petition has been filed against the order dated 09.07.2010 in dismissing the application in I.A.No.61 of 2007, an application filed under Sections 148 and 151 of the Code of Civil Procedure and thereby refusing to condone the delay of 422 days in representing the appeal papers.
2. The brief facts of the averments raised before the Court below by the revision petitioner in support of his case for condonation of delay are as follows:-
Originally, the petitioner engages Thiru.R.Sankaranarayanan as his Counsel to deal with the arbitration proceedings before the High Court, Madras, and he entrusted all the papers and documents with him pertaining to the Arbitration proceedings. Subsequently, on 07.04.2006, an Award was passed in Arbitration No.4 of 2005. On 27.04.2006, the petitioner challenged the award by filing appropriate petition under Section 34 of the Arbitration and Conciliation Act, 1996 well within the limitation period by engaging another counsel before the learned Principal District Judge, Namakkal. However, the appeal papers were returned on 01.06.2006, by the learned Principal District Judge, for compliance of certain defects. In representing the appeal papers, there has been a delay caused to the extent of 422 days as he could not able to contact his then counsel who defended him in the arbitration proceedings. At last, he was given to understand that his then counsel very often used to visit foreign countries in connection with his profession apart from attending Supreme Court and other High Courts. He was able to meet him when his then counsel when he came down to Komarapalayam to attend a wedding and immediately thereafter, he had managed to meet him at Chennai and obtained the material documents. In that process, there had been a delay of 422 days in representing the appeal papers. In the mean time, he was served with attachment notice in R.E.P.No.23 of 2007. Hence, this petition to condone the delay of 422 days in representing the papers.
3. The respondent who obtained the award in the arbitration proceedings filed his counter denying the cause for the delay and contending that the appeal was returned for rectification only few formal defects. Had the petitioner filed the data memo and enclosures apart from providing two thick fly sheets, the appeal would have been numbered. New grounds of objections have been incorporated in the petition at the time of representation. The reasons stated in the petitioner for the delay are not acceptable. When the petitionerengaged a local counsel to agitate the award proceedings, the question of meeting his then counsel who defended him in the arbitration proceedings would not at all arise when that too the defects noticed by the Court were all formal defects and the same could have been rectified within a reasonable time. Hence, the petition is liable to be dismissed.
4. Heard Mr.M.S.Krishnan, learned Senior Counsel for the petitioner and Mr.R.Subramanian, learned counsel for the 1st respondent.
5. The learned Senior Counsel Mr.M.S.Krishnan would submit in his argument that the lower Court has erred in not accepting the prayer of the petitioner for condonation of delay in re-presentation of the application which is inconsistent with law. He would further submit in his argument that the application was filed in time and it was returned for certain defects in the application and the counsel, who was engaged by the petitioner, namely Mr.R.Sankaranarayanan, was out of station and gone abroad and therefore, it was not represented by the local counsel immediately, and the petitioner could meet the counsel only after a longer period and asked about his application and thereafter only, the counsel acted and had re-presented the application with an application for condonation of delay and therefore, the petitioner should not be penalised for the omission of the counsel. He would further submit that it is only a delay in re-presentation and therefore, it is a matter in between the petitioner and the Court and however, the respondent was also given an opportunity to state his objections. He would also submit in his argument that the lower Court did not exercise its discretion to condone the delay, even though the re-presentation of delay would not extend the period of limitation, as the application was presented in time. He would further submit in his argument that the delay of 422 days caused in re-presentation of the application was not wilful, on the part of the petitioner and he has got a very good case in the application. He would also submit that the petitioner has questioned the arbitration agreement itself and on the foot of the said ground, the application is likely to be allowed and therefore, the meritorious claim of the petitioner should not be shut by rejecting the application at the threshold, by refusing the condonation of delay in re-presentation. He would also submit that the lower Court has found that the reasons submitted for condoning the delay are not convincing and acceptable, cannot prejudice the petitioner, since the petitioner was not responsible for the omission of representation and the petitioner should not be penalised for the act of his counsel. He would draw the attention of this Court to a judgment of Hon’ble Apex Court reported in AIR 1972 SC 749 in between The State of West Bengal v. The Administrator, Howrah Municipality and others, for the principle that the expression “Sufficient Cause” should receive a liberal construction, so as to advance substantial justice, when no negligence or inaction or want of bona-fide is imputable to a party. He would also bring it to the notice of this Court yet another judgment of Hon’ble Apex Court reported in 1998(7) SCC 123 in between N.Balakrishnan v. M.Krishnamurthy, for the same principle. The learned Senior Counsel would bring it to the notice of this Court to a judgment of Hon’ble Apex Court reported in 2002(1) CTC 769 in between Ram Nath Sao @ Ram Nath Sahu and others v. Goberdhan Sao and others, for the same principle. He would also cite a judgment of this Court reported in 2006(4) LW 230 in between M.N.Abdul Wahab v. Salem City Municipality Corporation for the principle that the negligence of other persons should not be considered as that of the party, who is applying for condonation. He would also draw the attention of the Court to a judgment of this Court reported in 2009(4)CTC 722 in between S.Janaki v. M/s.Swetha Associates, represented by its partner, Mr.P.Sureshkumar and others, for the principle that the Court should not refuse to condone the delay in filing any application, even, if the defendant has contributed to such delay and in such circumstances, this Court should consider the position of the opposite party by compensating with cost for his laches, if any.
6. He would also submit that the delay caused in re-presentation of the appeal cannot be treated as the delay in filing the application and the delay should have been condoned in such cases liberally as it is a matter in between the Court and the petitioner as per various judgments of this Court. He would therefore, request that the order passed by the lower Court in rejecting the plea of the petitioner to condone the delay in re-presentation of 422 days has to be interfered and set aside and the revision be allowed with suitable conditions.
7. The learned Senior Counsel Mr.R.Subramaniam would submit in his argument that the lower Court was correct in dismissing the claim of the petitioner, since there is no merit in the appeal as well as the reasons for delay are not acceptable nature. He would further submit that the return of the applications by the Court was only on flimsy reasons that batta to be enclosed and 2 fly sheets to be attached and it did not require service of the Madras counsel to go comply and re-present the same and the reason submitted so cannot be accepted. He would also submit in his argument that the petitioner has added in the grounds of application after the re-presentation and such grounds would require proper limitation period and therefore, it could not be considered that the delay was caused only in re-presentation of the application. He would further submit in his argument that when the reasons submitted by the petitioner was not acceptable, there is no question of any maintainability of the application. The arbitrator was appointed by the order of the Hon’ble The Chief Justice as per Section 11 of Arbitration and Conciliation Act, and it cannot be questioned, in the application since it has got the perspective effect and therefore, there could be any merit in the appeal as argued by the petitioner.
8. He would cite a judgment of Hon’ble Apex Court reported in 2009(1) MLJ 936 (SC) in between Unissi (India) Pvt. Ltd., v. P.G. Institute of Medical Education & Research for the principle that the arbitration can be inferred from even the tender documents indicating certain conditions of contract contained arbitration clause and no formal agreement need be executed, for arbitration.
9. He would also cite a judgment of Hon’ble Apex Court reported in AIR 2001 SC 3730 in between Smita Conductors Ltd., v. Euro Alloys Ltd., for the same principle. He would also submit in his argument that the petitioner has stated false particulars in the affidavit and therefore, the lower Court did not accept the versions of the petitioner and had correctly rejected the claim of condonation.
10. He would also cite a judgment of this Court made in C.R.P.N.P.D.No.3309 of 2010 dated 24.09.2010 in between Janarthanan Vs. Chandrasekaran in support of his argument. He would further submit that the lower Court, has exercised its jurisdiction correctly and had come to a conclusion that the petitioner has not come to Court with correct particulars and therefore, the request submitted by the petitioner was not accepted and hence, there is no necessity for this Court to interfere with the orders passed by the lower Court and hence, the petition is liable to be dismissed.
11. I have given anxious thoughts to the arguments advanced on either side. The indisputed facts are that the petitioner has filed an application to set aside the award passed by the 2nd respondent on 07.04.2006 in Arbitration No.4 of 2005 under Section 34 of the Arbitration and Conciliation Act, on 27.04.2006 the said petition was returned by the lower Court on 01.06.2006, for certain defects. The said returned application was re-presented with the delay of 422 days and therefore, an application was filed by the petitioner before the lower Court seeking for condonation of delay in re-presentation.
12. Now, the dispute in between parties are that the said delay of 422 days was caused beyond the control of the petitioner, which was denied by the 1st respondent. The lower Court had considered the case of both sides and had come to a conclusion to dismiss the said application. According to the petitioner, the delay was caused due to the non-availability of his Madras counsel since he was not available in India and he could only meet the Madras counsel long after in a social function and thereafter only the local counsel could act for complying with the returns. The said plea was stoutly opposed by the 1st respondent that it is not sufficient to condone the delay. The lower Court accepted the contention of the respondent and had rejected the plea of the petitioner.
13. Now, the point for consideration is whether the discretion exercised by the lower Court in rejecting the claim of condonation in re-presentation of the application is in accordance with law. The condonation sought for by the petitioner was in respect of the condonation of the re-presentation of an application which was already filed into Court within the period of limitation as stipulated by law. However, it has been contended by the respondent that certain grounds have been newly raised and those grounds cannot be introduced subsequently, except with the permission of the Court, but it has been inserted and filed after the period of limitation. As regards, the judgments of the Hon’ble Supreme Court submitted by the learned Senior Counsel for the petitioner, they would categorically lay that the condonation of delay should have been considered liberally. According to the judgment reported in AIR 1972 SC 749 in between The State of West Bengal v. The Administrator, Howrah Municipality and others, the principle in construing the expression “Sufficient Cause” has been explained as follows:-
“30. From the above observations it is clear that the words “sufficient cause” should receive a liberal construction so as to advance substantial justice when no negligence or inaction or want of bona-fide is imputable to a party.”
14. The said view was up-held in a later judgment of the Hon’ble Apex Court reported in 1998(7) SCC 123 in between N.Balakrishnan v. M.Krishnamurthy. The relevant passage would run thus:-
“12. A Court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the Court is always deliberate. This Court has held that the words “sufficient cause” under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakunthala Devi Jain v.Kuntal Kumari and State of West Bengal v.Administrator, Howrah Municipality.
13. It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not forth as part of a dilatory strategy, the Court must show utmost consideration to the suitor……”
15. The said principle was also up-held in yet another judgment of the Hon’ble Apex Court reported in 2002(1) CTC 769 in between Ram Nath Sao @ Ram Nath Sahu and others v. Goberdhan Sao and others. The relevant passage would run as follows:-
“12. Thus it becomes plaint that the expression “sufficient cause” within the meaning of Section 5 of the Act or Order 22 Rule 9 of the Code or any other similar provision should receive a liberal construction so as to advance substantial justice when no negligence or inaction or want of bona fide is imputable to a party. In a particular case whether explanation furnished would constitute “sufficient cause” or not will be dependent upon facts of each case. There cannot be a straitjacket formula or accepting or rejecting explanation furnished for the delay caused in taking steps. But one thing is clear that the Courts should not proceed with the tendency of finding fault with the cause shown and reject the petition by a slipshod order in over jubilation of disposal drive. Acceptance of explanation furnished should be the rule and refusal an exception more so when no negligence or inaction or want of bona fide can be imputed to the defaulting party. On the other hand, while considering the matter the Courts should not lose sight of the fact that by not taking steps within the time prescribed a valuable right has accrued to the other party which should not be lightly defeated by condoning delay in a routine like manner. However, by taking a pedantic and hyper technical view of the matter the explanation furnished should not be rejected when stakes are high and / or arguable points of facts and law are involved in the case, causing enormous loss and irreparable injury to the party against whom the lis terminates either by default or inaction and defeating valuable right of such a party to have the decision on merit. While, considering the matter, Courts have to strike a balance between resultant effect of the order it is going to pass upon the parties either way.”
Following the said principle, this Court has also come to the conclusion that the litigant should not be shut from offering his defence by refusing to condone the delay in a judgment reported in 2009(4)CTC 722.
16. Apart from this, a judgment of a 1st Bench of this Court reported in 1993 TLNJ 375 in between Y.Cusbar v. K.Subbarayan has been to the point at issue, towards the principle that the delay in re-presentation of papers cannot be put to the account of the party and it has to be considered liberally. It has been categorically held as follows:-
“This is not a case where-in the appeal has been filed out of time. This is a case in which the appeal is filed in time. Therefore, it cannot be said that the decree under appeal has assumed finality and the right has been accrued to the respondent. The delay in representation of the papers in the instant case, cannot be put to the account of the party. Several times, it happens due to the mistake on the part of the advocate’s clerk or the advocates in presenting the appeal. Therefore, the Court has to take care to see that the justice does not suffer in such cases. If there is any undue delay in representation of the papers it can be compensated by awarding costs. Therefore, we are of the view that when the appeal has been filed in time, but there is inordinate delay in representation of the papers returned for rectification of the defects, by the appellate Court, the delay can be condoned on taking a lenient view by compensating the other side on payment of costs.”
17. It is true that this Court has also come to a conclusion in a judgment reported in 2002 (3) CTC 22 in between Buvaneshwari v.Elumalai, for the principle that the re-presentation delay is only an administrative order and it is not a judicial order. The relevant passage in the judgment would read thus:-
“14. The time granted by the Court for the representation of the plaint, is only an administrative order and not a judicial order, and as such, if there is any delay in the representation of the plaint, an application to excuse the said delay could be filed under Section 151, CPC and it need not necessarily be the one under Section 148, CPC. In fact, Section 151 CPC is an omnibus provision available in the code to make suitable orders, which was filed under Section 151, CPC would have been allowed by the Trial Court. Even otherwise, the substance of the petition is more important than the form. Mere quoting of the provision wrongly, is not fatal to the petition itself. In that view of the matter also, the Trial Court could have allowed the said petition in excusing the delay in representation of the plaint.”
18. The said view of this Court was also confirmed by yet another judgment of this Court reported in 2004 (3) MLJ 607 in between Muthusamy (died) and others v. Ammasi alias Muthu Gounder and others. It would even go to show that no notice need to be sent to the respondent in an application filed by the petitioner seeking condonation of delay in re-presentation of papers. The relevant passage would run thus:-
“There was a delay of 117 days in re-presenting the appeal papers, to condone which, I.A.No.170 of 1996 was filed and it was dismissed by the Sub-Court, Sankari. It is that order which is in challenge in this revision. In view of the judgments of this Court in the cases reported in 1978 T.N.L.J.332 and 1993 T.N.L.J.375, to the effect that, in matters like this, no notice need be sent to the party in opposition the approach of the learned Sub-Judge in refusing to condone the delay is erroneous. Consequently, the impugned order is set aside and the revision is allowed.”
19. However, the learned counsel for the 1st respondent had argued that the petitioner has no case in the application to set aside the award and therefore, the rejection of re-presentation would not cause any loss or prejudice to the petitioner. For that he had argued, for the appointment of arbitrator, under Section 11 is a judicial order and it would take perspective effect and it cannot be set aside and the only point raised by the petitioner in the said application would be no use and therefore, there cannot be any meritorious case for the petitioner to be closed at the threshold of rejecting the condonation. Apart from that the further contention of the 1st respondent would be that the existence of the arbitration agreement can be inferred by various circumstances. For that he has relied upon a judgment of the Hon’ble Apex Court reported in AIR 2001 SC 3730 in between Smita Conductors Ltd., v. Euro Alloys Ltd. The relevant passage would run thus:-
“6. What needs to be understood in this context is that the agreement to submit to arbitration must be in writing. What is an agreement in writing is explained by para 2 of Art.2. If we break down para 2 into elementary parts, it consists of four aspects. It includes an arbitral clause, (1) in a contract containing an arbitration clause signed by the parties, (2) an arbitration agreement signed by the parties, (3) an arbitral clause in a contract contained in exchange of letters or telegrams, and (4) an arbitral agreement contained in exchange of letters or telegrams. If an arbitration clause falls in any one of these four categories, it must be treated as an agreement in writing…….
………. May be, the appellant may not have addressed letters to the respondent in this regard but once they state that they are acting in respect of the contracts pursuant to which letters of credit had been opened and they are invoking the force majeure clause in these two contracts, it obviously means that they had in mind only these two contracts which stood affirmed by reason of these letters of credit. If the two contracts stood affirmed by reason of their conduct as indicated in the letters exchanged, it must be held that there is an agreement in writing between the parties in this regard.”
20. In the judgment of the Hon’ble Apex Court reported in 2009(1) MLJ 936 (SC) in between Unissi (India) Pvt. Ltd., v. P.G. Institute of Medical Education & Research, the principle would also run thus:-
“14. Therefore, considering the above aspects of the matter in this case, we must come to this conclusion that although no formal agreement was executed, the tender documents indicating certain conditions of contract contained an arbitration clause. It is also an admitted position that the appellant gave his tender offer which was accepted and the appellant acted upon it.”
21. The applicability of the judgments of Hon’ble Apex Court to find out the merits of the case, in the application to set aside the award cannot be discussed in this application for the condonation of delay in representation and it has to be argued, at the time of the disposal of the said application, if ordered to be numbered. Apart from the said judgments, the learned counsel for the 1st respondent had quoted a judgment of this Court made in C.R.P.NPD.No.3309 of 2010 dated 24.09.2010 in between Janarthana v.Chandrasekaran, for the principle that the laches on the part of the petitioner has to be deprecated while exercising the discretion in condonation of delay. The relevant passage would run thus:-
“….. The said facts and circumstances of the case discussed therein is totally applicable to the present case. The petitioner has engaged his lawyer during the passing of ex-parte decree and thereafter, he was served with execution petition and he has contested through the same counsel and thereafter, he has received yet another notice in the said execution petition for delivery of possession has taken much time to approach the Court to condone the delay in filing the application to set aside the ex-parte decree. In such circumstances, the lethargic attitude of the petitioner shows that he has leisurely preferred the application to condone the delay as well as the application to set aside the ex-parte decree which cannot considered for the grant of any discretionary relief.”
22. On a careful perusal of the said judgment, it has been ordered in a case where the condonation of delay sought for by the petitioner therein, in filing an application to set aside exparte decree. This Court had found that the petitioner was very much lethargic in filing such an application, even after entered appearance in the E.P., proceedings and contested the same and thereafter, chosen to file such an application to condone the delay. As far as this case is concerned, the re-presentation delay even though found on the part of the petitioner, it was purely due to the inaction, on the part of the counsel, as rightly pointed out by the Division Bench judgment of this Court reported in 1993 TLNJ 375. The stake of the dispute and the award passed by the arbitrator was to a sum of Rs.24,30,022/- with subsequent interest at the rate of 12% per annum and for total sum of Rs.42,28,328/-, which was awarded with interest and cost. The petitioner has also made serious contentions in the counter statement and the lower Court has to go through the Arbitration Award and to see whether such an award is liable to be set aside under the provisions of Section 34 of the Arbitration and Conciliation Act, or not. By virtue of the dismissal of the application for condonation of delay in re-presentation, the right to question the award under Section 34 of Arbitration and Conciliation Act, has been foreclosed. Such circumstance would certainly prevent the rights of the parties, who had filed the application in time, before the Court from getting any relief as per law. No doubt, the delay of 422 days have been caused in re-presentation of papers. As per the dictum in the judgment of the Division Bench of this Court, the re-presentation delay is only an act or omission of the counsel and it cannot be imputed as the laches on the part of the litigant.
23. The only inaction which could be attributed against the petitioner could be that he had not contacted his counsel then and there, regarding his application returned for curation. But, the very negligence is on the part of the advocate’s office and it shall not penalise a litigant. Therefore, the principles laid down by the 1st Bench of this Court reported in 1993 TLNJ 375 in between Y.Cusbar v. K.Subbarayan, is squarely applicable to the facts of this case, that substantial justice shall be done to both parties by condoning the delay in re-presentation.
24. Therefore, it has become necessary for this Court to interfere with the order of the lower Court in refusing the condonation of delay in re-presentation and to set aside the same. The lower Court ought to have condoned the delay as it is not the fault of the petitioner. At the same time, the inordinate delay of 422 days has to be condoned, after compensating the respondent suitably. Therefore, this Court comes to a conclusion to allow the revision petition on condition to deposit a sum of Rs.5,00,000/- (Rupees Five Lakhs Only) before the lower Court to the credit of I.A.No.61 of 2007 in unnumberred Arb.O.P.No.___ of 2007, on the file of the learned Principal District Judge, Namakkal, within a period of four weeks from today for condoning the delay of 422 days in re-presentation. On such compliance, the lower Court is directed to number the said application, if otherwise in order and to proceed with the application in accordance with law. The amount so deposited shall be kept in a fixed deposit in any one of the nationalised Banks till the final adjudication in the said application. In default to deposit the said amount within such period, the revision preferred by the petitioner shall stand dismissed automatically without any further reference to this Court.
25. In the result, the revision petition is ordered with the aforesaid conditions. No order as to costs. Consequently, connected miscellaneous petition is closed.
.11.2010
Index:Yes / No
Internet: Yes / No
Note:Issue order copy on 16.11.2010.
ssn
V.PERIYA KARUPPIAH, J.,
ssn
To
The learned Principal District Judge,
Namakkal.
Pre-delivery order in C.R.P.NPD.No.2766 of 2010
and
M.P.No.1 of 2010
.11.2010
