1988 (8) TMI 428 - SC - Companies Law

Supreme Court affirms time-barred arbitration award challenge. Notice communication crucial.

The Supreme Court upheld the High Court's decision to dismiss the application for setting aside an award as time-barred. The key issue was the ... - Issues:- Application for setting aside the award barred by lapse of time- Requirement of notice under Section 14(2) of the Arbitration Act, 1940- Interpretation of the term 'notice' in the context of filing of an award- Compliance with the statutory requirements for setting aside an awardAnalysis:The appeal in question was against the judgment of the High Court of Calcutta, which dismissed an application for setting aside an award on the grounds of being time-barred. The appellant filed an affidavit on 4th February, 1978, stating that the award had been wrongly filed in the High Court and requested its removal. The respondent's advocate took out a Master's Summons on 10th January, 1978, based on an earlier affidavit affirming the filing of the award. The notice under Section 14(2) of the Arbitration Act was served on the appellant on 30th July, 1981, following which the appellant applied for a certified copy of the award on 18th August, 1981, and filed the application for setting aside the award on 8th September, 1981.The central issue revolved around the interpretation of the term 'notice' under Section 14(2) of the Act. The appellant contended that the notice was served after 30th July, 1981, making the application within the limitation period. The High Court, however, held that the notice was served prior to the specified date, rendering the application time-barred. The Supreme Court emphasized that the notice need not be in writing and could be communicated orally, as long as there was intimation of the filing of the award to the parties or their counsel.The Court referred to previous judgments to support its interpretation, highlighting that the communication of the filing of the award by the Court to the parties was essential for compliance with the statutory requirements. The Court reiterated that the crucial aspect was the service of the notice by the Court, regardless of the method of service. In this case, both Courts found that the notice had been issued and served before 30th July, 1981, leading to the conclusion that the application was time-barred.The appellant argued that the service of notice under Section 14(2) was mandatory and that the application for setting aside the award would not be time-barred until such notice was served. However, the Court clarified that mere knowledge of the filing of the award was insufficient, emphasizing the necessity of formal service of notice by the Court to the concerned parties. Ultimately, the Court upheld the decision of the High Court, dismissing the appeal without costs.