Statutory arbitration excluded from Limitation Act; award not disturbed for non-application of limitation.

A statutory arbitration referred under Section 54 of the Bombay Co-operative Societies Act, 1925 was held outside the scope of the Indian Limitation Act. Section 3 did not apply by itself to arbitration proceedings, and although Section 37 of the Indian Arbitration Act, 1940 extended the Limitation Act to arbitrations as court proceedings, Section 46 excluded statutory arbitrations from that extension. Principles governing contractual arbitrations, including any implied obligation to decide according to existing law and entertain a limitation defence, could not be imported into a reference created by statute. Rule 35, requiring awards to accord with justice, equity and good conscience, did not override the statutory exclusion. The award could not therefore be interfered with for failure to apply limitation.

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Issues: Whether the Indian Limitation Act applies to a dispute referred for decision under Section 54 of the Bombay Co-operative Societies Act, 1925, and whether failure to apply limitation furnished a ground to interfere with the award under Section 54-A.

Analysis: The arbitration under Section 54 was a statutory arbitration, not a contractual reference. Section 3 of the Indian Limitation Act does not in terms extend to arbitration proceedings, and though Section 37 of the Indian Arbitration Act, 1940 makes the Limitation Act applicable to arbitrations as proceedings in court, Section 46 expressly excludes statutory arbitrations from that extension. The principles governing contractual arbitrations, where an implied term may require the arbitrator to decide according to the existing law and to entertain a limitation defence, could not be imported into a reference created by statute. Rule 35, which requires the award to be made in accordance with justice, equity and good conscience, did not compel a different result where the statute itself excluded the application of Section 37.

Conclusion: The Indian Limitation Act did not apply to the statutory arbitration under Section 54, and the award could not be interfered with on the ground that limitation was not applied.

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