TaxTMI 
TaxTMI 
2018 (4) TMI 2000
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....hardson Wilson for M/s. P. Wilson Associates for R3 in W.P. No. 9181/2016. JUDGMENT Introductory:- The applicability of the provisions of the Limitation Act, 1963, and more particularly Article 137 to the statutory arbitration under Section 3G(5) of the National Highways Act, 1956, is the substantial issue raised in these intra court appeals and the related Writ Petitions for our determination. 2. These intra-Court appeals have been filed by the Project Director, Project Implementation Unit, National Highways Authority of India challenging the orders passed in the respective Writ Petitions, wherein, the writ Court had directed initiation of Arbitration proceedings under Section 3-G(5) of the National Highways Act for determination of the value of the lands belonging to the landowners whose lands were acquired for the purpose of construction of National Highways. The Writ Petitions viz., W.P. Nos. 9250, 9251 and 9181 of 2016 have been filed challenging the orders of the 1st respondent viz., the District Collector/ Arbitrator dated 31.12.2015 in and by which the representations of the petitioners in the respective Writ Petitions were rejected by the District Collector/ Arb....
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....le 137 of the Limitation Act. (b) The learned counsel would also point out that Section 3-G(6) makes the provisions of the Arbitration and Conciliation Act applicable to Arbitrations under the National Highways Act, 1996. He invited our attention to the provisions of Section 43 of the Arbitration and Conciliation Act, 1956, which makes the provisions of the Limitation Act, 1963 applicable to the Arbitration proceedings. Drawing our attention to Section 21 of the Arbitration Act which provides that Arbitration proceedings are deemed to have commenced on the date on which a request for the dispute to be referred to Arbitration is received by the respondent, the learned counsel would contend that applications made after the period of 3 years prescribed under the residuary Article 137 of the Limitation Act are time barred. (c) The sum and substance of the contention of the learned counsel for the appellant is that once an application is contemplated under the provisions of National Highways Act for the reference of a dispute to Arbitration, in view of Section 43 of the Arbitration and Conciliation Act, 1996 r/w. Section 21 of the said Act, the provisions of the Limitation Act, 1963 w....
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....sions of this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every arbitration under this Act." Section 21 of the Arbitration and Conciliation Act, 1996 reads as follows: "21. Commencement of arbitral proceedings. Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent." Section 43 of the Arbitration and Conciliation Act, 1996 reads thus: " 43. Limitations. 1. The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in court. 2. For the purposes of this section and the Limitation Act, 1963 ( 36 of 1963), an arbitration shall be deemed to have commenced on the date referred in section 21. 3. Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some steps to commence arbitral proceedings is taken within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it is of opinion that in the ci....
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....er Section 11 of the 1996 Act, it shall be open for the Chief Justice or the designated Judge to verify whether the claim is hopelessly barred by limitation. Under such circumstances, it cannot be contended by the appellant that Limitation Act has no application at all." (b) He would also rely upon the judgment of a Division Bench of the Karnataka High Court in T. Yunis Vs. National Highways Authority of India and others [ILR 2012 KAR 6055]. In the said judgment, the Karnataka High Court had considered the question whether the Article 119 of the Limitation Act or Article 137 of the Limitation Act would apply. The Karnataka High Court on an assumption that the Limitation Act is applicable to the Arbitrations under the National Highways Act concluded that Article 137 would apply to an application under Section 3-G(5) of the National Highways Act, 1956. (c) Mr. Richardson Wilson, learned counsel would also rely upon the judgments of the Hon'ble Supreme Court in Steel Authority of India Vs. J.C. Budharaja (1999) 8 SCC 122, Union of India Vs. Momin Construction Company [(1997) 9 SCC 97], Panchu Gopal Bose Vs. Board of Trustees for Port of Calcutta [(1993) 4 SCC 338] and Kerala St....
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....visions of the Limitation Act to a statutory arbitration was not an issue. The Hon'ble Supreme Court had also held that the words "any other application" under Article 137 cannot be said to be an application under the Code of Civil Procedure alone. 17. We are now left with the Division Bench judgments of the Kerala High Court in K. Leela Vs. The District Collector and Arbitrator (Judgment dated 30 March 2015 in W.A. No. 226 of 2015), and the Karnataka High Court in T. Yunis Vs. National Highways Authority of India and others [ILR 2012 KAR 6055]. These judgments are to the effect that the provisions of the Limitation Act, 1963 would apply to arbitrations contemplated under the provisions of Section 3-G(5) of the National Highways Act, 1956. 18. Thiru. K.V. Sajeev Kumar, learned counsel for the landowners would contend that none of the above three judgments had taken note of the provisions of Section 2(4) of the Arbitration and Conciliation Act, 1996. The learned counsel would point out that Section 2(4) of the Arbitration and Conciliation Act, 1996, makes the provisions of part (1) of the Arbitration and Conciliation Act, 1996 applicable to statutory arbitrations except the pr....
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....nt provides that the reference shall be to a person named or designated in the agreement, requiring that the difference be submitted to the person so named or designated. (4) Where the terms of an agreement to refer future differences to arbitration provide that any claims to which the agreement applies shall be barred unless notice to appoint an arbitrator is given or an arbitrator is appointed or some other step to commence arbitration proceedings is taken within a time fixed by the agreement, and a difference arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper. (5) Where the Court orders that an award be set aside or orders, after the commencement of an arbitration, that the arbitration agreement shall cease to have effect with respect to the difference referred, the period between the commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed....
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....ceedings in Court contemplated under Section 3 of the Limitation Act; but though Section 46 of the Arbitration Act provides for the application of most of the provisions of the Act to arbitration proceedings held under any statute, this section makes an exception along with some other sections, regarding the application of Section 37. The result therefore would be that though under Section 37 the provisions of the Limitation Act would apply to arbitration proceedings, those provisions would be excluded so far as arbitration proceedings held under any statute are concerned, by virtue of Section 46 of the Arbitration Act. This position in law is not disputed by Mr. Tarkunde." 24. A similar question arose in Tamil Nadu Generation and Distribution Corporation Limited Vs. PPN Power Generating Company Private Limited [(2014) 11 SCC 53], wherein, the Hon'ble Supreme Court while considering the applicability of Limitation Act, 1963 to a statutory arbitration under the Electricity Act, 2003 had concluded that in view of Section 2(4) of Arbitration and Conciliation Act, 1996, the provisions of Section 43 will not apply to a statutory arbitration. The Hon'ble Supreme Court had obser....
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.... noted here that the matter in M.P Steel Corpn. had arisen from the proceedings under the Customs Act and hence in that case there was no occasion to consider the issue whether the Limitation Act is applicable to an action initiated before the Commission by virtue of the provisions of the electricity act, 2003. However, this judgment does help the respondents to an extent by holding that the principles underlying section 14 of the limitation act will be applicable even in matters filed before a quasi-judicial tribunal such as the Commission. But the moot question remains to be answered-Whether the bar of limitation is required to be respected by the Commission on the ground that there is no provision in the Electricity Act conferring additional rights upon a party moving the Commission for relief so as to claim even such reliefs which stand barred by limitation before the civil court or even for arbitral proceedings? The other ancillary issue required to be answered is - Whether by virtue of the provisions of the electricity act, 2003 the limitation act has been made applicable to an action before the Commission by express provision or even by necessary intendment? 28. Coming ba....
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....56 as well as the Limitation Act, 1963 concluded that it was only Article 137 that would apply to such proceedings. 29. The Division Bench of the Karnataka High Court in National Highways Authority of India Vs. Udaykumar and others had held that in view of Section 2(4) of Arbitration and Conciliation Act, 1996, the provisions of Limitation Act, 1963 would not be applicable to statutory arbitrations. 30. Adverting to the cases on hand, the facts are not in dispute. The lands belonging to the land owners who are the respondents in the Writ Appeals and petitioners in the Writ Petitions were acquired for the purpose of widening the National Highways under the National Highways Act, 1956. The competent Authority passed orders under Section 3-G(1) of the said Act. The landowners had filed applications though belatedly seeking re-determination of the compensation by referring the matter to an arbitrator appointed by the Central Government in terms of Section 3-G(5) of the Act. The applications were dismissed by the Arbitrator on the ground that they have been filed beyond 3 years. 31. The judgment of the Kerala High Court in K. Leela is the basis for the contention of the National High....