# MADAN LAL v. SUNDERLAL & ANOTIIER

- **Citation:** [1967] 3 S.C.R. 147
- **Court:** Supreme Court of India
- **Decided:** 1967-03-09
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/madan-lal-v-sunderlal-anotiier-4190
- **Pages:** 6

## Headnote

A
MADAN LAL
v.
SUNDERLAL & ANOTIIER
March 9, 1967
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[K. N. WANCHOO, R. S. BACHAWAT AND V. RAMASWAMI, IJ.]
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Arbitration Act 10 of 1940-S. 30, objection on filing award-con1aining grounds for setting it aside-Whether Art. 158 Limitation Act
applicable.
An arbitration award in respect of certain
disputes
between the
appellant and the respondents was filed in Court and notice of the ~
served on the appellant on September 30, 1957. The appellant filed an
objection on November 3, 1957 attacking the validity of the award 011
various grounds.
The respondents contended before the trial Court that the objection
was in the nature of an application to set aside the award and contained
grounds which fell under s. 30 of the
Arbitration
Act 10 o~ 1940;
lberefore as the objection was filed more than 30 days after notice wu
served o~ the appellant,. it was barred by limitation under Art. 158 of
the Limitation Act No. 9 of 1908. The trial Court '!!'held the appellant's objection and an appeal to the High Court was dismissed.
On appeal to this Court,
HELD : Dismissing the appeal,
The Arbitration Act contemplates making of an application to
set
aside an award on grounds mentioned in s. 30.
This application must
be made within 30 days of the date of service of notice as provided in
Art. 158 of the Limitation Act.
An objection petition in 1he nature of
a written-statement may in appropriate cases be treated as such· .applica-
~on provided it is filed within the period of limitation prescribed. ~
1f the court has the power to set a•ide an award suo m_otu that power
cannot be used to set aside an award on grounds falling under s. 30, If
taken in a petition filed more than 30 days after the· service· of notice,
for in that case the limitation provided would be completely neptived.
(151 E, G-H; 152 D-E]
Hastimal Dalichand Bora v. Hlralal Motichand Mutlta, A.I.ll. (1954)
Born. 243, Saha cl Co. v. Ishar Singh v. Krlpal Singh, A.l.R (1956) Cal.
321 and M,ohan Das v. Kwumal, A.I.R. (1955) Ajm. 47, distinguished.

## Text

A
MADAN LAL
v.
SUNDERLAL & ANOTIIER
March 9, 1967
B
[K. N. WANCHOO, R. S. BACHAWAT AND V. RAMASWAMI, IJ.]
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Arbitration Act 10 of 1940-S. 30, objection on filing award-con1aining grounds for setting it aside-Whether Art. 158 Limitation Act
applicable.
An arbitration award in respect of certain
disputes
between the
appellant and the respondents was filed in Court and notice of the ~
served on the appellant on September 30, 1957. The appellant filed an
objection on November 3, 1957 attacking the validity of the award 011
various grounds.
The respondents contended before the trial Court that the objection
was in the nature of an application to set aside the award and contained
grounds which fell under s. 30 of the
Arbitration
Act 10 o~ 1940;
lberefore as the objection was filed more than 30 days after notice wu
served o~ the appellant,. it was barred by limitation under Art. 158 of
the Limitation Act No. 9 of 1908. The trial Court '!!'held the appellant's objection and an appeal to the High Court was dismissed.
On appeal to this Court,
HELD : Dismissing the appeal,
The Arbitration Act contemplates making of an application to
set
aside an award on grounds mentioned in s. 30.
This application must
be made within 30 days of the date of service of notice as provided in
Art. 158 of the Limitation Act.
An objection petition in 1he nature of
a written-statement may in appropriate cases be treated as such· .applica-
~on provided it is filed within the period of limitation prescribed. ~
1f the court has the power to set a•ide an award suo m_otu that power
cannot be used to set aside an award on grounds falling under s. 30, If
taken in a petition filed more than 30 days after the· service· of notice,
for in that case the limitation provided would be completely neptived.
(151 E, G-H; 152 D-E]
Hastimal Dalichand Bora v. Hlralal Motichand Mutlta, A.I.ll. (1954)
Born. 243, Saha cl Co. v. Ishar Singh v. Krlpal Singh, A.l.R (1956) Cal.
321 and M,ohan Das v. Kwumal, A.I.R. (1955) Ajm. 47, distinguished.
CIVIL APPELLATE JURISDICTION : Civil Appeal No 990 of
1964.
.
Appeal from the judgment and decree dated April 15, 1963
of the Allahabad High Court, Lucknow Bench in First Appeal
from Order No. 30 of 1960.
B. C. Misra and C. P. Lal, for the appellant.
P. K. Chatterjee, for respondeq.t No. 1.
S. P. Sinha and P. K. Chatterjee, for respondent No. 2.
148
SUPREME COURT RBPOllTS
(1967] 3 S.C.ll.
The Judgment of the Court was delivered by
Wanchoo, J. This is an appeal on a certificate granted by the
Allahabad High Court and arises' in the following circumstances.
On May 20, 1965, an agreement was entered into between the
appellant and the respondents referring certain differences between
them to the arbitration of three persons. On January 19, 1956,
an award was made, signed by two out of the three arbitrators as
the third arbitrator had refused to sign the award. The award was
filed in court on September 7, 1957 and the respondents prayed for
a decree in accordance with the award. Notice of filing of the
award was issued to the appellant and was served upon him on
September 30, 1957. On November 3, 1957, the appellant filed
an objection in the nature of a written statement. By this objection the appellant attacked the validity of the award on various
grounds. But the objection did not contain any prayer at the end,
nor did it indicate what relief the appellant desired, though there
were as many as 43 paragraphs therein. When the matter came
to be heard in the trial court, the respondents contended that the
so-called objection was in the nature of an application to set aside
the award and contained grounds coming under s. 30 of the Arbitration Act, No. 10 of 1940, (hereinafter referred to as the Act).
Therefore, as the objection was filed more than 30 days after the
notice was served on the appellant, it was barred by limitation
under Art. 158 of the Indian Limitation Act, No. 9 of 1908.
The trial court held that the appellant's objection was not
maintainable, as his remedy was to apply under s. 33 of the Act,
if he wanted the award to be set aside on the grounds raised in the
objection. As ile·had not done so and as the objection was itself
filed more than 30 days after the service of notice on him, he was
barred from raising any ground for setting aside the award which
fell under s. 30 of the Act.
The trial court also held that the
objection could not be treated as an application under s. 33 of
the Act in view of the fact that it was beyond 30 days as required
by Art. 158 of the Limitation Act. The trial court therefore passed
a decree in terms of the award.
The appellant then went in appeal to the High Court, and the
main question urged there was whether the appellant could maintain his objection when he had failed to make an application under
s. 33 of the Act for setting aside the award on grounds contained
in the objection. It seems that there were other points also before
the High Court, but the High Court held that if the main question
was answered against the appellant it would not be necessary to go
into other points. It seems therefore that other points were not
pressed before the High Court. , Thd High. Court came to !he
conclusion that the award could not be set aside on grounds which
fell under s. 30 of the Act, except on an application under s. 33
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MADANLAL v. SUNDER, LAL (Wanchoo, 1.)
t4i.
of the Act within thirty days of the service of notice of filing of
the award as required by Art. 158 of the Limitation Act. The
High Court further held that the objection of the appellant could
not be treated as an application under s. 33, as, if it was treated
as such application, it would be barred by time. The High Court
therefore dismissed the appeal, but granted a certificate to theappellant to appeal to this Court.
We have heard learned counsel for the appellant on the main
question raised in the High Court.
We may add that learned
counsel wanted to raise other points which were not pressed before
the High Court, but we have not permitted him to do so.
We are of opinion that this appeal must fail. The Act was.
passed in 1940 and as the long title shows it is an Act to consoli·
date and amend the law relating to arbitration. Before 1940, the
law relating to arbitration was mainly contained in the Second
Schedule to the Code of Civil Procedure, which was repealed by
the Act which is now a self-contained code in the matter of arbitra·
tion.
The scheme of the Act is to divide arbitration into three
classes. The first consists of arbitration without intervention of a
court and is contained in Chap. II of the Act which has 17 sec·
tions from s. 3 to s. 19. The second consists of arbitration with
i:itervention of a court where there is no suit pending, which is
in Chap. III of the Act, and there is only one section (s. 20) therein,
as sub-s. (5) thereof applies the other provisions contained in the
Act to this type of arbitration also so far as they can be made appli·
cable. The third type of arbitration is contained in Chap. IV,
namely, arbitration in suits.
This chapter contains 5 sections, and
s. 25 thereof applies the other provisions of the Act so far as they
can be made applicable.
Chapter Il makes various provisions with respect to arbitrations
of the first type. Reference may be made to a few which are material for our purpose. SC\:tion 5 lays down that the authority of an
appointed arbitrator or umpire shall not be revocable except with
the leave of the court, unless a contrary intention is expressed in
the arbitration agreement.
Section 8 gives power to court to
appoint an arbitrator or umpire in certain circumstances. Section
11 gives power to court to remove an arbitrator or umpire in certain circumstances and s. 12 gives consequential power to court
to appoint persons to fill vacancies which may have arisen. Section 13 provides for powers of the arbitrators and s. 14 provides
for the award to be sill!led and filed.
When the award is filed
the court has to give notice to the parties of the filing of the award
under s. 14(2). Under s. 15, the court is given power to modify
or correct an award and under s. 16 the court can remit the award
for reconsideration.
Section 17 provides for judgment in terms
of the award and reads ·thus :-
150
SUPRBMB COUllT RBPORTS
(1967] 3 s.c.R.
"Where the court sees no cause to remit .award on
any of the matters referred to arbitration for reconsideration or to set aside the award, the court shall, after the
time for making an application to set aside the award
has expired, or such application having been made, after
refusing it, proceed to pronounce judgment according.to
the award, and upon the judgment so pronounced a decree shall follow and no appeal shall lie from such decree except on the ground that it is in excess of, or not
otherwise in accordance with, the award."
Section 19 gives power to the court to supersede the arbitration
agreement in certain circumstances.
This analysis of the relevant provisions of the Act contained
in Chapter II which apply mutatis mutandis to arbitrations of the
other two types shows that the court has to pronounce judgment
in accordance with the award if it sees no cause to remit the award
or any of the matters referred to arbitration for reconsideration, or
if it sees no cause to set aside the award. The court has to wait
for the time given to a party to make an application for setting
aside the award and where such an application has been made the
court has to decide it first and if it rejects it the court proceeds
to pronounce judgment according to the award. It is clear therefore from s. 17 that an application to set aside the award is contemplated therein and it is only when no such application has been
made within the time allowed or if such an application has been
filed and has been rejected that the court proceeds to pronounce
judgment in terms of the award. The Act therefore contemplates
the making of an application to set aside an award and the grounds
on which such an application can be made are to be found in s.
30. ·Tue grounds on which an application can be made for setting
aside the award are-(a) that an arbitrator or umpire has misconducted himself or the proceedings, (b) that an award has been
made after the issue of an order by the court superseding the arbitration or after arbitration proceedings have become invalid under
11. 35, or (c) that an award has been improperly procured or is
otherwise invalid. These are the only grounds on which an award
can be set aside uqder s. 30 and it will be seen that if a party wants
11n 1lward to be set aside on any of these grounds it has to make
11n application.
Thus any party wishing to have an award set
aside on the ground that it was improperly procured or otherwise
invalid has to make an application. We may also refer to s. 32
which lays down that "notwithstanding any law for the time being
in force, no suit shall lie .on any ground whatsoever for a decision
upon the existence, effect or validity of an arbitration agreement or
11ward, nor shall any arbitration agreement or award be set aside,
amended, modified or in any way affected otherwise than as provided in this Act.".
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MADANLAL v. SUNDEil LAL (Wanchoo, /.)
151
It is clear therefore from me scheme of the Act that if a party
wants an award to be set aside on any of the grounds mentioned
in s; 30 it must apply within 30 days of the date of service of
notice of filing of the award as provided in Art. 158 of the Limitation Act. If no such application is made the award cannot be set
as~ on any of the grounds specified in s. 30 of the Act. It may
be conceded that there is no special form prescribed for making
such an application and in an appropriate case an objection of the
type made in this case may be treated as such an application, if it
is filed within the period of limitation. But if an objection like
this. has been filed after the period of limitation it cannot be treated
as an application to set aside the award, for if it is so treated it will
be barred by limitation.
It is not in dispute in the present case that the objections raised
by the appellant were covered by s. 30 of the Act, and though the
appellant did not pray for setting aside the award in his objection
that was what he really wanted the court to do after hearing his
objection.
As in the present case the objection was filed more
than 30 days after the notice it could not be treated as an application for setting the award, for it would then be barred by limitation
The position thus is that in the present case there was no application to set aside the award as grounds mentioned in s. 30 within
the period of limitation and therefore the court could not set aside
the award on those grounds. There can be no doubt on the scheme
of the Act that any objection even in the nature of a written-statement which falls under s. 30 cannot be considered by the court
unless such an objection is made within the period of limitation
(namely, 30 days), though if such an objection is made within
limitation that objection may in appropriate cases be treated as an
application for setting aside the award.
. Learned counsel for the appellant however urges that s. 17
gives power ~o the court to set aside the award and that such powacan be exercised even where an objection in the form of a writtenstat~ment has ~n made more than 30 days after the service of the
notice .of ~e 1!Jing of th~ award as the court can do so suo motu
He relies Ill this connectton on Hastimal Dalichand Bora v H" ~
l110tichand ¥utha(') and Saha & Co. v. lshar Singh KriPaI S;~gh
( ) · AssllDllllg that ·!11~ court has power to set. aside the award suo
motu: we are of op1ruon that that power cannot be exercised to
set as1~e an award on grounds which fall under s 30 of the A t "f
tf en !11 an ob~ection petition filed more than 30 °days after se~i~
o n?ttce of filmg of the award, for if that were so the limitation
Provtded un~er Art. 158 of the Limitation Act would be complet~Iy negati~~· The two c~s on which the appellant relies do
not m our Oplll!on support him. In Hastimafs case(') it was
(0 A.I.R. 1954 Bom. 243.
(2) A.f.R. 1956 Cal, 32!.
152
SUPREME COURT llEPOllTS
[1967] 3 S.C.ll.
observed that "if the award directs a party to do an act which is
prohibited by law or if it is otherwise patently illegal or void it
would be open to the court to consider this patent defect in the
iiward suo motu, and when the court acts suo motu no question of
limitation prescribed by Art. 158 can arise". These observations
only show that the court can act suo motu in certain circumstances
which do not fall within s. 30 of the Act.
Saha & Co.'s case(') was a decision of five Judges by a majority of 3 : 2 and the majority judgment is against the appellant. The
minority judgment certainly takes the view that the non-existence
or invalidity of an arbitration agreement and an order of reference
to arbitration may be raised after the period of limitation for the
purpose of setting aside an award because they are not grounds
for setting aside the award under s. 30. It is not necessary in the
present case to resolve the conflict between the majority and the
minority Judges in Saha & Co.'s case('), for even the minority
judgment shows that it is only where the grounds are not those
falling within s. 30, that the award may be set aside on an objection made beyond the period of limitation, even though no application has been made for setting aside the award within tl1e period
of limitation. Clearly therefore where an objection as in the present case raises grounds which fall squarely within s. 30 of the Act
.that objection cannot be heard by the court and cannot be treated
as an application for setting aside the award unless it is made
within the period of limitation. Th~ Saha & Co.'s case(') therefore also does not help the appellant.
Learned counsel for the appellant also relies on Mohari Dll3
v. Kessumal ('). In that case the objection which was made more
than 30 days after the service of notice was that the award had been
filed by a person not authorised by the arbitrator to do so. The
court held that such an objection did not fall within s. 30 of the
Act and therefore Art. 158 of the Limitation Act did not apply.
On these facts the decision in that case may be right.
But the
court seems to have made a general observation that Art. 158
cannot apply to a written-statement by a defendant in reply to
an application to have the award made a rule of the court. If by
that general observation the court means that even if the objection
is of the nature falling within s. 30 and is filed more than 30 days
after service of notice, it would be open to the court to set aside
the award on such objection, we are of the opinion that the view
is incorrect.
In the result the appeal fails and is hereby dismissed with costs.
R.K.P.S.
(I} A.l.R. 1956 Cal. 321.
(2)AJ.R. 1955 Ajm. 47
Appeal dismissed.
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