# MOHD. USMAN MILITARY CON'.).'RACTOR, JHANSI v. UNION OF INDIA, MINISTRY OF DEFENCE September 26, 1968

- **Citation:** [1969] 2 S.C.R. 232
- **Court:** Supreme Court of India
- **Decided:** 1968-09-26
- **Case number:** Civil Appeal No. 14 of 1968
- **Bench:** S. M. Sikri, R. S. Bachawat
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mohd-usman-military-con-ractor-jhansi-v-union-of-india-ministry-of-defence-4490
- **Pages:** 6

## Headnote

Indian A •bitration Act, 1940, ss. 8 and 20-Applications under--
Whether sutject to limitation laid down, in Art. 181-Limitation Act.,
1908-Effect of-General Clauses Act, 1897, s. 8(1).
The app i:llant entered into a contract with the Government of India. '
The contract contained an arbitration clause.
For certain supplies made
under the contract the appellant made representations to the Government for
payment and
for
arbitration
of disputes.
On
·or
about
July
10,
1958
Government
refused
to
refer
the
matter for crbitratiou. Ou July 11, 1961 the appellant filed an application in the Court of the District Judge under ss. 8 and 20 of the Arbitration Act, 1940, for filing the arbitration agreement and for an order
of reference of the disputes to an arbitrator appointed by the court. The
respondent .;:ontended that the application was barred by Limitation. The
District Judge allowed the application, holding that there was no limitation for making an application under ss. 8 and 20. The defendant's
appeal was dismissed by the High Court as incompetent in so far as
it
challeni.ed
the order under s. 8 but was allowed in so far as it
challenged the order ·under s. 20. The High Court held that an appli·
cation under s. 20 is governed by Art. 181 of the Indian Limitation Act,
1908. In •:oming to this conclusion the High Court took into account
the settled judicial view that the operation of Art. 181 is limited to applications under the Code of Civil Procedure, and reasoned as follows :
Article 181 should be construed as if the words 'under the Code' were
added in ii..
The Arbitration Act, 1940 repealed paragraph 17. of the
second schPdule to the Code and re-enacted it in s. 70 with minor modifications.
That being so s. 8(1) of the General Clauses Act, 1897
applied and the implied reference in Art. 181.to paragraph 17 of the
second schedule to the Code should be construed as a reference to s. 20
of the Arbitration Act, 1940.
Appeal against the High Court's judgment
was filed with certificate,
.
HELD : The appeal must be allowed.
By the Arbitration Act, 1940 the Legislature amended Arts. 158 and
178 of the Limitation Act and made them applicable to the relevant proceedings under the Arbitration Act but no similar change was made in
Art. 181. It is manifest that save as provided in Arts. 158 and 178
there would not be any limitation for other applications under the Act.
Further there is nothing to indicate that for the purpose of limitation
s. 20 of the 1940 Act should be regarded as a re-enactment of the corresponding provision of the Code and not of the Indian Arbitration Act,
1899. [236 D-G]
In the circumstances it is not possible to construe the implied reference
in Art. 181 to the Code of Civil Procedure as a reference to the Arbitration Act, 1940 or to hold that Art. 181 applies to applications under
that Act.
The rule of construction given in s. 8(1) of the General
Clauses Act cannot be applied, as it appears that the legislature had a
A
B
c
D
E
F
G
.,
••
'
H
.t
.
'
Ill
.... ,
•
.....
MOHD. USMAN v~ UNION (Bachawat, J.)
233
A
different intention. It follows that an application under ss. 8 and 20
of the Arbitration Act, 1940 is not governed by Art. 181. The Limitation Act does not prescribe any period of limitation for such an application. [236 G-H]
B
c
The present application under ss. 8 and 20 was therefore not barred
by limitation. [23 7 A]
Bai Manekbai v. Manekji Kavasji, [1880] I.L.R. 7 Born.
213,
214
Haiwraj Gupta v. Official Liquidator Dehra Dun Mussourie
Electric
Tramway Company, (1933) L.R. 60 I.A. 13,
20, Shah Mulchand
&
Co. v. Jawahar Mills Ltd. [1953] S.C.R. 351, 371, Bombay Gas Co. v.
Gopal Bhiva, [1964] 3 S.C.R. 709 and Wazirchand Mahajan & Anr. v.
Union of India, [19671 I S.C.R. 303, referred to.

## Text

MOHD. USMAN MILITARY CON'.).'RACTOR, JHANSI
v.
UNION OF INDIA, MINISTRY OF DEFENCE
September 26, 1968.
[S. M. SIKRI AND R. S. BACHAWAT, JJ.]
Indian A •bitration Act, 1940, ss. 8 and 20-Applications under--
Whether sutject to limitation laid down, in Art. 181-Limitation Act.,
1908-Effect of-General Clauses Act, 1897, s. 8(1).
The app i:llant entered into a contract with the Government of India. '
The contract contained an arbitration clause.
For certain supplies made
under the contract the appellant made representations to the Government for
payment and
for
arbitration
of disputes.
On
·or
about
July
10,
1958
Government
refused
to
refer
the
matter for crbitratiou. Ou July 11, 1961 the appellant filed an application in the Court of the District Judge under ss. 8 and 20 of the Arbitration Act, 1940, for filing the arbitration agreement and for an order
of reference of the disputes to an arbitrator appointed by the court. The
respondent .;:ontended that the application was barred by Limitation. The
District Judge allowed the application, holding that there was no limitation for making an application under ss. 8 and 20. The defendant's
appeal was dismissed by the High Court as incompetent in so far as
it
challeni.ed
the order under s. 8 but was allowed in so far as it
challenged the order ·under s. 20. The High Court held that an appli·
cation under s. 20 is governed by Art. 181 of the Indian Limitation Act,
1908. In •:oming to this conclusion the High Court took into account
the settled judicial view that the operation of Art. 181 is limited to applications under the Code of Civil Procedure, and reasoned as follows :
Article 181 should be construed as if the words 'under the Code' were
added in ii..
The Arbitration Act, 1940 repealed paragraph 17. of the
second schPdule to the Code and re-enacted it in s. 70 with minor modifications.
That being so s. 8(1) of the General Clauses Act, 1897
applied and the implied reference in Art. 181.to paragraph 17 of the
second schedule to the Code should be construed as a reference to s. 20
of the Arbitration Act, 1940.
Appeal against the High Court's judgment
was filed with certificate,
.
HELD : The appeal must be allowed.
By the Arbitration Act, 1940 the Legislature amended Arts. 158 and
178 of the Limitation Act and made them applicable to the relevant proceedings under the Arbitration Act but no similar change was made in
Art. 181. It is manifest that save as provided in Arts. 158 and 178
there would not be any limitation for other applications under the Act.
Further there is nothing to indicate that for the purpose of limitation
s. 20 of the 1940 Act should be regarded as a re-enactment of the corresponding provision of the Code and not of the Indian Arbitration Act,
1899. [236 D-G]
In the circumstances it is not possible to construe the implied reference
in Art. 181 to the Code of Civil Procedure as a reference to the Arbitration Act, 1940 or to hold that Art. 181 applies to applications under
that Act.
The rule of construction given in s. 8(1) of the General
Clauses Act cannot be applied, as it appears that the legislature had a
A
B
c
D
E
F
G
.,
••
'
H
.t
.
'
Ill
.... ,
•
.....
MOHD. USMAN v~ UNION (Bachawat, J.)
233
A
different intention. It follows that an application under ss. 8 and 20
of the Arbitration Act, 1940 is not governed by Art. 181. The Limitation Act does not prescribe any period of limitation for such an application. [236 G-H]
B
c
The present application under ss. 8 and 20 was therefore not barred
by limitation. [23 7 A]
Bai Manekbai v. Manekji Kavasji, [1880] I.L.R. 7 Born.
213,
214
Haiwraj Gupta v. Official Liquidator Dehra Dun Mussourie
Electric
Tramway Company, (1933) L.R. 60 I.A. 13,
20, Shah Mulchand
&
Co. v. Jawahar Mills Ltd. [1953] S.C.R. 351, 371, Bombay Gas Co. v.
Gopal Bhiva, [1964] 3 S.C.R. 709 and Wazirchand Mahajan & Anr. v.
Union of India, [19671 I S.C.R. 303, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 14 of
1968.
Appeal from the judgment and decree, dated December 12,
1964 of the Allahabad High Court in F.A. F.O. No. 401 of 1963.
R. M. Hazarnavis, K. L Hatht' and Atiqur Rehman, for the
respondent.
D
The Judgment of the Court was delivered by
E
F
G
H
Bachawat, J.
By a contract,
dated March 8, 1945,
the
appellant agreed to supply meat to the Government of India. The
contract contained an arbitration clause for reference of disputes
arising out of the contract to the officer named in the contract.
The appellant claims that a sum of Rs. 8,38,994/10/6/- is due
to him in respect of the supplies of meat made by him during
the period between April 1, 1945 and March 31, 1946. He made
representations to the Government for payment and for arbitration of the disputes. On or about July 10, 1958 the Government
refused to refer the matter to arbitration. On July 11, 1961 the
appellant filed an application in the Comt of the District Judge,
Jhansi, under ss. 8 and 20 of the Arbitration Act, 1940 for filing
the arbitration agreement and for an order of reference of the
disputes to an arbitrator appointed by the Court.
The respondent contended that the application was barred by limitation. The
District Judge allowed the application.
He held that there was
no period of limitation for making an application under ss. 8 and
20. The defendant filed an appeal against the order. The High
Court dismissed the appeal as incompetent in so far as it challenged
the order under s. 8, and allowed it in so far as it challenged the
order under s. 20. The High Court held that the application was
governed by Art. 181 of the Indian Limitation Act, 1908 and
was barred by limitation as it was made more than three years
after the disputes had arisen. The appellant has filed this appeal
after obtaining a certificate from the High Court.
The point in issue is whether an application under s. 20 of
the Arbitration Act, 1940 is governed by Art. 181 of the Indian
L2Sup.CI 69-16
234
SUPREME COURT REPORTS
[1969] 2 S.C.R.
Limitation Act. Since the decision in Bai Manekbai v. Manekji
A
Kavasji(l) it is well settled that the operatio~ .of Art.
181
is
limited to applications under the Code of Civil Procedure. In
that case Westropp, C.J. after referring to the corresponding Art.
178 in the second schedule to the Limitation Act of 1877
observed:
"An examination of all the other articles in the
second schedule relating to "applications", that is to say
of the Third division of that schedule, shows that the
applications therein contemplated are such as are made
under the Code of Civil Procedure. Hence it is natural
to conclude that the applications referred to in Article
178 are applications ejusdem generis, i.e., applications
under the Code of Civil Procedure. The preamble of
the Act, moreover, purports to deal with 'certain applications' only, and not with al! applications."
·
This decision was followed in numerous cases and was approved
in Hansraj Gupta v. Official Liquidator Dehra Dun, Mussourie
·Electric Tramway Company(').
Having regard to these decisions, Das, J. said in Shah Mulchand & Co., v. Jawahar Mills
Ltd. ( 3 ) : "This long catena of decisions may well be said to have
as it were, added the word 'under the Code' in the first column
of that Article." The Court held that the amendment of Arts. 158
and 178 and the illsertion of the words "under the Arbitration
Act, 1940" in place of the words "under the Code of Civil Procedure, 1908" did not alter the settled meaning of Art. 181. To
tihe same effect is the decision in Bombay Gas Co. v. Gopal
Bhiva. (') Following these decisions the Court held in Wazirchand Mahajan & Anr. v. Union of India(") that an application
under s. 20 of the Arbitration Act, 1940 not being an application under the Code! of Civil Procedure was not governed by
Art. 181.
The High Court has come to the conclusion that an application under s. 20 of the Arbitration Act is governed by Art. 181
for the following reasons : Article 181 should be construed as
if the words "under the Code" were added in it. The Arbitration
Act, 1940 repealed paragraph 17 of the second schedule to the
Code and re-enacted it in s. 20 with minor modifications. That
being so, s. 8 ( l) of the General Clauses Act, 1897 applied and
the implied reference in Art. 181 to paragraph 17 of the second
schedule to the Code should be construed as a reference to s. 20
of the Arbitration Act, 1940.
No different intention is to be
found in the Arbitration Act, 1940 and there is nothing to indi-
(1) [1880] I.L.R. 7 Born. 213, 214.
(2) [1933] L.R. 60 I.A. 13, 20.
(3) [1953] S.C.R. 351, 371.
(4) [1964] 3 S.C.R. 709.
(5) [1967] I S.C.R. 303.
B
' c
D
E
F
G
H
>--
.....
~
~
•
.-
A
B
1
•
c
D
E
•
F
G
•
H
MOHD. USMAN v. UNION (Bachawat, J.)
235
cate that an application under s. 20 can be made at any time
without any limitation.
The argument that the implied reference in Art.
181
to
paragraph 17 of the second schedule to the Code should be con.
strued as a reference to s. 20 of the Arbitration Act and not raised
and considered iin Wazirchand Mahajan's case('). It is, therefore, our duty to examine this contention.
Section 8 ( 1) of the General Clauses Act corresponds to the
Interpretation Act, 1889 (52 & 53 vict. c. 63) and runs as
follows :
"Where this Act, or any Central Act or Regulation
•made after the commencement of this Act, repeals and re-enacts,
with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed, shall, unless a different intention appears, be construed as references to the provision so reenacted."
The section embodies the rule of construction that
where the provision of an Act is repealed and re-enacted with or
without modification, a reference to the repealed provision in any
other enactment should be regarded as a reference to the provision
re-enacted in the new form unless it appears that the legislature
had a different intention.
The Arbitration Act, 1940 was passed with a view to consolidate and amend the law relating to arbitration.
Formerly
the general law relating to arbitration was to be found in the
Indian Arbitration Act, 1899 and the Code of Civil Procedure,
1908. Paragraphs 1 to 16 of the second schedule to the Code
applied to all arbitrations in suits.
As to arbitrations otherwise
than in suits, the Indian Arbitration Act, 1899 applied to cases
where, if the subject-matter submitted to arbitration were the
subject of a suit, the suit could be instituted in a Presidency
town; in other cases, the Code of Civil Procedure, 1908 applied
The Arbitration Act, 1940 repealed both the enactments.
It
extends to the whole of India except the State of Jammu and
Kashmir, and save as provided in s. 4 7 applies to all arbitrations.
As to the provisions of the new Act under which applications can
be made to Court, ss. 8, 14, 16, 28 and 30, correspond to provisions which are found in both the repealed enactments, ss. 5 and
9 correspond to similar provisions in the Indian Arbitration Act,
1899, and ss. 15 and 20 correspond to similar provisions in the
second schedule to the Code and some sections such as sec. 11,
are entirely new.
In the circumstances, a question may arise
whether the provisions of the new Act can be regarded as reenactments of the repealed provisions of the Indian Arbitration
Act, 1899 or of the Code. But for the purpose of this case we
shall assume that s. 20 of the new Act is a re-enactment with
(1) [1967] I S.C.R. 303.
236
SUPREME co~T REPORTS
[1969] 2 S.C.R.
modification of paragraph 17 of the second schedule to the Code.
A
We shall also assume that Art. 181 of the Limitation Act as constrlled by the Courts should be reg.arded . as containing a reference
to the Code of Civil Procedure mcluding paragraph 17 of the
second schedule thereof. Even after making those two assumptions it appears to us that the implied reference in Art. 181 to
the Code of Civil Procedure cannot be construed as a reference
B
to the Arbitration Act, 1940.
· Before their amendment by the Indian Arbitration Act, 1940,
Art 158 of the Limitation Act applied to applications "under
the Code of Civil Procedure, 1908 to set aside an award" and •
Art. 178 applied to applications "under the same Code for the
filing in Court of an award . . . . ". The Arbitration Act, 1940
C
amended Arts. 158 and 178. The amended Art. 158 applies to
applications "under the Arbitration Act, 1940 to set aside an
award or to get an award remitted for consideration", that is to
say, to application under ss. 16 and 30 of the Act. The amended
Art. 178 applies to applications "under the Arbitration Act, 1940
for the filing in Court of an award", that is to say to applicaD
tions under s. 14 of the Act. In amending Arts. 158 and 178 the
legislature acted upon the view that the references to the Code
-0f Civil Procedure, 1908 in the second schedule to the Limitation
Act could not in the absence of the amendment be construed as
references to the Arbitration Act, 1940.
At the same time the
legislature refrained from amending Art. 181 and providing that
E
the article will apply to other applications under the Arbitration
Act, 1940. It is manifest that the legislature intended that save
as provided in articles 158 and 178 there would not be any limitation for other applications under the Act. Take the case of an
application under s. 28 of the Act for enlargement of the time for
making the award.
A similar application under paragraph 8
of the second schedule to the Code was governed by Art. 181,
F
but a like application under s. 12 of the Indian Arbitration Act,
1899 was not subject to any period of limitation. There is nothing to indicate that for the purpose of limitation s. 20 of the new
Act should be regarded as a re-enactment of the corresponding
provision of the Code and not of the Indian Arbitration Act,
1899. An application under s. 8 of the new Act corresponding to
G
paragraph 5 of the second schedule to the Code and s. 8 of the
Indian Arbitration Act, 1899 stand on the same footing. In the
circumstances, it is not possible to construe the implied reference
in Art. 181 to the Code of Civil Procedure as a reference to the
Arbitration Act, 1940, or to hold that Art. 181 applies to applications under that Act. The rule of construction given in s. 8 (1)
H
of the General Clauses Act cannot be applied, as it appears that
t~e legislature had a different intenti~n. ~t follows that an application under ss. 8 and 20 of the Arb1trat10n Act,
1940 is not
•
,
•
•
•
'
,.,
•
•
•
•
MOHD. USMAN v. UNION (Bachawat, !.)
237
A
governed by Art. 181. The Limitation Act does not prescribe
any period of limitation for such an application. It follows that
the present application under ss. 8 and 20 is not barred by
limitation.
B
•
c
In conclusion we must observe that the appellant's claim relates
to supplies during the period between April 1, 1945 and March
31, 1946.
There is a serious contention whether the olaim is
barred by limitation.
It will be the duty of the arbitrator to
consider this matter carefully and to decide whether or not the
claim is so barred .
In the result, the appeal is allowed, the order of the High
Court is set aside and the order of the District Judge, Jhansi, is
restored.
In the circumstances of the case, there will be no
order as to costs in this Court.
G.C.
Appeal allow~d .