# OIL AND NATURAL GAS CORPORATION LTD v. M/S. NIPPON STEEL CORPORATION LTD

- **Citation:** [2006] Supp. 8 S.C.R. 596
- **Court:** Supreme Court of India
- **Decided:** 2006-11-07
- **Case number:** Civil Appeal No. 4699of2006
- **Bench:** Dr. Ar. Lakshmanan, Tarun Chatterjee
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/oil-and-natural-gas-corporation-ltd-v-m-s-nippon-steel-corporation-ltd-21935
- **Pages:** 29

## Headnote

Indian Arbitration Act, 1940; Section 14:
Arbitration-Filing of an award in Court-Notice to parties-Held:
C Award filed at the instance of the Arbitrator by an advocate-He was not
standing counsel for the appellant at the time of filing of award-Merely
because he is on the panel of the Advocates of the appellants, it does not
determine his representative capacity-Besides, the award was filed by the
counsel acting as an agent of the arbitrator-Mere, knowledge of.filing of
D the award to the counsel cannot be construed as actual/constructive notice
to the client-Doctrine of constructive notice cannot be extended to acts
performed at the instance of third party-Since the counsel/advocate did not
act on behalf of the appellant, principle of agency cannot be exten4ed to
such situation-Hence provisions under O.Ill R.5 CPC not attracted-Code
of Civil Procedure, 1908-0rder III Rule 5.
E
Limitation Act, 1963; Article l 19(b):
Arbitration-Award-Limitation-Commencement of-Effective dateHeld: limitation cannot be computed from the date of knowledge of the
award-Moreover, appellant did not have any knowledge of filing of the
F award-Notice regarding filing of award must be given to the appellant by
some act· of Court-Mere intimation from one party to other about filing of
the award cannot be construed as notice in terms of Section 14(2) of 1940
Act-Objection filed by the appellant not barred by time, hence, order
dismissing the arbitration petition on the ground of limitation is set aside.
G
Doctrines:
Doctrine of constructive Notice-Applicability of
The questions that arose for determination in this appeal were as to
H
596
OIL AND NI\ TURAL GAS CORPN. LTD. "· NIPPON STEEL CORPN. LTD.
597
whether the filing of an award in the Court by an advocate acting as an agent A
of the arbitrator is deemed notice to tbe appellant, one of the parties to the
Award under Section 14(2) of the Arbitration Act, 1940 and as to whether
the limitation for setting aside the said award at the instance of the appellant,
shall commence from that date.
Thus, the substantial questions oflaw arose for determination by this B
Court were:
(i) as to whether the High Court was justified in extending the principle
of constructive notice to the facts of the present case ignoring the express
stipmations of Section 14(2) of the Arbitration Act, 1940;
(ii) as to whether the High Court was justified in ignoring the
fundamental difference between the two expressions i.e. date of service of notice
and date of knowledge of award;
c
(iii) as to whether the High Court was justified in overlooking the
legislative intent in framing Article 119(b) of the Limitation Act by D.
incorporating the expression "the date of service of notice";
(iv) as to whether in view of the exhaustive nature of Article 119(b) of
the Limitation Act, the High Court was justified in importing the principle
embodied in Order Ill Rule 5 of the Code of Civil Procedure;
E ,
(v) as to whether the High Court has failed to appreciate the significance
of the expression "the Court shall thereupon give notice to the parties of filing
of the award" occurring in Secti.on 14(2) of the Arbitration Act, 1940; and
(vi) as to whether the High Court was justified in overlooking that the F
presumption of constructive notice can Le drawn only against the party whom
the counsel is representing at the time of performing the said act.
The appellant contended that the award was filed on behalf of the
arbitrator, the doctrine of constructive notice cannot be stretched to the extent
of imputing knowledge on the appellant of filing of the award; that as per G
Section 14(2) of the Arbitration Act, the arbitrator causes the award to be
filed on request of either of the party or on the express direction of the Court;
that the appellant has not filed any application requesting the arbitrator to
file the award in Court. In the absence of such an application, the award filed
by the arbitrator, cannot be construed as an award filed at the in

## Text

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A
OIL AND NATURAL GAS CORPORATION LTD.
v.
M/S. NIPPON STEEL CORPORATION LTD.
NOVEMBER 7, 2006
B
[DR. AR. LAKSHMANAN AND TARUN CHATTERJEE, JJ.]
Indian Arbitration Act, 1940; Section 14:
Arbitration-Filing of an award in Court-Notice to parties-Held:
C Award filed at the instance of the Arbitrator by an advocate-He was not
standing counsel for the appellant at the time of filing of award-Merely
because he is on the panel of the Advocates of the appellants, it does not
determine his representative capacity-Besides, the award was filed by the
counsel acting as an agent of the arbitrator-Mere, knowledge of.filing of
D the award to the counsel cannot be construed as actual/constructive notice
to the client-Doctrine of constructive notice cannot be extended to acts
performed at the instance of third party-Since the counsel/advocate did not
act on behalf of the appellant, principle of agency cannot be exten4ed to
such situation-Hence provisions under O.Ill R.5 CPC not attracted-Code
of Civil Procedure, 1908-0rder III Rule 5.
E
Limitation Act, 1963; Article l 19(b):
Arbitration-Award-Limitation-Commencement of-Effective dateHeld: limitation cannot be computed from the date of knowledge of the
award-Moreover, appellant did not have any knowledge of filing of the
F award-Notice regarding filing of award must be given to the appellant by
some act· of Court-Mere intimation from one party to other about filing of
the award cannot be construed as notice in terms of Section 14(2) of 1940
Act-Objection filed by the appellant not barred by time, hence, order
dismissing the arbitration petition on the ground of limitation is set aside.
G
Doctrines:
Doctrine of constructive Notice-Applicability of
The questions that arose for determination in this appeal were as to
H
596
OIL AND NI\ TURAL GAS CORPN. LTD. "· NIPPON STEEL CORPN. LTD.
597
whether the filing of an award in the Court by an advocate acting as an agent A
of the arbitrator is deemed notice to tbe appellant, one of the parties to the
Award under Section 14(2) of the Arbitration Act, 1940 and as to whether
the limitation for setting aside the said award at the instance of the appellant,
shall commence from that date.
Thus, the substantial questions oflaw arose for determination by this B
Court were:
(i) as to whether the High Court was justified in extending the principle
of constructive notice to the facts of the present case ignoring the express
stipmations of Section 14(2) of the Arbitration Act, 1940;
(ii) as to whether the High Court was justified in ignoring the
fundamental difference between the two expressions i.e. date of service of notice
and date of knowledge of award;
c
(iii) as to whether the High Court was justified in overlooking the
legislative intent in framing Article 119(b) of the Limitation Act by D.
incorporating the expression "the date of service of notice";
(iv) as to whether in view of the exhaustive nature of Article 119(b) of
the Limitation Act, the High Court was justified in importing the principle
embodied in Order Ill Rule 5 of the Code of Civil Procedure;
E ,
(v) as to whether the High Court has failed to appreciate the significance
of the expression "the Court shall thereupon give notice to the parties of filing
of the award" occurring in Secti.on 14(2) of the Arbitration Act, 1940; and
(vi) as to whether the High Court was justified in overlooking that the F
presumption of constructive notice can Le drawn only against the party whom
the counsel is representing at the time of performing the said act.
The appellant contended that the award was filed on behalf of the
arbitrator, the doctrine of constructive notice cannot be stretched to the extent
of imputing knowledge on the appellant of filing of the award; that as per G
Section 14(2) of the Arbitration Act, the arbitrator causes the award to be
filed on request of either of the party or on the express direction of the Court;
that the appellant has not filed any application requesting the arbitrator to
file the award in Court. In the absence of such an application, the award filed
by the arbitrator, cannot be construed as an award filed at the instance of the H
598
SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.
A appellant and thus doctrine of constructive notice cannot be extended to the
facts and circumstances of the case; that the notice referred therein should
always be given by the Court; that the words used in Article 119 of the
Limitation Act, 1963 make it abundantly clear that the said Article recognizes
the date of service of notice as the relevant date for computation of the
stipulated period of limitation. The Legislature, after exercising its wisdom,
B has specifically used the expression "the date of service of notice" and not
the date of knowledge of the filing of the award, in Article 119 of the
Limitation Act; that the construction now adopted by the High Court tends to
obliterate the difference between the date of service of notice and the date of
knowledge of the award, and is thus, contrary to the legislative intent; that in
C view of the expression "the date of notice" used in Article 119 of the Limitation
Act, the period of limitation has to be computed from the date of service of
notice; that the High Court has erred in importing the principle of Order III
Rule 5 of the C.i>.C. to the facts of the present case; that the counsel has not
acted as representative of the appellant; that the High Court is not right in
applying the proposition laid down by this Court in F.C.I. v. B. Kuttappan,
D (t993J 3 sec 445 and has failed to appreciate the legal proposition laid down
by this Court in Deo Narain Choudhary v. Shree Narain Choudhary, (2000)
8 SCC 626. However, it has committed an error in overlooking the proposition
laid down by this Court in Ch. Ramalinga Reddy v. Superintending Engineer,
(1999) 9 SCC 610; and that the notice referred to in Section 14(2) n_eed not
E specifically be framed in a written format.
Respondent submitted that the instant case is squarely covered by the.
decision of this Court in FC.I. v. B. Kuttappan; that the letters submitted by
the appellant confirm that the award was filed by Advocate/advocates Company
as the counsel of the appellant and that they had, by their own showing, been
F appointed by the appellant to act on its behalf in Court; that there is not a
word to say that the said Advocate/advocates Company had filed the award in
Court for and on behalf of the Arbitrator nor despite the specific contention
of the bar of limitation, had any affidavit been filed either by the arbitrators
or any one from the office of the said Company of Advocates to say that the
G Arbitrator had engaged him; that it is settled law that intimation,
communication or notice to pleader is notice to the party in view of Order III
Rule 5 ofC.P.C. and that such intimation, communication or notice to pleader
would be sufficient compliance with Section 14(2) of the Arbitration Act, 1940;
that the appellant is estopped from claiming _that it did not have the
corresponding knowledge of the filing of the award by the said Company of
H Advocates; that the moment the award was filed by the appellant's counsel in
OIL AND NATURAL GAS CORPN. LTD.'" NIPPON STEEL CORPN. LTD.
599
Court and was taken on record by the Court, the notice by the Court is deemed A
to the appellant; and that the question in the instant case is not whether the
appellant had expressly instructed .its counsel to file the award in Court but
wliether the very act of the appellant's counsel acting as counsel of the
appellant in filing the award in Court imputes deemed and constructive
knowledge of the filing of the award on the appellant.
Allowing the appeal, the Court
HELD: I.I. In the instant case, the award was filed at the instance of
the arbitrator by M/s. Little & Co., as is clear from Annexure P-4. The
description of M/s. Little & Co. as the lawyer of the respondent in the
Arbitration, is not of any consequence and not binding on the appellant so C
long as no vakalat is given to them at the relevant time of filing of the award
before the Court to act as their lawyer in the proceedings initiated under
Sections 33 & 34 of the Arbitration Act, 1940 before the High Court.
1610-H; 611-E-F)
1.2. The fact that Annexure P-4 was filed after filing of the award and D
that the address of the appellant for service of 11otice as furnished by the
counsel reflects that M/s Little & Co. was not representing the appellant at
the time of filing of the award. These letters clearly establish that M/s Little
& Co. at the time of filing of the award was acting at the instance of the
Arbitrator.1611-F-G)
1.3. The fact that Mis Little & Co. on the panel of the advocates of the E
appellant does not determine its representative capacity at the time of filing
of the award. Panel lawyers are not standing counsel for the ONGC in the
High Court. Panel lawyers' services are availed of, on a case to case basis.
Mis Little & Co. filed the award acting as the agent of the arbitrator and
while doing this ministerial act of filing of the award on behalf of the
Arbitrator they were not acting in their capacity as the counsel of the appellant. F
(611-H; 612-AJ
1.4. The respondent has misconstrued the pleadings of the appellant.
The appellant is not denying the fact that M/s. Little & Co. was counsel for
him in the arbitration proceedings. The appellant is, in fact, only contending
that at the time of filing of the award, the counsel was not acting on behalf of G
the appellant but was acting as a representative of the arbitrator. The law
requires the arbitrator to file the award before the competent Court. The
Arbitrator can discharge this legal duty by himself or through an agent who
happened to be an appellant's counsel in the Arbitration. The fact that the
counsel had filed the award at the express request of the arbitrator reflects H
600
SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.
A that the counsel was acting as a representative of the Arbitrator at the time
of filing of the award and was not discharging any professional service as a
lawyer to the appellant (612-B-C-DJ
1.5. Since the appellant had no intention to get the award filed in Court,
there was no question of appointing M/s. Little & Co. to coordinate with
B arbitrator to obtain the award and file the same before the court Therefore,
the knowledge of the said lawyer about the filing of the award is not a notice,
either actual or constructive to the appellant. (612-D-E)
2.1. The principles enshrined in Order Ill Rule 5 C.P.C. one not
applicable to the facts of the instant case. The principles embodied in the
C said Rule is only applicable in cases where the counsel acts on behalf of his
client and where the counsel in its representative capacity represents its client
In the instant case, by filing the award at the instance of the arbitrator, the
counsel is acting as a representative of the arbitrator and was not acting as
a representative of the appellant and, therefore, the presumption envisaged
D by the said Rule cannot be stretched to situations where the pleader is not
acting on behalfofthe party. (612-F-G)
3.1. In view of the specific expression used in Article 119 of the
Limitation Act, limitation cannot be computed from the date of knowledge of
the award. Further, at the time of filing of the award, the appellant did not
E have knowledge of the filing of the award as the 2ward was filed by Mis Little
& Co. at the instance of the Arbitrator. (613-A-.13)
3.2. The fact that Mis. Little & Co. was directed by the Court to furnish
address of the parties for service of notice indicates that the Court itself did
not consider the act of filing of the award by Mis. Little & Co. as notice or
F even constructive notice. The doctrine of constructive notice cannot be
extended to acts that are performed at the instance of a third party.
(613-D-E; 614-AJ
4.1. The High Court has failed to follow the direction laid down by this
Court in the decided cases of Dea Narain Choudhary v. Shree Narain
Choudhary and Ch. Ramalinga Reddy v. Superintending Engineer. In these
G cases, this Court has expressly laid down that notice regarding filing of Award
must be given to the Court by some act of Court The letter of Prothonotary
and Senior Master cannot be regarded as an act of Court. This Court also
conclusively laid down in these cases that mere intimation from one party to
the other of the filing of the Award cannot be construed as notice in terms of
H Section 14(2) of the Act Hence, the intimation from the Prothonotary seeking
OIL AND NATURAL GAS CORPN. LTD. r. NIPPON STEEL CORPN. LTD.
60}
address of the parties for the purpose of issuance of notice cannot be A
characterized as notice in terms of Section 14(2) of the Act.
(622-H; 623-D-E-FI
Deo Narain Choudh01y v. Shree Narain Choudhary, (2000( 8 SCC 626
and Ch. Ramalinga Reddy v. Superinknding Engineer, (19991 9 SCC 610,
relied on.
Kumbha Ma-w,ji v. Union of India, !19531 SCR 878; Nilkantha
Shidramappa Ningashetti v. Kashinath Somanna Ningashetti and Ors., (1962)
B
2 SCR 551; Parasramka Commercial Company v. Union of India, (1969) 2
SCC 694; Indian Rayon Corporation Ltd. v. Raunaq and Company Pvt. Ltd.,
(1988) 4 SCC 31; Food Corporation of India and Ors. v. E. Kuttappan, (1993J C
3 SCC 445; Patel Motibhai Naranbhai and Anr. v. Dinubhai Motibhai Patel
and Ors., (1996) 2 SCC 585; Secretary to Govt. of Karnataka and Anr. v. V.
Harishbabu, (1996( 5 SCC 400; East India Hotels Ltd. v. Agra Development
Authority, (2001) 4 SCC 175 and Bharat Coking Coal Ltd. v. L.K. Ahuja,
(2004) 5 sec 109, referred to.
4.2. At the time of filing of the Award Mis. Little & Co. was not acting
as representative of the appellant as admitted by the respondent in the counter
affidavit. The Arbitrator had caused the Award to be filed through Mis. Little
& Co. The categorical admission cannot, therefore, be ignored or brushed
aside. (623-F-G]
F.C.1. v. B. Kuttappan, (1993( 3 SCC 445, distinguished.
D
E
4.3. For the foregoing reasons, the objection to the Award filed by the
appellant were not barred by time. Hence, the appeal is allowed and the order
passed by the High Court in Appeal No. 321 of 1997 affirming the judgment
passed by the Single Judge dismissing the arbitration petition under Sections F ·
30 and 33 of the 1940 Act on the ground oflimitation under Article 119 of
the Limitation Act is set aside. 1623-G-H; 624-Al
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4699of2006.
From the final Judgment and Order dated 6th/8th December, 2005 of the G
High Court of Judicature at Bombay in Appeal No. 321/1997 in Arbitration
Petition No. 260of1996 in Award No.98/1996.
Gopal Subramanium, A.S.G., K.R. Sasiprabhu, Sreegesh M.K. and
Abhishek Tewari for the Appellant.
H
602
SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.
A
Ashok H. Desai, Dr. Aman M. Hingorani and Priya Hingorani (for
B
Mis. Hingorani & Associates) for the Respondent.
The Judgment of the Court was delivered by
DR. AR. LAKSHMANAN, J. Leave granted.
Oil & Natural Gas Corporation Ltd. is the appellant. Aggrieved by the
judgment and order dated 6th/8th December, 2005 passed by the High Court
of Judicature at Bombay in Appeal No. 321 of 1997 in Arbitration Petition No.
260of1996 in Award No. 98 of 1996, this appeal was preferred.·
C
The question that falls for determination in this appeal is whether the
D
filing of the award dated 2.3.1996 by M/s. Little & Co., advocate for the Oil
& Natural Gas Corporation Ltd. (for short "ONGC") in the Court on 23.3.1996
is the deemed notice under Section 14(2) of the Arbitration Act, 1940 and
whether the limitation for setting aside the said award at the instance of
ONGC shall commence from that date.
The appellant is a Public Sector Oil Company incorporated under the
Companies Act, 1956 and engaged in the business of exploration and
exploitation of Hydrocarbons. The appellant, ONGC and the respondent
Mis Nippon Steel Corporation Ltd. entered into a contract for transportation
E. and installation of fabricated structures of South Basein Platform Complex
which was to be located at about 80Kms. west of Bombay in the Arabian Sea.
Disputes and difference arose between the parties which were subsequently
arbitrated and an award was passed on 2.3.1996 under the Indian Arbitration
Act, 1940 which confers statutory jurisdiction on. courts of law either to
convert a legally valid award into a rule of the Court or set aside/remit the
F same on the grounds specifically provided for that purpose in the said Act.
G
There is an express and well defined statutory scheme for the same in the Act.
A provision of law - Section 14 of the Indian Arbitration Act, 1940, which is
relevant for this appeal, reads as under:
"14. Award to be signed and filed -
(1)
When the arbitrators or umpire have made their award, they shall
sign it ant:! shall give notice in writing to the parties of the making
and signing thereof and of the amount of fees and charges
payable in respect of the arbitration and award.
H
(2)
The arbitrators or umpire shall, at the request of any party to the
OIL AND NATURAL GAS CORPRN. LTD. I'. NIPPON STEEL CORPN. LTD. [LAKSHMANAN, J.] 603
arbitration agreement or any person claiming under such party or A
if so directed by the Court and upon payment of the fees and
charges due in respect of the arbitration and award and of the
costs and charges of filing the award, cause the award or a
signed copy of it, together with any depositions and documents
which may have been taken and proved before them, to be filed
in Court, and the Court shall thereupon give notice to the parties B
of the filing of the award.
(3)
Where the arbitrators or umpire state a special case under Clause
(b) of Section 13, the Court, after giving notice to the parties and
hearing them, shall pronounce its opinion thereon and such
opinion shall be added to, and shall form part of, the award."
C
The plain and simple language of the above provision requires firstly
that the arbitrators/umpire, as the case may be, shall:
(a)
sign the award they make
ID
(b) give notice in writing to the parties of the making and signing of
the award
(c)
cause the award along with the records be filed in Court
Thereupon the Court shall:
(d) give notice to the parties of the filing of the award
(e)
if a special case is referred to court, shall pronounce its opinion,
after giving notice to the parties and hearing them.
E
On 23.3.1996, Mis. Little & Co., the advocates, as per the request ofihe
ArbitratfJr filed an award in the Court on behalf of the Arbitrator. The Court,
on 9.5.1996, issued a notice to the parties about the filing of the award which F
was received by the appellant on 14.6.1996. The appellant, on the receipt of
the notice from the Court, moved an application for setting aside the award
on 12.7.1996. The learned single Judge rejected the petition of the appellant
solely on the ground that the same was time barred as the appellant had
knowledge of the filing of the award much prior to the date of notice to them <'.}
by the Court.
Aggrieved by the judgment and order as passed by the learned single
Judge, the appellant filed an appeal before the Division Bench of the High
Court which also dismissed the appeal reaffirming the judgment of the learned
single Judge holding that the application of the appellant was barred by H
604
SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.
A limitation as the same was moved after a span of 30 days from the knowledge
of the filing of the award in Court. The Division Bench also directed the
appellant to deposit with the office of the Prothonotary & Senior Master, High
Court, Bombay, a sum of Rs.2,36,29,954/-. The appellant deposited the above
said amount as per the said order. Thereupon the respondent moved a Notice
B of Motion No. 206 of 2006 in Appeal No. 32 I of I 997 in Arbitration No. 260/
96 in Award No. 98/96 praying the Court to direct the office of the Prothonotary
& Senior Master, High Court, Bombay to pay and hand over the sum of
Rs.2,36,29,954/- with accrued interest due thereon to the respondent. The
appellant filed an affidavit in reply to the notice of motion. The respondent
again moved a Notice of Motion No. 1082 of 2006 praying the Court to pass
C a judgment and decree in terms of the Award dated 2.3. I 996. Hence the
present appeal by way of special leave petition has come up.
D
We have heard Mr. Gopal Subramanium, learned Additional Solicitor
General of India, appearing for the appellant and Mr. Ashok H. Desai, learned
senior counsel appearing for the respondent.
The learned ASG and the learned senior counsel advanced elaborate
,..
submissions with reference to the provision.> of the Indian Arbitratiol'! Act,
1940, Limitation Act, 1963 and also cited many decisions in support of their
respective contentions.
E
Mr. Gopal Subramanium submitted as under:
(a)
that the award was filed by the arbitrator and not by the appellant
and that the appellant has not instructed their counsel to file the
award and that the award was filed by the counsel at the instance
of the arbitrator. The arbitrators had addressed a letter to the
F
counsel along with their affidavits for filing the award. As the
award was filed on behalf of the arbitrator, the doctrine of
constructive notice cannot be stretched to the extent of imputing
knowledge on the appellant of filing of t:1e award;
G
H
(b)
that as per Section 14(2) of the Arbitration Act, the arbitrator
causes the award to be filed on request of either of the party or
on the express direction of the Court. In the instant case, the
appellant has not filed any application requesting the arbitrator
to file the award in Court. In the absence of such an application,
the award filed by the arbitrator, cannot be construed as an award
filed at the instance of the appellant and hence doctrine of
;
:
OIL AND NATURAL GAS CORPRN. LTD. 1·. NIPPON STEEL CORPN. LTD. [LAKSHMANAN. J.] 605
constructive notice cannot be extended to the facts and A
circumstances of the case. The High Court has overlooked the
significance of the expression "the Court shall thereupon give
notice to the parties of the filing of the award" occurring in the
aforesaid section. The use of the aforesaid expression in the said
section reflects the legislative intention that the notice referred B
therein should always be given by the Court.
(c)
The High Court has failed to comprehend the true spirit and
intent of clause (b) of Article 119 of the Limitation Act. Mr. Gopal
Subramanium submitted that the words used in Article 119 makes
it abundantly clear that the said Article recognizes the date of
service of notice as the relevant date for computation of the C
stipulated period of limitation. The Legislature, after exercising
its wisdom, has specifically used the expression "the date of
service of notice" and not the date of knowledge of the filing
of the award, in AI ticle 119 of the Limitation Act.
The
construction now adopted by the High Court tends to obliterate D
the difference between the date of service of notice and the date
of knowledge of the award, and is hence contrary to the legislative
intent.
(d) that the appellant has not received any communication or
intimation about the filing of the award except for the notice E
dated 9.5.1996. The expression "the Court shall thereupon give
notice to the parties of the filing of the award" occurring in
Section 14(2) of the Arbitration Act has to be conjointly read
with the expression "the date of notice" occurring in Article
I I 9(b) of the Limitation Act. A con joint reading of the aforesaid
section in the manner indicated above leads to an irresistible F
:.:::onclusion that the relevant date to be taken into account for
completion of the period of limitation as stipulated in Article
l I 9(b) of the Limitation Act, is the date of service of notice by
·the Court. The notice dated 9.5.1996 is the first form of
communication received by the appellant on 14.6.1996 as regards G
the filing of the award. Accordingly, the period of thirty days has
to be computed from 14.6.1996 i.e. the date of receipt of the said
notice. In view of the expression "the date of notice" used in
Article 119 of the Limitation Act, the period of limitation has to
be computed from the date of service of notice.
H
606
SUPREME COURT REPORTS (2006) SUPP. 8 S.C.R.
A
(e)
The provisions of Order III Rule 5 of C.P.C. is reproduced
hereunder:
"5.
Service of process on pleader-Any process served on the
pleader who has been duly appointed to act in Court for any party
or left at the office or ordinary residence of such pleader, and whether
B
the same is for the personal appearance of the party or not, shall be
presumed to be duly communicated and made known to the party
whom the pleader represents, and, unless the Court otherwise directs,
shall be as effectual for all purposes as if the same had been given
to or served on the party in person."
c
It was argued that the High Court has erred in importing the principle
of Order III Rule 5 of the C.P.C. to the facts of the present case. The principle
embodied in the said Rules is only applicable in cases where the counsel acts
on behalf of his client and where the counsel in his representative capacity
represents his client. In the present case, the counsel has not acted in his
D representative capacity. By filing the award at the instance of the arbitrator,
the counsel was acting as a representative of the arbitrator and was not acting
as a representative of the appellant. Since at the time of filing of the award,
the counsel was acting under the instruction of the arbitrator, the principles
of agency cannot be extended to the aforesaid facts of the present case.
E
Explaining further, the learned ASG submitted that it is manifest from the
aforesaid Rule that the presumption inherent in the said Rule applies only in
cases where the pleader has been duly appointed to act for the party. The
presumption under the Rule cannot be applied to situations where the pleader
is not acting for the party. For application of the aforesaid Rule, it is sine
qua non that the pleader should have been appointed by the party to act in
F Court. It is submitted that in the instant case, the counsel was not appointed
by the appellant to act in Court on its behalf. The counsel, at the time of
filing of the award, was acting on behalf of the arbitrator and was appointed
by the arbitrator to file the award on his behalf.
G
H
(f)
that the High Court is not right in applying the proposition laid
down by this Court in F.C.I. v. B. Kuttappan, (1993] 3 SCC 445
and has failed to appreciate the legal proposition laid down by
this Court in Dea Narain Choudha1y v. Shree Narain Choudha1y,
(2000] 8 SCC 626. The High Court has committed an error in
overlooking the proposition laid down by this Court in Ch.
Ramalinga Reddy v. Superintending Engineer, (1999] 9 SCC 610.
OIL AND NATURAL GAS CORPRN. LTD. r. NIPPON STEEL CORPN. LTD. [LAKSHMANAN, J.) 607
(g) That the High Court has overlooked real bone of contention A
between parties and have been swayed away by the proposition
that the notice contemplated by Section 14(2) of the Arbitration
Act can be in any form i.e., oral or written and the aforesaid
proposition only adumbrates the principle that the notice referred
to in Section 14(2) need not specifically be framed in a written B
fonnat.
Thus Mr. Gopal Subramanium submitted that the impugned judgment is
contrary to well settled proposition of law.
Mr. Ashok H. Desai, learned senior counsel, appearing for the respondent
submitted as follows:
C
I.
The instant case is squarely covered by the decision of this
Court in F.C.I. v. 8. Kuttappan (supra).
2.
In regard to the argument of the learned A SG appearing for the
appellant, that Mis. Little & Co., advocate was acting as a D
representative of the arbitrator and it was not acting as a
representative of the appellant and that they were not appointed
by the appellant to act in Court on their behalf, Mr. Ashok Desai
submitted that the above submission is falsified by Annexures P3 and P-4 filed by the appellant itself. Annexure f'-3 is the letter
dated 23.3.1996 addressed to the Prothonotary & Senior Master, E
High Court, Mumbai by which Mis. Little & Co., advocates, in
their capacity as an advocate for the appellant herein, requested
that the award therein be taken on file.
Annexure P-4 is the letter dated 26.4.1996 addressed to the
Prothonotary & Senior Master, High Court, Mumbai by which F
Mis Little
& Co., advocates, again in their capacity as the
advocate for the appellant herein, gave the addresses of the
parties as well as their advocates.
According to Mr. Ashok Desai, both these letters confirm that the
award was filed by Mis. Little & Co., advoca,tes as the counsel for the G
appeliant and that they had, by their own showing, been appointed by the
appellant to act on its behalf in Court. The learned single Judge also held
that there is not a word to say that Mis. Little & Co. had filed the award in
Court for and on behalf of the Arbitrator nor despite the specific contention
of the bar of limitation, had any affidavit been filed either by the arbitrators H
608
SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.
A or any one from the office of Mis. Little & Co. to say that the Arbitrator had
engaged or required Mis. Little & Co. to file the award.
B
c
D
E
F
(3)
It is settled law that intimation, communication or notice to pleader
is notice to the party in view of Order Ill Rule 5 of C.P.C. and that
such intimation, communication or notice to pleader would be
sufficient compliance with Section 14(2) of the Arbitration Act,
1940. Therefore, Mr. Ashok Desai submitted that the appellant
is estopped from claiming that it did not have the corresponding
knowledge of the filing of the award by Mis. Little & Co. The
moment the award was filed by the appellant's counsel in Court
and was taken on record by the Court, the notice by the Court
is deemed to the appellant. In other words, even in the absence
of formal notice, some other act of the Court is enough to foist
awareness of the filing of the award in Court, wherefrom the
period of limitation is to commence.
(4)
Inviting our attention to Rule 786 of the Bombay High Court
(Original Side) Rules, Mr. Ashok Desai submitted that the award
has been filed in Court, the Prothonotary and Senior Master shall
forthwith issue notice of such filing to the parties interested in
the award.
In the instant case, the learned single Judge has
recorded that the Prothonotary & Senior Master of the Court had
on around 24.4.1996 directed the counsel for the appellant Mis
Little & Co., to furnish detailed addresses of the parties and that
the appellant's counsel had on 26.4.1996 furnished those
addresses.
The learned single Judge found that this
. communication from the Court received by the appellant's counsel
on or before 26.4.1996 could itself be treated to be a notice by
the Court to counsel for the appellant, about the filing of the
award in Court. Thus it was submitted even if the period of 30
days as contemplated under Article 119 of the Limitation Act is
computed from 26.4.1996, the petition to set aside the award filed
on 12. 7 .1996 would be time barred.
G He denied that the High Court has failed to follow the dictum laid down by
chis Court in the case of Deo !"arain Choudhary v. Shree Narain ChoudhG1y,
(supra) and in Ch. Ramalinga Reddy v. Superi17tending Engineer (supra).
In the above cases, this Court held that limitation does not begin to run
H merely on filing of a caveat in Court by the objecting party as the notice
OIL AND NATURAL GAS CORPRN. LTD. 1·. NIPPON STEEL CORPN. LTD. [LAKSHMANAN, J.] 609
regarding filing of the award must be act of Court, even though it need not A
be in writing. The instant case is not one where deemed or constructive
notice is imputed to the appellant because its own counsel expressly acting
as its counsel, filed the award in Court and hence the appellant is estopped
from claiming lack of knowledge about the filing of the award on that date.
It does not lie in the mouth of the appellant whose counsel had filed the B
award in Court to contend that it did not have the knowledge of the filing
of the award. Likewise, in the case of Ch. Ramalinga Reddy v. Superintending
Engineer (supra), this Court held that mere intimation from one party to the
other party as to the filing of the award, without direction by the Court, is
not notice in terms of Section 14(2) of the Arbitration Act, 1940. The instant
case is again not one where constructive or deemed notice is imputed to the C
appellant because of any intimation sent by the respondent to the appellant.
Concluding his arguments, Mr. Ashok Desai submitted that the instant
case is fully covered by the decision of this Court in F.C./. v. B. Kuttappan
(supra) as aforesaid. In the said case, this Court has been pleased to impute
cl¥1structive notice to the party for the act of its counsel on similar facts. Mr.
Ashok Desai submitted that when the party or its pleader already has
knowledge of the filing of the award in Court in terms of Section 14 of the
Arbitration Act, 1940, a subsequent notice by the Court to the parties in this
regard is of no legal consequence and cannot in law prejudice the rights of
D
the parties. He further submitted that it is factually incorrect that in the E
instant case, Mis Little & Co. did not act in its "representative capacity" on
behalf of the appellant and reiterated that in the instant case Mis. Little &
Co. filed the award expressly acting in Court as the counsel for the appellant
and that Mis. Little & Co. was appointed by the appellant to act in Court on
its behalf which is evident from Annexures ·P-3 and P-4 to the appeal.
Arguing further, Mr. Ashok Desai submitted that the question in the
instant matter is not whether the appellant had expressly instructed its counsel
to file the award in Court but whether the very act of the appellant's counsel
acting as counsel of the appellant in filing the award in Court imputes deemed
and constructive knowledge of the filing of the award on the appellant.
It was also submitted by Mr. Ashok Desai that the decisions of this
Cour: in Dea Natain Choudhary v. Shree Narain Choudhury (supra) and Ch.
Ramalinga Reddy v. Superintending Engineer (supra), are not applicable to
F
G
the facts of the instant case and are even otherwise consistent with the
decision of this Court in F.C./. v. B. Kuttappan (supra). Mr. Ashok Desai H
610
SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.
. A further submitted that the appeal filed by the ONGC has no merits and
therefore, is liable to be dismissed with heavy costs.
Questions of law:-
In the above background, the following substantial questions of law
B arise for consideration by this Court:
c
D
E
1.
Whether the High Court was justified in extending the principle
of constructive notice to the facts of the present case ignoring
the express stipulations of Section 14(2) of the Arbitration Act,
1940?
2.
Whether the High Court was justified in ignoring the fundamental
difference between the two expressions i.e. date of service of
notice and date of knowledge of award?
3.
Whether the High Court was justified in overlooking the legislative
intent in framing Article 1 l 9(b) of the Limitation Act by
incorporating the expression "the date of service of notice"?
4.
Whether in view of the exhaustive nature of Article l 19(b) of the
Limitation Act, the High Court was justified in importing the
principle embodied in Order III Rule 5 of the Code of Civil
Procedure?
5.
Whether the High Court has failed to appreciate the significance
of the expression "the Court shall thereupon give notice to the
parties of filing of the award" occurring in Section 14(2) of the
Arbitration Act, 1940?
F
6.
Whether the High Court was justified in overlooking that the
presumption of constructive notice can be drawn only against
the party whom the counsel is representing at the time of
performing the said act?
We have given our careful consideration to the entire material placed before
G us, tl1e arguments advanced by both sides with reference to the pleadings,
annexures, documents, provisions of law in the Indian Arbitration Act, 1940
and of the Limitation Act, 1963 and the rulings cited by both the counsel.
In the instant case, the award was filed ai the instance of the arbitrator
by M/s. Little & Co. on 23.3.1996 as is clear from Annexure P-4. The relevant
H part of annexure P-4 reads as under:
OIL AND NA TIJRAL GAS CORPRN. LTD. 1·. NIPPON STEEL CORPN. LTD. [LAKSHMANAN. J.)
611
"We, therefore, now give below the address of the parties as well as A
their advocates for the purpose of serving notice in respect of the
above award.
The address of the claimant is as under:
The addresses of the respondents and their advocates are as under:
Oil and Natural Gas Corporation Ltd.
(E & C Division)
Bombay Regional Business Centre
16-E Maker Towers,
Cuffe Parade,
Bombay-400 005
Mis Little Co.
Central Bank Building, 3rd Floor,
Mahatma Gandhi Road,
Fort, Bombay-400 023."
The description of Mis. Little & Co. as the lawyer of the respondent
in the Arbitration, is not of any consequence and not binding on the appellant
so long as no vakalat is given to them at the relevant time ·of filing of the
award before the Court to act as their lawyer in the proceedings initiated
under Sections 33 & 34 of the Arbitration Act, 1940 before the High Court.
The fact that Annexure P-4 is filed after filing of the award and that the
counsel has furnished the address of the appellant for service of notice
reflects that Mis. Little & Co. was not representing the appellant at the time
c
D
E
F
of filing of the award. These letters, in our view, clearly establish that Mis
Little & Co. at the time of filing of the award was acting at the instance of G
the Arbitrator.
The fact that Mis Little & Co. on the panel of the advocates of the
appellant does not determine its representative capacity at the time of filing
of the award. Panel lawyers are not standing counsel for the ONGC in the
High Court. Panel lawyers' services are availed of, on a case to case basis .. H
612
SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.
A Mis. Little & Co. filed the award acting as the agent of the arbitrator and while
doing this ministerial act of filing of the award on behalf of the Arbitrator they
were not acting in their capacity as the counsel of the appellant.
The respondent has misconstrued the pleadings of the appellant. The
appellant is not denying the fact that Mis. Little & Co. was the counsel for
B the appellant in the arbitration proceedings. The appellant is, in fact, only
contending that at the time of filing of the award, the counsel was not acting
on behalf of the appellant but was acting as a representative of the arbitrator.
The law requires the arbitrator to file the award before the competent Court.
The Arbitrator can discharge this legal duty by himself or through an agent
C who happened to be an appellant's counsel in the Arbitration. The fact that
the counsel had filed the award at the express request of the arbitrator reflects
that the counsel was acting as a representative of the Arbitrator at the time
of filing of the award·and was not discharging any professional service as
a lawyer to the appellant. In fact, as contended by the learned ASG appearing
for the appellant, that the appellant had no occasion to appoint Mis. Little
D & Co. to act as its lawyer before the High Court even before the award was
filed. Since the appellant had no intention to get the award filed in Court,
there was no question of appointing Mis Little & Co. to coordinate with
arbitrator to obtain the award and file the same before the court.