Case Note & Summary
The appellant insurance company issued a fire insurance policy to the respondent company for Rs.70,00,000. A fire occurred on 23.04.2000. The insurer offered Rs.7,98,019 on 06.12.2000, which was refused. A meeting on 20.09.2001 resulted in a revised offer of Rs.33,80,925, also refused, but Rs.25,00,000 was paid through Vijaya Bank. The respondent filed a consumer complaint before NCDRC, which was dismissed as involving complicated questions of law. The matter was referred to arbitration. The arbitral tribunal passed a majority award on 28.06.2004 for Rs.44,90,000 with 18% interest, effectively the full insured sum, with a dissenting opinion. The insurer's application under Section 33 of the Arbitration and Conciliation Act, 1996 was dismissed on 17.12.2004. The insurer filed a petition under Section 34 before the District Judge, Jaipur on 24.02.2005, within limitation. The respondent objected to jurisdiction. The District Judge, Jaipur, by order dated 12.03.2008, held the petition not maintainable and returned it under Order 7 Rule 10 and 10A CPC, directing presentation before the District Judge, Jodhpur on 02.04.2008. The insurer re-presented on 10.04.2008, eight days late. The respondent filed an application under Section 3 of the Limitation Act to dismiss the petition as time-barred. The insurer filed an application under Section 14 of the Limitation Act seeking exclusion of time spent before the Jaipur court. The District Judge, Jodhpur, dismissed the Section 14 application and allowed the Section 3 application, dismissing the Section 34 petition. The High Court upheld this order. The Supreme Court allowed the appeal, holding that the time spent before the Jaipur court should be excluded under Section 14, and the delay of eight days in re-presentation was not fatal as the insurer acted diligently. The matter was remitted to the District Judge, Jodhpur for consideration on merits.
Headnote
A) Limitation Act - Section 14 - Exclusion of time in bona fide proceedings - When a petition under Section 34 of the Arbitration and Conciliation Act, 1996 is returned under Order 7 Rule 10 CPC for presentation to the proper court, the time spent in the court lacking jurisdiction can be excluded under Section 14 of the Limitation Act, provided the petitioner acted bona fide and with due diligence. The delay in re-presentation beyond the date fixed by the returning court is not fatal if the petitioner acted diligently and the delay is minimal. (Paras 7-11) B) Civil Procedure Code - Order 7 Rule 10 and 10A - Return of plaint/petition - Representation after amendment - After the substitution of Rule 10A, the representation of a petition in the proper court as per the order of return cannot be considered a fresh filing in all circumstances. The court must consider the entire period from the original limitation and the delay in re-presentation separately. (Paras 8-10) C) Arbitration and Conciliation Act, 1996 - Section 34 - Limitation for setting aside award - The period of limitation under Section 34(3) is three months from the date of receipt of the award, extendable by 30 days. A petition filed within that period before a court lacking jurisdiction is within time, and the benefit of Section 14 of the Limitation Act can be availed for the period spent in such court. (Paras 7, 11)
Issue of Consideration
Whether the time spent in proceedings before a court lacking jurisdiction can be excluded under Section 14 of the Limitation Act when the petition under Section 34 of the Arbitration and Conciliation Act, 1996 is returned for presentation to the proper court, and whether the delay in re-presentation beyond the date fixed by the returning court is fatal.
Final Decision
The Supreme Court allowed the appeal, set aside the orders of the District Judge, Jodhpur and the High Court, and remitted the matter to the District Judge, Jodhpur for consideration of the petition under Section 34 of the Arbitration and Conciliation Act, 1996 on its merits, after excluding the time spent before the District Judge, Jaipur under Section 14 of the Limitation Act and condoning the delay of eight days in re-presentation.
Law Points
- Limitation Act
- 1963
- Section 14
- Order 7 Rule 10 and 10A CPC
- Arbitration and Conciliation Act
- 1996
- Section 34
- Section 37
