COMMISSIONER, M.P. HOUSING BOARD AND OTHERS versus M/S. MOHANLAL AND COMPANY

Citation: [2016] 3 S.C.R. 357 · Decided: 19-07-2016 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2016] 3 S.C.R. 357. 
COMMISSIONER, M.P. HOUSING BOARD AND OTHERS 
A 
v. 
M/S. MOHANLAL AND COMPANY 
(Civil Appeal No. 6573of2016) 
JULY 19,2016 
[DIPAK MISRA AND ROHINTON f'ALI NARIMAN, JJ.j 
Arbitration and Conciliation Act. 1996: s.34(2) - Delay in 
filing objection 11/s.34(2) il'hether c1111donable in aid of s.14 of 
Limitation Act - In the instant case. arbitral award passed on 
11.11.2010 - Respondent filed s.11 application for seeking 
appointment of arbitrator on the ground that there was 110 ctrbitration 
clause in the contract - High Court dismissed the application which 
order remained unchallenged and a/fained finality - Thereqfte1; 
respondent filed an o~jection u/s.34(2) on 26.9.2011 to challenge 
the award - Respondent also filed application u/s.14 seeking 
exclusion of time consumed in the proceedings u/s.11 asserting that 
he was bonqfidely prosecuting the case in the court having no 
jurisdictio11 - Whether s. ]./ would be applicable - Held: Not 
applicable -- s.14{1) of the limitmion Act lays down that the 
proceedings must relate to the same matter in issue - Filing of an 
application u/s.11 for un appointment of arbitrator is totalzy different 
from an objection filed u/s.34 - It cannot be said that the 
proceedings related to "same matter in issue·· - Respondent had 
duly participated in the arbitral proceeding - There was thus 
absence of diligence a11d good faith on part of respondent - Time 
consumed for pursuing remedy u/s. JJ not excludible for filing 
objection - Limitation Act, 1963 - s.14. 
Allowing the a11peal, the Court 
HELD: The ob,iection was filed beyond the JICriod 
prescribed under the 1996 Act. However, the a1>pellants sought 
exclusion of the time spent in the proceedings in court as 
envisaged under Section 14 of the Act. It is settled in law that 
Section 14 of' the Act applies to Section 34(3) of the 1996 Act. 
Section 14 would be applicable in cases of mistaken remedy or 
selection of a wrong forum. In the case at hand, the respondent 
appeared before the arbitrator and after the award was passed, 
357 
B 
c 
D 
E 
f. 
G 
H 
., 
358 
A 
B 
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D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2016] 3 S.C.R. 
chose not to file any objection to the award immediately. On the 
contrary, the respondent filed an application under Section 11 of 
1996 Act before the High Court for appointment of an arbitrator. 
Section 14(1) of the Act lays down that the proceedings must 
relate to the same matter in issue. It emphasises on due diligence 
and good faith. Filing of an application under Section 11 of the 
1996 Act for an appointment of arbitrator is totally different from 
an objection to award filed under Section 34 of the 1996 Act. To 
put it differently, one is at the stage of initiation, and the other at 
the stage of culmination. By no stretch of imagination, it can be 
said that the proceedings relate to "same matter in issue". 
Additionally, the respondent had participated in the arbitral 
proceeding and was aware of passing of the award. He, may be, 
by design, invoked the jurisdiction of the High Court for 
appointment of an arbitrator. Liberal interpretation should be 
placed on Section 14 of the Act, but if the fact situation exposits 
absence of good faith of great magnitude, law should not come to 
the rescue of such a litigant. This is so because the respondent 
instead of participating in the arbitration proceedings, could have 
immediately taken steps for appointment of arbitrator as he 
thought appropriate or he could have filed his ob.icctions under 
Section 34(2) of the Act within permissible parameters but he 
chose a way, :m innovative path, possibly harbouring the thought 
that he could contrive the way where he could alone rule. This is 
neither diligence nor good faith. On the contrary, it is absence of 
both. The High Court has fallen into grave error by concurring 
with the opinion expressed by the Additional District Judge and, 
therefore, both the orders deserve to be lancinated. [Paras 14, 
17, 18, 19] [364-D-E; 365-G; 366-B, E-H; 367-A-C) 
State of Goa v. Western Builders (2006) 6 SCC 239: 
2006 (3) Suppl. SCR 288; Consolidated Engineering 
Enterprises v. 
Principal Secretary, Irrigation 
lJepar/ment and ot/Jcrii (2008) 7 sec 169: 2008 (5) 
SCR 1108; Ranwdhar Shril'as v. Bhagll'andas (2005) 
13 SCC 1: 2005 (4) Suppl. SCR 808; Union of India 
v. Popular Construction Co. (2001) 8 SCC 470:2001 
(3) Suppl. SCR 619 - relied on. 
MP. Housing Board and Another v. Sohanlal 

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