MOHD. USMAN MILITARY CONTRACTOR, JHANSI versus UNION OF INDIA, MINISTRY OF DEFENCE

Citation: [1969] 2 S.C.R. 232 · Decided: 26-09-1968 · Supreme Court of India · Bench: S.M. SIKRI · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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 Govern-
ment 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 applica-
tion in the Court of the District Judge under ss. 8 and 20 of the Arbi-
tration 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 limita-
tion 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 ap-
plications 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The Arbitration Act, 1940 repealed paragraph 17.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 modi-
fications. 
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 pro-
ceedings 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 cor-
responding 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 Arbi-
tration 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 Limi-
tation Act does not prescribe any period of limitation for such an appli-
cation. [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 arbitrat

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