(Prayer: Appeal (disposed of on 27-10-1952) from the order of Krishnaswami Nayudu, J., dated 6-11-1951 in the exercise of the Ordinary Original Civil Jurisdiction of the High Court in Appln., No. 2355 of 1951 in O.P. No. 66 of 1951.)

Venkatarama Aiyar, J.

The question that is raised in this appeal is whether S. 5 of the Limitation Act is applicable to an application filed under the Indian Arbitration Act to set aside an award. In certain arbitration proceedings to which the appellant was a party an award was pronounced and it was filed on the Original Side of this Court in O.P. No. 66 of 1951, Notice of this petition was served on the appellant on 27th March 195

1. Art. 158 of the Limitation Act provides that an application to set aside an award should be filed within 30 days from the date of service of the notice of filing of the award. The appellant did not file any application to set aside the award within the time limited by Art. 158. The High Court was closed for summer recess on the 28th April 1951 and on the day of reopening the appellant filed Appln. No. 2355 of 1951 under S. 5 of the Limitation Act for excusing the delay in filing the application to set aside the award. That application was dismissed by Krishnaswami Nayudu, J., on the ground that S. 5 of the Limitation Act was inapplicable, and this appeal has been brought against that order of dismissal.

S. 5 of the Limitation Act runs as follows:

Any appeal or application for a review of judgment or for leave to appeal or any other application to which this section may be applicable by or under any enactment for the time being in force may be admitted after the period of limitation prescribed therefor; when the appellant or applicant satisfied the Court that he had sufficient cause for not preferring the appeal or making the application within such period.

As we are concerned in these proceedings with an application to set aside an award, the only question to be determined is whether there is any enactment which had made S. 5 applicable to such proceedings.

Before the Arbitration Act of 1940 the law was well settled that the Court had no power under S. 5 of the Limitation Act to extend the time prescribed by Art. 158 for failing an application to set aside an award. That was held by Mookerjce and Holmwood, JJ., in Surjanarain v. Bunwarijha (18 C.L.J. 35), and that view was followed by the Lahore High Court in Devi Ditta v. Baluram (8 Lah. 274). The learned Advocate for the appellant does not dispute the correctness of the law as laid down in those decisions. What he contends is that the law has been changed by the Arbitration Act, and under S. 37(1) of the Act properly construed, S. 5 of the Limitation Act would be applicable to an application to set aside an award. S. 37(1) runs as follows:

All the provisions of the Indian Limitation Act, 1908, shall apply to arbitrations as they apply to proceedings in Court

The question is, what is the precise meaning of the word arbitration in this section The contention of the appellant 19 that arbitration proceedings mentioned in the section include not only proceedings before the arbitrators, but also applications taken out for filing the awards in Court or for setting them aside. He contends that they are also arbitration proceedings and that by virtue of S. 37(1) the provisions of the Limitation Act including S. 5 will apply. He relied upon certain observations of the Privy Council occurring in Ramdutt Ramkissendas v. E.D. Sasoon and Co. , (56 Cal. 1048 = 29 L.W. 682 (P.C), as supporting this position. The facts in that case Were these. There were certain arbitration proceedings which resulted in an award. But that award was set aside. Subsequently the applicant commenced fresh arbitration proceedings with reference to the same subject matter. The opposite party pleaded that at the time of the new proceedings an action by the applicant would be barred and that therefore no relief should be granted to him in arbitration proceedings. The applicant pleaded that he was entitled to the benefit of S. 14 of the Limitation Act and to deduction of the time taken in the prior arbitration proceedings. It was this question that came up for consideration before the Privy Council. Lord Salvesan held that the applicant was entitled to the benefit of S. 14 of the Limitation Act. His Lordship observed that the Limitation Act was in its own terms inapplicable to proceedings before the arbitrators and that if the opposite party was entitled to rely on a plea of limitation based on the Limitation Act, the applicant would likewise be entitled to rely on S. 14 of that Act. Then occur the observations on which the Advocate for the appellant relies:

Arbitrations under the Indian Arbitration Act are not prosecuted by filing suits and preferring appeals from the decrees in such suits but by procuring awards and filing them in Court and resisting applications to set them aside.

It is contended on the strength of these observations that proceedings taken in Court for setting as side awards must also be considered to be arbitration proceedings. We are unable to agree that that was what was intended in those observations. The Privy Council was dealing with the question as to whether the provisions of the Limitation Act were applicable to proceedings before the arbitrator. They were not concerned with an application before the Court arising out of arbitration proceedings, and taken in their context the observations do not amount to a decision that an application to set aside an award must be taken to be an arbitration proceeding. The matter has to be decided on an interpretation of the language of S. 37(1). Whatever force there might have been in the contention of the appellant if S. 37(1) had stopped with the words

apply to the arbitrations, it is wholly untenable in view of the words that follow, namely, as they apply to proceedings in Court.

The section makes a sharp distinction between arbitrations and proceedings in Court. Whatever justification there might be for considering an application to set aside an award in a Court as an arbitration proceeding, there can be none for holding it to be not a proceeding in Court. In the context, therefore, the word arbitration should be limited to proceedings before the arbitrators; and an application to set aside an award being a proceeding in Court, cannot be held to be an arbitration proceeding. Moreover, S. 37(1) is intended to apply to proceedings in arbitration the provisions of the Limitation Act which would otherwise be inapplicable. But even apart from S. 37(1), Art. 158 in terms applies to an application to set aside an award. On the construction of the section, therefore, we are of opinion that arbitration referred to in S. 37(1) cannot include a proceeding taken in Court for setting aside the award.

That this is the correct conclusion will be clear if regard is had to the history of the legislation on the subject. S. 37(1) is a reproduction of S. 16(1) of the English Arbitration Act of 1934. Before that Act the statutory law in England relating to arbitration contained no provision similar to S. 16(1). In the absence of such a provision the question was raised whether a party could plead limitation in proceedings before the arbitrators. In the decision in In re Ashley and the Tyldesley Coal and Salt Co. (68 L.J. Q.B. 252), a Bench of the Divisional Court in England had held that it was open to the defendant to plead limitation in proceedings before the arbitrator. That the law laid down in that case was not accepted without question would be clear from the observations of the Court of Appeal in the case reported in Gayzer Irwing and Co. Ltd. v. Board of Trade (1927) 1 K.B. 269) where Scrutton L.J. in particular expressed doubts as to the correctness of the decision in In re Astley and the Tyldesley Coal and Salt Co. (68 L.J. Q.B. 252). When that case was taken in appeal to the House of Lords Viscount Cave L.C. observed that it was not necessary in that case to express an opinion as to whether In re Ashley and the Tyldesley Coal and Salt Co. (68 L.J. Q.B. 252), was correctly decided. It was only in 1929 that the Privy Council held in the case reported in Ramdutta Ramkissendas v. E.D. Sasoon & Co. (56 Cal. 1048 = 29 L.W. 682 (P.C.), that the law as laid down in Gayzer Irwing Co., Ltd. v. Board of Trade (1927) 1 K.B. 269) was correct. As late as 1931 in Halsburys Laws of England, Vol. 1 page 653, para 1 104, the law on the subject is stated in these terms:

In mercantile references it is an implied term of the contract that the arbitrator must decide the dispute according to the existing law of contract and every defence which would have been open in a Court of law can be legally raised for the arbitrators decision unless the parties have agreed to exclude the defense.

and the Statute of Limitation is mentioned as one of the laws in accordance with which the arbitrators should pronounce their decision. It was in this state of the law that the Arbitration Act of 1934 was enacted and S. 16(1) provided that the rules of limitation applicable to proceedings in civil Court should also be applicable to proceedings before the arbitrators. It was this provision that has been enacted in S. 37(1) of the Indian Arbitration Act. The true scope of this provision is therefore that when proceedings are taken before the arbitrator the parties are entitled to plead limitation exactly as if the proceedings had been taken in a civil Court. That being the scope of S. 37(1), its operation should be limited to proceedings before the arbitrator and not to proceedings taken in a Court, though they might arise out of arbitration proceedings. In this view we are of opinion that S. 37(1) does not have the effect of making S. 5 of the Limitation Act applicable to an application to set aside the award.

We agree with Krishnaswami Nayudu J. that there is no power in the Court to extend the time prescribed by Art. 158 of the Limitation Act. This appeal is accordingly dismissed. The parties will bear their own costs in the appeal.