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2013 (4) TMI 145 - HC - Indian LawsLimitation Act - SAIL entered into a Charter Party agreement with ICL (Company) for importing coal. The vessel was to discharge cargo at four places in India. The dispute arose when the vessel arrived at Paradip Port and completed discharge of unloading coal to the extent of 24,088 MT and leaving a balance quantity of 23,501 MT to be discharged at Haldia Port being the next port of discharge. At the time of unloading at Paradip Port, one of the cranes out of four cranes of the vessel had been found out of order for which SAIL calculated the lay time on pro-rata basis which ICL did not agree, that gave rise to dispute to be resolved through arbitration in terms of the arbitration clause stipulated in the Charter Party Agreement. SAIL was not happy with the award. SAIL challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 before the Delhi High Court on December 16, 1999. Court declined to entertain the appeal. Finally SAIL filed the appeal in this court. ICL raised preliminary issue to the effect that applications were barred by laws of limitation u/s 14 and this Court also lacked territorial jurisdiction to entertain the applications. ICL contended that they would have to file a civil action either before a Paradip Court or Haldia had there been no arbitration clause. None of the eventualities occurred within the territorial jurisdiction of this Court. Held that Section 14 of the Limitation Act would exclude the period when a litigant would approach a different Court other than the appropriate Court. The Arbitration was held at Delhi. SAIL thought, it would be the appropriate Court. On such bonafide belief, they approached the Delhi High Court who later on held that it did not have territorial jurisdiction to entertain the same. Delhi High Court did not dismiss the petition. It directed return of the petition with a liberty to file it in the proper Court. Hence the time taken by Delhi High Court would certainly stand excluded. Once the Court found that it had no territorial jurisdiction to entertain a lis it must return the same to the litigant at the earliest so that the delay in the process must not prejudice his right to approach a Court of law. That was the basic concept behind Section 14. In the instant case, on facts, we would find the Courts at Haldia and Paradip would be appropriate to decide an identical controversy in a civil action. Hence the principal Civil Court having jurisdiction on either of those two places would be the right choice. From the Apex Court decisions in Consolidated Engineering Enterprises Vs- Principal Secretary, Irrigation Department and Others 2008(4) TMI 668 - SUPREME COURT . It is clear that enunciated in Section 14 would also apply in case of Section 34 application. Hence we hold that the period taken by the Delhi High Court in deciding the issue would stand excluded from being counted in the instant case. If we exclude the said period we would find the petition well within the prescribed period of limitation. Hence the learned Judge was perhaps not correct on the issue. We thus hold, it is a fit and proper case, SAIL should approach Principal Civil Court having territorial jurisdiction over Paradip Port or Haldia Port. We thus direct return of the petition to SAIL for being filed at the appropriate Court as referred to above. We direct the Registrar Original Side to cause return of the petition to SAIL keeping a loco copy thereof.
Issues Involved:
1. Limitation period for filing the application under Section 34 of the Arbitration and Conciliation Act, 1996. 2. Territorial jurisdiction of the Calcutta High Court to entertain the application under Section 34. 3. Applicability of Section 14 of the Limitation Act to arbitration proceedings. 4. Necessity of obtaining leave under Clause 12 of the Letters Patent for filing the application under Section 34. Detailed Analysis: 1. Limitation Period for Filing the Application under Section 34: The primary contention by SAIL was that the limitation period started from the date they received the arbitral award (September 22, 1999), not from the date of the award (September 6, 1999). SAIL filed the application on December 17, 1999, which was within the 90-day period. The court acknowledged that the application was filed within the prescribed period of limitation before the Delhi High Court. The delay in filing the petition in Calcutta High Court was due to administrative processes, and hence, there was no delay attributable to SAIL. 2. Territorial Jurisdiction of the Calcutta High Court: SAIL argued that the Calcutta High Court had jurisdiction as the lay time calculation and demand were made from their office in Calcutta. However, ICL contended that the cause of action arose at Paradip and Haldia ports where the breach occurred. The court held that significant parts of the cause of action arose outside the jurisdiction of the Calcutta High Court. The appropriate courts were determined to be those having jurisdiction over Paradip or Haldia, where the actual events leading to the dispute occurred. 3. Applicability of Section 14 of the Limitation Act to Arbitration Proceedings: The court considered multiple precedents and concluded that Section 14 of the Limitation Act, which allows for exclusion of time spent in proceedings in a court without jurisdiction, applies to arbitration proceedings under Section 34. The period taken by the Delhi High Court to decide on jurisdiction was excluded from the limitation period, making SAIL's application timely. 4. Necessity of Obtaining Leave under Clause 12 of the Letters Patent: ICL argued that leave under Clause 12 was necessary for filing the application under Section 34 if part of the cause of action arose outside the jurisdiction of the Calcutta High Court. The court, however, left this issue open for future determination, as it was not directly relevant to the present case. Conclusion: The court directed the return of the petition to SAIL for filing in the appropriate court having jurisdiction over Paradip or Haldia. The period taken by the Delhi High Court and the time taken by the Calcutta High Court in deciding the issue were to be excluded from the limitation period. The appeals were allowed in part, modifying the judgment and order of the learned Single Judge accordingly.
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