2013 (4) TMI 361 - HC - Companies Law

Arbitration and Conciliation - the petitioner seeks review of the order and judgment dated 1st February, 2013 passed by this Court in Arbitration Appeal NO. 6 of 2007 and in particular paragraphs 35, 36 and 46 thereof holding that claim nos. 1 and 2 are barred by limitation - Held that - On perusal of the records including the written arguments filed by both parties, it is clear that the State Government has not disputed the statement made by the review petitioner in the review petition that the State Government had not raised issue of limitation in respect of the claim nos. 1 and 2 in their written arguments and had addressed the court on the issue of limitation only in respect of claim nos. 3 to 5. The only submission made in the affidavit in reply is that under section 3 of the Limitation Act, it is duty cast upon the court itself to consider as to whether or not any suit, proceeding or claim is within the period of limitation or barred by the statutes of limitation. The duty so cast upon the court under aforesaid section 3 is mandatory, peremptory and is not whittled down for the lack or absence of pleadings or oral submissions made in this regard by a contesting party. Thus Mr.Chinoy, the senior counsel is right in his submission that in absence of any such plea raised by the respondents on the issue of limitation in respect of the claim nos. 1 and 2 either in the written submission or across the bar, the review petitioner had no opportunity to deal with any such plea which was not raised by the respondents. Merely because the High Court is not described as persona designata in section 37 of the Arbitration and Conciliation Act, 1996, would not mean that if any such appeal is entertained by the High Court under section 37 (1) of the Arbitration and Conciliation Act, 1996, it would not be the High Court exercising its power under Article 215 of the Constitution of India and would not be the court of record. There is no substance in the submission made by Mr.Kumbhakoni that while exercising power under section 37 of the Arbitration and Conciliation Act, 1996, High Court would not be the court of record under Article 215 and would not have plenary jurisdiction including procedural review relating to the errors apparent on the face of the record. The provisions of Arbitration and Conciliation Act, 1996 does not exclude the powers of High Court to exercise its plenary powers and to exercise procedural review in case of error apparent on the face of the record with a view to prevent miscarriage of justice or to correct grave and palpable errors committed by it. As the respondents not having pressed the issue of limitation in respect of claim nos. 1 and 2, there was no opportunity given to the review petitioner to address this court on issue of limitation in respect of those two claims. There is error apparent on the face of the record in paragraphs 35, 36 and 46 of the judgment holding that claim nos. 1 and 2 also barred by law of limitation and were set aside on the ground of limitation. By the present review petition, the review petitioner seeks procedural review of the order passed by this court, thus the procedural review can be exercised under the plenary jurisdiction which this court has. Provisions of Code of Civil Procedure 1908 can be applied to the proceedings in court to the extent the provisions thereof are not inconsistent with the provisions of the Arbitration and Conciliation Act, 1996. None of the provisions of the Arbitration and Conciliation Act, 1996 bars High Court from exercising power to have procedural review by exercising plenary jurisdiction. The present review petition thus filed by the review petitioner for seeking procedural review by praying this court to exercise plenary jurisdiction for correcting an error apparent on the face of the record is maintainable.

Issues Involved:
1. Review of the judgment dated 1st February 2013.
2. Limitation of claims.
3. Power of High Court to review its own orders.
4. Procedural Review versus Review on Merits.
5. Application of Code of Civil Procedure (CPC) in Arbitration proceedings.

Detailed Analysis:

1. Review of the Judgment Dated 1st February 2013:
The petitioner filed a review petition seeking the review of the order and judgment dated 1st February 2013, particularly paragraphs 35, 36, and 46, which held that claim nos. 1 and 2 were barred by limitation. The petitioner argued that the State Government had only contended that claim nos. 3 to 5 were time-barred and had not raised the issue of limitation concerning claim nos. 1 and 2. This was supported by the fact that the State Government's written submissions and oral arguments only addressed the limitation of claim nos. 3 to 5.

2. Limitation of Claims:
The original judgment dated 1st February 2013 set aside the award made by the Arbitral Tribunal on the ground of limitation, holding that all five claims were barred by the law of limitation. The petitioner contended that the plea of limitation was restricted to claim nos. 3 to 5 and not claim nos. 1 and 2. The court, on its own, held that claim nos. 1 and 2 were also barred by limitation, which the petitioner argued was an error apparent on the face of the record.

3. Power of High Court to Review its Own Orders:
The petitioner relied on several judgments to argue that the High Court, as a court of record under Article 215 of the Constitution, has inherent powers to correct its records and prevent miscarriage of justice or correct grave and palpable errors. The Supreme Court judgments in Shivdeo Singh vs. State of Punjab, M.M. Thomas vs. State of Kerala, and Supreme Court Bar Association vs. Union of India were cited to support this view. The petitioner argued that the High Court has plenary jurisdiction to correct errors apparent on the face of the record.

4. Procedural Review versus Review on Merits:
The petitioner distinguished between procedural review and review on merits, arguing that the High Court has the power to conduct a procedural review to correct procedural errors that go to the root of the matter. The petitioner cited the Supreme Court judgment in Kapra Mazdoor Ekta Union vs. Birla Cotton Spinning and Weaving Mills Ltd., which highlighted the distinction between a procedural review and a review on merits. The petitioner argued that the review sought was procedural, aimed at correcting the court's error in addressing the limitation of claim nos. 1 and 2, which was not raised by the State Government.

5. Application of Code of Civil Procedure (CPC) in Arbitration Proceedings:
The petitioner argued that the provisions of the CPC could be applied to arbitration proceedings to the extent that they are not inconsistent with the provisions of the Arbitration and Conciliation Act, 1996. The petitioner relied on the Supreme Court judgment in ITI Ltd. vs. Siemens Public Communications Network Ltd., which held that the revisional jurisdiction of the High Court under Section 115 of the CPC is not expressly or impliedly barred by the Arbitration Act. The petitioner contended that the High Court has the power to exercise procedural review under its plenary jurisdiction.

Conclusion:
The court concluded that there was an error apparent on the face of the record in paragraphs 35, 36, and 46 of the judgment dated 1st February 2013, which held that claim nos. 1 and 2 were barred by limitation. The court held that the High Court, as a court of record, has the power to exercise procedural review to correct such errors. The review petition was made absolute in terms of prayer (a), and the matter was directed to be placed on board for hearing on claim nos. 1 and 2.

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