Facts

The appellant's husband was the sole proprietor of M/S S.R. Engineering Construction, which secured a work order bearing CA No. CWE/TEZ/8 in 1987-1988 from the respondents. The agreement involved constructing a permanent 'armament section' at Tezpur under Cl. 70 of the contract, which contained an arbitration clause. After the firm completed the work and raised a bill on 18.01.1993, the respondents failed to make payment. Following protracted litigation, an arbitrator was appointed by the District Judge, Sonitpur in T.S. (Arb.) Case No. 19/2003 on 26.08.2019. The appellant's husband passed away during the arbitral proceedings and she came to represent him as his legal heir.

The arbitrator made an award dated 31.05.2022 directing the respondents to pay Rs. 1,33,47,268.92/- with interest of 9% p.a. till realization. As the respondents had not cleared the arbitrator's fees, the award could not be published. On the appellant's application under Section 38 of the 1940 Act, the District Judge, Sonitpur by order dated 21.09.2022 directed the respondents to clear dues of Rs. 47,212.33/-, upon which a copy of the award shall be furnished to both parties. The appellant received the copy of the award on 22.09.2022. The respondents deposited their balance fees only on 18.11.2022, after which they received the notice of filing the award on the same date. On 10.11.2022, the appellant filed an application under Section 17 of the Arbitration Act, 1940 seeking pronouncement of judgment according to the arbitral award.

Question for Consideration

Whether the time for filing an Application under Section 17 of the 1940 Act commences when the party seeking to challenge the award receives a formal notice of the making of the award, or from the date such party is aware of the existence of the award.


Decisions of Lower Courts

Both the District Court and the High Court held the Section 17 application to be premature, treating 18.11.2022 as the date of 'notice of filing the award' and holding that only a formal notice issued by a court will satisfy the requirement of Section 14(2) of the 1940 Act.

Key Holding and Decision of the Supreme Court

The Supreme Court allowed the appeal. The Court held that the precise form of what constitutes 'notice' of filing the award is unspecified under the Act. Interpreted reasonably, what must be required is that the parties come to know about the existence of the award so that any objections may be filed. The word 'notice' indicates that the parties merely reach a state of awareness about the award, and not the imposition of another procedural step. As is discernible from the texts of sub-sections (1) and (2) of Section 14, the notice under sub-section (2) need not be a written one.

Relying on Nilkantha Sidramappa Ningashetti v. Kashinath Somanna Ningashetti, Food Corporation of India v. E. Kuttappan, Indian Rayon Corporation Ltd. v. Raunaq and Co. (P) Ltd., and Bharat Coking Coal Ltd. v. C.K. Ahuja, the Court held that Section 14(2) merely functions to apprise the parties about the existence of the award, and the date of receiving a copy of the award is not its requirement.

The formal date of notice, i.e., 18.11.2022, holds no significance as the respondents were made sufficiently aware of the award's filing on 21.09.2022 itself. Holding otherwise would allow the respondents to take advantage of their own inaction. The limitation is to be treated as expired on 20.10.2022, and the appellant's application under Section 17 was valid and well beyond the period for filing objections to the award.