J.C.SHAH - (1.) UNDER an agreement, dated 1/11/1950, with the State of Himachal Pradesh, Triloknath Mahajan-second appellant in this appeal-purchased the right to extract and collect certain medicinal herbs from the forests of Chamba District. The period of the agreement was one year from September l, 1950. By Cl.y Cl. 22 of the agreement it was provided that all disputes between the parties arising under the agreement or under any clause thereunder or in any manner connected with or arising out of the agreement or the operation thereof, or the rights, duties or liabilities of either parties thereunder including the dispute or difference as to the construction of the agreement shall be referred to the sole arbitration of the Deputy Commissioner, Mandi District, Himachal Pradesh, and if that officer be unable or unwilling to act, to such Assistant as the Deputy Commissioner shall appoint as the sole arbitrator. Triloknath Mahajan transferred all his right, title and interest under the agreement to Wazirchand Mahajan-the first appellant-with the permission of the State of Himachal Pradesh.
(2.) DISPUTES arose in October 1950 between the appellants and the State of Himachal Pradesh regarding the right to collect herbs from certain areas and the failure of the State authorities to prevent trespassers from removing herbs, the right to which was granted to the second appellant. The appellants addressed a letter on 30/05/1952 to the Chief Conservator of Forests, Himachal Pradesh, requiring that Officer to submit the matters in difference to the arbitration of the Deputy Commissioner, Mandi District. By his reply, dated 23/06/1952, the Chief Conservator declined to agree to a reference contending that the matters desired to be referred to were outside the arbitration claues. On 22/06/1952, the appellants applied to the District Court of Chamba for an order that the agreement dated 1/11/1950 be filed in the Court and that the disputes between them and the State be referred to the sole arbitration of the Deputy Commissioner Mandi District. The State of Himachal Pradesh contended inter alia that the application for filing the arbitration agreement was barred by the law of limitation as the right to apply, if any, arose in the year 1950 and not on 23/06/1952, as alleged. The Court of First Instance held that the' Limition Act did not govern an application for filing an arbitration agreement under S. 20 of the Arbitration Act, 1940 and that even if the application was governed by Art 181 of Sch. I of the Limitation Act. 1908, since the application was made within three years from the date on which the Chief Conservator of Forests, Himachal Pradesh, declined to make a reference, it was not barred. The Court accordingly ordered that the agreement be filed and the disputes be referred to the arbitrator named in the agreement. During the pendency of this application before the trial Court, the Part 'C' State of Himachal Pradesh became Union Territory, and the Union of India was substituted as a party in place of the State of Himachal Pradesh. In appeal by the Union of India, the Judicial Commissioner, Himachal Pradesh, reversed the order of the Trial Court. In the view of the Judicial Commissioner an application for filing an arbitration agreement under S. 20 of the Arbitration Act is governed by Art. 181 of the Limitation Act, and since the period of three years prescribed thereby commences to run from the date on which differences arose between the parties, i.e., about the month of September -October 1950, and in any case on 1/09/1951, the application for reference filed by the appellants was barred. The terms of Art. 181 are general, and are apparently not restricted to applications under the Code of Civil Procedure. But that Article is included in the group of articles which fall under the head "Third Division Applications". As originally enacted all applications contemplated to be made under Arts. 158 to 180, were applications made under the Code of Civil Procedure and there was a catena of authorities holding that in Art. 181 the expression ''under the Code of Civil Procedure" must be deemed to be necessarily implicit.
(3.) IN Hansraj Gupta v. Official Liquidators of the Dehradun-Mussorie Electric Tramway Co. Ltd., 60 INd App 13: (AIR 1933 PC 63), the Judicial Committee of the Privy Council observed at p. 20 (of INd App): " * * * * but a series of authorities commencing with Bai Manekbai v. Manekji Kavasji, (1883) ILR 7 Bom 213, has taken the view that Art. 181 only relates to applications under the Code of Civil Procedure, in which case no period of limitation has been prescribed for the application." IN Sha Mulchand and Co. Ltd. (IN liquidation) v. Jawahar Mills Ltd., 1953 SCR 351: (AIR 1958 SC 98), this Court observed after referring to certain decisions: "This long catena of decisions may well be said to have as it were, added the words "under the Code" in the first column of that article (Art. 181)'', and in Bombay Gas Co. Ltd. v. Gopal Bhiva, (1964) 3 SCR 709: ( AIR 1964 SC 752), this Court observed: "It is well settled that Art. 181 applies only to applications which are made under the Code of Civil Procedure. * * * *" It is true that in Hansraj Gupta's case, 60 INd App 13: (AIR 1933 PC 63), the Judicial Committee was dealing with the period of limitation for filing an application under S. 186 (1) of the INdian Companies Act 1913, to order a contributory in a winding-up to pay a debt; and Sha Mulchand's case, 1953 SCR 351: (AIR 1953 SC 98), related to an application under the INdian Companies Act, 1913, for rectification of the share-register and restoration of the name of a member whose shares were forfeited for non-payment of calls. IN the Bombay Gas Co.'s case, (1964) 3 SCR 709: ( AIR 1964 SC 752), this Court was dealing with an application for enforcement of an order under S. 33C (2) of the INdustrial Disputes Act, 14 of 1947 for computation of benefit in terms of money and for a direction to the employers to pay the same. But in each case the decision of the Court proceeded upon the general ground that Art. 181 of the Limitation Act, 1908, governed applications under the Code of Civil Procedure. This Court impliedly rejected in each case the argument that merely because powers under the Code of Civil Procedure may be exercised by a Court entertaining an application, the application could not be deemed to be one under the Code. It is true that in the Limitation Act originally enacted in 1908, by the group of Arts. 158 to 180 only applications under the Code of Civil Procedure were dealt with. By the amendment made by the Arbitration Act 10 of 1940, Arts. 158 and 178 were modified and in the articles for the expression "under the Code of Civil Procedure, 1908" the words "under the Arbitration Act 1940" were substituted. The reason which persuaded the Courts from time to time to hold that the expression ''under the Code" must be deemed to be added in Art. 181 did not continue to apply after the amendment of Arts. 158 and 178. It may be recalled that the law relating to consensual arbitration, except in respect of cases governed by Arbitration Act, 1899, was enacted in Sch. II of the Code of Civil Procedure, 1908. By the enactment of Act 10 of 1940, Sch II of the Code of Civil Procedure and the INdian Arbitration Act, 1899, were repealed and an Act dealing with all arbitration was enacted, and it was found necessary on that account to amend Arts. 158 and 178 so as to make them consistent with the legislative changes. The reason which persuaded the Courts to hold that the expression "under the Code" was deemed added to Art. 181 has now disappeared, but on that account the expression "applications for which no period of limitation is provided elsewhere in this Schedule" in Art. 181 cannot be given a connotation different from the one which prevailed for nearly 60 years before 1940.;