C.B.Capoor, J.C. - (1.)THIS appeal by the Union of India is directed against an order of Shri Sant Ram, the then Senior Subordinate Judge of Chamba whereby an agreement for reference to arbitration was ordered to be filed.
(2.)AN agreement dated 1-11-1950 was entered into between Trilok Chand Mahajan, respondent No. 2, and the Chief Commissioner Himachal Pradesh whereby the former agreed to Purchase and the latter agreed to sell the right to extract, collect and export certain medicinal herbs out of the forests of Chamba district except for certain regions thereof. The agreement was to be operative for one year with effect from 1-9-1950. One of the terms of agreement was that if differences will arise with regard to the construction or any matter or thing touching the agreement the said dispute shall be referred to the sole arbitration of the Deputy Commissioner Mandi district. Differences arose between Trilok Chand and the officers of the Forest Department. The grievance of the aforesaid Trilok Chand was that he was not allowed to exploit some of the ranges for about three weeks in September 1950 and the others till about the middle of October 1950 as a result of which he suffered a loss of Rs. 1,37,412/11/-. The herbs extracted by Trilok Chand worth about Rs. 18,165/5/- were seized by the Forest Department on the ground that the same had been extracted without any right prior to the coming into operation of the agreement. Later on, the Chief Conservator of Forests wrote to Trilok Chand that the seized herbs could be returned upon payment of a sum of Rs. 1,577/8/-. The aforesaid sum was accordingly paid on 30-4-1955 but the herbs were not returned. He served a notice dated 30-5-1952 on the Chief Conservator of Forests Himachal Pradesh requiring the submission of the matters in difference to the arbitration of the Deputy Commissioner Mandi. The Chief Conservator of Forests replied on 236- 1952 that the matters which were desired to be referred to arbitration were outside the purview of the agreement for reference. In the meantime Trilok Chand had transferred his right under the agreement to Wazir Chand Mahajan, respondent No. 1. On 23-6-1955 an application was filed by the aforesaid respondents under Section 20 of the Arbitration Act for the filing of the agreement for reference. The application was inter alia opposed by the appellant on the ground that it was barred by the law of limitation. The contention was that differences had arisen between the parties in September and October 1950 and the application under Section 20 should have been filed within three years of October 1950. The aforesaid objection did not find favour with the learned Senior Subordinate Judge and hence has been filed the present appeal.
The only point that has been contended on behalf of the appellant is that the application under Section 20 of the Arbitration Act was filed more than three years after the arising of differences between the parties and as such was barred under Article 181 of the Limitation Act. It was conceded on behalf of the respondents that the aforesaid article was applicable and what was contended was that the cause of action for the filing of the aforesaid application arose on 23-6-1952 when the appellant refused to agree to refer the matter in difference to arbitration and as such the application was within time. Even though it was conceded by the learned counsel for the respondents that Article 181 of the Limitation Act governed the application under consideration the question as to whether the aforesaid article applies or not needs some consideration in view of the following observations made by their Lordships of the Supreme Court in the case reported in AIR 1953 SC 98 at p. 104, Sha Mulchand and Co. Ltd. v. Jawahar Mills Ltd., Salem : "It does not appear to us quite convincing, without further argument, that the mere amendment of Articles 158 and 178 can ipso facto alter the meaning which, as a result of a long series of judicial decisions of the different High Courts in India, came to be attached to the language used in Article 181. This long catena of decisions may well be said to have, as it were, added the word's 'under the Code' in the first column of that Article. If those words had actually been used in that column then a subsequent amendment of Articles 158 and 178 certainly would not have affected the meaning of that article. If, however, as a result of judicial construction, those words have come to be read into the first column as if those words actually occurred therein, we are not of opinion, as at present advised, that the subsequent amendment of Articles 158 and 178 must necessarily and automatically have the effect of altering the long acquired meaning of Article 181 on the sole and simple ground that after the amendment the reason on which the old construction was founded is no longer available."

(3.)IN the case of Amarnath v. the Union of INdia reported in AIR 1957 All 206 it was held that Article 181 which is a residuary article must be held to apply to applications not only under the Code of Civil Procedure but also under the Arbitration Act for which no provision is made elsewhere in the third division.