Arbitration and Conciliation, 1996 – s. 37(1)(c) and s.34 – Whether order of the Single Judge of the High Court refusing to condone the Appellant’s delay in filing an application u/s. 34 of the Arbitration and Conciliation Act, 1996 is an appealable order u/s. 37(1)(c) of the said Act – Held: An appeal u/s. 37(1)(c) of the Arbitration Act, 1996 would be maintainable against an order refusing to condone delay in filing an application u/s. 34 of the Arbitration Act, 1996 to set aside an award. Arbitration and Conciliation, 1996 – s. 37(1)(c) – Arbitration Act, 1940 – s.39(1)(vi) – Held: s. 39(1)(vi) of the 1940 Act is in pari materia to s. 37(1)(c) of the Arbitration Act, 1996 – This was held in two of the judgments of the Supreme Court i.e. Chief Engineer of BPDP/REO Ranchi v. Scoot Wilson Kirpatrick India (P.) Ltd. (2006)
13 SCC 622:[2006] 8 Suppl. SCR 836 and Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. (2011) 8 SCC 333: [2011] 11 SCR 1.
Allowing the appeal, the Court
HELD: Whether order of the Single Judge of the High Court refusing to condone the Appellant’s delay in filing an application u/s. 34 of the Arbitration and Conciliation Act, 1996 is an appealable order u/s. 37(1)(c) of the said Act ?
1. A reading of section 34(1) of the Arbitration and Conciliation Act, 1996 would make it clear that an application made to set aside an award has to be in accordance with both sub-sections (2) and (3). This would mean that such application would not only have to be within the limitation period prescribed by sub-section (3), but would then have to set out grounds under sub-sections (2) and/or (2A) for setting aside such award. What follows from this is that the application itself must be within time, and if not within a period of three months, must be accompanied with an application for condonation of delay, provided it is within a further period of 30 days, this Court having made it clear that section 5 of the Limitation Act, 1963 does not apply and that any delay beyond 120 days cannot be condoned – State of Himachal Pradesh v. Himachal Techno Engineers and Anr. (2010) 12 SCC
210 at paragraph 5. [Para 8][839-G-H; 840-A-B]
2. Now coming to section 37(1)(c) of the 1996 Act. It is important to note that the expression “setting aside or refusing to set aside an arbitral award” does not stand by itself. The expression has to be read with the expression that follows “under section 34”. Section 34 is not limited to grounds being made out under section 34(2). Obviously, therefore, a literal reading of the provision would show that a refusal to set aside an arbitral award as delay has not been condoned under sub-section
(3) of section 34 would certainly fall within section 37(1)(c). The aforesaid reasoning is strengthened by the fact that under section 37(2)(a), an appeal lies when a plea referred to in sub-section (2) or (3) of section 16 is accepted. This would show that the Legislature, when it wished to refer to part of a section, as opposed to the entire section, did so. Contrasted with the language of section 37(1)(c), where the expression “under section 34” refers to the entire section and not to section 34(2) only, the fact that an arbitral award can be refused to be set aside for refusal to condone delay under section 34(3) gets further strengthened. [Para 9][840-B-E]
3. In Essar Constructions, a judgment rendered under section 39 of the Arbitration Act, 1940 this Court was faced with the same question as is raised in this appeal. In Essar Constructions it was held that “the order refusing to condone the delay in filing the claim petition has the effect of finally disposing of the original petition. Such an order can, therefore, be treated as an award and hence it is appealable”. [Paras 10 and 12][840-E-F; 841-G-H; 842-A]
4. It will be noticed that so far as the present question is involved, section 39(1)(vi) of the 1940 Act is in pari materia to section 37(1)(c) of the Arbitration Act, 1996. This was held in two of the judgments of the Supreme Court i.e. Chief Engineer of BPDP/REO Ranchi v. Scoot Wilson Kirpatrick India (P.) Ltd. and Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. [Para 14] [843-C-D]
5. The reasoning in Essar Constructions commends itself to this Court, being on a pari materia provision to that contained in section 37(1)(c) of the Arbitration Act, 1996. This Court may only add that the reasoning of the aforesaid judgment is further strengthened by analysis of the additional words “under section 34” which occur in section 37(1)(c), and which are absent in section 39(1)(vi) [the pari materia provision to section 34 of the Arbitration Act, 1996 being section 30 of the Arbitration Act, 1940]. [Para 19][846-C-E]
6. The counsel for the respondent has relied on section 5 of the Arbitration Act, 1996. According to respondent, in furtherance of this object, section 37 was enacted giving a limited right of appeal. He argued that an appeal, being a creature of statute should not, therefore, be enlarged beyond what is provided by the Legislature. This section does not take respondent’s argument much further, as after the non-obstante clause, the section states that no judicial authority shall intervene “except where so provided in this Part”. What is “provided in this part” is section 37, which therefore brings us back to square one. Undoubtedly, a limited right of appeal is given under section
37 of the Arbitration Act, 1996. But it is not the province or duty of this Court to further limit such right by excluding appeals which are in fact provided for, given the language of the provision as interpreted by us hereinabove. Thus, this last argument also has no legs on which to stand. [Paras 35 and 36][856-G-H]
7. Consequently, the question of law is answered by stating that an appeal under section 37(1)(c) of the Arbitration Act, 1996 would be maintainable against an order refusing to condone delay in filing an application under section 34 of the Arbitration Act, 1996 to set aside an award. [Para 37][857-B-D] Essar Constructions v. N.P. Rama Krishna Reddy (2000)
6 SCC 94 : [2000] 3 SCR 923; Chief Engineer of BPDP/REO Ranchi v. Scoot Wilson Kirpatrick India (P.) Ltd. (2006) 13 SCC 622 : [2006] 8 Suppl. SCR 836; Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. (2011) 8 SCC 333 : [2011] 11 SCR 1; Union of India v. Manager, Jain and Associates (2001) 3 SCC 277 : [2001] 1 SCR 889; Amar Nath Om Prakash v. State of Punjab (1985)
1 SCC 345 : [1985] 2 SCR 72 – relied on.
State of Maharashtra and Anr. v. M/s Ramdas
Construction Co. and Anr. 2006 (6) Mah. L.J. 678; Union of India v. Radha Krishna Seth and Anr. 2005 SCC OnLine All 8400 – overruled.
BGS SGS Soma JV. v. NHPC Limited (2020) 4 SCC 234 – distinguished.
Union of India v. Simplex Infrastructures Ltd. (2017)
14 SCC 225 – held inapplicable.
Harmanprit Singh Sidhu v. Arcadia Shares and Stock Brokers Pvt. Ltd. 2016 SCC OnLine Del 5383; State of Himachal Pradesh v. Himachal Techno Engineers and Anr. (2010) 12 SCC 210 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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