Government of Maharashtra (Water Resources Department) Represented by Executive Engineer vs M/s Borse Brothers Engineers & Contractors Pvt. Ltd.

s. 5 – Application of, to appeals u/s. 13(1A) of the CC Act providing a uniform 60-day period of limitation – Held: A middle course to be adopted between the N.V. International’s case which does not allow condonation of delay beyond 30 days, and an openended provision in which any amount of delay can be condoned, provided sufficient cause is shown – Maxim ut res magis valeat quam pereat-liberal construction should be put upon written instruments, to be followed – Commercial Courts Act, 2015. Constitution of India – Art. 141 – Binding precedent – N.V. International v. State of Assam’s case applied the provisions of s. 5 of the Limitation Act and held that no condonation of delay could take place beyond 120 days – Whether the hard and fast rule applied by this Court in N.V. International’s case, is correct in law – Held: N.V. International’s case while determining limitation period for filing appeal u/s. 37 did not notice the provisions of the CC Act at all and can be said to be per incuriam on this count - Period of 90 days plus 30 days and not thereafter mentioned in s. 34(3) of the 1996 Act cannot now apply, the limitation period for filing of appeals under the CC Act being 60 days and not 90 days – Thus, N.V. International’s case has been wrongly decided and is overruled – Arbitration and Conciliation Act, 1996 – ss. 37 and 34(3) – Commercial Courts Act, 2015.

Disposing of the appeals, the Court

HELD: 1.1 The requirement of an arbitral procedure which is efficient and the minimising of the supervisory role of courts in arbitral process would certainly show that one of the main objectives of the Arbitration and Conciliation Act 1996is the speedy disposal of disputes through the arbitral process. Section

5 of the Arbitration Act is important. Section 37 of the Arbitration Act, when read with section 43 thereof, makes it clear that the provisions of the Limitation Act would apply to appeals that are filed under section 37. Articles 116 and 117 of the Limitation Act provide for a limitation period of 90 days and 30 days, depending upon whether the appeal is from any other court to a High Court or an intra-High Court appeal. There can be no doubt whatsoever that section 5 of the Limitation Act would apply to the said appeals, both by virtue of section 43 of the Arbitration Act and by virtue of section 29(2) of the Limitation Act. [Para 15, 23][210-D-E; 222C-E] Consolidated Engg. Enterprises v. Irrigation Deptt. (2008) 7 SCC 169 : [2008] 5 SCR 1108 – relied on.

1.2 When the Commercial Courts Act, 2015 is applied to the said appeals, given the definition of “specified value” and the provisions contained in sections 10 and 13 thereof, it is clear that it is only when the specified value is for a sum less than three lakh rupees that the appellate provision contained in section

37 of the Arbitration Act would be governed, for the purposes of limitation, by Articles 116 and 117 of the Limitation Act. The submission that depending upon which court decides a matter, a limitation period of either 30 or 90 days is provided, which leads to arbitrary results, and that, therefore, the uniform period provided by Article 137 of the Limitation Act should govern appeals as well, is rejected. It is settled that periods of limitation must always to some extent be arbitrary and may result in some hardship, but this is no reason as to why they should not be strictly followed. The submission that since no period of limitation has been provided in section 37 of the Arbitration Act, as a result of which the neat division contained in the Limitation Act of different matters contained in suits, appeals and applications will somehow have to be destroyed, the word “appeals” has to be read into “applications” so that Article 137 of the Limitation Act could apply, is also rejected. [Para 24, 25][224-E-G; 225-D-E]

Boota Mal v. Union of India [1963] 1 SCR 70 – referred to.

1.3 Even in the rare situation in which an appeal under section 37 of the Arbitration Act would be of a specified value less than three lakh rupees, resulting in Article 116 or 117 of the Limitation Act applying, the main object of the Arbitration Act requiring speedy resolution of disputes would be the most important principle to be applied when applications under section

5 of the Limitation Act are filed to condone delay beyond 90 days and/or 30 days depending upon whether Article 116(a) or 116(b) or 117 applies. As a matter of fact, given the timelines contained in sections 8, 9(2), 11(4), 11(13), 13(2)-(5), 29A, 29B, 33(3)-(5) and 34(3) of the Arbitration Act, the object of speedy resolution of disputes would govern appeals covered by Articles 116 and

117 of the Limitation Act. Thus, from the scheme of the Arbitration Act, and the judgments given, condonation of delay under section

5 of the Limitation Act has to be seen in the context of the object of speedy resolution of disputes. [Para 26, 31][225-E-G; 228-C] Union of India v. Popular Construction Co. (2001) 8 SCC 470 : [2001] 3 Suppl. SCR 619; State of Goa v. Western Builders (2006) 6 SCC 239; Kandla Export Corpn. v. OCI Corpn. (2018) 14 SCC 715 : [2018] 1 SCR 915; ICOMM Tele Ltd. v. Punjab State Water Supply and Sewerage Board (2019) 4 SCC 401 – relied on.

1.4 The bulk of appeals, however, to the appellate court under section 37 of the Arbitration Act, are governed by section

13 of the Commercial Courts Act. Sub-section (1A) of section 13 of the Commercial Courts Act provides the forum for appeals as well as the limitation period to be followed, section 13 of the Commercial Courts Act being a special law as compared with the Limitation Act which is a general law, which follows from a reading of section 29(2) of the Limitation Act. Section 13(1A) of the Commercial Courts Act lays down a period of limitation of 60 days uniformly for all appeals that are preferred under section 37 of the Arbitration Act. [Para 32][228-D-E]

BGS SGS SOMA JV v. NHPC (2020) 4 SCC 234 –

referred to.

1.5 Section 13(1A) of the Commercial Courts Act does not contain any provision akin to section 34(3) of the Arbitration Act. Section 13(1A) of the Commercial Courts Act only provides for a limitation period of 60 days from the date of the judgment or order appealed against, without further going into whether delay beyond this period can or cannot be condoned. Though the object of expeditious disposal of appeals is laid down in section 14 of the Commercial Courts Act, the language of section 14 makes it clear that the period of six months spoken of is directory and not mandatory. By way of contrast, section 16 of the Commercial Courts Act read with the Schedule thereof and the amendment made to Order VIII Rule 1 of the CPC, would make it clear that the defendant in a suit is given 30 days to file a written statement, which period cannot be extended beyond 120 days from the date of service of the summons; and on expiry of the said period, the defendant forfeits the right to file the written statement and the court cannot allow the written statement to be taken on record. By way of contrast, there is no such provision contained in section

13 of the Commercial Courts Act. [Para 33, 34, 36][228-F-G; 229A-B; 232-C]

1.6 There are no other provisions in the Commercial Courts Act which provide for a period of limitation coupled with a condonation of delay provision which is either open-ended or capped. Also, the period of 180 days provided was one indicia which led the Court to exclude the application of section 5 of the Limitation Act, as it was double and triple the period provided for appeals under the other provisions of the same Act. Section 13(1A) of the Commercial Courts Act, by way of contrast, applies an intermediate period of 60 days for filing an appeal, that is, a period that is halfway between 30 days and 90 days provided by Articles 116 and 117 of the Limitation Act. [Para 38][234-B-C] CCE & Customs v. Hongo India (P) Ltd. (2009) 5 SCC 791; Suryachakra Power Corpn. Ltd. v. Electricity Deptt. (2016) 16 SCC 152 : [2016] 8 SCR 108; ONGC v. Gujarat Energy Transmission Corpn. Ltd. (2017) 5 SCC 42 : [2017] 2 SCR 922 – distinguished.

Salem Advocate Bar Assn. (II) v. Union of India (2005)

6 SCC 344; SCG Contracts (India) (P) Ltd. v. K.S. Chamankar Infrastructure (P) Ltd. (2019) 12 SCC 210 : [2019] 3 SCR 1050 – referred to.

1.7 Section 21 of the Commercial Courts Act was pressed into service stating that the non-obstante clause contained in the CC Act would override other Acts, including the Limitation Act, as a result of which, the applicability of section 5 thereof would be excluded. Thus, the submission that the application of section

5 of the Limitation Act is excluded given the scheme of Commercial Courts Act, is rejected. [Para 40, 41][234-E-F; 235D-E] B.K. Educational Services (P) Ltd. v. Parag Gupta & Associates (2019) 11 SCC 633 : [2018] 12 SCR 794 – referred to.

1.8 It was submitted as to whether the hard and fast rule applied by this Court in N.V. International’s case is correct in law. N.V. International’s case does not notice the provisions of the Commercial Courts Act at all and can be said to be per incuriam on this count. Secondly, it is also correct to note that the period of 90 days plus 30 days and not thereafter mentioned in s. 34(3) of the Arbitration Act cannot now apply, the limitation period for filing of appeals under the Commercial Courts Act being 60 days and not 90 days. Thirdly, the submission that absent of a provision curtailing the condonation of delay beyond the period provided in s. 13 of the Commercial Courts Act would also make it clear that any such bodily lifting of the last part of section 34(3) into section 37 of the Arbitration Act would also be unwarranted. It cannot be said that this is a mere casus omissus which can be filled in by the Court. [Para 42][235-E-H]

1.9 The difference between interpretation and legislation is sometimes a fine one, as the judges do not merely interpret the law but also create law. [Para 43][236-A] Eera v. State (NCT of Delhi) (2017) 15 SCC 133 : [2017]

7 SCR 924 – referred to.

1.10 It is a littledifficult to appreciate how a cap can be judicially engrafted onto astatutory provision which then bars condonation of delay by even one day beyond the cap so engrafted.[Para 47][238-A]

1.11 The submission that the limitation of power on a civil court at the initial stage can be read as a limitation onto the appellate court, cannot be accepted. [Para 49][239-D-E] Chandi Prasad v. Jagdish Prasad (2004) 8 SCC 724 : [2004] 4 Suppl. SCR 942; D. Purushotama Reddy v. K. Sateesh (2008) 8 SCC 505 : [2008] 11 SCR 738 – referred to.

1.12 Reliance upon P. Radha Bai’s case on the doctrine of unbreakability when applied tos. 34(3) of the Arbitration Act, also does not carry the matter much further, as the question is whether this doctrine can be bodily lifted and engrafted onto an appeal provision that has no cut-off point beyond which delay cannot be condoned. Thus, N.V. International’s case has been wrongly decided and is overruled. [Para 50][239-G-H; 240-A-B]

N.V. International v. State of Assam (2020) 2 SCC 109 – overruled.

P. Radha Bai v. P. Ashok Kumar (2019) 13 SCC 445 : [2018] 12 SCR 143 – referred to.

1.13 The question still arises as to the application of section

5 of the Limitation Act to appeals which are governed by a uniform 60-day period of limitation. At one extreme, there is N.V. International’s case which does not allow condonation of delay beyond 30 days, and at the other extreme, there is an open-ended provision in which any amount of delay can be condoned, provided sufficient cause is shown. It is between these two extremes that this Court have to steer a middle course. One judicial tool to steer this course is contained in the latin maxim ut res magis valeat quam pereat- liberal construction should be put upon written instruments. [Para 51, 52] [240-B-E]

CIT v. Hindustan Bulk Carriers (2003) 3 SCC 57 : [2002] 5 Suppl. SCR 387 – referred to.

1.14 Reading the Arbitration Act and the Commercial Courts Act as a whole, it is clear that when section 37 of the Arbitration Act is read with either Article 116 or 117 of the Limitation Act or section 13(1A) of the Commercial Courts Act, the object and context provided by the said statutes, read as a whole, is the speedy disposal of appeals filed under section 37 of the Arbitration Act. To read section 5 of the Limitation Act consistently with the said object, it is necessary to discover as to what the expression “sufficient cause” means in the context of condoning delay in filing appeals under section 37 of the Arbitration Act. The expression “sufficient cause” contained in section 5 of the Limitation Act is elastic enough to yield different results depending upon the object and context of a statute. [Para 53, 54] [242-B-D]

Ajmer Kaur v. State of Punjab (2004) 7 SCC 381 : [2004] 2 Suppl. SCR 601; Brahampal v. National Insurance Company 2020 SCC OnLine SC 1053 – referred to.

1.15 Given the object sought to be achieved under both the Arbitration Act and the Commercial Courts Act, that is, the speedy resolution of disputes, the expression “sufficient cause” is not elastic enough to cover long delays beyond the period provided by the appeal provision itself. Besides, the expression “sufficient cause” is not itself a loose panacea for the ill of pressing negligent and stale claims. Likewise, merely because the government is involved, a different yardstick for condonation of delay cannot be laid down. Also, merely because sufficient cause has been made out, there is no right in the appellant to have delay condoned.[Para 56, 57, 60][246-B-C; 249-B; 251-F] Basawaraj v. Land Acquisition Officer (2013) 14 SCC 81: [2013] 8 SCR 227; Postmaster General v. Living Media India Ltd. (2012) 3 SCC 563 : [2012] 1 SCR 1045; State of Rajasthan v. Bal Kishan Mathur (2014)

1 SCC 592 : [2013] 10 SCR 137; State of U.P. v. Amar Nath Yadav (2014) 2 SCC 422; State of T.N. v. N. Suresh Rajan (2014) 11 SCC 709 : [2014] 1 SCR 135; State of M.P. v. Bherulal (2020) 10 SCC 654; State of M.P. v. Chaitram Maywade (2020) 10 SCC 667; Ramlal v. Rewa Coalfields Ltd. (1962) 2 SCR 762 – referred to.

1.16 The object of speedy disposal sought to be achieved both under the Arbitration Act and the Commercial Courts Act, for appeals filed under section 37 of the Arbitration Act that are governed by Articles 116 and 117 of the Limitation Act or section 13(1A) of the Commercial Courts Act, a delay beyond 90 days,

30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule. In a fit case in which a party has otherwise acted bona fide and not in a negligent manner, a short delay beyond such period can, in the discretion of the court, be condoned, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the first party’s inaction, negligence or laches. [Para 61][252-E-F]

1.17 In the Civil Appeal arising out of SLP (C) No. 665 of 2021, the impugned judgment of the High Court, the Govt of Maharashtra had not approached the court bona fide. Apart from this, there is a long delay of 131 days beyond the 60- day period provided for filing an appeal under section 13(1A) of the Commercial Courts Act. There is no explanation worth the name contained in the condonation of delay application, beyond the usual file-pushing and administrative exigency. [Para 62, 63][252G; 253-C-D]

1.18 In the Civil Appeal arising out of SLP (C) No. 15278 of 2020, the impugned judgment of the High Court relied upon Consolidated Engg.’s case and thereby stated that the judgment of this Court in N.V. International’s case would not apply. The judgment of the High Court is wholly incorrect inasmuch as Consolidated Engg.’s case was a judgment which applied the provisions of section 14 of the Limitation Act and had nothing to do with the application of section 5 of the Limitation Act. N.V. International’s case was a direct judgment which applied the provisions of section 5 of the Limitation Act and then held that no condonation of delay could take place beyond 120 days. The High Court was bound to follow N.V. International’s case, as on the date of the judgment of the High Court, N.V. International’s case was a judgment of two judges of the Supreme Court binding upon the High Court by virtue of Article 141 of the Constitution. On this score, the impugned judgment of the High Court is set aside. That apart, on the facts of this appeal, there is a long delay of 75 days beyond the period of 60 days provided by the Commercial Courts Act. Despite the fact that a certified copy of the District Court’s judgment was obtained by the respondent on 27.04.2019, the appeal was filed only on 09.09.2019. This explanation for delay falls woefully short of making out any sufficient cause. The condonation of delay is set aside on this score also. [Para 64-66][253-D-H; 254-A-E]

1.19 In the Civil Appeal arising out of SLP (C) Diary No. 18079 of 2020, there is a huge delay of 227 days in filing the appeal, and a 200-day delay in refiling. The facts of the case also show that there was no sufficient cause whatsoever to condone such a long delay. The judgment of the High Court cannot be faulted on this score. [Para 67][254-E-F]

Union of India v. Varindera Constructions Ltd. (2020)

2 SCC 111 – referred to.