Arbitration and Conciliation Act, 1996:
s. 34 – Application under – Delay of 514 days in filing – Condonation of delay – If permissible – Held: By virtue of s. 34(3), recourse to the court against an arbitral award cannot be beyond the period prescribed therein i.e. three months – The proviso thereto allows this period to be further extended by another period of thirty days on sufficient cause being shown – The words ‘but not thereafter” in the proviso makes the legislative intent clear that statutory period of three months is extendable by another period of upto thirty days and no more – Section 5 of Limitation Act has no application to the application u/s. 34 – However, the provisions of s. 14 of Limitation Act would be applicable to the application u/s.
34 – In the present case, even if benefit of s.14 of Limitation Act is given, in view of the proviso to s.34, only 30 days can be condoned beyond the limitation period of three months – There will still be a delay of 131 days in filing the application, which cannot be condoned – Administrative difficulties would not be a valid reason to condone a delay above and beyond the statutory period prescribed u/s. 34 – High Court was not justified in condoning the delay of 514 days in filing the application u/s. 34 – Application u/s. 34 is dismissed on the ground that it is barred by limitation – Limitation Act, 1963 – ss.5 and 14.
Allowing the appeal, the Court
HELD : 1. Section 34 of Arbitration and Conciliation Act, 1996 provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award “in accordance with” sub-section (2) and sub-section (3). Subsection (2) relates to the grounds for setting aside an award. An application filed beyond the period mentioned in sub-section (3) of Section 34, would not be an application “in accordance with” that sub-section. By virtue of Section 34(3), recourse to the court against an arbitral award cannot be beyond the period prescribed. Sub-section (3) of Section 34, read with the proviso, makes it abundantly clear that the application for setting aside the award on one of the grounds mentioned in sub-section (2) will have to be made within a period of three months from the date on which the party making that application receives the arbitral award. The proviso allows this period to be further extended by another period of thirty days on sufficient cause being shown by the party for filing an application. The intent of the legislature is evinced by the use of the words “but not thereafter” in the proviso. These words make it abundantly clear that as far as the limitation for filing an application for setting aside an arbitral award is concerned, the statutory period prescribed is three months which is extendable by another period of upto thirty days (and no more) subject to the satisfaction of the court that sufficient reasons were provided for the delay. [Para 8][681-C, G-H]
2. Section 5 of the Limitation Act, 1963 deals with the extension of the prescribed period for any appeal or application subject to the satisfaction of the court that the appellant or applicant had sufficient cause for not preferring the appeal or making the application within the prescribed period. Section 5 of the Limitation Act has no application to an application challenging an arbitral award under Section 34 of the 1996 Act. [Para 9][682-F-G]
Union of India v. Popular Construction Company (2001)
8 SCC 470 : [2001] 3 Suppl. SCR 619 – relied on.
3. Section 14 of the Limitation Act deals with the “exclusion of time of proceeding bona fide” in a court without jurisdiction, subject to satisfaction of certain conditions. From the scheme and language of Section 34 of the Act of 1996, the intention of the legislature to exclude the applicability of Section 14 of the Limitation Act is not manifest. Having regard to the legislative intent, the provisions of Section 14 of the Limitation Act, 1963 would be applicable to an application submitted under Section 34 of the Act of 1996 for setting aside an arbitral award.” [Para 10][685-D-E]
Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department (2008) 7 SCC 169 : [2008] 5 SCR 1108 – relied on.
4. In the present case, application under Section 34 of the 1996 Act was submitted on 30 January 2015 before the District Judge, for setting aside the arbitral award dated 27 October 2014. On 12 February 2016, the District Judge dismissed the respondent’s application for want of jurisdiction. It was only on
28 March 2016, that the respondent filed an application under Section 34 of the 1996 Act before the High Court challenging the arbitral award, along with an application for condonation of delay of 514 days. A plain reading of sub-section (3) along with the proviso to Section 34 of the 1996 Act, shows that the application for setting aside the award on the grounds mentioned in subsection (2) of Section 34 could be made within three months and the period can only be extended for a further period of thirty days on showing sufficient cause and not thereafter. Even if the benefit of Section 14 of the Limitation Act is given to the respondent, there will still be a delay of 131 days in filing the application. That is beyond the strict timelines prescribed in subsection (3) read along with the proviso to Section 34 of the 1996 Act. The delay of 131 days cannot be condoned. To do so, as the High Court did, is to breach a clear statutory mandate. Administrative difficulties would not be a valid reason to condone a delay above and beyond the statutorily prescribed period under Section 34 of the 1996 Act. [Paras 11, 13 and 15] [685-G-H; 686-G-H; 687-A-B; 688-D]
Union of India v Tecco Trichy Engineers & Contractors (2005) 4 SCC 239 : [2005] 2 SCR 983 – distinguished.
5. Therefore, in view of the period of limitation prescribed in Section 34(3), the Single Judge of the High Court was not justified in condoning the respondent’s delay of 514 days in filing the application. The petition under Section 34 stands dismissed on the ground that it is barred by limitation. [Para 16][688-E-F]
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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