2013 (11) TMI 1527 - HC - Indian Laws

Delay of 166 days in filing Objections - Section 34 of the Arbitration and Conciliation Act, 1996 - Statutory period of limitation of three months and thirty days as prescribed under section 34(3) of the Act - Jurisdiction to condone delay in re-filing - Held that - A plain reading of section 34(3) of the Act indicates that the period of limitation prescribed is with respect to making an application for setting aside an award and not in respect of further steps once such an application is made. Thus, there is no time specified in the Act, in respect of re-filing of an application under section 34 of the Act, which has been returned to remove to certain defects. Thus, in our view, while section 34(3) of the Act does indicate the intention of the legislature to ensure that there is no undue delay in filing of an application under section 34 of the Act, the same does not provide any time limit for re-presenting the application. Any restriction with regard to the jurisdiction of the court in condoning the delay in refiling cannot be read into the provision of section 34(3) of the Act. Once an application or an appeal has been filed within the time prescribed, the question of condoning any delay in re-filing would have to be considered by the Court in the context of the explanation given for such delay. In absence of any specific statute that bars the jurisdiction of the Court in considering the question of delay in refiling, it cannot be accepted that the courts are powerless to entertain an application where the delay in its re-filing crosses the time limit specified for filing the application. Although, the courts would have the jurisdiction to condone the delay, the approach in exercising such jurisdiction cannot be liberal and the conduct of the applicant will have to be tested on the anvil of whether the applicant acted with due diligence and dispatch. The applicant would have to show that the delay was on account of reasons beyond the control of the applicant and could not be avoided despite all possible efforts by the applicant. The purpose of specifying an inelastic period of limitation under section 34(3) of the Act would also have to be borne in mind and the Courts would consider the question whether to condone the delay in re-filing in the context of the statute. Thus, in our view a Court would have the jurisdiction to condone delay in re-filing even if the period extends beyond the time specified in section 34(3) of the Act. In the present case, there has been an inordinate delay of 166 days and in our view the appellant has not been able to offer any satisfactory explanation with regard to the same. A liberal approach in condoning the delay in refiling an application under section 34 of the Act is not called for as it would defeat the purpose of specifying an inelastic period of time within which an application, for setting aside an award, under section 34 of the Act must be preferred. - Decided against the appellant.

Issues Involved:
1. Condonation of delay in re-filing objections under Section 34 of the Arbitration and Conciliation Act, 1996.
2. Jurisdiction of the court to condone delay beyond the statutory period.
3. Applicability of Section 5 of the Limitation Act, 1963 to re-filing delays.
4. Interpretation of Section 34(3) of the Arbitration and Conciliation Act, 1996.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Re-filing Objections:
The appellant sought to condone a delay of 166 days in re-filing objections under Section 34 of the Arbitration and Conciliation Act, 1996. The initial objections were filed with a delay of 17 days and were returned by the Registry due to defects. The appellant re-filed the objections on multiple occasions, with the final re-filing occurring on 06.01.2010, according to the appellant, or 05.02.2010, according to the respondent, resulting in a delay of 166 or 195 days, respectively.

2. Jurisdiction of the Court to Condon Delay Beyond the Statutory Period:
The primary controversy was whether the court could condone the delay in re-filing beyond the statutory period of three months and thirty days as prescribed under Section 34(3) of the Act. The learned Single Judge dismissed the application for condonation of delay, stating that the statutory period could not be stretched beyond three months and thirty days. The court referred to the Supreme Court's decision in Union of India Vs. Popular Construction Co., which held that the power to condone delay does not extend beyond 30 days after the initial three-month period.

3. Applicability of Section 5 of the Limitation Act, 1963 to Re-filing Delays:
The appellant contended that the court could condone the delay in re-filing if sufficient cause was shown. The appellant relied on the judgment in S.R. Kulkarni v. Birla VXL Limited, arguing that defects of a formal or ancillary nature should not affect the validity of the initial filing. The respondent countered that Section 5 of the Limitation Act does not apply to delays in re-filing beyond the statutory period.

4. Interpretation of Section 34(3) of the Arbitration and Conciliation Act, 1996:
The court examined whether Section 34(3) of the Act, which prescribes a limitation period for filing objections, also applies to re-filing after curing defects. The court concluded that Section 34(3) pertains to the initial filing and does not specify a time limit for re-filing. However, the court emphasized that the delay in re-filing must be justified with sufficient cause and that the conduct of the party must pass the test of diligence.

The court noted that the delay in re-filing is different from the initial filing delay and that the rationale for limitation periods is to ensure timely recourse to legal remedies. The court referred to the Supreme Court's decision in Indian Statistical Institute v. Associated Builders, which held that delay in re-filing due to circumstances beyond the control of the appellant could be condoned.

Conclusion:
The court held that it has the jurisdiction to condone the delay in re-filing even if it extends beyond the period specified in Section 34(3) of the Act. However, this jurisdiction should not be exercised liberally, and the applicant must show that the delay was unavoidable and beyond their control. In the present case, the appellant failed to provide a satisfactory explanation for the inordinate delay of 166 days. Consequently, the court dismissed the appeal and directed the release of the decretal amount to the respondent.

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