2020 (10) TMI 1348 - HC - Indian Laws

Validity of arbitral award - Section 34 of The Arbitration and Conciliation Act, 1996 - HELD THAT - In instant case on hand, that the three months period has to be computed from 14.06.2019 by excluding the date of receipt of award is not in dispute. If one goes by the computation in Himachal Techno Engineers case, 3 months would expire on 13.09.2019 whereas Bibi Salma Khatoon principle suggests that it may be possible to construe that it elapsed on 14.09.2019. However, it may not be necessary to enter into this arena in this case - This Court therefore embarked upon the exercise of examining if sufficient cause qua delay condonation plea has been made out. Before this Court does that, it is made clear that the contention of learned Standing Counsel for Southern Railways that Assam Urban Water Supply case is distinguishable on facts as no recourse to Section 4 of Limitation Act has been taken cannot be sustained as Assam Urban Water Supply case is an authority for the proposition that the last day on which the prescribed period ends being a Court holiday would apply only to prescribed period of limitation and not to further condonable periods post prescribed period of limitation. In instant application, it is not the case of Southern Railways that the last day of the prescribed period of three months fell on a Court holiday. The argument of learned Standing Counsel for Southern Railways that Sagufa Ahmed 2020 (9) TMI 713 - SUPREME COURT case is distinguishable as it centres around suo motu orders passed by Hon'ble Supreme Court during the lock down period is of no avail as Hon'ble Supreme Court has comprehensively considered Sections 2(j) and 4 of Limitation Act as well as Section 10 of GC Act and had made it clear that what was extended by Hon'ble Supreme Court during the lock down is the period of limitation and not the period upto which the delay can be condoned in exercise of discretion conferred by a statute. The pre-application notice under Section (5) has been held to be directory and not mandatory as mentioned supra. Therefore, this Court has repeatedly held that one year period under sub-section (6) should be reckoned from the date of presentation of Section 34 application in cases where Section 34 application is presented without a pre-application notice - Post disposal of Section 34 application also, an intra-court appeal has been provided under Section 37 of A and C Act, but only for very limited kind of orders with a clear embargo by way of a negative connotation 'and from no others' within parenthesis. Sub-section (3) of Section 37 makes it clear that no second appeal shall lie from an order passed in an appeal under Section 37. These features of A and C Act delineated supra make it clear strict time lines run as a common chord throughout the statute and this common chord is the sublime philosophy and salutary principle underlying the A and C Act. This has been borne in mind in testing the captioned delay condonation application. Application dismissed.

Summary

Issues Involved:
1. Challenge to the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996.
2. Application for condonation of delay in filing the petition challenging the arbitral award.

Detailed Analysis:

1. Challenge to the Arbitral Award:
The Southern Railways filed an Original Petition (O.P) on 14.10.2019 under Section 34 of the Arbitration and Conciliation Act, 1996 (A and C Act) to challenge an arbitral award dated 10.06.2019. The award was made by a sole arbitrator concerning disputes arising from a contract for gauge conversion work between Mayliaduthurai-Thiruvarur Railway Stations. The primary disputes involved reduction of vitiation amounts from running bills and the price variation clause.

2. Application for Condonation of Delay:
Southern Railways also filed an application (A.No.9150 of 2019) to condone a 30-day delay in filing the O.P. The key dates relevant to the delay are:
- Award made: 10.06.2019
- Award received by Southern Railways: 13.06.2019
- Prescribed period of three months starts: 14.06.2019
- High Court closed for Dussehra vacation: 05.10.2019 to 13.10.2019
- O.P filed: 14.10.2019

The Contractor resisted the application, arguing that the delay exceeded 30 days and was therefore not condonable under the proviso to sub-section (3) of Section 34 of the A and C Act.

Court's Analysis and Reasoning:
- The Court highlighted that applications under Section 34 of the A and C Act are termed as Original Petitions in this Court.
- It was undisputed that the three-month period should be computed from 14.06.2019, excluding the date of receipt of the award (13.06.2019), as per the Himachal Techno Engineers case.
- The Court noted that the prescribed period of three months ended on 13.09.2019. Southern Railways argued that the delay was due to the Dussehra vacation when the Court was closed, thus justifying the filing on the next working day, 14.10.2019.
- The Contractor contended that the benefit of Section 10 of the General Clauses Act, 1897 and Section 4 of the Limitation Act, 1963 applies only to the prescribed period of limitation and not to the further condonable period of 30 days.

Key Case Laws Cited:
- Simplex Infrastructure Limited Vs. Union of India: Emphasized that the expression "but not thereafter" in the proviso to Section 34(3) is crucial and delay beyond 30 days is not condonable.
- Popular Construction Company: Reinforced that the language of the proviso to Section 34(3) is strict and non-derogable.
- Himachal Techno Engineers: Clarified that the date of receipt of the award should be excluded when computing the three-month period.
- Assam Urban Water Supply: Stated that the benefit of the Court being closed applies only to the prescribed period of limitation and not to the further condonable period.

Conclusion:
- The Court concluded that the delay of even one day beyond 30 days is not condonable due to the strict language of the proviso to Section 34(3) of the A and C Act.
- The Court found that Southern Railways did not provide a convincing explanation for the delay, as the affidavit in support of the application was terse and lacked specificity.
- The Court emphasized the importance of adhering to strict timelines under the A and C Act to ensure expeditious resolution of disputes, a critical component of the Alternate Dispute Resolution (ADR) mechanism.

Final Order:
- The application for condonation of delay (A.No.9150 of 2019) was dismissed.
- Consequently, the Original Petition (O.P(D).No.128930 of 2019) was rejected as time-barred.
- There was no order as to costs.