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2023 (12) TMI 1342 - HC - Indian LawsExclusion of the period of 1854 days in computing the period of limitation for filing the Petition challenging the Award - defect of jurisdiction - Section 14 of the Limitation Act - HELD THAT - The Applicant in the present case has failed to exercise due diligence and good faith. Further, the proceedings adopted by the Applicant viz. the Writ proceedings cannot be said to be proceeding suffering from defect of Jurisdiction or any other causes of like nature . It is not the submission of the Applicant/Petitioner that the Writ Court cannot interfere with the Arbitral Award. In the present case, the Writ Court chose not to interfere on account of alternate remedy. In the decision of the Supreme Court in Zafar Khan 1984 (7) TMI 404 - SUPREME COURT Defect of Jurisdiction has been construed as well as other cause of like nature and explanation (c) to Section 14 has also been referred to which provides misjoinder of parties or causes of action shall be deemed to be a cause of like nature with defect of jurisdiction. This expression must take its colour and content from the just preceding expression, defect of jurisdiction . In the present case, the Writ Petition challenging the Award cannot be termed as defect of jurisdiction . There are much merit in the submission of the Counsel of Respondent No.1 that presuming Section 14 applies to the Arbitration Petition, the Arbitration Petition is not preferred within the prescribed period of limitation as the delay is of 166 days as the period between receipt of the Award and filing of the Writ Petition as well as the period between the rejection of the Writ Petition and filing of the SLP and the period between the dismissal of SLP and filing of the Arbitration Petition cannot be counted in the exclusion period under Section 14 of the Limitation Act. Thus, in any event the Arbitration Petition has been preferred beyond the permissible period of 120 days under Section 34 of the Arbitration Act. There are no merit in the present Interim Application for exclusion of the period of 1854 days from 5 th April, 2017 till 1st November, 2022 in computing the period of limitation for filing the Petition challenging the Award dated 31st March, 2017 passed by the Facilitation Council constituted under the MSME Act. The delay beyond the permissible period of 120 days under Section 34(3) and proviso thereto of the Arbitration Act can in no event be condoned. The Commercial Arbitration Petition under Section 34 of the Arbitration Act is dismissed as being barred by Limitation and is accordingly disposed of.
Issues Involved:
1. Exclusion of the period of 1854 days in computing the period of limitation for filing the Petition. 2. Condonation of delay of 21 days in filing the Petition under Section 34(3) of the Arbitration & Conciliation Act, 1996. 3. Applicability of Section 14 of the Limitation Act, 1963. 4. Bona fide prosecution of the Writ Petition and SLP. 5. Due diligence and good faith in prosecuting the Writ Petition and SLP. 6. Defect of jurisdiction or other cause of like nature under Section 14 of the Limitation Act. Detailed Analysis: 1. Exclusion of the period of 1854 days in computing the period of limitation for filing the Petition: The Applicant sought exclusion of the period from 5th April 2017 to 1st November 2022 in computing the period of limitation for filing the Petition challenging the Award dated 31st March 2017. The Applicant argued that the time spent in prosecuting the Writ Petition and the SLP should be excluded under Section 14 of the Limitation Act, 1963. However, the Court found that the necessary ingredients for the applicability of Section 14 were not met in this case. 2. Condonation of delay of 21 days in filing the Petition under Section 34(3) of the Arbitration & Conciliation Act, 1996: The Applicant also sought condonation of a 21-day delay in filing the Petition under Section 34(3) of the Arbitration & Conciliation Act, 1996. The Court noted that even if the period spent in prosecuting the Writ Petition and the SLP was excluded, the delay in filing the Petition was still beyond the permissible period of 120 days under Section 34(3) of the Arbitration Act. 3. Applicability of Section 14 of the Limitation Act, 1963: The Court highlighted that Section 14 of the Limitation Act requires the prosecution of another civil proceeding with due diligence and in good faith in a Court that is unable to entertain it due to a defect in jurisdiction or other cause of like nature. The Court found that the Applicant did not meet these requirements, as the Writ Petition was not prosecuted with due diligence and good faith, and the proceedings did not suffer from a defect in jurisdiction. 4. Bona fide prosecution of the Writ Petition and SLP: The Court noted that the Respondent had raised objections to the maintainability of the Writ Petition at the outset, and the Applicant continued to prosecute the Writ Petition despite these objections. The Court found that this could not be considered a bona fide prosecution of proceedings. Additionally, the Applicant's decision to file an SLP instead of adopting appropriate proceedings under Section 34 of the Arbitration Act further demonstrated a lack of bona fide prosecution. 5. Due diligence and good faith in prosecuting the Writ Petition and SLP: The Court emphasized that the burden to show due diligence and good faith is on the party seeking the benefit of Section 14 of the Limitation Act. The Applicant failed to demonstrate due diligence and good faith in prosecuting the Writ Petition and the SLP. The Court referred to the definition of "Good Faith" under Section 2(h) of the Limitation Act, which requires actions to be done with due care and attention. 6. Defect of jurisdiction or other cause of like nature under Section 14 of the Limitation Act: The Court found that the Writ proceedings did not suffer from a defect of jurisdiction or any other cause of like nature. The Writ Court chose not to interfere with the Arbitral Award due to the existence of an alternate remedy, not because of a lack of jurisdiction. The Court referred to the Supreme Court's decision in Zafar Khan & Ors. Vs. Board of Revenue UP, which clarified that "defect of jurisdiction" must be construed narrowly and in relation to the preceding expression. Conclusion: The Court concluded that the Applicant did not meet the necessary requirements for the applicability of Section 14 of the Limitation Act. Consequently, the period of 1854 days could not be excluded for computing the period of limitation for filing the Petition. The delay beyond the permissible period of 120 days under Section 34(3) of the Arbitration Act could not be condoned. Therefore, the Interim Application was disposed of, and the Commercial Arbitration Petition under Section 34 of the Arbitration Act was dismissed as being barred by limitation.
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