2024 (7) TMI 457 - SC - Indian Laws

Period of limitation for filing a petition under Section 34 of the Arbitration Act - HELD THAT - As per Section 12(1) of the Limitation Act, the day from which the limitation period is to be reckoned must be excluded. In this case, the period of limitation for filing a petition under Section 34 will have to be reckoned from 30th June 2022, when the appellants received the award. In view of Section 12(1) of the Limitation Act, 30th June 2022 will have to be excluded while computing the limitation period. Thus, in effect, the period of limitation, in the facts of the case, started running on 1st July 2022. The period of limitation is of three months and not ninety days. Therefore, from the starting point of 1st July 2022, the last day of the period of three months would be 30th September 2022. As noted earlier, the pooja vacation started on 1st October 2022. In the facts of the case in hand, the three months provided by way of limitation expired a day before the commencement of the pooja vacation, which commenced on 1st October 2022. Thus, the prescribed period within the meaning of Section 4 of the Limitation Act ended on 30th September 2022. Therefore, the appellants were not entitled to take benefit of Section 4 of the Limitation Act. As per the proviso to subsection (3) of Section 34, the period of limitation could have been extended by a maximum period of 30 days. The maximum period of 30 days expired on 30th October 2022. As noted earlier, the petition was filed on 31st October 2022. The High Court was right in holding that the petition filed by the appellants under Section 34 of the Arbitration Act was not filed within the period specified under subsection (3) of Section 34 - there are no merit in the appeal - appeal dismissed.

Summary

Issues:
1. Calculation of limitation period for filing a petition under Section 34 of the Arbitration Act.
2. Applicability of Section 4 of the Limitation Act.
3. Interpretation of the proviso to subsection (3) of Section 34 of the Arbitration Act.

Analysis:

Calculation of limitation period for filing a petition under Section 34 of the Arbitration Act:
The case involved a dispute between the State of West Bengal and a contractor appointed for the construction of a bridge. The Arbitral Tribunal passed an award on 30th June 2022, directing the State to pay a sum to the contractor. The State received the award on the same day. The High Court dismissed the State's petition challenging the award under Section 34 of the Arbitration Act on the ground of limitation. The State contended that the limitation period should be calculated from 1st July 2022, making the petition filed on 31st October 2022 within the limitation period. However, the Court held that the limitation period started from the day the State received the award, i.e., 30th June 2022. Taking into account the exclusion of the first day as per Section 12(1) of the Limitation Act, the limitation period expired on 30th September 2022, before the pooja vacation began on 1st October 2022.

Applicability of Section 4 of the Limitation Act:
The State argued that they should be entitled to the benefit of Section 4 of the Limitation Act, which allows for the filing of suits, appeals, or applications on the day the court reopens if the prescribed period expires when the court is closed. However, the Court clarified that the prescribed period for making an application under Section 34 of the Arbitration Act is three months, as per Section 2(j) of the Limitation Act. The Court emphasized that the period of 30 days mentioned in the proviso to subsection (3) of Section 34 is not part of the prescribed period or limitation period. Therefore, Section 4 of the Limitation Act does not apply in this context.

Interpretation of the proviso to subsection (3) of Section 34 of the Arbitration Act:
The Court reiterated that the proviso to subsection (3) of Section 34 of the Arbitration Act excludes the applicability of Section 5 of the Limitation Act, which deals with the extension of the limitation period. The Court highlighted that the limitation period could only be extended by a maximum of 30 days, as specified in the proviso. In this case, the maximum extension period expired on 30th October 2022, while the State filed the petition on 31st October 2022. Consequently, the Court upheld the High Court's decision that the State's petition was not filed within the specified limitation period under subsection (3) of Section 34, leading to the dismissal of the appeal.