2025 (1) TMI 623 - SC - Indian Laws

Applicability of Limitation Act to proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 (ACA) - Whether the benefit of the additional 30 days under the proviso to Section 34(3), which expired during the vacation, can be given when the petition is filed immediately after reopening in exercise of power under Section 4 of the Limitation Act? Do the provisions of the Limitation Act apply to Section 34 proceedings, and to what extent? - HELD THAT - When Section 29(2) of the Limitation Act already makes Sections 4 to 24 of the Limitation Act applicable to special statutes, including the ACA. It held that the ACA does not prescribe the period of limitation for various proceedings under the Act, and deviates from the Limitation Act in specific instances like Section 34(3) and Sections 43(2) to (4).16 By virtue of Section 29(2), the Limitation Act applies to court proceedings under the ACA. The purpose of Section 43(1) of the ACA is to extend the applicability of the Limitation Act to arbitrations also, as these are private tribunals and not courts. Since the Limitation Act is only applicable to court proceedings, Section 43(1) is necessary to make it applicable to arbitrations in the same manner as it applies to court proceedings. The mere prescription of a period of limitation that is different from the Limitation Act, even if mandatory and compulsory, is not sufficient to displace the applicability of the Limitation Act s provisions.20 However, an exclusion of the Limitation Act s provisions can be inferred if the nature and language of the provisions, and the scheme of the special law necessarily exclude the applicability of one or more of the provisions contained in Sections 4 to 24 of the Limitation Act.21 Thus, as per settled caselaw, an express reference to an exclusion is not essential and the court can examine the language of the special law and its scheme to arrive at a conclusion that certain provisions of the Limitation Act are impliedly excluded. Once the Court commenced disapplying provisions of the Limitation Act to the ACA on the ground of implied exclusions, it is only a matter of interpretation to include or exclude provisions from Sections 4 to 24 of the Limitation Act on a case-to-case basis. Thus, for example, while the Court held that Sections 5 and 17 of the Limitation Act are excluded from Section 34(3), it came to the conclusion that Sections 4, 12, and 14 of the Limitation Act are applicable. In a way, the applicability of provisions from Sections 4 to 24 of the Limitation Act and the manner in which they apply are at the doorstep of the court, rather than being determined by a clear and categorical statutory prescription. Conclusion - The Limitation Act applies to Section 34 proceedings, with specific exclusions. Section 4 applies only to the 3-month period, and Section 10 of the GCA does not apply. Appeal dismissed.

1. ISSUES PRESENTED and CONSIDERED

The judgment primarily addresses the following legal issues:

i. Do the provisions of the Limitation Act apply to proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 (ACA), and to what extent?

ii. Does Section 4 of the Limitation Act apply to Section 34(3) of the ACA, and if so, does it apply only to the 3-month limitation period or also to the 30-day condonable period?

iii. In light of the answer to the above, will Section 10 of the General Clauses Act (GCA) apply to Section 34(3) of the ACA, and if so, in what manner?

2. ISSUE-WISE DETAILED ANALYSIS

i. Applicability of the Limitation Act to Section 34 Proceedings

Relevant legal framework and precedents: Section 29(2) of the Limitation Act stipulates that if a special or local law prescribes a different period of limitation, the provisions of Sections 4 to 24 of the Limitation Act shall apply unless expressly excluded. Section 43(1) of the ACA states that the Limitation Act applies to arbitrations as it does to court proceedings.

Court's interpretation and reasoning: The court held that the Limitation Act generally applies to arbitrations and court proceedings under the ACA, except where expressly excluded. The court examined various cases to determine the extent of applicability of Sections 4 to 24 of the Limitation Act to Section 34(3) of the ACA.

Key evidence and findings: The court found that while Section 5 of the Limitation Act is excluded due to the mandatory nature of the 30-day period in the proviso to Section 34(3), Sections 12 and 14 of the Limitation Act are applicable.

Application of law to facts: The court concluded that there is no wholesale exclusion of the Limitation Act's provisions in calculating the limitation period under Section 34(3). Each provision's applicability is tested individually.

Treatment of competing arguments: The court rejected the argument that the Limitation Act does not apply to Section 34 proceedings, affirming its applicability except where expressly excluded.

Conclusions: The Limitation Act applies to Section 34 proceedings, with specific provisions excluded based on express or implied exclusions.

ii. Applicability of Section 4 of the Limitation Act to Section 34(3)

Relevant legal framework and precedents: Section 4 of the Limitation Act allows for filing on the next working day if the prescribed period expires on a court holiday. Section 34(3) of the ACA provides a 3-month period to challenge an arbitral award, with a further 30-day condonable period.

Court's interpretation and reasoning: The court held that Section 4 applies to the 3-month limitation period but not to the 30-day condonable period. This interpretation was based on the distinction between the "prescribed period" and the condonable period.

Key evidence and findings: The court relied on precedents such as Assam Urban and Bhimashankar to support its interpretation.

Application of law to facts: The court found that the appellant's application was filed beyond the condonable period, which expired during the court's vacation, and thus could not benefit from Section 4.

Treatment of competing arguments: The court rejected the appellant's argument that Section 4 should apply to the entire period, including the condonable period.

Conclusions: Section 4 of the Limitation Act applies only to the 3-month period under Section 34(3) of the ACA, not the additional 30-day condonable period.

iii. Applicability of Section 10 of the GCA to Section 34(3)

Relevant legal framework and precedents: Section 10 of the GCA allows for filing on the next working day if the last day falls on a court holiday. The proviso excludes its applicability to proceedings under the Limitation Act.

Court's interpretation and reasoning: The court held that Section 10 of the GCA does not apply to Section 34(3) of the ACA because the Limitation Act applies, as affirmed in Bhimashankar.

Key evidence and findings: The court emphasized the express exclusion in the proviso to Section 10 of the GCA.

Application of law to facts: The court concluded that the appellant could not benefit from Section 10 of the GCA due to the applicability of the Limitation Act.

Treatment of competing arguments: The court rejected the appellant's reliance on Sridevi Datla, differentiating it based on the context of Section 34(3) of the ACA.

Conclusions: Section 10 of the GCA is inapplicable to Section 34(3) of the ACA due to the Limitation Act's applicability.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "The Limitation Act, 1963 shall be applicable to the matters of arbitration covered by the 1996 Act save and except to the extent its applicability has been excluded by virtue of express provision contained in Section 34(3) of the Arbitration Act."

Core principles established: The Limitation Act applies to Section 34 proceedings, with specific exclusions. Section 4 applies only to the 3-month period, and Section 10 of the GCA does not apply.

Final determinations on each issue: The court dismissed the appeal, holding that the Section 34 application was barred by limitation as it was filed beyond the condonable period, which expired during the court's vacation.

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