9911796707
TMI Blog2025 (1) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... ings 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 g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ............................................................................. 37 1. Introduction: Leave granted. Facts, to the extent that they are relevant for determining the issue of limitation for filing an application challenging an arbitral award under Section 34 of the Arbitration and Conciliation Act, 19961 are as follows. The appellants received the arbitral award on 14.02.2022. The 3- month limitation period for filing the application under Section 34(3) of the ACA expired on 29.05.2022, on which date the court was functioning, but closed after five days for vacation commencing from 04.06.2022 to 03.07.2022. The application under Section 34 was filed immediately on the court s reopening, i.e. 04.07.2022. The High Court single judge under Section 34 and the High Court division bench under Section 37 dismissed the petition as barred by limitation. Under these circumstances, the issue before us is 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, 19632. 1.1 After considering Sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered the date of reopening for calculating limitation. In the meanwhile, the respondent filed for execution of the award. 3. Decision of the High Court under Section 34 and Section 37 of the ACA: The Section 34 application was dismissed by the single judge by order dated 07.02.2023 as being barred by limitation. The appellants preferred an appeal under Section 37, which was dismissed by the division bench by order dated 03.04.2024 that is impugned before us. The reasoning of the High Court proceeds as follows: 3.1 The limitation period commenced from 14.02.2022, when the appellants received a signed copy of the award. Under Section 34(3), an application to set aside the award must be made within a period of 3 months from the receipt of the award, which comes up to 14.05.2022. However, the High Court referred to this Court s order dated 10.01.20225, which extended the period of limitation in cases where the limitation expired between 15.03.2020 and 28.02.2022. The extended period of limitation was 90 days from 01.03.2022, which expired on 29.05.2022. The condonable period of 30 days expired on 28.06.2022, which fell during the summer vacation. The application was filed on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od expires on a holiday. He relied on Sridevi Datla v. Union of India9, where the benefit of Section 10 of the GCA was extended to the party when the condonable period under Section 16 of the NGT Act expired on a holiday and the appeal was filed on the next working day. Additionally, he submitted that the term certain day in Section 10 of the GCA gives it wider import than Section 4 of the Limitation Act, and extends its applicability to when the condonable period expires on a court holiday. 5.3 Third, Mr. Kaul expressed doubt regarding the correctness of Bhimashankar (supra), where Section 10 of the GCA was held to be inapplicable to Section 34(3) as the Limitation Act applies. He sought to highlight certain contradictions in the judgment by referring to paras 54, 55 and 57. He submitted that while paras 54 and 55 hold the Limitation Act to be inapplicable to Section 34(3), the Court rejected the benefit of Section 10 of the GCA in para 57 on the basis that the Limitation Act applies. In this manner, the Court distinguished Sridevi Datla (supra) and did not sufficiently deal with the reasoning there. Instead, the Court relied on Assam Urban (supra), which did not consider Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod, which cannot be extended any further. He also submitted that Sridevi Datla (supra) did not notice the distinction drawn in Sagufa Ahmed (supra) when applying Section 10 of the GCA. 6.3 Fourth, he submitted that Section 10 of the GCA does not apply to Section 34(3) as the Limitation Act applies. He also responded to Mr. Kaul s reliance on the words certain day in Section 10 of the GCA by submitting that they apply when a statute fixes a particular day or date for performing some act, which is not the case here. Therefore, the Section 34 application, which was filed on the 126th day, was barred by limitation and the High Court could not have condoned the delay through reference to Section 10 of the GCA. 6.4 In the written submissions, the respondent has further submitted that once Section 4 of the Limitation Act applies to Section 34(3), the provision cannot be further split into individual sections, sub-sections, and provisos to make Section 10 of the GCA applicable. Moreover, Section 10 of the GCA cannot be applied to the condonable period as that would amount to reading the expression prescribed period in Section 10 as including the condonable 30-day period, which is contrary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to which, they are not expressly excluded by such special or local law. 9. The effect of Section 29(2) has been summarised by this Court in Mukri Gopalan v. Cheppilat Puthanpurayil15 as follows: 8. A mere look at the aforesaid provision shows for its applicability to the facts of a given case and for importing the machinery of the provisions containing Sections 4 to 24 of the Limitation Act the following two requirements have to be satisfied by the authority invoking the said provision. (i) There must be a provision for period of limitation under any special or local law in connection with any suit, appeal or application. (ii) The said prescription of period of limitation under such special or local law should be different from the period prescribed by the Schedule to the Limitation Act. 9. If the aforesaid two requirements are satisfied the consequences contemplated by Section 29(2) would automatically follow. These consequences are as under: (i) In such a case Section 3 of the Limitation Act would apply as if the period prescribed by the special or local law was the period prescribed by the Schedule. (ii) For determining any period of limitation prescribed by such special or loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From reading the provision, it is clear that an application to set aside an arbitral award under Section 34 must be within 3 months from the receipt of the award or the date of disposal of a request under Section 33. This is the period of limitation.18 Further, the court may exercise discretion to entertain the application, within a further period of 30 days, if sufficient cause is shown, but not thereafter.19 14. As per Section 29(2) of the Limitation Act, the effect of there being a different limitation period under Section 34(3) is that: Section 3 of the Limitation Act applies to proceedings under Section 34 of the ACA as if the 3-month limitation period is the period prescribed in the Schedule to the Limitation Act. Further, Sections 4 to 24 of the Limitation Act apply to determine whether the application is within the period of limitation, insofar as, and to the extent to which, they are not expressly excluded. . 15. There are two aspects necessary for our consideration at this point: first, the interpretation of express exclusion ; and second, the extent of such exclusion. 16. The mere prescription of a period of limitation that is different from the Limitation Act, even if m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Limitation Act26: This Court in State of Himachal Pradesh v. Himachal Techno Engineers27 held that Section 12 of the Limitation Act applies for the purpose of calculating limitation under Section 34(3), and the same is not excluded by the provisions of the ACA. It held that the day from which the 3-month limitation period is to be reckoned must be excluded as per Section 12(1).28 20. Section 14 of the Limitation Act29: In State of Goa v. Western Builders (supra), a division bench of this Court held that nothing in the ACA or in the language of Section 34 excludes the applicability of Section 14 of the Limitation Act. Hence, the time spent by a party who was bona fide prosecuting his remedy before a court that did not have jurisdiction must be excluded while calculating the prescribed period under Section 34(3). It held that when the special law is silent and there is no specific prohibition, it must be interpreted in a manner that advances justice. While the object of the ACA is to ensure expeditious decisions in commercial matters through arbitration, Section 43 makes the entirety of the Limitation Act applicable. The Limitation Act is excluded only to that extent of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndatory 3 months plus 30 days period.39 Based on these inconsistencies between Section 17 of the Limitation Act and the language of Section 34(3), the Court held that there is an express exclusion . 22.2 It also considered the object of the ACA to ensure speedy dispute resolution and finality to the award; enforceability of the award under Section 36 of the ACA, once the time to challenge the award expires; and unbreakability of the time limit under Section 34(3), to hold that Section 17 of the Limitation Act is inapplicable.40 23. Section 4 of the Limitation Act: We found it necessary to deal with the case-law, categorised as per the provisions of the Limitation Act, due to a certain view at the bar that the provisions of the Limitation Act are entirely inapplicable to Section 34(3). Such a view was put forth before the High Court as well as before us. Through the above discussion, it is amply clear that there is no wholesale exclusion of the provisions of the Limitation Act in calculating the period of limitation under Section 34(3). Rather, each provision s applicability/exclusion has been individually tested by this Court, on a case-to-case basis, based on the language and purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of 30 days expired during court vacation between 25.12.2003 to 01.01.2004. The application under Section 34 was filed on 02.01.2004, on the date of court reopening. This Court upheld the dismissal of the Section 34 application on the ground of delay, as the same could not be condoned. 26.1 First, the Court held that by virtue of Section 43(1), the Limitation Act applies to matters of arbitration, save and except to the extent its applicability has been excluded by virtue of the express provision contained in Section 34(3) of the 1996 Act .42 26.2 It then considered the meaning of the expression prescribed period in Section 4, to determine whether the appellants in this case would be entitled to an extension of time. Reading Section 2(j) of the Limitation Act in the context of Section 34(3) of the ACA, it held that the prescribed period for an application to set aside the arbitral award is 3 months. The 30-day period is not the period of limitation, but the condonable period, and is therefore not the prescribed period . Hence, it held that Section 4 was not attracted to the facts of the case.43 27. Contrary to the interpretation of the judgment put forth by Mr. Kaul during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings under the Arbitration Act is concerned, the aforesaid has no substance. Section 43(1) of the Arbitration Act specifically provides that the Limitation Act, 1963 shall apply to arbitrations as it applies to proceeding in Court. However, as observed and held by this Court in Assam Urban, 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. (emphasis supplied) In paras 55 and 56, it discussed Popular Construction (supra) and Hindustan Construction (supra) on the inapplicability of Section 5 of the Limitation Act and the mandatory nature of the 30-day time limit for condonation of delay, respectively. 29.3 Finally, in paras 57 and 58, in light of the proviso to Section 10 of the GCA which specifically excludes its applicability to any act or proceeding to which the Limitation Act applies, the Court rejected the applicability of Section 10 of the GCA to Section 34(3). 30. The logic of the above reasoning in Bhimashankar (supra), like in Assam Urban (supra), proceeds on the basis that Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ously claim benefit of Section 10 of the GCA. 34. Since the applicability of Section 10 of the GCA is rejected at the very threshold, it is no longer necessary to consider the interpretation of prescribed period under Section 10 of the GCA as including the condonable period, as put forth by this Court in Sridevi Datla (supra) in the context of Section 16 of the NGT Act. The position of law in the context of Section 34(3) of the ACA has been clearly enunciated in Assam Urban (supra), Bhimashankar (supra), and Rajpath Contractors (supra). Hence, Sridevi Datla (supra) can be differentiated on this ground as well. 35. Summarising the Current Position of Law: From the reasoning and decisions in the above cases, the following conclusions evidently follow: 35.1 First, Section 4 of the Limitation Act applies to Section 34(3) of the ACA. 35.2 Second, Section 4 of the Limitation Act benefits a party only when the prescribed period , i.e. the 3-month limitation period under Section 34(3) expires on a court holiday. In such a situation, the application under Section 34 will be considered as having been filed within the limitation period if it is filed on the next working day of the court. 35.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions.47 If this limited remedy is denied on stringent principles of limitation, it will cause great prejudice and has the effect of (a) denying the remedy, and (b) in the long run, it will have the effect of dissuading contracting parties from seeking resolution of disputes through arbitration. This is against public policy. 36.4 However, the difficulty arises as the judgments affirming the applicability of Section 4 of the Limitation Act equate the expression prescribed in that section and Section 29(2) of the Limitation Act only with the main period of limitation (3 months). The problem with this construction is that the special law, i.e., Section 34(3) of the ACA, along with its proviso does not prescribe the period of limitation in the manner that a period is specified in the Schedule of the Limitation Act. The statutorily prescribed period under Section 34(3) of the ACA is 3 months, and an additional 30 days. In our opinion, it will be wrong to confine the period of limitation to just 3 months by interpreting it as the prescribed period and excluding the balance 30 days under the proviso to Section 34(3) as not being the prescribed period through a process of interpretat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FAO (OS) (COMM) No. 67/2023 dated 03.04.2024 and dismiss the appeal. 39. There shall be no order as to costs. 40. Pending applications, if any, stand disposed of. JUDGMENT PANKAJ MITHAL, J. 1. The sole issue arising in this appeal for our consideration is whether the High Court was justified in dismissing the petition filed by the appellants herein under Section 34 of the Arbitration and Conciliation Act, 1996 Hereinafter referred to as the A C Act as barred by time. 2. My esteemed brother, in his opinion expressed on the above issue, has clearly concluded that the petition filed by the appellants under Section 34 of the A C Act was beyond limitation and was rightly dismissed as barred by time. I fully agree with the said opinion expressed by my brother on the basis of the legal interpretation of the various relevant provisions and the conclusions drawn on its basis. However, I would like to write a supporting opinion in my own way based upon the facts of the case at hand. 3. On account of lease agreements entered into between the appellants and the respondent, certain disputes arose between them. Therefore, respondent invoked the arbitration clause whereupon the disputes were ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtained it within a further period of 30 days. Therefore, the maximum period in which the petition under Section 34 of the A C Act, after condoning the delay, could be entertained is 90+30 days i.e., 120 days. The said period expired on 28.06.2022 which fell during the summer vacation of the Court. Therefore, the petition filed by the appellants on the first day of re-opening of the Court after summer vacation was within time. 8. In order to appreciate the above submission, it may be pertinent to refer to Section 43 of the A C Act which provides for the applicability of the Limitation Act, 1963 which in unequivocal terms states that the Limitation Act shall apply to Arbitrations as it applies to proceedings in court. In view of the above provision and the case law on the subject as discussed by my brother, there remains no doubt that the Limitation Act is applicable to the arbitration proceedings as also to court proceedings under the A C Act. 9. The Limitation Act is based on public policy to bring to an end the life of a dispute for which appropriate remedy has not been availed within a time bound period. 10. Section 3 of the Limitation Act, 1963 clearly lays down that every suit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be attracted to accord any benefit to the appellants. 15. The period of limitation prescribed for instituting a suit or filing an appeal or making an application has to be distinguished from a condonable period which cannot be made part of the period of limitation prescribed. 16. In view of the above discussion, as the period of limitation prescribed for filing a petition under Section 34 of the A C Act expired on a working day and not on a day on which the court was closed, the appellants were not entitled to file it on the re-opening of the court after the summer vacation and as such the petition so filed was patently barred by limitation. 17. Admittedly, as the period of limitation prescribed for filing a petition under Section 34 of the A C Act expired on 29.05.2022 whereas the petition was preferred on 04.07.2022 much beyond the period of limitation prescribed and the condonable period of 30 days stipulated under the proviso to Section 34(3) of the A C Act, the petition under Section 34 of the A C Act was beyond time and the delay could not have been condoned. Accordingly, there is no error or illegality on part of the High Court in dismissing the petition under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. In such circumstances, in my opinion, the legislature ought not to confine condoning the delay only for a prescribed period and not beyond it. Rather it should follow the principle of condoning the delay as enshrined under Section 5 of the Limitation Act. This would not only avoid a good case to be thrown out on the ground of limitation but at the same time would bring about uniformity in law. 21. I, therefore, suggest to the law makers to keep this in mind while enacting new Acts and ensure that uniform system is applied in all enactments, be it present or future. FOOT NOTE 1 Hereinafter ACA . 2 Hereinafter Limitation Act . 3 Hereinafter GCA . 4 In Re: Cognizance of Extension of Limitation, Suo Motu Writ Petition (C) No 3 of 2020. 5 ibid. 6 (2012) 2 SCC 624. 7 (2023) 8 SCC 453. 8 (2001) 8 SCC 470. 9 (2021) 5 SCC 321. 10 Sagufa Ahmed v. Upper Assam Polywood Products Pvt Ltd, (2021) 2 SCC 317. 11 Relied on H.H. Raja Harinder Singh v. S. Karnail Singh, 1956 SCC OnLine SC 111; Manohar Joshi v. Nitin Bhaurao Patil, (1996) 1 SCC 169; and Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department, (2008) 7 SCC 169. 12 (2024) 7 SCC 257. 13 (2008) 7 SCC 169. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section. 23 Popular Construction (supra), para 12. 24 ibid, para 16. 25 ibid. 26 The relevant portion of Section 12 of the Limitation Act reads: 12. Exclusion of time in legal proceedings. (1) In computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded 27 (2010) 12 SCC 210. 28 ibid, paras 12, 19. 29 The relevant portion of Section 14 of the Limitation Act reads: 14. Exclusion of time of proceeding bona fide in court without jurisdiction. (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (2) In computing the period of limitation for any application, the time ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
