9911796707
TMI BlogLIMITATION FOR FILING AN APPLICATION FOR CHALLENGING AN ARBITRAL AWARD UNDER SECTIO 34 OF THE ARBITRATION AND CONCILITION ACT, 1996X X X X Extracts X X X X X X X X Extracts X X X X ..... LIMITATION FOR FILING AN APPLICATION FOR CHALLENGING AN ARBITRAL AWARD UNDER SECTIO 34 OF THE ARBITRATION AND CONCILITION ACT, 1996 X X X X Extracts X X X X X X X X Extracts X X X X ..... er the law for the time being in force; or * the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or * the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration; * the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt; or * the Court finds that- * the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or * the arbitral award is in conflict with the public policy of India. Time limit Section 34(3) of the Act provides that an application for setting aside may not be made after 3 months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal. The proviso to this section provides that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of three months it may entertain the application within a further period of 30 days, but not thereafter. Limitation under General Clauses Act Section 10 of General Clauses Act, 1897 provides that where, by any Central Act or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open. This section shall apply to any act or proceeding to which the Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limitation Act, 1877 applies. This section applies also to all Central Acts and Regulations made on or after the fourteenth day of January, 1887. In MYPREFERRED TRANSFORMATION AND HOSPITALITY PVT. LTD. AND ANR. VERSUS M/S FARIDABAD IMPLEMENTS PVT. LTD. - 2025 (1) TMI 623 - SUPREME COURT, the appellant entered into lease agreement with the respondent company. A dispute arised between them. The respondent invoked the arbitration clause and an arbitration was conducted. The award was made in favour of the respondent on 04.02.2022. The appellant received the scanned copy of the arbitral award on 4.02.2022. The original order was received by him on 14.02.2022. Since dissatisfied with the said award the appellant wanted to file a petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 34(3) of the Act to get the award set aside. The time limit for filing the application expired on 29.05.2022. The Court was functioning on that day and functioning till the vacation started from 04.06.2022 to 03.07.2022. The petitioner filed the application under Section 34(3) on 04.07.2022, the day after the vacation was over. The Single Bench of High Court dismissed the petition as time barred on 07.02.2023. Against this order the present the appellant filed an appeal before the Division Bench. The Division Bench also dismissed the appeal of the appellant on 03.04.2024. In the meanwhile, the respondent filed for execution of the award. The High Court dismissed the appeal as time barred. The High Court observed that the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication under Section 34(3) of the Act was to be filed within 14.05.2022. The Supreme Court extended the period of limitation due to COVID 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 according to the proviso to Section 34(3) of the Act expired on 28.06.2022, which fell during the summer vacation. The application was filed on the first date of reopening of the court, i.e., on 04.07.2022. Section 4 of the Limitation Act applies only to cases where the 'prescribed period' of limitation expires on a date when the court is closed. However, it does not apply when the 30-day condonable perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d expires on a court holiday. The Supreme Court permitted filing between 27.06.2022 to 02.07.2022 which would not impact the applicability of Section 10 of the General Clauses Act, as 04.07.2022 would be considered as the date of court reopening for the purpose of limitation. The High Court held that it does not have the power to condone the delay in the present case and dismissed the Section 37 appeal. Being aggrieved against the order of Division Bench, the appellant filed the present appeal before the Supreme Court. The Supreme Court observed that the limitation period commenced from 14.02.2022, when the appellants received a signed copy of the award. The Supreme Court, due to COVID, on 10.01.2022 extended the period of limitation in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses where the limitation expired between 15.03.2020 and 28.02.2022. The Supreme Court vide their order dated 10.05.2024 issued notice on the condition that the appellants must deposit Rs. 2 crores with the Executing Court and also stayed the execution proceedings. The appellant complied with the said order. The appellant submitted the following before the Supreme Court- * The Limitation Act, including Section 4, does not apply to Section 34(3) of the Act. * Since the Limitation Act is excluded, Section 10 of the General Clauses Act applies to Section 34(3) of the Act, including when the condonable period expires on a holiday. * The term 'certain day' in Section 10 of the General Clauses Act gives it wider import than Section 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Limitation Act, and extends its applicability to when the condonable period expires on a court holiday. * Section 10 of the General Clauses Act must apply to the proviso. Its inapplicability would be oppressive and would render the 30-day condonable period under Section 34(3) otiose when it expires on a court holiday, leaving the party remediless. The respondent submitted the following before the Supreme Court- * Section 4 of the Limitation Act only applies to the 3-month limitation period and not to the 30-day condonable period under Section 34(3), which cannot be extended any further. * Section 10 of the General Clauses Act does not apply to Section 34(3) of the Act as the Limitation Act applies. * The words 'cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain day' in Section 10 of the General Clauses Act apply when a statute fixes a particular day or date for performing some act, which is not the case here. * Therefore, the application filed under Section 34 of the Act, 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 General Clauses Act. * Once Section 4 of the Limitation Act applies to Section 34(3) of the Act, the provision cannot be further split into individual sections, sub-sections, and provisos to make Section 10 of the General Clauses Act applicable. * Section 10 of the General Clauses Act cannot be applied to the condonable period as that would amount to reading the expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 'prescribed period' in Section 10 as including the condonable 30-day period. The Supreme Court considered the submissions of both the parties. The Supreme Court framed the following issues to be decided- * Do the provisions of the Limitation Act apply to Section 34 proceedings, and to what extent? * Does Section 4 of the Limitation Act apply to Section 34(3) as per an analysis of the statutory scheme as well as precedents of this Court on the issue? If Section 4 applies, does it apply only to the 3-month limitation period or also the 30-day condonable period? * In light of the answer in (ii), will Section 10 of the General Clauses Act apply to Section 34(3), and if so, in what manner? The Supreme Court analysed the provisions of L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation Act and the Act. Section 29(2) of the Limitation Act stipulates that where any special or local law prescribes a period of limitation that is different from the Schedule, Section 3 of the Limitation Act shall apply as if such period is the one prescribed in the Schedule. Further, Section 4 to 24 shall apply insofar as, and to the extent to which, they are not expressly excluded by such special or local law. Therefore, Section 29(2) imports the provisions of the Limitation Act to special and local laws that prescribe a different period of limitation, unless there is an express exclusion contained in such law. Section 43(1) of the Act fortifies the applicability of the Limitation Act not only to court proceedings under the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but also to arbitrations. The Supreme Court observed that an application to set aside an arbitral award under Section 34 of the Act 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. The court may exercise discretion to entertain the application, within a further period of 30 days, if sufficient cause is shown, but not thereafter. 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. The Supreme Court, next considered the application of Section 5 of the Limitation Act. Whether a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt can condone delay beyond 30 days, as specified in the proviso to Section 34(3), by relying on Section 5 of the Limitation Act? The Supreme Court considered the expression 'but not thereafter' in the proviso to Section 34(3), which it held would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act. Hence, Section 5 would not apply as it would render this phrase redundant if a further period was allowed to be condoned through reference to Section 5 of the Limitation Act. The Supreme Court next considered the meaning of the expression in Section 4 of the Limitation Act. Reading Section 2(j) of the Limitation Act in the context of Section 34(3) of the Act, the Supreme Court held that the 'prescribed peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od' 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. Section 4 of the Limitation Act applies to Section 34(3) of the Act, it only applies in relation to the prescribed period of 3 months. It does not apply when the condonable period of 30 days expires on a day when the court is not working. Next the Supreme Court considered the applicability of Section 10 of the General Clauses Act. Whether the appellant can claim the benefit of Section 10 of the General Clauses Act? The Supreme Court is of the view that the Limitation Act applie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to Section 34(3) of the Act but Section 10 of the is not applicable. Section 10 of the General Clauses Act must General Clauses Act apply to the 30-day period stipulated in the proviso to Section 34(3) also warrants rejection due to the statutory language of the proviso to Section 10 of the General Clauses Act, which states that it does not apply to 'any act or proceeding' to which the Limitation Act applies. The Supreme Court summarised the case and concluded as below- * Section 4 of the Limitation Act applies to Section 34(3) of the Act. * 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, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. * Section 4 of the Limitation Act does not come to the aid of the party when the 3-month limitation period expires on a day when the court was working. The 30-day condonable period expiring during the court holidays will not survive and neither Section 4, nor any other provision of the Limitation Act, will inure to the benefit of the party to enable filing of the Section 34 application immediately after reopening. * since Section 4 of the Limitation Act applies to proceedings under Section 34 of the Act, the applicability of Section 10 of the General Clauses Act stands excluded in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the express wording of its proviso that excludes the applicability of the provision when the Limitation Act applies. The Supreme Court observed that the construction of limitation statutes is quite stringent and unduly curtails a remedy available to arbitrating parties to challenge the validity of an arbitral award. The same shall be addressed by the Parliament. The purpose of applying the Limitation Act to special laws is to vest in the court the power to exercise discretion or to grant the benefit of exclusion. In such cases, when the Limitation Act applies, the discretion of the court as contemplated under its provisions, commencing from Sections 4 to 24, must be given full effect. In this light, the additional period of 30 days sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecifically provided under the Act loses its efficacy and purpose, and becomes untenable due to the current position of law.
The Supreme Court dismissed the application preferred by the appellant under Section 34 of the Act stands dismissed as it was filed beyond the condonable period of 30 days, which conclusively and absolutely expired on 28.06.2022. X X X X Extracts X X X X X X X X Extracts X X X X
|
