VERY IMPORTANT POINT
The provisions of Section 5 of the Limitation Act, 1963 are not applicable to an application challenging an award, under Section 34 of the Arbitration and Conciliation Act, 1996. In view specific similar provision in Section 34(3) proviso of the later Act.

Headnote:Arbitration and Conciliation Act, 1996-Section 34(3)-Application to set aside within 3 months or on sufficient cause 4 months-Limitation Act, 1963-Section 5 r/w 29(2)-Condonation of delay on showing sufficient cause-Arbitration award made on 29.8.98 given to appellant-Filed in Court on 29.3.1999-Appellant filed an application to set aside the award on 19.4.1999-Barred by limitation under Section 34(3)-Appellant moved an application to condone delay under Section 5 L.M. Act-Rejected-Appeal against-Whether the provisions of Section 5 of the Limitation Act, 1963 are applicable to an application challenged an award under Section 34 of Arbitration and Conciliation Act, 1996? (No)-Appeal dismissed case law referred.
       Held : The question which arises for determination in this case is whether the provisions of Section 5 of the Limitation Act, 1963 are applicable to an application challenging an award, under Section 34 of the Arbitration and Conciliation Act, 1996 (referred to hereafter as the 1996 Act ). (Para 2)
       As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are but not thereafter used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the Court could entertain an application to set aside the Award beyond the extended period under the proviso, would render the phrase but not thereafter wholly otiose. No principle of interpretation would justify such a result. Apart from the language, express exclusion may follow from the scheme and object of the special or local law. "Even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the Court to examine whether and to what extent the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation" [Hukum Narain Yadav v. Lalit Narain Mishra, 1974(2) SCC 133]. Here the history and scheme of the 1996 Act support the conclusion that the time limit prescribed under Section 34 to challenge an Award is absolute and unextendable by Court under Section 5 of the Limitation Act. The Arbitration and Conciliation Bill, 1995 which preceded the 1996 Act stated as one of its main objectives the need "to minimise the supervisory role of courts in the arbitral process" [4(v) of the Statement of Objects and Reasons of the Arbitration and Conciliation Act, 1996]. This objective has found expression in Section 5 of the Act which prescribes the extent of judicial intervention in no uncertain terms :
       "5. Extent of judicial intervention.-Notwithstanding anything contained in any other la for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part."
       The Part referred to in Section 5 is Part I of the 1996 Act which deals ith domestic arbitrations. Section 34 is contained in Part I and is therefore subject to the sweep of the prohibition contained in Section 5 of the 1996 Act. Furthermore, Section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award "in accordance with" sub section 2 and sub section 3. Sub section 2 relates to grounds for setting aside an award and is not relevant for our purposes. But an application filed beyond the period mentioned in Section 34, sub section. Consequently by virtue of Section 34(1), recourse to the court against an arbitral award cannot be made beyond the period prescribed. The importance of the period fixed under Section 34 is emphasised by the provisions of Section 36 which provide that "where the time for making an application to set aside the arbitral award under Section 34 has expired.... the award shall be enforced and the Code of Civil Procedure 1908 in the same manner as if it were a decree of a court". This is a significant departure from the provisions of the Arbitration Act, 1940. Under the 1940 Act, after the time to set aside the award expired, the court was required to "proceed to pronounce judgment according to the award and upon the judgment so pronounced a decree shall follow". Now the consequence of the time expiring under Section 34 of the 1996 Act is that the award becomes immediately enforceable without any further act of the Court. If there were any residual doubt on the interpretation of the language used in Section 34, the scheme of the 1996 Act would resolve the issue in favour of curtailment of the Court s powers by the exclusion of the operation of Section 5 of the Limitation Act. (Paras 11, 12, 13, 14 and 15)
       Held finally : In the circumstances and for the reasons earlier stated we answer the question posed at the outset in the negative. The appeal is accordingly dismissed without any order as to costs. (Para 17)

Judgement Key Points

Key Points: - The 1996 Act sets a time limit under Section 34(3) for applying to set aside an arbitral award and this period is subject to a possible extended period of 30 days for sufficient cause, but not beyond that (Section 34(3) proviso) (!) (!) . - The court held that Section 5 of the Limitation Act, 1963 does not apply to applications under Section 34 of the 1996 Act due to express exclusion inferred from the proviso and the scheme of the 1996 Act (extensive judicial intervention prohibition) (!) (!) (!) (!) . - Express exclusion can be implied through the language and scheme of a special/local law, even if not explicitly stated, to limit application of general Limitation Act provisions (!) (!) . - The time limit under Section 34 is absolute and unextendable by the court under Section 5 of the Limitation Act; the award becomes enforceable once the period expires (Section 36) (!) (!) . - The decision clarifies that Union of India v. Hanuman Prasad & Brothers and similar references do not apply to the 1996 Act’s Section 34 context when considering limitation and condonation (!) . - The 1996 Act’s objective to minimize judicial intervention is reflected in Section 5, restricting court interference in arbitrations, thereby supporting non-application of Section 5’s condonation (!) (!) (!) . - The 1996 Act is a special law with a specific limitation regime for setting aside awards, which displaces the general Limitation Act to the extent of express or implied exclusion (!) (!) (!) . - The decision explicitly dismisses the appeal on the grounds that the extended period cannot be entertained under Section 5, affirming the absolute time limit for Section 34 challenges (!) .

Question 1?

What is the applicability of Section 5 of the Limitation Act, 1963 to applications challenging arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996?

Question 2?

What is the effect of Section 34(3) proviso on the extension of time for filing an application to set aside an arbitral award?

Question 3?

What are the implications of the express exclusion doctrine for Limitation Act provisions in relation to the 1996 Act?

JUDGMENT

Ruma Pal, J.-Leave granted.

2. The question which arises for determination in this case is whether the provisions of Section 5 of the Limitation Act, 1963 are applicable to an application challenging an award, under Section 34 of the Arbitration and Conciliation Act, 1996 (referred to hereafter as the 1996 Act ).

3. The award in this case was made by the Arbitrator on 29th August, 1998. Under the impression that the Arbitration Act, 1940 applied, the Arbitrator forwarded the original Award to the appellant with a request to file the Award in the High Court of Bombay so that a decree could be passed in terms of the Award under the provisions of the Arbitration Act, 1940. The Award as accordingly filed by the appellant in the Bombay High Court on 29th March, 1999. The appellant filed an application challenging the Award on 19th April, 1999 under Section 30 read with Section 16 of the Arbitration Act, 1940. Subsequently, the application was amended by inserting the words "Arbitration and Conciliation Act, 1996" in place of "Arbitration Act, 1940". The application was dismissed by the learned Single Judge on 26th October, 1999 on the ground that it was barred by limitation under Section 34 of the 1996 Act. The Division Bench rejected the appeal and upheld the findings of the learned Single Judge.

4. Before us, the appellant has not disputed the position that if the Limitation Act, 1963 and in particular Section 5, did not apply to Section 34 of the 1996 Act, then is objection to the award was time barred and the appeal would have to be dismissed. The submission however is that Section 29(2) of the Limitation Act makes the provisions of Section 5 of the Limitation Act applicable to special laws like the 1996 Act since the 1996 Act itself did not expressly exclude its applicability and that there was sufficient cause for the delay in filing the application under Section 34. Counsel for the respondent, on the other hand, has submitted that the language of Section 34 plainly read, expressly excluded the operation of Section 5 of the Limitation Act and that there was as such no scope for assessing the sufficiency of the cause for the delay beyond the period prescribed in the proviso to Section 34.

4. The issue will have to be resolved with reference to the language used in Sections 29(2) of the Limitation Act, 1963 and Section 34 of the 1996 Act. Section 29(2) provides that :

"Whether any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 (inclusive) shall apply only to so far as, and to the extent to which, they are not expressly excluded by such special or local law."

5. On an analysis of the section, it is clear that the provisions of Section 4 to 24 will apply when :

(i) there is a speical or local law which prescribes a different period of limitation for any suit, appeal or application; and

(ii) the special or local law does not expressly exclude those Sections.

6. There is no dispute that the 1996 Act is a Special law and that Section 34 provides for a period of limitation different from that prescribed under the Limitation Act. The question then is - is such exclusion expressed in Section 34 of the 1996 Act? The relevant extract of Section 34 reads :

"34. Application for setting aside arbitral award.-(1) xxx xxx xxx

(2) xxx xxx xxx xxx

(3) An application for setting aside may not be made after three 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

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2001 Supreme(SC) 1375

VERY IMPORTANT POINTThe provisions of Section 5 of the Limitation Act, 1963 are not applicable to an application challenging an award, under Section 34 of the Arbitration and Conciliation Act, 1996. In view specific similar provision in Section 34(3) proviso of the later Act.