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2010 (5) Supreme 681
SUPREME COURT OF INDIA
R V Raveendran and Gyan Sudha Misra, JJ.
State of Himachal Pradesh & Anr. — Appellants
versus
M/s Himachal Techno Engineers & Anr. — Respondents
Civil Appeal No.5998 of 2010
[Arising out of SLP [C] No.4063/2010]
Decided on : 26-7-2010
Facts of the Case :
Petition under section 34 of Act,1996 was filed by appellant herein in the instant case challenging arbitral award. The petition was accompanied by an application under sub-section (3) of section 34 of the Act, for condonation of delay of 28 days in filing the petition.Single Judge of High Court dismissed application for condonation of delay and petition under section 34 of the Act holding that as the award was received in the office on 10.11.2007, the period of three months, that is “90 days” had to be reckoned from 11.11.2007 by excluding date of receipt, that said three months period ended on 9.2.2008, that even if the maximum additional period of 30 days was counted thereafter last date of limitation for filing petition would have been 10.3.2008 and petition filed on 11.3.2008 was barred by limitation.
2.Present appeal has been filed against said order of High Court.
Findings of the Court :
When the award is delivered or deposited or left in the office of a party on a non working day, date of such physical delivery is not the date of ‘receipt’ of the award by that party. The fact that beldar or a watchman was present on a holiday or non-working day and had received copy of award could not be considered as ‘receipt of the award’ by the party concerned, for the purposes of section 31(5) of the Act. Necessarily date of receipt would have to be the next working day. Date of receipt therefore taken as 12.11.2007 and not 10.11.2007.As the award was received by the Executive Engineer on 12.11.2007,for the purpose of calculating the three months period, said date shall have to be excluded having regard to Section 12(1) of Limitation Act, 1963 and Section 9 of General Clauses Act, 1897.Consequently, the three months should be calculated from 13.11.2007 and would expire on 12.2.2008. Thirty days from 12.2.2008 under the proviso should be calculated from 13.2.2008 and, having regard to the number of days in February, would expire on 13.3.2008. Hence held that petition filed on 11.3.2008 was well in time and was not barred by limitation. Impugned order of High Court was set aside. The delay of twenty eight days on the part of appellant in filing the application under section 34 of the Act being within the limit of condonable delay, was condoned, as sufficient cause was shown. Matter was remanded to High Court for consideration of petition under section 34 of Act on merits, in accordance with law. Appeal was allowed.
Result : Appeal allowed.
The Supreme Court's decision in the provided document primarily addresses the limitation period for applications under Section 34 of the Arbitration and Conciliation Act, 1996, related to setting aside arbitral awards. It emphasizes the importance of calculating the limitation period accurately, considering the date of receipt of the award and the correct interpretation of calendar months versus days. The Court clarifies that the period of limitation is to be computed from the day after the award is received, excluding holidays or non-working days when the award is delivered or left in the office on such days. It also stresses that the period of three months should be understood as calendar months, not merely 90 days, and the additional thirty days for condonation are also to be calculated accordingly (!) (!) (!) .
However, the document does not directly address limitation periods specifically for negotiable cases, such as negotiable instruments or related disputes. Its focus is on arbitration awards and the procedural aspects of filing petitions to set aside such awards within prescribed limitation periods. Therefore, based on this document, the Supreme Court did not provide a specific ruling or commentary on limitation for negotiable cases.
JUDGMENT
R.V. Raveendran, J. —
Leave granted. Heard.
2.The appellant (State of Himachal Pradesh represented by the Executive Engineer, I&PH Division, Hamirpur) entered into a contract with the respondent on 15.7.2002, for the construction of a water purification plant. The respondent raised a dispute in regard to the payment for extra work, which was referred to arbitration. The arbitrator made an award dated 5.11.2007 in favour of the respondent and sent it to the parties by speed post. The postal cover containing the award was received by a peon/beldar in the office of the Executive Engineer on 10.11.2007 (a Saturday) which was a government holiday. 11th November, 2007 being a Sunday was also a holiday. It was received by the Executive Engineer on 12.11.2007.
3.A petition under section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’ for short) was filed by the appellant on 11.3.2008, challenging the arbitral award. The petition was accompanied by an application under sub-section (3) of section 34 of the Act, for condonation of delay of 28 days in filing the petition. The respondent resisted the application contending that the petition under section 34 was filed beyond the period of 3 months plus 30 days and therefore, was liable to be rejected. A learned Single Judge of the High Court dismissed the application for condonation of delay and as a consequence dismissed the petition under section 34 of the Act. He held that as the award was received in the office on 10.11.2007, the period of three months, that is “90 days” had to be reckoned from 11.11.2007 by excluding the date of receipt; that the said three months period ended on 9.2.2008; that even if the maximum additional period of 30 days was counted thereafter (by calculating from 10.2.2008), the last date of limitation for filing the petition would have been 10.3.2008 and therefore the petition filed on 11.3.2008 was barred by limitation. He held that court had power to condone the delay only to a maximum period of ninety days plus thirty days and therefore, the delay in filing the petition on 11.3.2008 could not be condoned. Feeling aggrieved the appellant has filed this appeal by special leave.
4.Section 34 of the Act relates to applications for setting aside arbitral awards. Sub-section (3) of Section 34 prescribes the period of limitation for such applications. It reads thus:
“(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 had been disposed of by the arbitral tribunal:
Provided that if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.”
Having regard to the proviso to section 34(3) of the Act, the provisions of section 5 of the Limitation Act, 1963 will not apply in regard to petitions under section 34 of the Act. While section 5 of the Limitation Act does not place any outer limit in regard to the period of delay that could be condoned, the proviso to sub-section (3) of section 34 of the Act places a limit on the period of condonable delay by using the words “may entertain the application within a further period of thirty days but not thereafter.” Therefore, if a petition is filed beyond the prescribed period of three months, the court has the discretion to condone the delay only to an extent of thirty days, provided sufficient cause is shown. Where a petition is filed beyond three months plus thirty days, even if sufficient cause is made out, the delay cannot be condoned.
5.This leads us to the question whether the petition was filed beyond three months plus thirty days. There is no dispute that if the petition had been filed within a period of three months plus thirty days,
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