IMPORTANT POINT
Limitation period of 3 months under section 34(3) of the Arbitration and Conciliation Act, 1996 cannot be taken to include, automatically, the extendable period of 30 days at the discretion of the court.

JUDGMENT

R.M. Lodha, J.-Two contracts were entered into between the appellants and the respondents - (i) for construction of Tezpur Town Water Supply Scheme and (ii) for construction of Tinsukia Town Water Supply Scheme. Certain disputes arose between the parties concerning these contracts and to resolve such disputes, sole arbitrator was appointed by the Chief Justice of Gauhati High Court on March 26, 2002 under Section 11 of the Arbitration and Conciliation Act, 1996 (for short, 1996 Act'). On May 10, 2002 the appellants filed application under Section 16 of the 1996 Act questioning the jurisdiction of the sole arbitrator as according to the appellants there was no arbitration clause in the agreement. This application came to be rejected by the sole arbitrator.

2. Thereafter, the sole arbitrator proceeded with the arbitration and passed two awards in relation to the above contracts in favour of the respondents on August 22, 2003. The awards were received by the appellants on August 26, 2003. On January 2, 2004, the appellants made two applications for setting aside the awards dated August 22, 2003 under Section 34 of the 1996 Act. These applications were accompanied by two separate applications for extension of time under Section 34(3) of the 1996 Act.

3. The District Judge, Kamrup, Guwahati, dismissed the appellants' applications under Section 34 of the 1996 Act on June 1, 2004 and June 5, 2004 on the ground of limitation.

4. The appellants challenged the above orders of the Districted Judge, Kamrup, Guwahati, in the Gauhati High Court in two separate Arbitration Appeals, being Arbitration Appeal Nos. 6 of 2004 and 7 of 2004. The Division Bench of that Court upheld the view of the District Judge, Kamrup, Guwahati and dismissed the above Arbitration Appeals.

5. Mr. Bijender Singh, learned counsel for the appellants, submitted that the Division Bench gravely erred in applying the decision of this Court in Union of India Vs. Popular Construction Co., (2001) 8 SCC 470 to the facts of the present case. He submitted that the judgment of this Court in Popular Construction Co. (supra) was rendered on the question of applicability of Section 5 of the Limitation Act, 1963 (for short, 1963 Act') and has no application to the peculiar facts of the present case where extension was sought by the appellants under Section 4 of the 1963 Act. In support of his argument, Mr. Bijender Singh, learned counsel, referred to Section 2(j) of the 1963 Act that defines 'period of limitation' and Section 43 of the 1996 Act that makes the 1963 Act applicable to arbitration matters.

6. Mr. Shyam Divan, learned senior counsel for the respondents, on the other hand, submitted that the High Court did not commit any error in upholding the view of the District Judge, Kamarup, Guwahati. According to the learned senior counsel, the High Court's view is consistent with Section 34(3) of the 1996 Act, particularly proviso (3) thereof.

7. Section 34(3) of the 1996 Act provides that an application for setting aside an award may be made within three months of the receipt of the arbitral award. The proviso that follows subsection (3) of Section 34 provides that on sufficient cause being shown, the court may entertain the application for setting aside the award after the period of three months and within a further period of 30 days but not thereafter.

8. In Popular Construction Co. (supra), this Court has held that an application for setting aside an award filed beyond the period mentioned in Section 34(3) would not be an application "in accordance with sub-section (3) as required under Section 34(1) of the 1996 Act" and Section 5 of the 1963 Act has no application to such application. In para 12 of the report, it was held in Popular Construction Co. (supra) thus:-

"12. 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 ex