SUPREME COURT OF INDIA
R.F. NARIMAN, NAVIN SINHA, K.M. JOSEPH, JJ.
Chintels India Ltd. – Appellant
Versus
Bhayana Builders Pvt. Ltd. – Respondent
Civil Appeal No. 4028 of 2020
Decided On : 11-02-2021
Constitution of India,1950 - Article 133 read with 134A - Arbitration and Conciliation Act, 1996 - Section 34 and 37(1)(c) - Limitation Act - Section 5 - Arbitration - Award - Refusal to condone the delay - Appellant, has relied strongly upon the judgment of this Court in Essar Constructions vs. N.P. Rama Krishna Reddy, (2000) 6 SCC 94, which was a judgment delivered under section 39 of Arbitration Act, 1940 - His argument is that since section 39 of the 1940 Act is in pari materia with section 37 of Arbitration Act, 1996, in that an appeal lies where a single Judge refuses to condone delay, resulting in an order refusing to set aside an arbitral award, ratio of Essar Constructions (supra) would apply on all fours to same provision contained in section 37 - It was only in the course of discussion relatable to this question that this Court approved certain observations made in decision of the Delhi High Court in Harmanprit Singh Sidhu vs. Arcadia Shares and Stock Brokers Pvt. Ltd. 2016 SCC Online Del 5383, in which a learned single Judge of the Delhi High Court allowed an application for condonation of delay, a Division Bench then holding that an appeal against such an order was not maintainable under section 37 of Arbitration Act, 1996 - Whether a learned single Judge’s order refusing to condone Appellant’s delay in filing an application under section 34 of the Arbitration and Conciliation Act, 1996 is an appealable order under Section 37(1)(c) of said Act. – Held, order of this Court does not in any manner touch upon reasoning of Bombay High Court - On contrary, this court refers to judgment of this Court in Himachal Pradesh Techno Engineers (supra), which as has been held by Court hereinabove, makes it clear that Section 5 of Limitation Act is excluded by section 34(3) of Arbitration Act, 1996 and that no condonation of delay can take place beyond period of 120 days - It is on this ground, citing learned District Judge’s order, that this Court did not interfere. Consequently, it cannot be said that this Court approved of judgment of Division Bench of Bombay High Court - Likewise, reasoning contained in Radha Krishna Seth (supra), does not commend itself to Court - Both these judgments therefore do not state law correctly and stand overruled - Consequently, question of law is answered by stating that an appeal would be maintainable against an order refusing to condone delay in filing an application under section 34 of Arbitration Act, 1996 to set aside an award - Appeal is accordingly allowed.
JUDGMENT :
R.F. NARIMAN, J.
1. This appeal arises out of a certificate issued under Article 133 read with Article 134A of the Constitution of India by the High Court of Delhi in the impugned judgment dated 04.12.2020. The question raised in this appeal is whether a learned single Judge’s order refusing to condone the Appellant’s delay in filing an application under section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act, 1996”) is an appealable order under Section 37(1)(c) of the said Act. After considering, in particular, two judgments of this Court, the High Court held:
“18. We have considered the rival contentions. Though, as observed by us in the hearing on 5th November, 2020, in view of BGS SGS Soma JV supra having referred to the grounds under Section 34 in entirety and not confined to Section 34(2) only, we were inclined to differentiate between a case of return of an application under Section 34 on the ground of the Court to which it is presented not having territorial jurisdiction, on the one hand and rejection of an application under Section 34 on the ground of having not been filed within the prescribed time, on the other hand, but in view of the Supreme Court having been approached against Ramdas Construction Co. (supra), expressly holding an appeal as the one before us, to be not maintainable under Section 37 and having dismissed the appeal with a speaking order, though not expressing any opinion on the maintainability of the appeal, we consider ourselves bound thereby and hold this appeal to be not maintainable.
19. We may however observe that Section 37(1)(b) also, while providing for the appealable orders, refers to Section 34 in entirety and not to Section 34(2); though BGS SGS Soma JV supra has held that the order which is appealable thereunder is an order testing the arbitral award on the grounds set out in Section 34 but in our humble opinion if the intention of the legislature was to confine the appeals only to grounds under Section 34(2), nothing prevented them from, instead of referring to Section 34 generally in Section 37(1)(c), referring only to Section 34(2). We are of the view that sub-section (3) of Section 34, by use of the words ‘but not thereafter’ as interpreted in Union of India vs. Popular Construction Co. (2001) 8 SCC 470, restricts the power otherwise vested in Court to condone the delay beyond thirty days, the same also creates a ground of time bar for refusing to set aside the award and is part of the self-contained code for setting aside of the award; thus, refusal to set aside an award on the ground of the said time bar, would be a refusal within the meaning of Section 37 and appealable under Section 37. There is also merit in the contention of Mr. Rajshekhar Rao, Advocate for the appellant that refusal to condone the delay also entails affirmation of the underlying order. Mention in this regard may be made of Section 27 of the Limitation Act, 1963 which, though in the context of suit for possession of any property, extinguishes the right to property at the determination of the period prescribed for instituting the suit for possession thereof. However we need not discuss further since, as aforesaid, we are bound by the dicta in BGS SGS Soma JV and Ramdas Construction Co. (supra).
20. We may also consider another aspect. By reading Section 37 as not permitting an appeal against refusal to condone the delay in applying for setting aside of the award, the persons aggrieved by the award are left with no remedy but to approach the Supreme Court by way of a petition under Article 136 of the Constitution of India. The refusal to set aside the award may not necessarily be by the Commercial Division of the High Court but may also be by the Commercial Courts of the country. No other remedy would be available to the persons aggrieved by the award, against the decision of any Commercial Court in the country refusing to condone the delay in applying for setting aside of the award, le
Point of Law : Even if the period of delay is considered to be of 21 days. Since Section 34(3) of the Act, 1996 bars condonation of delay beyond the period of 30 days after the period of 3 months is ....
Delay beyond 120 days (90+30) in Section 34 petitions or corresponding appeals under Section 37 of Arbitration Act not condonable via Limitation Act Section 5; negligence, inaction, lack of bonafides....
The period for challenging an arbitral award under Section 34 of the Arbitration and Conciliation Act cannot be extended beyond the prescribed period, as the Act is a self-contained special law and t....
The limitation period for an application under Section 34 of the Arbitration and Conciliation Act cannot be extended beyond specified timelines, maintaining strict adherence to legal provisions.
Hon’ble Supreme Court was dealing with three civil appeals. In the civil appeal arising from Bombay and Delhi High Courts, both Courts refused to condone delay in filing appeals beyond 120 days.
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