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SUPREME COURT OF INDIA
PAMIDIGHANTAM SRI NARASIMHA, PRASHANT KUMAR MISHRA, JJ.
M/S R. K. Transport Company – Appellant
Versus
M/S Bharat Aluminum Company Ltd. (BALCO) – Respondent
Civil Appeal No. 4763 of 2025 Arising Out of SLP (C) No. 26489 of 2024
Decided On : 03-04-2025
Arbitration and Conciliation Act, 1996 – Sections 34 and 37 – Limitation Act, 1963 – Sections 4 and 12 – Setting aside arbitral award – Period of limitation – Limitation period for filing application to set aside arbitral award is three months from the date on which the party receives arbitral award, which can be further extended by 30 days on sufficient cause being shown – Statutory language of Section 34(3) clearly stipulates limitation period as “three months”, as opposed to condonable period as “thirty days” – There is nothing in statutory language or scheme of Section 34(3) that is contraindicative that Section 12(1) does not apply – Respondent’s application under Section 34, which was filed on next working day of court, must be considered as being filed within limitation period – Benefit of Section 4 of Limitation Act will enure to benefit of respondent – There was no delay in filing application and sufficient cause need not be shown for condonation of delay – High Court rightly allowed Section 37 appeal and held that respondent’s Section 34 application was filed within limitation period. (Paras 8, 12, 13, 14 and 15)
Facts of the case:
Present appeal arises out of an order of Chhattisgarh High Court dated 27.09.2024 by which it allowed respondent’s appeal under Section 37 of Arbitration and Conciliation Act, 1996 and held respondent’s application under Section 34 as being filed within limitation period.
Findings of Court:
Court do not wish to interfere with High Court’s direction to stay execution of pending recovery till the matter is adjudicated on merits, since the same is interim in nature and appellant has already withdrawn 50% of the arbitral sum that was deposited by respondent.
Result : Appeal dismissed.
JUDGMENT :
PAMIDIGHANTAM SRI NARASIMHA, J.
1. Leave granted.
2. It is just as necessary to follow a precedent as it is to make a precedent.
3. The present appeal arises out of an order of the Chhattisgarh High Court dated 27.09.2024 by which it allowed the respondent’s appeal under Section 37 of the Arbitration and Conciliation Act, 1996,1[Hereinafter “ACA”.] and held the respondent’s application under Section 34 as being filed within the limitation period.
4. The short facts necessary for adjudication are as follows. The parties entered into a contract on 01.04.2002 for bauxite mining and delivery. Pursuant to disputes arising on payments under the contract, the matter was referred to arbitration, resulting in an arbitral award of Rs. 51,33,40,100 dated 09.04.2022 in favour of the appellant. It is undisputed that the award was signed and delivered to the respondent on this very day. The respondent filed an application to set aside the award under Section 34 on 11.07.2022, along with an application for stay of the award. The Trial Court, on 13.07.2022, passed an ex-parte order that the Section 34 application was within limitation as the 3-month period expired on 09.07.2022, which was a second Saturday and the following day was a Sunday. Since the court was closed on both these days, the respondent filed the application on the next working day. It also directed the respondent to deposit 50% of the arbitral sum. It is relevant to note that such amount was deposited by the respondent, and the same has been withdrawn by the appellant after furnishing a bank guarantee.
5. The appellant challenged the order dated 13.07.2022 by filing a writ petition under Article 227 of the Constitution, wherein the High Court gave the appellant liberty to file a recall application as the Trial Court order had been passed ex-parte. The appellant filed such recall application before the Trial Court, which was allowed on 25.04.2023 and it was held that the Section 34 application is barred by limitation as the 3-month period expired on 08.07.2022 on which day the court was working. The respondent filed a Section 37 appeal against this order, which was allowed by the High Court by the order impugned herein. The High Court relied on Section 12 of the Limitation Act, 1963,2[Hereinafter “the Limitation Act”.] and this Court’s decision in State of Himachal Pradesh v. Himachal Techno Engineers, (2010) 12 SCC 210 to hold that the limitation period expired on 09.07.2022, which was a court holiday. Therefore, Section 4 of the Limitation Act becomes applicable as per Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Limited, (2023) 8 SCC 453, and the Section 34 application must be considered as being within the limitation period as it was filed on the next working day. The High Court remanded the parties to appear before the Trial Court, and also directed that the interim order in respect of execution of pending recovery shall continue till the application is decided on merits.
6. We have heard learned senior counsel, Mr. Mukul Rohatgi for the appellant and learned senior counsel, Mr. Ranjit Kumar for the respondent and have also perused the written submissions.
7. Mr. Rohatgi submitted that the limitation period must be calculated from the date on which the award was received by the respondent, i.e., 09.04.2022 and therefore, the 3-month limitation period expired on 08.07.2022. He submitted that the Limitation Act, including Section 12, does not apply to proceedings under Section 34 of the ACA. Since the court was working on the date on which limitation expired, Section 4 of the Limitation Act will not apply to hold the application filed on 11.07.2022 as being within the limitation period. There was a 3-day delay in filing the Section 34 application but the respondent did not file an application for condonation that showed sufficient cause to condone the delay. Finally, he also submitted that the respondent must be required to deposit 100% of
Setting aside arbitral award – Period of limitation – Section 12(1) of Limitation Act, 1963 will apply.
The application under Section 34 of the Arbitration Act was dismissed as barred by limitation since filed after the three-month period following the award, with no eligibility for an extension under ....
The limitation for setting aside an arbitral award begins from the date of receipt of the award, not from the rejection of an application under S.33.
Limitation Act shall apply to arbitrations as it applies to proceedings in Court.
Statutory limitations under Section 34(3) of the Arbitration Act are strict; applications for setting aside arbitral awards cannot be entertained if filed beyond the designated timeframe.
The court emphasized the peremptory language of section 34 of the Arbitration and Conciliation Act, 1996, and the requirement for sufficient cause to condone any delay in filing the application.
The prescribed period for filing an application under Section 34 of the Arbitration Act is three months, and the 30-day extension does not constitute part of this period.
The period of limitation under the Arbitration and Conciliation Act should exclude non-working days, allowing for sufficient cause extension beyond three months.
The limitation period for challenging an arbitral award under Section 34(3) of the Arbitration and Conciliation Act, 1996 is strict and non-extendable, emphasizing the need for timely recourse to mai....
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