2019 Supreme(Bom) 660
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.C. Gupte, J.
Globe Capital Market Ltd. – Appellant
Versus
Globe Capital Market Ltd. – Respondent
Notice of Motion No. 1457 of 2016, Arbitration Petition (Lodging) No. 88 of 2016
Decided On : 12-03-2019
Anurag Agarwal, Kokila Kalra, Zain Mookhi, Sunil Vyas, Birrul Mohamedi, Mansukhlal Hiralal.
The main legal point established in the judgment is that even with the benefit of exclusion of time under Section 14 of the Limitation Act, a delay in filing an arbitration petition beyond the permissible period cannot be condoned.
Headnote:
Condonation of Delay - Arbitration Petition - Section 14 of the Limitation Act - Section 34 of the Arbitration and Conciliation Act, 1996 - 14, 43 - The court discussed the application of Section 14 of the Limitation Act to the filing of an arbitration petition and the exclusion of time spent in proceeding bona fide in a court lacking jurisdiction. The judgment highlighted the interpretation of Section 14 and its application to the present case, emphasizing that even with the benefit of exclusion of time, the delay in filing the arbitration petition was beyond the permissible period and could not be condoned.
Fact of the Case:
The notice of motion sought condonation of a delay of 144 days in filing an arbitration petition, based on Section 14 of the Limitation Act, due to the earlier challenge petition being returned by the Delhi Court for want of territorial jurisdiction.
Finding of the Court:
The court found that even with the benefit of exclusion of time under Section 14 of the Limitation Act, there was a clear delay beyond the maximum permissible period of 120 days in filing the arbitration petition under Section 34 of the Arbitration and Conciliation Act, and thus the petition could not be entertained.
Issues: The main issue was the condonation of the delay in filing the arbitration petition, based on the exclusion of time under Section 14 of the Limitation Act.
Ratio Decidendi: The court held that even with the benefit of exclusion of time under Section 14 of the Limitation Act, the delay in filing the arbitration petition was beyond the permissible period and could not be condoned.
Final Decision: The Notice of Motion seeking condonation of delay was dismissed, and the arbitration petition was not registered or entertained.
S.C. Gupte, J.
1. This notice of motion is taken out in an arbitration petition, which is under objections inter-alia on the ground of delay. According to the Applicant there is a delay of about 129 days in filing the present petition (the correct number of days being 144). The notice of motion seeks condonation of that delay.
2. The Applicant's case for condonation is under Section 14 of the Limitation Act. It is not in dispute that Section 14 applies to filing of an arbitration petition, whilst Section 5 of the Limitation Act does not. The case of the Applicant is that it had earlier filed a challenge petition in respect of the same award before the District Judge, Patiala House Court, New Delhi. That petition was objected to by the Respondent herein on the ground of want of territorial jurisdiction of the Delhi Court. The court came to a conclusion that as per the agreement between the parties, the court lacked territorial jurisdiction to entertain and try the challenge petition. The petition was, accordingly, directed to be returned under Order VII Rule 10 of the Code of Civil Procedure ("Code") with liberty to the Applicant to file a fresh petition in a court of competent jurisdiction. The present petition is filed in pursuance of that liberty. There is, however, as noted above, delay of 144 days in filing the petition. The Applicant's explanation for this delay is that the original papers were handed over by the court office at Delhi to the Applicant only in the month of December 2015. It is submitted that the Applicant thereafter had to approach a lawyer in Mumbai to file the petition. It is submitted that the lawyer tried to file the original petition returned by the Delhi court in this court, the Registry did not accept it, since it was not in the format required by this court. It is submitted that the papers had therefore to be sent back to Delhi for rectifying the defect, which took some time, whereafter the petition was filed. It could, however, be filed only on 20 January 2016. It is submitted that this delay, which was, at any rate, not intentional, needs to be condoned in the interest of justice.
3. Section 14 of the Limitation Act, 1963 rules on exclusion of time spent in proceeding bona fide in a court which lacked jurisdiction or was unable to entertain the proceeding for a like reason. Section 14 provides that in computing the period of limitation for any suit (arbitration reference being covered by virtue of Section 43 of the Arbitration and Conciliation Act, 1996), the time during which the plaintiff (here, the Applicant) has been prosecuting with due diligence another civil proceeding (here, the challenge petition), whether in a Court of first instance or of appeal or revision, against the defendant (here, the Respondent) shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. Explanation to Section 14 makes certain subsidiary provisions for effecting such exclusion of time. Clause (a) of the Explanation provides that in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted. Thus, in the present case, the Applicant will be entitled to the benefit of exclusion of time between 24 May 2014, on which date the earlier petition under Section 34 of the Arbitration and Conciliation Act, 1996 ("Act") was filed by the Applicant before the Delhi court and 17 September 2016, when that court returned the petition under Order VII Rule 10 of the Code, giving liberty to the Applicant to file appropriate proceedings before a court of competent jurisdiction; such exclusion would have to be made counting both "24 May 2014" and "17 September 2015" as dates of pendency of the earlier proceeding. If time is so excluded, the present petition is out of