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IN THE HIGH COURT AT CALCUTTA
SHEKHAR B. SARAF, J.
Esha Agarwal and Another – Petitioners
Versus
Ram Niranjan Ruia – Respondent
AP No. 845 of 2022
Decided On : 17-01-2023
Arbitration & Conciliation Act - Challenge to Arbitral Award - Section 34
Fact of the Case:
The petitioners filed an application under Section 34 of the Arbitration & Conciliation Act, 1996, seeking to set aside an arbitral award in favor of the respondent. They also sought condonation of a delay of forty-two days in filing the application beyond the statutorily mandated period of three months.
Finding of the Court:
The court found that the application was filed beyond the prescribed period of limitation and that the court's power to condone the delay is limited to thirty days, as per Section 34(3) of the Act. The court referred to the recent decision of the apex court in Mahindra and Mahindra Financial Services Limited vs. Maheshbhai Tinabhai Rathod and Others, (2022) 4 SCC 162, which reiterated the restricted scope of the courts' power to condone the delay in such cases.
Issues: The issues involved in the case were the challenge to the arbitral award, the delay in filing the application, and the applicability of Section 34(3) of the Arbitration & Conciliation Act, 1996.
Ratio Decidendi: The court held that the application was time-barred and could not be condoned beyond the extendable period of thirty days provided in Section 34(3) of the Act. The court emphasized the limited scope for condonation of delay in challenging arbitral awards, as established by the recent decision of the apex court.
Final Decision: The court dismissed the application, stating that there shall be no order as to costs.
JUDGMENT :
SHEKHAR B. SARAF, J.
1. This application has been filed by Esha Agrawal and Sweta Rungta (hereinafter referred to as the ‘petitioners’) under Section 34 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) praying for setting aside of an award passed by Sri Rudradeb Chaudhuri, Sole Arbitrator, on July 7, 2022 in favour of Ram Niranjan Ruia (hereinafter referred to as the ‘respondent’).
2. The petitioners have also prayed for condonation of a delay of forty-two days in filing this application beyond the statutorily mandated period of three months as provided under Section 34(3) of the Act.
Facts
3. The factual matrix of the present case has been mapped out below:
(b) The petitioners consented to enter into an agreement for sale with the respondent to purchase the suit premises. The said agreement was executed on December 29, 2020. The petitioners also paid a sum of INR 10,00,000/- (ten lakhs only) to the respondent in furtherance of the advance assured to be paid at the time of the execution of the said contract.
(c) Upon receiving certain documents related to the suit premises from the respondent, the petitioners discovered that the respondent had purchased the suit premises from Rameswar Prasad Agarwalla Trust. In light of the same, the petitioners asked the respondent for documentary evidence showing that the trustees of Rameswar Prasad Agarwalla Trust had the right to dispose of the suit premises which was earlier a trust property.
(d) Meanwhile, in pursuance of the agreement for sale, the possession of certain portions of the suit premises was handed over by the respondent to the petitioners. As a result, further payment for a total of INR 29,81,250/- (Twenty-Nine Lakhs Eighty-One Thousand Two Hundred Fifty Only) was made by the petitioners to the respondent.
(e) The respondent provided a copy of the Assessment Roll of the record maintained by the Kolkata Municipal Corporation dated July 1, 1979, in respect of the suit premises to the petitioners. In addition, they also provided receipts for tax payment on the suit premises for the period of the Third Quarter, FY 2019-2020, which recorded the respondent as the owners of the suit premises.
(f) Not satisfied with the same, the petitioners issued a legal notice to the respondent on November 8, 2021, in pursuance of their demand for documents to establish that the trustees of the Rameswar Prasad Agarwalla Trust from which the respondent had purchased the said suit promises and had the right to dispose of the said premises which earlier was a trust property. As a result of the alleged failure on the part of the respondent to provide such documents, another legal notice dated November 29, 2021, for demand of the refund of INR 39,81,250/- (Thirty-Nine Lakhs Eighty-One Thousand Two Hundred Fifty Only) paid by the petitioners to the respondent was issued by the petitioners.
(g) On account of the failure on the part of the respondent to make payment of the abovementioned refund amount, the petitioners, vide their letter dated December 12, 2021, invoked arbitration and addressed a letter to the Sole Arbitrator named in the arbitration clause, Shri Rudradeb Chaudhuri, Advocate of High Court at Calcutta.
(h) The Sole Arbitrator published an award on July 7, 2022, directing the petitioners to make payment of the balance consideration of INR 2,75,00,000/- (Two Crores Seventy-Five Lakhs Only. The sole arbitrator also directed the petitioners to execute a registered deed of conveyance. In addition to this.
(i) the arbitrator also directed that failure on the part of the petitioners to pay the balance consideration before execution of the deed of conveyance would lead to the forfeiture
The main legal point established in the judgment is the restricted scope of the courts' power to condone the delay in filing applications to challenge arbitral awards, as per Section 34(3) of the Arb....
Setting aside arbitral award – Courts cannot condone delay beyond extendable period of thirty days.
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....
The main legal point established in the judgment is that the limitation period for challenging an award under Section 34(3) of the Arbitration and Conciliation Act is strict and cannot be extended be....
The judgment establishes the strict interpretation and application of the limitation period under Section 34(3) of the Arbitration Act, emphasizing the requirement for sufficient cause and the mandat....
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.
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