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2024 Supreme(Cal) 1199

IN THE HIGH COURT AT CALCUTTA
SUBHENDU SAMANTA, J.
Future Market Networks Ltd. - Petitioner
Versus
Laxmi Pat Surana & Anr. - Respondents
AP-COM No. 135 of 2024 (Old Case No.AP 698 of 2016)
Decided On : 11-07-2024

Advocates Appeared:
For the Petitioner: Mr. Rishad Medora, Ms. Arti Bhattacharyya, Ms. Debomita Sadhu, Mr. Naman Chowdhury.
For the Respondent: Mr. L.P. Surana.

IMPORTANT POINT
The interpretation of 'three months' in Section 34(3) of the Arbitration and Conciliation Act, 1996, is clarified to mean three calendar months, not strictly 90 days.

Headnote:

Limitation - Arbitration - Arbitration and Conciliation Act, 1996 - Section 34(3) - The court interpreted Section 34(3) of the Arbitration and Conciliation Act, 1996, emphasizing that the limitation period for filing an application to set aside an arbitral award is three months from the date of receipt of the award, not to be equated with 90 days.

Fact of the Case:

The petitioner filed an application under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside an arbitral award dated 19th May 2016. The respondent raised a limitation objection, claiming the application was filed after the statutory period.

Finding of the Court:

The court found that the application was filed within the statutory period of limitation as prescribed under Section 34(3) of the Arbitration and Conciliation Act, 1996, rejecting the respondent's limitation objection.

Issues: Whether the application filed under Section 34 of the Arbitration and Conciliation Act, 1996, was barred by limitation as per Section 34(3).

Ratio Decidendi: The court held that the three-month period in Section 34(3) should be interpreted as three calendar months, not strictly as 90 days, allowing the application to be considered timely.

Result: The application under Section 34 of the Arbitration and Conciliation Act, 1996, is within the statutory period of limitation and is therefore maintainable.

JUDGMENT :

Subhendu Samanta, J.

1. This is an application u/s 34 of the Arbitration and Conciliation Act, 1996 for setting aside an arbitral award dated 19th May 2016 passed by the sole arbitrator Mr. Shyamaprasad Sarkar, bar at law, Senior Advocate, Calcutta.

2. Mr. Laxmi Pat Surana respondent No.1-in-person to this matter, has raised a point of limitation before this court by submitting that, the instant application u/s 34 of Arbitration and Conciliation Act, 1996, is barred by limitation according to the provision of Section 34(3) of the said Act 1996.

3. The contention of Mr. Surana is that, the award in question was passed and signed on 19th May 2016. The award was received on the same day i.e. on 19th May of 2016. He submits that the instant application u/s 34 of Limitation Act was filed on 17th August 2016. The date of filing of the instant application from the date of receiving of the award is calculated to be 91 days. Mr. Surana submits that Section 34(3) of Act 1996 specifically enumerated, an application for setting aside the award can only be filed within 90 days from the date of delivery of the award. The present petitioner has preferred this application on 91st day. Thus the instant application filed by the petitioner is barred by limitation and liable to be dismissed. In support of his contention Mr. Surana has referred the relevant authorities as follows:-

    1. KMC Vs. Jain Infraprojects Ltd. (A.P. 411 of 2020)

2. Simplex Infrastructure Ltd. Vs. Union of India 2019 (2) SCC

3. Bhimshankar Sahakari Sakkare Karkhana Niyamita Vs. Walchandnagar Industries Ltd. (2023) 8 SCC 453

4. Food Corporation of India Vs. AP State Warehousing Corporation (IA No. 1 of 2022 and CMA No. 157 of 2022)

5. Government of Maharshtra Vs. Borse Engineers & Contractors P. Ltd. 2021 SCC OnLine SC 233

6. K. Chellamuthu & Co. Vs. Union of India and Anr. OP 410 of 2009

7. Mahindra & Mahindra Financial Vs. Mahesbhat Tinabhai Rathod (2022) 4 SCC 162

8. P. Radhabai & Ors. Vs. P. Ashok Kumar & Anr. (2019) 13 SCC 445

9. NHAI Vs. Subhas Bindlish & Ors. SLP (Civil) Diary No. 17812 of 2019

10. Chintel India Ltd. Vs. Bhayana Builders P. Ltd 2021 SCC OnLine SC 80

4. Mr. Surana Argued that

    (a) The coordinate bench of this Hon'ble Court in KMC v Jain Infraprojects Ltd. (A. P. 411 of 2020) has unambiguously considered three months, as stated Section 34(3), as 90 days. Paragraph 10 of the judgement states that ".... since the petitioner received the impugned Award on 27th February, 2019, the prescribed period under section 34(3) of Act expired on 27th May, 2019. The application under section 34 was filed by the petitioner on 18th June, 2019 after 112 days from the date of receipt of the Award by the petitioner and hence after a delay of 22 days." It is stated that if the delay of 22 days, as contained in the Order, is deducted from 112 days (time taken to file the application), the prescribed period of limitation is strictly 90 days. The Hon'ble Court in stating that the prescribed period under section 34(3) of Act expired on 27th May, 2019 has computed the period as 90 days as 2 days of February, 31 days of March, 30 days of April and 27 days of May 90 days. It is humbly stated that this Hon'ble Court is bound by the decision of the Coordinate Bench. In case of any contrary view, the subject deserves to be referred to a larger bench.

(b) The period of three months has once again been interpreted as 90 days by the Hon'ble Supreme Court in its judgement in Simplex Infrastructure Ltd. v. Union of India reported at 2019 (2) SCC 455, by stating that "Hence, even if the Respondent is given the benefit of the provision of Section 14 of the Limitation Act in respect of the period spent in pursuing the proceedings before the District Judge, Port Blair, the petition under Section 34 was filed much beyond the outer period of ninety days."

This important aspect of the judgement has not been contradicted by the Petitioner herein.

(c) The limitation period of 90 days has been fortified by an

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