IMPORTANT POINT
An application to set aside an arbitral award under Section 34 must be filed within 90 days, extendable by 30 days, and any delay beyond 120 days is not condonable.

JUDGMENT :

I. P. Mukerji, J.

1. This is an appeal by the Railways, under Section 37 of the Arbitration and Conciliation Act, 1996. It is against a judgment and order dated 24th August, 2023 made by the learned Commercial Court at Asansol. It was under Section 34 of the said Act for setting aside an arbitral award dated 21st June, 2014 made by a sole arbitrator. The application was dismissed, without the court going into the merits of the matter. The learned judge held that the application was barred by the laws of limitation.

2. The Railways appealed to us.

3. Section 34(3) of the said Act provides that an application to set aside an arbitral award has to be made by the applicant within 90 days of receipt of the award. The court has the power to extend the time for a further period of 30 days if sufficient cause is shown to it, but not thereafter.

4. It is now settled law that any delay beyond 120 days from the date of receipt of the award is not condonable by the court. As the proviso to Section 34(3) prescribes a special period of limitation under Section 29 of the Limitation Act, 1963 [See Union of India vs. Popular Construction Company, (2001) 8 SCC 470 also see Simplex Infrastructure Limited vs. Union of India, (2019) 2 SCC 455.

5. The award which was made on 21st June, 2014 directed the Railways to refund the freight collected from the respondent. This amount was nearly Rs.20 lakhs.

6. Ms. Chandreyi Alam, learned Advocate appearing for the appellant says that the appellants were not parties to the arbitration agreement but an award has been passed against them which was received by them on 21st June, 2014. She tried to contend that not being a party to the arbitral proceedings the time limit prescribed by the Arbitration and Conciliation Act, 1996 did not bind her client as it applied only to the parties. Therefore, the enormous delay in making the said application be condoned by this court.

7. We are unable to accept this contention. Let us take a look at Section 34 of the said Act. Section 34 (1) enacts as follows:-

“34(1). Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3)….”

8. The Section does not say that only a party to an arbitral proceeding can apply under it. Without mentioning any party or person it is most careful to stipulate that “recourse to a court” challenging an award may be made “only by an application” under Section 34(2) and (3). Section 34(3) specifies the above time limit to make the application which is three months from the date the applicant had received.

9. Whether a person is a party or not to the arbitral proceedings, if an arbitral award has been passed against him, it has to be challenged under Section 34 of the Arbitration and Conciliation Act, 1996 within the time prescribed by it.

10. The relevant dates are as follows:-

The award was made and published on 21st June, 2014. On that very day the respondent said they received the award. The appellant Railway’s contention is that since they were not parties to the arbitration proceedings the award was not served upon them. However, on 10th September, 2014 the Railways filed an appeal under Section 37 of the said Act (Appeal No.10 of 2014) in Jharkhand High Court at Ranchi. On 30th January, 2015 this proceeding was dismissed by the court on the ground that an appeal under Section 37 did not lie from an arbitral award. The proper procedure was to challenge the award under Section 34 by an application. An application entitled Civil Miscellaneous Petition No.194 of 2015 was filed for vacation of this order which was withdrawn on 30th June, 2016.

11. The Only provision of law which could have saved the appellant was Section 14 of the Limitation Act.

12. Now, let us have a look at Section 14 of the Limitation Act which is in the following terms:-

“14. Exclusion of time of proceeding bona fide in court without jurisdiction.- (1) In computing the period