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2022 Supreme(Chh) 345

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Arvind Singh Chandel, J.
Union of India - Appellant
Vs.
Bhola Prasad Agrawal, S/o Late Shri Harufumal Agrawal - Respondent
Arbitration Appeal No.15 of 2022
Decided On : 21-09-2022

Advocates:
Advocate Appeared:
For the Appellant : Shri Ramakant Mishra, Assistant Solicitor General
For the Respondent:Shri Abhishek Vinod Deshmukh and Shri Anurag Singh, Shri Rahul Jha, Government Advocate

The delivery of the signed copy of the arbitral award to the party is a crucial stage in the arbitral proceedings, and the limitation period for filing objections commences only from the date of such delivery.

Headnote:

Arbitration Appeal - Limitation - National Highways Act, 1956, Arbitration and Conciliation Act, 1996 - Section 34(3) of the Arbitration Act, Section 31(5) of the Arbitration Act - The judgment discusses the limitation period for filing an application under Section 34 of the Arbitration Act, the requirement of delivering a signed copy of the arbitral award to each party, and the consequences of non-delivery of the signed copy. The court emphasizes that the limitation period prescribed for filing objections commences only from the date when the signed copy of the award is delivered to the party making the application for setting it aside. It also highlights that the delivery of the signed copy of the award is a crucial stage in the arbitral proceedings, conferring certain rights on the party and bringing an end to the right to exercise those rights on expiry of the prescribed period of limitation.

Fact of the Case:

The case involved an appeal against the rejection of an application under Section 34 of the Arbitration Act on the ground of limitation. The appellant had not received a signed copy of the arbitral award as mandated by Section 31(5) of the Arbitration Act.

Finding of the Court:

The court found that the appellant had become aware of the arbitral award when the respondent moved an application for enhancement of compensation based on the award. The court held that the mere non-delivery of a signed copy of the award did not create any prejudice to the appellant. Consequently, the court affirmed the rejection of the appeal/application on the ground of limitation.

Issues: The main issue was whether the District Judge was justified in rejecting the appeal/application under Section 34(2) of the Arbitration Act only on the ground of limitation.

Ratio Decidendi: The court emphasized that the limitation period for filing objections commences only from the date when the signed copy of the award is delivered to the party making the application for setting it aside. It also highlighted that the delivery of the signed copy of the award is a crucial stage in the arbitral proceedings, conferring certain rights on the party and bringing an end to the right to exercise those rights on expiry of the prescribed period of limitation.

Final Decision: The court dismissed the appeal and affirmed the rejection of the appeal/application under Section 34(2) of the Arbitration Act on the ground of limitation.

JUDGMENT :

1. The instant appeal has been preferred against the order dated 17.2.2020 (Annexure A1) passed by the District Judge, Ambikapur in M.J.C. (Civil) No.3 of 2020 arising out of the order dated 7.3.2018 (Annexure A4) passed by the Additional Commissioner/Arbitrator under the provisions of National Highways Act, 1956 (henceforth ‘the Highways Act’). The District Judge/Principal Civil Court has rejected the application moved under Section 34 of the Arbitration and Conciliation Act, 1996 (henceforth ‘the Arbitration Act’) on the ground of limitation.

2. The short question involved for consideration in this arbitration appeal is whether the District Judge was justified in rejecting the appeal/application moved under Section 34(2) of the Arbitration Act only on the ground of limitation.

3. Facts of the case, in short, are that for upgradation and widening of National Highway No.78 (Ambikapur to Patthalgaon Section) certain acquisition took place wherein Respondent 1’s land was also acquired and award was granted under Section 3G of the Highways Act by Respondent 2 in Land Acquisition Case No.02/A82/2015-16 (Annexure A2) and the amount for acquisition was granted to Respondent 1 vide order dated 17.10.2016. Respondent 1 being dissatisfied by the award passed by the competent authority filed application before the Arbitrator, Surguja Region, wherein after perusal of the claim proposed by Respondent 1, the Arbitrator vide order dated 7.3.2018 (Annexure A4) enhanced the award granted by Respondent 2. The Appellant being aggrieved by the order dated 7.3.2018 preferred an appeal under Section 34 of the Arbitration Act on 21.1.2020 (Annexure A5). Vide the impugned order dated 17.2.2020 (Annexure A1), the District Judge/Principal Civil Court, Ambikapur rejected the appeal/application only on the ground of limitation. Hence, this appeal moved by the Appellant under Section 37 of the Arbitration Act.

4. Learned Assistant Solicitor General appearing for the Appellant submitted that the order passed by the Arbitrator dated 7.3.2018 was never communicated to the Appellant. The Appellant came to know about the award passed by the Arbitrator only when Respondent 1 made a representation for disbursement of the amount of award. As the order was not delivered to the Appellant as contained in Section 31(5) of the Arbitration Act, the Appellant made applications for obtaining certified copy of the arbitral award vide applications dated 14.11.2019, 16.6.2021, 4.1.2022 and 4.2.2022. In spite of that, certified copy of the award dated 7.3.2018 has not been provided to the Appellant. It was further submitted that limitation should be counted from the date of getting certified copy of the award. The delivery of an award constitutes an important stage in the arbitral proceeding. Referring to the judgment of the Supreme Court in (2005) 4 SCC 239 (Union of India v. Tecco Trichy Engineers & Contractors), it was submitted that delivery of an arbitral award is not a matter of formality but of substance as it confers certain rights on the party. Further relying on the judgment in (2010) 12 SCC 210 (State of Himachal Pradesh v. Himachal Techno Engineers), it was argued that the time period for filing an application under Section 34 of the Arbitration Act would commence a day after the receipt of award by the party. In the instant case, the arbitral award was passed on 7.3.2018 whereas the Appellant has not been supplied a signed copy of the award as mandated by the law and procedure. To complete the arbitration proceeding, it is mandatory to supply the signed copy of award to both the parties and in the event of failure to perform the mandatory provision and procedure the arbitration proceeding cannot be held to be completed. The application under Section 34(2) of the Arbitration Act was also filed with a xerox copy of the award passed by the Arbitrator as the same was received by the Appellant through the representation made by Respondent 1. Therefore, it is

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