The period of limitation under the Arbitration and Conciliation Act should exclude non-working days, allowing for sufficient cause extension beyond three months.

JUDGMENT :

Goutam Bhaduri, J.

1. In the present appeal, the challenge is to the order dated 25.04.2023 passed by the Commercial Court wherein the appellants have been non-suited by recalling the order of admission of an appeal and the appeal was dismissed holding that it is barred by time. Hence the appellant is before this Court.

2. The facts of the case are that an award was passed by the sole arbitrator in Arbitration Case No.1/2012. The award was in favour of the respondent. The said award was received by the appellant with the signed copy of the award on the same day i.e., 09.04.2022 the day the award was passed. The appellant filed the appeal on 11.07.2022 under section 34 of the Arbitration and Conciliation Act, 1996 before the Commercial Court. The prayer was made to set aside the award and grant of stay was also sought for. When the case was listed before the Commercial Court, the Reader to the Court was directed to submit check report and to ensure to come up for consideration on admission on 13.07.2022. The appellant in support of appeal memo, filed his affidavit stating that 09.07.2022 was non-working day being second Saturday so far as the Commercial Court is concerned and obviously next day was Sunday. Subsequently, the application was immediately filed on 11.07.2022 u/s 34 of the 1996 Act seeking setting aside of the award passed by the Sole Arbitrator along with stay application. Thereafter, when the matter was taken up on 13.07.2022, the Commercial Court issued notice on Section 34 application of the appellant with a rider to deposit 50% of the arbitral amount within a period of 4 weeks. Accordingly, 50% of the awarded amount was deposited by the appellant on 05.08.2022 and the proceedings were going on. Thereafter, after furnishing bank guarantee and executing personal bonds, the amount was disbursed to the respondent.

3. Against the order of stay of recovery and notice by Commercial Court, the respondent on 14.10.2022 filed writ petition bearing W.P(227). No.680/2022 before the High Court of Chhattisgarh with a prayer to direct the appellant to deposit the balance amount of the awarded amount with liberty to the respondent to withdraw such amount and also sought further direction to the appellant to furnish a bank guarantee of any nationalized bank for the remaining dues of the award. Thereafter, this High Court on 10.11.2022 granted liberty to the petitioner (respondent herein) to move an application before the concerned Court to recall the said order. Order dated 10.11.2022 passed in WP(227) No.680/2022 is relevant here and quoted below :

“10.11.2022

Shri Ravish Chandra Agrawal, Senior Advocate along with Shri Ashish Surana, counsel for the petitioner.

Heard.

Issue notice to the Respondent on payment of PF within a period of 7 days through ordinary as also registered mode acknowledgment due.

Also heard on I.A.No.1/2022, an application for grant of stay.

Issue notice to the respondents on this application also, as above.

Shri Agrawal submits that the order dated 13.07.2022 has been passed ex-parte without affording an opportunity of hearing to the other side.

In view of the above, liberty is granted to the petitioner to move an application before the concerned Court to recall the said order.”

4. Thereafter, the application was filed by the respondent to recall the order dated 13.07.2022 wherein the respondent prayed that the appeal was barred by time and sought to recall the order dated 13.07.2022 on the ground that the said order directing deposit of 50% of the amount awarded was passed ex-parte and no opportunity of hearing was given to the respondent. The application for recall of the order dated 13.07.2022 was heard by the Commercial Court and eventually, the order dated 25.04.2023 was passed by the Commercial Court wherein it was held that the appeal filed by the appellant herein before the Commercial Court was barred by limitation