High Court of Delhi
DEEPA SHARMA, J.
Sapna Tuteja & Another - Appellants
Versus
L&T Finance Ltd. - Respondent
OMP No. 112 of 2014 & IA No. 1787 of 2014
Decided on: 12-01-2015
Arbitration and Conciliation Act - Challenging ex parte award - Section 34
Fact of the Case:
The petitioners challenged an ex parte award passed by the Arbitrator in Arbitration Proceedings. They claimed to have been unaware of the proceedings until receiving a notice of Execution Petition. The petitioners filed an application for condoning the delay in filing the petition under Section 34 of the Act.
Finding of the Court:
The Court found that the petition was filed beyond the period of limitation prescribed under Section 34(3) of the Act and was thus not maintainable.
Issues: The main issue was whether the petition was filed within the prescribed period of limitation under Section 34(3) of the Act.
Ratio Decidendi: The Court held that the period of limitation for filing the petition under Section 34(3) of the Act is absolute and unextendable, as per the Supreme Court's decision in Popular Construction. The Court emphasized that the time limit prescribed under Section 34 to challenge an award is absolute and cannot be extended by the Court under Section 5 of the Limitation Act.
Final Decision: The petition was dismissed as it was filed beyond the period of limitation prescribed under Section 34(3) of the Act.
1. Vide this present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’), the petitioners have challenged the ex parte award dated 22.06.2011, passed by respondent No.2, the Arbitrator, in Arbitration Proceedings No. 243/2011, titled as L&T Finance Ltd. vs. Spark Engineers & Contractors and Ors.
2. The case of the petitioners is that the petitioner No.1 had taken a loan of Rs.30,00,000/- from respondent No.1 for purchase of machine, namely, Horizontal Directional Drilling Machine with the brand name of Horizon, Model No. RT00 valuing Rs.40,00,000/-. The loan amount was repayable in 35 equal instalments of Rs.1,10,800/-. Petitioner No. 2 was the guarantor of the said loan agreement. The petitioner No.1 had paid the instalments from time to time and till October, 2010.
3. It is submitted that petitioners were always ready and willing to repay the loan amount and also handed over the machinery on 16.03.2011 and shown the willingness to pay the balance amount. The award had been challenged being contrary to provision of Section 24(2) of the Act and also on the ground that at no stage of arbitral proceedings, the petitioners were served and they were not aware of the proceedings till receiving the notice of Execution Petition No.297/2012, titled as L&T Finance vs. M/s Spark Engineers and Contractors and Anr. The first notice was first received on 21.09.2013 and thereafter on 03.10.2013
4. Along with the said petition, the petitioner has also filed an application bearing IA No. 1787/2014 under Section 34(3) of the Act for condoning the delay in filing the petition under Section 34 of the Act. In this application, the petitioners have submitted that the petitioners had become aware of passing of the award ultimately/lastly on 03.10.2013 upon receiving the summons of execution of award from this Court in Execution Petition No.297/2012, which was listed for hearing 09.10.2013. He engaged a counsel, namely, Surender Kumar Gupta, but the counsel did not do the needful and thereafter, the petitioners engaged another advocate Savita Malhotra on 02.01.2014 and signed an attorney in her favour. The said counsel applied for inspection of execution petition on 03.01.2014 for 06.01.2014. However, the file was not made available and thereafter the said counsel again made an application for file inspection on 09.01.2014 and the file was made available to her on 10.01.2014. It is submitted that since the father of the counsel got admitted for spinal injury in hospital on 04.01.2014 and was discharged from the hospital on 09.01.2014, she could not inspect the record of execution. It is submitted that petition was required to be filed on 03.01.2013, i.e., within three months of service and thus the delay of 11 days occurred in filing the present petition. Vide this application, the petitioner has prayed for condoning the delay of 11 days in filing the present petition.
5. In the reply to the petition under Section 34 of the Act, the respondents has raised the preliminary objection that the present petition is barred by limitation. It is submitted that the award was passed on 22.06.2011 and the petition has been filed on 15.01.2014, almost after 3 years and thus liable to be dismissed. It is contended that vide IA No.1787/2014, the petitioner has sought the condonation of delay of 11 days, while the delay of is of 1245. It is submitted that in Union of India vs. Popular Construction 2001(8) SCC 470, the Court has clearly held that the time limit prescribed under Section 34 of the Act to challenge the award is absolute and that cannot be extended under Section 5 of the Limitation Act and this view was affirmed by this Court in Union of India vs. Uttam Singh Duggal 198 (2013) DLT 62A(CN). It is further submitted that the notice of execution petition was served upon the petitioners on 03.09.2013 and affidavit of service was also filed in this regard. The petitioners have falsely stated the d
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