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2017 Supreme(Del) 1370
IN THE HIGH COURT OF DELHI AT NEW DELHI
VALMIKI J. MEHTA, J.
Mr. Lalit Kumar - Appellant
Versus
M/S Indiabulls Securities Ltd. And Anr. - Respondents
FAO No.246 of 2016
Decided on : 09-05-2017
Advocate Appeared:
For the Appellant :Mr. Hemant Sharma, Advocate
For the Respondent:Mr. Ankit Jain, Advocate
The main legal point established is that the benefit of Section 14 of the Limitation Act is contingent on pursuing alternative proceedings bonafidely and in good faith, and that the nature of the proceedings must align with the requirements of the Act. Additionally, the court clarified that Lok Adalat was not empowered to provide exclusion of time under Section 14 of the Limitation Act.
Headnote:
Arbitration & Conciliation Act - Challenging Impugned Order - Section 34 - Section 14 of the Limitation Act
Fact of the Case:
The appellant challenged the impugned order dismissing objections filed under Section 34 of the Arbitration & Conciliation Act, 1996, as barred by limitation. The disputes arose between the parties regarding transactions, leading to arbitration proceedings and an award in favor of the respondent. The appellant filed a complaint before the Consumer Forum, seeking exclusion of the period spent in pursuing the complaint under Section 14 of the Limitation Act.
Finding of the Court:
The court found that the appellant's proceedings before the Consumer Forum were independent and not in the nature of objections under Section 34 of the Act. It held that the appellant did not pursue the proceedings before the Consumer Forum bonafidely and in good faith, thus denying the benefit of Section 14 of the Limitation Act. The court also rejected the appellant's reliance on the Lok Adalat order for exclusion of time under Section 14.
Issues: The issues were whether the appellant was entitled to the benefit of Section 14 of the Limitation Act for the period spent in pursuing the complaint before the Consumer Forum and whether the Lok Adalat order could provide exclusion of time under Section 14.
Ratio Decidendi: The court held that the benefit of Section 14 of the Limitation Act can only be given if the alternative proceedings are pursued bonafidely and in good faith, and if the proceedings are in the nature of objections under Section 34 of the Act. It also emphasized that Lok Adalat was not entitled to pass an order giving benefit of exclusion of time under Section 14 of the Limitation Act.
Final Decision: The court dismissed the appellant's objections under Section 34 of the Act as grossly time-barred, affirming the lower court's decision. It held that the appellant was not entitled to the benefit of exclusion of time under Section 14 of the Limitation Act for the period spent in the Consumer Forum proceedings.
VALMIKI J. MEHTA, J.
1. This first appeal has been filed under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) challenging the impugned order dated 25.2.2016 of the court below dismissing the objections filed by the present appellant under Section 34 of the Act as barred by limitation.
2. The facts of the case are that the present appellant was a customer of the respondent no.1/broking firm. Since the disputes and differences arose between the parties with respect to transactions entered into, and which were denied by the present appellant, the appellant invoked arbitration proceedings under the aegis of the National Stock Exchange. Arbitration proceedings culminated in passing of the Award dated 29.6.2013 whereby the Arbitrator Sh. S.S. Agarwal passed his Award dated 29.6.2013 awarding a sum of Rs.6,34,579.23/- to the respondent no.1 in the counter claim filed by the respondent no.1 in the arbitration proceedings and the claim petition of the present appellant was dismissed as being not substantiated. The Award dated 29.6.2013 was admittedly posted by the Arbitration Tribunal to the parties along with the covering letter dated 12.7.2013 and there is no dispute that the present appellant would have received the same by 14th or 15th July, 2013.
3. In law the limitation period of 90 days for filing objections to the Award therefore begins from 14th or 15th July, 2013 with the further fact that there can be condonation of delay of 30 days after 90 days in filing of the objections i.e objections can be filed under Section 34 to the Award within 120 days. After a period of 120 days, there cannot be condonation of delay in view of the judgment of the Supreme Court in the case of Union of India Vs. M/s Popular Construction Co. (2001) 8 SCC 470. I also note that though delay cannot be condoned beyond a period of 120 days, however, Supreme Court has held in the judgment in the case of Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation Department and Others (2008) 7 SCC 169 that the provision of Section 14 of the Limitation Act, 1963 will apply for the benefit of the person who has filed objections in case the objections are filed in a Court which does not have jurisdiction to try the objections.
4. In the present case the appellant after receiving the copy of the Award filed a complaint with the Consumer Forum on 13.8.2013. The contention of the appellant is that the period spent in pursuing of this complaint before the Consumer Forum from 13.8.2013 till 21.7.2015 be excluded under Section 14 of the Limitation Act as per the ratio of the judgment of the Supreme Court in the case of Consolidated Engineering Enterprises (supra).
5. On behalf of the respondent no.1 however it is argued that the appellant cannot be granted the benefit of Section 14 of the Limitation Act because the complaint filed before the Consumer Forum was an independent proceeding which was not in the nature of objections under Section 34 of the Act and which becomes clear from the averments of the complaint filed, and that if at all there remains any doubt whatsoever the same is resolved from the fact that the respondent no.1 in its written statement before the Consumer Forum clearly pleaded that the appellant was prohibited by the doctrine of res judicata in filing of the complaint before the Consumer Forum inasmuch as the disputes between the parties stood settled in terms of the Award of the Arbitrator dated 29.6.2013 and in response to the written statement of the present respondent no.1 in the Consumer Forum all that the appellant in his replication pleaded was that the Award is illegal on account of collusion of the respondent no.1 herein with the Arbitrator.
6. The issue before this Court is whether the appellant is entitled to the benefit of Section 14 of the Limitation Act for the period spent of pendency of the consumer case filed by the appellant before the Consumer Forum. Benefit of S
