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2018 Supreme(Del) 1678
IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATHIBA M. SINGH, J.
DDA – Petitioner
Versus
Bansal Traders – Respondent
O.M.P. 1603 of 2014
Decided On : 12-07-2018
For the Petitioner:Ms. Kanika Singh, Advocate.
For the Respondent:Mr. N.K. Jha, Advocate.
Timely action and genuine proceedings are crucial in arbitration cases, and the application of the Limitation Act should be in accordance with bona fide efforts.
Headnote:
Arbitration & Conciliation Act, 1996 - Section 34(3) - Limitation Act, 1963 - OMP 1603/2014 & I.A. 25470/2014 - 1996 Act, 1940 Act - [Section 34(3) of the Arbitration & Conciliation Act, 1996, Section 14 of the Limitation Act, 1963] - The judgment discusses the service of the arbitral award, condonation of delay, and the application of the Limitation Act in the context of arbitration proceedings. It emphasizes the importance of timely action and the need for genuine and bona fide proceedings.
Fact of the Case:
The case involved a petition filed under Section 34(3) of the Arbitration & Conciliation Act, 1996 read with Section 14 of the Limitation Act, 1963. The dispute arose from an agreement with an arbitration clause dated 25th February, 1982, resulting in an award challenged by both parties. The DDA filed a petition under Section 14 of the Arbitration Act, 1940, which was rejected by a Single Judge of the Court.
Finding of the Court:
The Court found that the delay in filing the petition under Section 34(3) of the 1996 Act was not justifiable and rejected the application for condonation of delay. Consequently, the OMP was dismissed.
Issues: The issues revolved around the service of the arbitral award, condonation of delay, and the application of the Limitation Act in the context of arbitration proceedings.
Ratio Decidendi: The Court emphasized the need for genuine and bona fide proceedings, the importance of timely action, and the application of the Limitation Act in arbitration cases.
Final Decision: The application for condonation of delay was rejected, and the OMP was dismissed.
Prathiba M. Singh, J.
O.M.P. 1603/2014 & I.A. 25470/2014
1. This is a petition filed under Section 34(3) of the Arbitration & Conciliation Act, 1996 read with Section 14 of the Limitation Act, 1963.
2. The litigation between the parties has had a long history. The parties had entered into agreement dated 25th February, 1982, which had an arbitration clause. The same had resulted in award dated 29th July, 2004 being passed. The said award was challenged by both parties under Section 34 of the Arbitration & Conciliation Act, 1996 (hereinafter ‘1996 Act’) vide O.M.P. Nos. 414/2004 & 31/2005.
3. On 7th November, 2007, the said petitions were disposed of and the award was set aside. A new Arbitrator was appointed by consent of parties.
4. Justice R.C. Chopra (Retd.,) the newly appointed Sole Arbitrator rendered his award on 12th October, 2012. As per the said award, the claims of Respondent, M/s Bansal Traders were partly allowed and the counter claims were rejected. The Claimant/Respondent filed an execution petition before the Trial Court. In the said execution petition, notice was issued to the DDA. As per the process server report in the said petition, EX. 9/2013, the DDA was served with the petition along with the copy of the award on 22nd May, 2013. In the said Execution proceedings, the Claims of the Respondent/Claimant to the extent they were allowed by the Arbitrator were accepted by DDA and payments were made.
5. The DDA chose to file a petition, in respect of rejection of its Counter Claim, under Section 14 of the Arbitration Act, 1940. A learned Single Judge of this Court vide order dated 14th October, 2014 rejected the said petition with the following observation:-
“11. Accordingly, the suit is returned to the Plaintiff. This would not, however, come in the way of the plaintiff in filing a petition under Section 34 of the 1996 Act, if it would otherwise be maintainable in law.”
6. The present petition was thereafter filed under Section 34(3) of the 1996 Act on 14th November, 2014 and was refiled on 12th December, 2014. Since there was a delay, DDA filed I.A. 25470/2014 praying for condonation of delay.
7. Learned counsel for the DDA has vehemently urged that the entire period during which the petition under Section 14 of the 1940 Act remained pending ought to be excluded for the purposes of determining the delay. She also submits that DDA was entitled to pray for condonation of delay under the 1940 Act. Under the 1996 Act, since DDA was never served with the award from the Arbitrator, it has to be presumed that DDA has no notice of the award. According to her, under Section 34, mere notice of the award is not sufficient but the award has to be served through the Arbitrator.
8. On the other hand, learned counsel for the Respondent submits that DDA was served with the execution petition on 22nd May, 2013; that itself constitutes adequate notice of the award. He also submits that under Section 14 of the Limitation Act, only if a bona fide proceeding was pending, the time period can be deducted. It is his submission that DDA was all along aware that the 1996 Act would apply inasmuch as even against the earlier award, O.M.P. 31/2005 was preferred under the 1996 Act and not under the 1940 Act. Thus the benefit of the pendency of the Section 14 petition which is not in good faith ought not to be given. He further submits that the application seeking condonation of delay is bereft of material particulars as it does not even mentioned the number of days for which the condonation of delay is sought.
9. The Court has heard the submissions on behalf of the parties. A perusal of the original arbitral record reveals that the learned Arbitrator had despatched the award to the DDA by speed post on 1st February, 2013, at the same time when it was despatched to the Claimant/Respondent. There are two speed post receipts dated 1st February 2013. The service of the award by speed post ought to be deemed to be adequate service as it is throu
