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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, J.
Union Of India - Appellant
Versus
M/s Rama Contractor - Respondent
Original Miscellaneous Petition (COMM) No. 255 of 2021, Miscellaneous Application No. 10941, 10942 of 2021
Decided On : 13-09-2021
Section 34 - Arbitration and Conciliation Act, 1996 - The court addressed the controversy of condoning the delay in filing the petition under Section 34 of the A&C Act. The principal issue was whether the delay in filing the petition could be condoned and if there were sufficient grounds to do so. The court discussed the interpretation of the period of limitation, the application of Section 14 of the Limitation Act, and the benefit of proviso to Section 34(3) of the A&C Act.
Fact of the Case:
The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, impugning an arbitral award. The petitioner sought condonation of a delay of 632 days in filing the petition and an additional delay of 10 days in re-filing the petition. The respondent contended that the delay could not be condoned as it exceeded the period allowed by the proviso to Section 34(3) of the A&C Act.
Finding of the Court:
The court found that the delay in filing the petition far exceeded the period of limitation of three months and could not be condoned. The court also noted that the petitioner failed to provide a reasonable explanation for the delay in filing the petition. As a result, the benefit of the proviso to Section 34(3) of the A&C Act was not available to the petitioner. The court dismissed the petition as filed beyond the period of limitation.
Issues: The issues involved the condonation of delay in filing the petition under Section 34 of the A&C Act, the interpretation of the period of limitation, and the application of Section 14 of the Limitation Act.
Ratio Decidendi: The court held that the period of limitation under Section 34(3) of the A&C Act refers to three calendar months and not a period of ninety days. The court also clarified that the benefit of Section 14 of the Limitation Act is available only if the party pursuing the prior proceedings did so diligently and in good faith. The court emphasized that the delay in filing the petition could not be condoned as it far exceeded the period of limitation.
Final Decision: The court dismissed the petition as filed beyond the period of limitation and disposed of all pending applications.
JUDGMENT
Vibhu Bakhru, J. - IA Nos. 10943/2021 & 10944/2021
1. The petitioner has filed the above-captioned petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter the A&C Act) impugning an arbitral award dated 25.06.2019 (hereafter the impugned award) delivered by the Arbitral Tribunal comprising of a Sole Arbitrator.
2. The petitioner has filed the aforesaid application (IA No. 10943/2021) praying that the delay of 632 (six hundred and thirty-two) days in filing the above-captioned petition be condoned. The petitioner has also filed an application (IA No. 10944/2021) seeking condonation of delay of 10 (ten) days in re-filing the above-captioned petition. It is contended on behalf of the respondent that the petition has been filed beyond the period that can be condoned by this Court in terms of proviso to Section 34(3) of the A&C Act and therefore, the applications are liable to be rejected.
3. Thus, the principal controversy to be addressed is whether this Court can condone the delay in filing the above-captioned petition and if so, whether there are sufficient grounds to do so.
4. Certain dates and events are necessary to be noted in order to address the aforesaid controversy. Admittedly, the impugned award was received by the petitioner on 26.06.2019 (one day after the Arbitral Tribunal had delivered the same). The petitioner filed the petition under Section 34 of the A&C Act in the Court of District Judge, Commercial Court, Patiala House, New Delhi on 24.10.2019. The said court did not have any jurisdiction to entertain the present petition and, on 12.02.2021, the petitioner withdrew the petition. The order dated 12.02.2021 passed by the learned District Judge reads as under:
"OMP(COMM.) No. 194/19
UNION OF INDIA Vs. M/S RAMA CONTRACTOR & ANR.
12.02.2021
Matter heard via video conferencing.
Present: Sh. Sanjay Yadav, Ld. Proxy Counsel for Sh. Sanjeev Yadav.
Ld. Counsel for Petitioner (via video conferencing).
Sh. Aman Dhyani, Ld. Counsel for Respondent no.1 (via video conferencing).
Proxy Counsel for Petitioner seeks some time to call Ld. Counsel for Petitioner who is busy else where in other Court in video conferencing hearing
Be awaited.
Called again.
Present: Sh. Sanjay Yadav, Ld. Proxy Counsel for Petitioner (via video conferencing).
Sh. Aman Dhyani, Ld. Counsel for Respondent no.1 (via video conferencing).
Heard. Perused.
Ld. Counsel for Petitioner seeks to withdraw present objections/petition with liberty to file it at proper forum.
Ld. Counsel for Petitioner has sent an e-mail to dedicated e-mail id of the Court with above said prayer.
Accordingly, petition is dismissed as withdrawn with liberty prayed for of course subject to law of limitation File be consigned to record room."
5. The petitioner claims that he had filed the above-captioned petition in this Court on 17.06.2021. The same was returned under objections and it was re-filed on 07.08.2021. According to the petitioner, there is a delay of ten days in re-filing the petition and the petitioner has sought condonation of the same.
6. Mr Sharma, learned counsel appearing for the respondent, submits that the petition filed before the learned District Judge was beyond the period of three months and thirty days and therefore, even if the delay in filing is reckoned from the date on which the above-captioned petition was first filed before the learned District Judge, the same was beyond the period of thirty days that could be condoned by the Court.
7. He drew the attention of this Court to the following passages from the decision of the Coordinate Bench of this Court in Union of India v. Wishwa Mittar Bajaj & Sons & Anr.: 141 (2007) DLT 179, in support of his contention that the period of three months from the receipt of the impugned award, would expire on 23.09.2019:
"26. Such meaning of a month was accepted by this court in the pronouncement of the Division Bench reported at AIR 1973 Delhi 58 Daryodh Singh Vs. UOI & Ors. In this behalf, the court held thus:
The main legal point established in the judgment is that the period of limitation under Section 34(3) of the A&C Act refers to three calendar months, and the benefit of Section 14 of the Limitation A....
The judgment established the application of Section 14 of the Limitation Act, 1963, in justifying the delay in filing the application under Section 34 of the A&C Act, and highlighted the discretion o....
The court permitted the condonation of delay due to previous proceedings in a wrong forum and pandemic-related delays, emphasizing liberal construction of the Limitation Act.
The Court emphasized the importance of due diligence and dispatch in exercising the right to challenge an Arbitral Award within the prescribed time, as per the provisions of the Arbitration Act.
Delay beyond 120 days (90+30) in Section 34 petitions or corresponding appeals under Section 37 of Arbitration Act not condonable via Limitation Act Section 5; negligence, inaction, lack of bonafides....
The law of limitation aims to prevent outdated, fictitious, or fraudulent claims and requires parties to exercise their rights within the prescribed time. The Court emphasized the need for due dilige....
Point of Law : If the extended/discretionary/condonable period of 30 days as contemplated in the proviso to Section 34(3) of the said Act of 1996 expires on a day on which the court is closed, a part....
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