IN THE HIGH COURT OF DELHI
Rajiv Shakdher, Talwant Singh, JJ.
South Delhi Municipal Corporation - Appellant
Versus
Purnanand - Respondent
FAO (COMM) 115 of 2021 & CM Appl. 21216 of 2021
Decided On : 02-12-2021
Arbitration and Conciliation Act - Limitation - Section 34, Section 36(2) - [Union of India v. Popular Construction Co., (2001)8 SCC 470, Simplex Infrastructure Ltd. v. Union of India, (2019)2 SCC 455, Consolidated Engg. Enterprises v. Irrigation Deptt., (2008)7 SCC 169, M.P. Housing Board v. Mohanlal & Co., (2016)14 SCC 199, Northern Railways vs. Pioneer Publicity Corporation Private Limited, (2017)11 SCC 234] - The court discussed the applicability of Section 5 of the Limitation Act, 1963 to Section 34 proceedings filed under the 1996 Act, the exclusion of time under Section 14 of the 1963 Act, and the consequences of not addressing defects in the Section 34 petition. The court emphasized the special nature of the 1996 Act and the strict timelines prescribed in Section 34, and highlighted the importance of due diligence and good faith in prosecuting the action.
Fact of the Case:
The appellants sought to stay the execution of an arbitral award but were dismissed by the Learned District Judge due to the Section 34 petition being beyond limitation. The appellants appealed this decision.
Finding of the Court:
The court found that the appellants did not demonstrate due diligence or good faith in prosecuting the action, and the delay in re-filing the Section 34 petition did not comply with the provisions of the 1996 Act. The court upheld the conclusion reached by the Learned District Judge.
Issues: The issues revolved around the timeliness of the Section 34 petition, the applicability of Section 5 and Section 14 of the Limitation Act, and the diligence and good faith of the appellants in prosecuting the action.
Ratio Decidendi: The court held that the appellants' failure to address defects in the Section 34 petition and the delay in re-filing demonstrated a lack of due diligence and good faith, leading to the dismissal of the appeal.
Final Decision: The appeal was disposed of, with the direction to remit the money deposited in the Court to the concerned executing Court and the excision of the cost direction due to the appellants' financial constraints.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral):
Preface:
1. This is an appeal directed against the order of the learned Single Judge dated 04.03.2021, passed in an application preferred by the appellants under Section 36(2) of the Arbitration and Conciliation Act, 1996 [in short `the 1996 Act'].
1.1. The said application was preferred by the appellants for staying the execution of the award dated 27.02.2019, passed by the arbitral tribunal.
1.2. The Learned District Judge (Commercial Court-02), West District, Tis Hazari Courts, Delhi [in short "the Learned District Judge"], while dealing with the aforementioned application, concluded that the main proceedings preferred by the appellants i.e., in the form of Section 34 petition was beyond limitation, and, therefore, both, the Section 36(2) application and the Section 34 petition, instituted under the 1996 Act, were not maintainable. This resulted in the dismissal of not only the Section 36(2) application but also the petition filed by the appellants under Section 34 of the 1996 Act.
1.3. It is against this order, as noticed above, that the appellants have preferred the present appeal.
2. Before we proceed further, there are two fundamental legal markers that need to be reiterated and concerning these markers, there can hardly be any doubt.
2.1. First, that Section 5 of the Limitation Act, 1963 is not applicable to the Section 34 proceedings filed under the 1996 Act. [See Union of India v. Popular Construction Co., (2001)8 SCC 470 and Simplex Infrastructure Ltd. v. Union of India, (2019)2 SCC 455]
2.1(a). This position obtains on account of various courts including the Supreme Court in the aforementioned judgments holding that the 1996 Act is a special Act, and, therefore, the language of sub-section (3) of Section 34 of the 1996 Act does not permit condonation of delay in filing a petition under Section 34 of the very same Act, beyond the prescribed period of three months and thirty [30] days from the date of receipt of the arbitral award.
2.1(b). The Supreme Court has, in the aforementioned judgements, in this behalf, laid emphasis on the expression "but not thereafter" found in the proviso to sub-Section (3) of Section 34 of the 1996 Act. The Supreme Court, in this context, has also referred to Section 29(2) of the Limitation Act, 1963 [in short `the 1963 Act'], which, inter alia, excludes the provisions of Sections 4 to 24 of the 1963 Act, where special acts or local laws, such as the 1996 Act, provide for specific period of limitation.
2.2. Second, although the provisions of Section 5 of the 1963 Act are not applicable to the petition filed under Section 34 of the 1996 Act, Section 14 of 1963 Act is applicable. [See Consolidated Engg. Enterprises v. Irrigation Deptt., (2008)7 SCC 169 and M.P. Housing Board v. Mohanlal & Co., (2016)14 SCC 199]
Backdrop:
3. With this preface, what is required to be noticed for adjudicating the present appeal is the following dates and events, which are not, in dispute.
3.1. As noticed above, the award was rendered by the arbitral tribunal on 27.02.2019. It was received by the appellants, admittedly, on the same date i.e., 27.02.2019.
3.2. Evidently, the respondent had moved an application under Section 33(4) of the 1996 Act. The arbitral tribunal disposed of the said application, on 08.08.2019. It is, once again, not disputed by the appellants that the order concerning the disposal of this application was received by them on 08.08.2019.
3.3. The appellants lodged a petition with the Registry of this Court under Section 34 of the 1996 Act, on 07.11.2019. Upon scrutiny by the Registry, the Registry pointed out thirty four (34) defects in the Section 34 petition lodged by the appellants on 11.11.2019.
3.3(a). Crucially, one of the defects pertained to the aspect concerning pecuniary jurisdiction. The Registry pointed out to the appellants that the petition filed under Section 34 of the 1996 Act did not conta
Setting aside arbitral award – Merely mentioning a wrong heading of provision on the application would not defeat cause of justice – Contents of application are required to be seen and not the provis....
Point of Law : Even if the period of delay is considered to be of 21 days. Since Section 34(3) of the Act, 1996 bars condonation of delay beyond the period of 30 days after the period of 3 months is ....
The court emphasized the peremptory language of section 34 of the Arbitration and Conciliation Act, 1996, and the requirement for sufficient cause to condone any delay in filing the application.
The application under Section 34(2) of the Act was not entitled to the benefit of Section 14 of the Limitation Act, as the appellant did not prosecute any civil proceedings in good faith and with due....
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