IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, J.
My Preferred Transformation And Hospitality Pvt. Ltd. & Anr. – Appellants
Versus
Faridabad Implements Pvt. Ltd. – Respondent
O.M.P. (COMM) 316 of 2022, IAs. 11689 of 2022 & 11690 of 2022
Decided On : 07-02-2023
ARBITRATION - CONDONATION OF DELAY - SECTION 34 OF THE ARBITRATION AND CONCILIATION ACT, 1996 - APPLICABILITY OF SECTION 4 OF THE LIMITATION ACT, 1963 AND SECTION 10 OF THE GENERAL CLAUSES ACT, 1897 - Held, the additional 30 days for challenging the impugned award, being not a prescribed period, i.e., three months and the additional 30 days having expired on June 30, 2022, the filing of the petition on July 4, 2022 shall be barred by time and the same cannot be condoned.
Fact of the Case:
Petitioner/applicant sought condonation of delay in filing a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (`Act of 1996' for short) for quashing and setting aside the arbitral award dated February 04, 2022. The Arbitrator had sent a soft copy of the impugned award dated February 04, 2022 to the applicant/petitioner by email and the hard copy thereof on February 14, 2022. According to the applicant, the petition under Section 34 of the Act of 1996, is within limitation as the Supreme Court in Suo Moto Writ Petition No. 3/2020, directed that the period from March 15, 2020 till February 28, 2022, shall stand excluded for the purpose of limitation in all proceedings and that the period of limitation would start from March 1, 2022.
Finding of the Court:
The Court held that the additional 30 days for challenging the impugned award, being not a prescribed period, i.e., three months and the additional 30 days having expired on June 30, 2022, the filing of the petition on July 4, 2022 shall be barred by time and the same cannot be condoned.
Issues: Whether the petition under Section 34 of the Arbitration and Conciliation Act, 1996 (`Act of 1996' for short) for quashing and setting aside the arbitral award dated February 04, 2022 is barred by limitation.
Ratio Decidendi: The Court held that the `prescribed period` is the three months' time provided under sub-section 3 of Section 34 of the Act of 1996. The period of 30 days beyond three months which the Court may extend on sufficient cause is not the period of limitation or in other words, the `prescribed period` and as such, there is no applicability of Section 4 of the Act of 1963. The Court further held that the applicability of Section 10 of the Act of 1897 is contingent upon the expiry of the `prescribed period`. In the present case, it has been admitted that the `prescribed period` expired on May 31, 2022, even Section 10 of the Act of 1897, will not come to the aid of the petitioner's case, which is liable to threshold rejection.
Final Decision: The application for condonation of delay cannot be accepted. The same is dismissed. Consequently, the petition is also rejected.
JUDGMENT
V. Kameswar Rao, J.
I.A. 11689/2022
1. By this order, I shall decide the aforesaid application which has been filed by the petitioner/applicant seeking condonation of delay in filing a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (`Act of 1996' for short) for quashing and setting aside the arbitral award dated February 04, 2022.
2. The Arbitrator had sent a soft copy of the impugned award dated February 04, 2022 to the applicant/petitioner by email and the hard copy thereof on February 14, 2022.
3. According to the applicant, the petition under Section 34 of the Act of 1996, is within limitation as the Supreme Court in Suo Moto Writ Petition No. 3/2020, directed that the period from March 15, 2020 till February 28, 2022, shall stand excluded for the purpose of limitation in all proceedings and that the period of limitation would start from March 1, 2022.
4. It is the case of the applicant that the statutory period of three months for challenging the impugned award had started from March 1, 2022 and expired on May 31, 2022, and the additional condonable period of 30 days for challenging the impugned award had expired on June 30, 2022.
5. It is also the case of the applicant that it had commenced internal deliberations for challenging the award and initiated the process for filing the petition under Section 34 of the Act, immediately after receiving the impugned award.
6. Mr. Rajiv Nayar, the learned Senior Counsel for the applicant, stated that the employees and the legal team in the petitioner/applicant company, who are associated with the arbitration proceeding exited the company and due to this sudden departure of the employees, the process of filing the petition got severely hindered for three weeks, i.e., till end of March, 2022. He also stated that the newly recruited employees and legal team fell ill due to spread of COVID-19 and other infections due to seasonal changes, which caused hindrance in the process of filing, for another four weeks, i.e., till end of April, 2022.
7. He stated that, when the applicant approached its counsel and instructed them to initiate the filing process under Section 34 of the Act, the counsels informed the petitioner/applicant that they were no longer in a position to handle the disputes and declined to file the petition. Therefore, it was extremely difficult for the petitioner/applicant to file Section 34(3) of the Act of 1996 petition before May 31, 2022, the `prescribed period`. Thereafter, the petitioner/applicant after many attempts engaged a new counsel to defend its interest in setting aside the impugned award.
8. He stated that the new counsel could not file the petition as this Court was closed for summer vacations from June 3, 2022 till July 04, 2022, which prevented the petitioner/applicant from filing the petition for no fault of its own. He also stated that the number of days falling under summer vacations should be excluded in computing the extended and condonable period of limitation, and a fresh period of limitation would then commence which would actually expire on July 31, 2022.
9. He stated that the petitioner/applicant filed the petition on the re-opening day after the Court vacation and the applicant was well within the condonable period of thirty days, and it is evident that, there has been a delay of only three days beyond the statutory period, which are bona fide and beyond the control of the petitioner. Therefore, the delay of three days is minor and falls within discretionary condonable power of this Court.
10. Mr. Nayar contended the respondents' contention that Section 4 of the Limitation Act, 1963 (`Act of 1963', for short) does not apply to the proviso to Section 34(3) of the Act of 1996, is untenable. He also submitted that the judgments relied by the respondent in Assam Urban Water Supply and Sewerage Board v. Subash Projects and Marketing Limited, (2012) 2 SCC 624, Sagufa Ahmed and Ors. v. Upper Assam Plywood Produ
Assam Urban Water Supply and Sewerage Board v. Subash Projects and Marketing Limited
H.H. Raja Harinder Singh v. S. Karnail Singh
Manohar Joshi v. Nitin Bhaurao Patil
Sagufa Ahmed and Ors. v. Upper Assam Plywood Products Private Limited and Ors.
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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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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 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 Limitation Act applies to arbitration proceedings under Section 34 of the ACA, but the condonable period does not extend beyond 30 days when it expires during a court holiday.
The limitation period for an application under Section 34 of the Arbitration and Conciliation Act cannot be extended beyond specified timelines, maintaining strict adherence to legal provisions.
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