The 120-day period prescribed under Section 34(3) of the Arbitration and Conciliation Act, 1996 for filing an application to set aside an arbitral award is absolute and unextendible by the court under Section 5 of the Limitation Act, 1963.

JUDGMENT :

1. Heard.

2. This appeal arises out of order dated 08.07.2022 passed by the Court of Commercial Judge, Alwar whereby, the application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act of 1996’) has been dismissed as barred by limitation.

3. Learned counsel for the appellant would argue that even though sufficient cause was shown, the learned Commercial Court has dismissed the application as barred by limitation ignoring the cause shown by the appellant.

4. The Commercial Court holding that the appeal being barred by limitation and was filed beyond the maximum period, which could not be condoned under the provisions of Section 34 (3) of the Act of 1996, has dismissed the appeal.

5. The Hon’ble Supreme Court in the case of Chintels India Limited Versus Bhayana Builders Private Limited, (2021) 4 Supreme Court Cases 602 held as below:-

“11. A reading of section 34(1) would make it clear that an application made to set aside an award has to be in accordance with both sub-sections (2) and (3). This would mean that such application would not only have to be within the limitation period prescribed by sub-section (3), but would then have to set out grounds under sub-sections (2) and/or (2-A) for setting aside such award. What follows from this is that the application itself must be within time, and if not within a period of three months, must be accompanied with an application for condonation of delay, provided it is within a further period of 30 days, this Court having made it clear that Section 5 of the Limitation Act, 1963 does not apply and that any delay beyond 120 days cannot be condoned – see State of H.P. v. Himachal Techno Engineers (2010) 12 SCC 210 at para 5.”

6. In a subsequent decision in the case of Mahindra and Mahindra Financial Services Limited Versus Maheshbhai Tinabhai Rathod and Others, (2022) 4 Supreme Court Cases 162 also similar view was taken by the Hon’ble Supreme Court and it was held as below:-

“9. The scope available for condonation of delay being self-contained in the proviso to Section 34(3) and Section 5 of Limitation Act not being applicable has been taken note by this Court in its earlier decisions, which we may note. In Union of India vs. Popular Construction Co., (2001) 8 SCC 470 it has been held as hereunder: (SSC pp.474-76, paras 12, 14 & 16)

“12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are “but not thereafter” used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the court could entertain an application to set aside the award beyond the extended period under the proviso, would render the phrase “but not thereafter” wholly otiose. No principle of interpretation would justify such a result.

14. Here the history and scheme of the 1996 Act support the conclusion that the time-limit prescribed under Section 34 to challenge an award is absolute and unextendible by court under Section 5 of the Limitation Act. The Arbitration and Conciliation Bill, 1995 which preceded the 1996 Act stated as one of its main objectives the need “to minimise the supervisory role of courts in the arbitral process”. This objective has found expression in Section 5 of the Act which prescribes the extent of judicial intervention in no uncertain terms:

‘5. Extent of judicial intervention.— Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.’

16. Furthermore, Section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award “in accordance with” sub-section (2) and sub-section (3). Sub-section (2) rel