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2024 Supreme(All) 899

IN THE HIGH COURT OF ALLAHABAD
SHEKHAR B. SARAF, J.
Smt. Jasvinder Kaur - Appellant
Versus
National Highways Authority Of India And Others - Respondents
Appeal Under Section 37 Of Arbitration And Conciliation Act No. 264 Of 2023
Decided On : 29-05-2024

Advocates Appeared:
For the Appellant : Ms. Gunjan Jadwani and Ms. Chandrika Patel, Advs.
For the Respondents: Mr. Pranjal Mehrotra, Advs.

IMPORTANT POINT
The limitation period for challenging an arbitral award under Section 34 of the Arbitration & Conciliation Act, 1996, commences only from the date the aggrieved party receives a signed copy of the award, as mandated by Section 31(5).

Headnote:

ARBITRATION - CHALLENGE TO ARBITRAL AWARD - Arbitration & Conciliation Act, 1996 - Sections 34, 37, 31(5); National Highways Act, 1956 - Sections 3A, 3D, 3G(5) - The court discussed the importance of timely delivery of a signed copy of the arbitral award as mandated by Section 31(5) of the Arbitration & Conciliation Act, 1996. It emphasized that the limitation period for challenging an arbitral award under Section 34(3) begins only upon receipt of the signed copy. The court found that the appellant was not served with the signed copy of the award, which was pronounced on January 31, 2023, and thus ruled that the application under Section 34 was filed within the permissible time frame.

Fact of the Case:

The appellant, Smt. Jasvinder Kaur, challenged the dismissal of her application under Section 34 of the Arbitration & Conciliation Act, 1996, which was deemed time-barred by the District Judge, Rampur. The dispute arose from a notification under the National Highways Act, 1956, leading to an arbitration award that the appellant claimed was not properly communicated to her.

Finding of the Court:

The court found that the District Judge failed to ascertain when the signed copy of the arbitral award was served to the appellant. The court highlighted that the limitation for filing an application under Section 34 begins only upon receipt of the signed award, which was not delivered to the appellant until February 1, 2023.

Issues: Whether the District Judge was justified in dismissing the application under Section 34 as time-barred when the appellant had not received the signed copy of the arbitral award.

Ratio Decidendi: The court reiterated that the delivery of a signed copy of the arbitral award is a substantive requirement under Section 31(5) of the Arbitration Act, and the limitation period for challenging the award commences only upon receipt of that signed copy. The court emphasized that procedural fairness necessitates that parties must be properly informed of the award to exercise their rights effectively.

Final Decision: The appeal under Section 37 of the Arbitration & Conciliation Act, 1996 was allowed, the order dated February 7, 2023, was set aside, and the District Judge was directed to adjudicate the application under Section 34 on merits within six months.

JUDGMENT :

(Shekhar B. Saraf, J.) :

1. The instant application has been filed under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) by Smt. Jasvinder Kaur (hereinafter referred to as the ‘Appellant’) challenging the order dated February 7, 2023 passed by District Judge, Rampur by which the application under Section 34 of the Act filed by the Appellant was dismissed as time barred.

FACTS

2. I have laid down the factual matrix of the instant lis below:

    a. A notification under Section 3A of the National Highways Act, 1956 (hereinafter referred to as the ‘NHAI Act’) was issued by National Highways Authority of India (hereinafter referred to as the ‘Respondent No. 1’). Subsequently, a notification under Section 3D of the NHAI Act was published by the Respondent on June 17, 2013.

b. Appellant filed an objection before the Competent Authority, claiming higher rate of compensation. Objection of the Appellant was rejected by the Competent Authority. Against the award passed by the Competent Authority, the Appellant preferred arbitration under Section 3G(5) of the NHAI Act.

c. The Arbitrator passed an award on January 31, 2023 (back dated to October 11, 2022). Thereafter, the Appellant proceeded to challenge the said arbitral award under Section 34 of the Act before the District Judge, Rampur which was dismissed vide order dated February 7, 2023 as time barred.

d. Aggrieved by the order dated February 7, 2023, the Appellant has preferred the instant appeal under Section 37 of the Act before this Court.

CONTENTIONS OF THE APPELLANT

3. Learned counsel appearing for the appellant has made the following submissions before this Court:

    a. District Judge, Rampur in its order dated February 7, 2023 has failed to return any finding as to when the signed copy of the award was served upon the Appellant. In the absence of any finding as to when the signed copy of the award was served upon the Appellant, it was erroneous on part of the District Judge, Rampur to return a finding that there was a delay in filing the application under Section 34 of the Act, in as much as Section 34(3) of the Act provides that the limitation for filing an application under Section 34 of the Act shall begin from the date when the arbitral award has been received by the aggrieved party.

b. In the application filed by the Appellant under Section 34 of the Act before the District Judge, Rampur, it was specifically pleaded by the Appellant that the award was not pronounced on October 11, 2022 which was the date fixed for pronouncement of award. The Appellant was making continuous efforts to enquire about the status of the award from court officer of the Arbitrator. Subsequently the award was pronounced only on January 31, 2023 and the certified copy of the same was made available to the Appellant only on February 1, 2023 pursuant to which the application under Section 34 of the Act was filed on February 7, 2023 and as such there is no delay in filing the application under Section 34 of the Act.

c. Appellant also sent a letter to the Respondents on February 6, 2023 duly intimating them that the award was pronounced only on January 31, 2023 and as such the Appellant will be assailing the same by filing a case under Section 34 of the Act.

d. District Judge, Rampur, without considering the averments of the Appellant, proceeded to dismiss the application under Section 34 of the Act vide its order dated February 7, 2023 without arriving at any finding as to when the Appellant became aware of the award.

e. Reliance is placed upon the judgment of this Court in Smt. Sudha v. Union of India & 3 Others (Appeal under Section 37 of the Arbitration & Conciliation Act, 1996 No. 271 of 2022).

f. A bare perusal of the Counter Affidavit filed by the Respondents clearly goes to show that the Respondent No. 1 has not controverted the fact that the award was not pronounced by the Arbitrator on October 11, 2022 and instead the award was published only o

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