Back
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
RITU BAHRI, CJ., RAKESH THAPLIYAL, J.
State of Uttarakhand - Appellant
Versus
M/s Hydel Construction Private Ltd. and Another - Respondents
Appeal From Order No. 05 Of 2024
Decided On : 07-03-2024
Delay - Arbitration - Section 34, 37 of the Arbitration and Conciliation Act, 1996 - The court emphasized the strict adherence to limitation periods for filing appeals under the Act, highlighting that any delay beyond the prescribed time cannot be condoned without sufficient cause.
Fact of the Case:
The State appealed against an arbitral award favoring a contractor, citing various grounds including procedural flaws and lack of evidence. The appeal was delayed by 31 days, which the court condoned, but ultimately dismissed the appeal due to the State's lack of standing in the arbitration.
Finding of the Court:
The court found that the State was not a party to the arbitration agreement and had accepted the arbitral award by not appealing within the stipulated time. The court upheld the findings of the Commercial Court regarding the contractor's performance and the State's failure to provide evidence.
Issues: Whether the appeal was maintainable given the State's lack of standing in the arbitration and the delay in filing the appeal.
Ratio Decidendi: The court ruled that the appeal was not maintainable as the State was not a party to the arbitration agreement and had failed to file a timely appeal against the arbitral award.
Result: The appeal is dismissed.
JUDGMENT :
(Ritu Bahri, CJ.) :
There is a delay of 31 days in preferring the present Appeal. For the reasons stated in the application seeking condonation of delay, the delay of 31 days in preferring the present Appeal is condoned. Delay Condonation Application (IA/01/2024) stands allowed.
2. The State has come up in appeal, under Section 37 of the Arbitration and Conciliation Act, 1996 against the judgment and order dated 06.09.2023 passed by the Court of learned Additional District Judge, Commercial Court, Dehradun in Arbitration Case No. 136/2016, “UJVN Ltd.V. M/s Hydel Construction Pvt. Ltd. & Anr.”
3. An agreement dated 30.03.1981 was executed between the State of Uttar Pradesh and respondent no. 1 – M/s Hydel Construction Private Ltd. for construction of Head Race Tunnel from Dhanargad Intermediate Adit (From 4.5 Kms. to 12.0 Kms.) of Maneri Bhali Hydroelectric Project Stage-II in District Uttarkashi.
4. The State Government, later on, had stopped the work, after creation of the State of Uttarakhand. For again starting the work, a supplementary agreement was executed between the State of Uttarakhand and respondent no. 1 on 03.07.2022. This work was completed in the year 2007. After inspection, it was found that the safety wall for this work is required to be constructed immediately, and for doing this work an agreement dated 18.02.2008 was executed with respondent no.1, and a supplementary agreement was executed between the parties. The Uttarakhand Government on 11.08.2008 had transferred all the agreements and supplementary agreements to the plaintiff-company for the said work. The plaintiff-company is a company registered under the Companies Act, 1956. Since respondent no. 1 did not complete the work within time, on 22.09.2009 a letter was issued for increasing the machinery and labour on the site. Again, on 03.10.2009, the plaintiff asked respondent no. 1 to complete the work, but respondent no. 1 was not competent to complete the work. The petitioner, on the request of respondent no. 1, permitted M/s K.S. Construction & Company as sub-contractor, due to which the agreement was cancelled, and despite it respondent no.1 has not completed the work, and has not submitted the final bill.
5. Respondent no. 1 sought reference of the matter for arbitration to the Arbitral Tribunal on 30.12.2011. The appellant returned the bank guarantee to respondent no. 1, which had expired. The workload, machinery, equipments etc. deployed by respondent no. 1 had not been certified, and the Arbitral Tribunal, without any evidence, in the ratio of 2:1 has allowed the claim of respondent no. 1. The Respondent no. 2 took the following grounds before the Commercial Court :
b. The constitution of Arbitral Tribunal is flawed and the arbitral award in question is against the public policy of India sand against the provisions contained under Section 75 & 81 of the Act.
c. During the course of arbitration despite being requested the plaintiff has not been made as party, the plaintiff is necessary party in the arbitral award and the Arbitral Tribunal has violated by the public policy by not making the plaintiff as party.
d. The learned Arbitral Tribunal regarding the claim has committed the error by applying the formula. The learned Arbitral Tribunal in the minority award has mentioned that the guidelines of CWC shall not be applied.
e. The learned Arbitral Tribunal has wrongly considered the contentions of the parties.
f. The learned Arbitral Tribunal regarding the limitation has not framed any issues and the parties have not been provided with an opportunity to place forward their submission in that regard.
g. The learned Arbitral Tribunal has ignored the fact that the respondent no.1 has not produced any evidence regarding the labor deployed in the site, machiner
The court reinforced that strict compliance with limitation periods under the Arbitration and Conciliation Act is mandatory, and delays beyond the prescribed time cannot be condoned without adequate ....
The law of limitation applies equally to all parties, including the Government, and a lack of diligence in filing appeals can result in rejection of delay condonation applications.
The court adopted a liberal and justice-oriented approach in the matter of condonation of delay, allowing the delay of 23 days to be condoned as sufficient cause was explained by the DDA.
Point of Law : Merely because the appellant is Government organization, lenience cannot be shown to condone such a long delay.
The court emphasized a pragmatic approach in determining 'sufficient cause' for delays attributed to government entities, asserting equal application of limitation laws for all parties involved.
The law of limitation is a valid substantive law that extinguishes the right to appeal, and once an appeal is found to be barred by limitation, there is no obligation on the Court to consider the mer....
Appeal – Statutory time limit to file Appeal – Claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technol....
The court emphasized that appeals under the Arbitration Act must adhere to strict timelines, and administrative delays do not constitute sufficient cause for condonation of delay.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
