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2012 Supreme(MP) 1177

MADHYA PRADESH HIGH COURT AT JABALBUR BENCH
J.K.Maheshwari, J.
Union of India - Appellant
Versus
Naveen Kumar Contractors & Suppliers - Respondent
Arbitration Appeal No. 16-2011
Decided On : 21-12-2012

Advocates Appeared:
Mr. S.K. Menon, Advocate for the Appellant
Mr. Akhilesh Jain, Advocate for the Respondent.

The main legal point established in the judgment is the strict adherence to the time limits prescribed under Section 34(3) of the Arbitration and Conciliation Act, 1996, and the exclusion of the applicability of Section 5 of the Limitation Act for condonation of delay beyond the specified period.

Headnote:

Arbitration and Conciliation Act - Construction Dispute - Section 34 of the Act - 2, 5, 12, 14, 29, 31, 32, 33, 34, 43 of the Arbitration and Conciliation Act, 1996

Fact of the Case:

The appellant filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an arbitral award. The application was rejected by the Trial Court as time-barred, and the appellant appealed the decision.

Finding of the Court:

The Court found that the application was filed after the prescribed period of limitation and the extended period, and the contention raised by the appellant was based on afterthought. The Court held that the appeal was devoid of substance and dismissed it.

Issues: The main issue was the timeliness of the application under Section 34 of the Act and whether the delay in filing the objection could be condoned.

Ratio Decidendi: The Court emphasized the provisions of Section 34(3) of the Act, which specifies the time limit for filing an application to set aside an arbitral award. The Court also considered the applicability of Section 5 of the Limitation Act and the interpretation of the term 'party' as defined in Section 2(h) of the Act.

Final Decision: The Court dismissed the appeal, holding that the objection filed by the appellant was time-barred and the contention raised was based on afterthought.

JUDGMENT :

Being dissatisfied by the order dated 6-7-2010 passed by the 11th Additional District Judge, Bhopal dismissing the application filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (for brevity, it be referred to as "the 1996 Act"), this appeal has been preferred under Section 37 of the Act.

2. The respondent was entrusted with the work of construction of 30 bedded hospital at Sagar, Madhya Pradesh vide letter dated 22-9-2003 for an amount of Rs. 2,58,95,958/- which was 5.59% below the estimated cost of Rs. 2,75,35,703/-. An agreement was executed on behalf of the Central Government by the Executive Engineer, CPWD, Division-II, Bhopal and the contractor. The date of completion of the work was specified as 1-4-2005. On account of non-completion of the work within the time the dispute arose. By the application raising various claims a dispute was raised by the contractor before the Chief Engineer as per Clause 25 of the agreement. The Chief Engineer has referred the dispute appointing the Arbitrator for 8 claims. The Arbitrator after receiving the reply and the counter reply passed the award on 15-10-2009. On perusal of the contents of the application filed under Section 34 of the Act before the Additional District Judge, Bhopal, Para 12 in the grounds, it is clear that certified copy of the award was received by the Executive Engineer on 20-10-2009. The objection was filed on 22nd day of February, 2010, i.e., on 125th day. The application under Section 5 of the Limitation Act was also filed, but the Trial Court rejected the said objection as barred by limitation in view of the proviso to sub-section (3) of Section 34 of the Act. It has been observed that the power of condonation of the delay on having sufficient cause is available after 90 days upto the extended period of thirty days, "but not thereafter" and the application has been filed after 120 days, accordingly dismissed the objection as time barred by the order impugned.

3. Learned Counsel appearing on behalf of the appellant contends that as per Section 2 (h) of the Act party to an arbitration agreement may prefer objection for setting aside the award passed by the Arbitrator within a period of 90 days. Referring CPWD Manual Clause 35, it is contended that the Chief Engineer is the authority to take a decision about the acceptance of the award or its challenge, however, party to the agreement is the Chief Engineer and the Executive Engineer who must have received the award because the power to take decision of filing objection is with the Chief Engineer. The Chief Engineer received the arbitral award on 12-11-2009 vide letter of the Superintending Engineer dated 11-11-2009, therefore, the date of receipt ought to be accepted as 12-11-2009 and from the said date the objection filed by the appellant is within the extended period of limitation to which sufficient ground to condone the delay is available in the facts of the present case, therefore, delay in filing of the objection under Section 34 of the Act may be condoned and it may be decided on merit. To buttress the aforesaid contention reliance has been placed on a judgment of Hon'ble the Apex Court in the case of Union of India Vs. Tecco Tricky Engineers and Contractors, 2005 Arb. W.L.J. 219 (SC) = AIR 2005 SC 1832. In view of the foregoing, it is urged that on condoning the delay in filing objection the order impugned passed by the Trial Court may be set aside and the matter may be remitted back to decide the objection on merit.

4. Per contra, Shri Akhilesh Jain, learned Counsel appearing on behalf of the respondent has strenuously urged that the argument so advanced by the appellant is unsustainable in law. Drawing my attention to the pleadings raised in the application filed under Section 34 of the Act, it is contended that copy of the arbitration award dated 15-10-2009 was admittedly received on 20-10-2009 by the Executive Engineer, who was a party to the proceeding, but lat




































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