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2024 Supreme(Online)(DEL) 11080
HIGH COURT OF DELHI
VIBHU BAKHRU, Tara Vitasta Ganju, JJ
MYPREFERRED TRANSFORMATION AND HOSPITALITY PVT LTD & ANR. – Appellant
Versus
FARIDABAD IMPLEMENTS PVT. LTD. – Respondent
FAO(OS)(COMM) No.67/2023
For the Appellants/Petitioners:Mr. Rajiv Nayar, Sr Advocate, Mr. Harsh Kaushik, Ms. Adrija Mishra, Mr. Saurav Seth
For the Respondents: Mr. Simran Mehta, Mr. Prakash Chand
The court clarified that delays beyond the prescribed period under the Arbitration and Conciliation Act cannot be condoned, even if the last day falls on a holiday, distinguishing between prescribed and discretionary periods.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34(3) - General Clauses Act, 1897 - Delay in filing application for setting aside arbitral award - Application dismissed as it was filed beyond the condonable period of thirty days - Court held it could not condone the delay as it exceeded the permitted timeframe, despite claims of closure during vacation affecting the filing date. (Paras 3, 10, 30)
(B) Limitation - The 'prescribed period' for limitation does not include the condonable period as per Section 34(3) of the A&C Act - Applicability of Section 10 of the General Clauses Act was rejected as it does not apply to periods governed by the Limitation Act. (Paras 24, 28)
(C) Judicial Precedent - The court reaffirmed the binding nature of previous judgments and clarified the distinction between prescribed periods and discretionary condonable periods. (Paras 27, 29)
Facts of the case:
The appellants sought to set aside an arbitral award issued on 04.02.2022, but their application was filed on 04.07.2022, beyond the thirty-day condonable period due to court closures.
Findings of Court:
The delay in filing the application could not be condoned as it was beyond the permissible timeframe.
Issues: Whether the delay could be condoned if the last day for filing fell on a court closure day.
Ratio Decidendi: The court ruled that the delay could not be condoned based on the interpretation of the A&C Act and the General Clauses Act, emphasizing the binding nature of prior judgments.
Result: Appeal dismissed.
VIBHU BAKHRU, J.
1. The appellants have filed the present appeal under Section 37(1)(c) of the Arbitration & Conciliation Act, 1996 (hereafter the A&C Act) impugning a judgment dated 07.02.2023 (hereafter the impugned judgment) passed by the learned Single Judge in OMP(COMM) No.316/2022 captioned Mypreferred Transformation & Hospitality Pvt. Ltd. & Anr. v. Faridabad Implements Pvt. Ltd. Page 2 of 16
2. The appellants had filed the aforementioned petition [OMP(COMM) No.316/2022] on 04.07.2022 for setting aside the Arbitral Award dated 04.02.2022 (hereafter the impugned award). Concededly, the petition was filed beyond the period of limitation as prescribed under Section 34(3) of the A&C Act. Accordingly, the appellants had filed an application (IA No.11689/2022) seeking condonation of delay in filing the above petition.
3. The learned Single Judge found that the Court did not have the power to condone the delay as it exceeded the period of thirty days and accordingly, dismissed the said application. Consequently, the appellants’ petition for setting aside the impugned award also stood rejected.
4. It is the appellants’ case that the period of thirty days after the expiry of the period of limitation – which was the outer limit of the delay that could be condoned by the Court – expired when this Court was closed for vacations, therefore, the said period stood extended to the date on which the Court reopened after vacations. The appellants claim, on the strength of Section 10 of the General Clauses Act, 1897 (hereafter the General Clauses Act), that their petition was filed within a period that could be condoned by the Court, as it was filed immediately on reopening of the Court after summer vacations.
5. Thus, the only controversy that requires to be addressed is whether the delay of thirty days that can be condoned by the Court in terms of the proviso to Section 34(3) of the A&C Act, would stand Page 3 of 16 extended to the next date on which the Court reopens, if the last day of the period of thirty days falls on a date when the Court is closed.
6. Before proceeding to consider the rival contentions and address the controversy, it is relevant to note the factual context in which the present controversy arises.
7. The Arbitral Award sought to be impugned by the appellants was rendered on 04.02.2022. A scanned copy of the impugned award was sent by an e-mail to the appellants on the said date. However, the appellants claim that the signed award (hard copy) was received on 14.02.2022. For the purpose of addressing the controversy, it is assumed that the impugned award was delivered to the appellants on 14.02.2022.
8. In terms of Section 34(3) of the A&C Act, an application for setting aside an arbitral award may be made within a period of three months from the date of receipt of the award. Thus, the application under Section 34 of the A&C Act to set aside the impugned award was required to be made within a period of three months from 14.02.2022, that is, on or before 14.05.2022. However, by virtue of the order dated 10.01.2022 passed by the Supreme Court in Suo Motu Writ Petition (C) No.3/2020 – In Re: Cognizance for Extension of Limitation, in cases where the period of limitation expired during the period between 15.03.2020 till 28.02.2022, the same was extended for a period of ninety days from 01.03.2022. Page 4 of 16
9. It is relevant to note that there is no cavil that the period of limitation for filing the petition is three calendar months from the date of receipt of the impugned award and therefore, it expired on 14.05.2022. However, by virtue of the order dated 10.01.2022 passed by the Supreme Court, further ninety days from 01.03.2022 (and not three months) were available to the appellants to file a petition to assail the impugned award. The said period expired on 29.05.2022.
10. This Court closed for summer vacations from 04.06.2022 to 03.07.2022. The appellants filed the petition on 04.07.2022, being the fi
