2018 Supreme(SC) 946

SUPREME COURT OF INDIA
N. V. Ramana, S. Abdul Nazeer, JJ.
P. RADHA BAI AND ORS. – APPELLANT(S)
VERSUS
P. ASHOK KUMAR AND ANR. – RESPONDENT(S)
CIVIL APPEAL NO(S). 7710-7713 OF 2013
Decided On : 26-09-2018

IMPORTANT POINTS
‘Express exclusion’ can be inferred either from the language of the special law or from the scheme and object of the special law.
Words ‘may not’ in section 34(3) should be understood to mean ‘cannot’.
Language of Section 34(3) tantamount to an “express exclusion” of Section 17.
Section 17 does not defer the starting point of limitation, it only postpones or defers the commencement of the limitation period.
In the context of section 34, Act 1996 limitation period commences from the date the Award is received by the party.

Headnote:(a) Limitation Act, 1963 – Section 29(2) – Applicability of sections 4 to 24 of the Act – Expression ‘express exclusion’ – Can be inferred either from the language of the special law or from the scheme and object of the special law. (Para 25, 30)

       [1964] 6 SCR 129; (1974) 2 SCC 133: [1964] 6 SCR 129; (2009) 5 SCC 791; (2001) 8 SCC 470; (2010) 5 SCC 23; (2004) 4 SCC 252 – Relied upon

       (2006) 6 SCC 239; (2008) 7 SCC 169; (2011) 1 SCC 117; (2016) 14 SCC 199 – Distinguished

       (b) Limitation Act, 1963 – Section 29(2) and 17 r/w section 34(3), Arbitration and Conciliation Act, 1996 – Section 29(2) prohibits application of Limitation Act to special Act if its provisions expressly exclude provisions of Limitation Act – Section 17 does not extend or break the limitation period – It only postpones or defers the commencement of the limitation period – Section 34(2) on the other hand providing a limitation period of three months from the date the party received the Arbitral Award – Words ‘may not’ in section 34(3) should be understood to mean ‘cannot’ – Use of the phrase “but not thereafter” in proviso to section 34(3) – Of a mandatory nature – Language of Section 34(3) tantamount to an “express exclusion” of Section 17 – Scheme and objects of Act 1996 also excludes section 17 by necessary implication – Extending Section 17 would go contrary to the principle of ‘unbreakability’ enshrined under Section 34(3). (Para 34, 35, 36, 38, 42)

       (2001) 8 SCC 470 – Relied upon

       [2003] SGHC 107 – Referred

       (c) Limitation Act, 1963 – Section 17 – Does not defer the starting point of limitation – It also does not encompass all kinds of fraud – Once a party becomes aware of the antecedent facts necessary to pursue a legal proceeding, the limitation period commences – In the context of section 34, Act 1996 limitation period commences from the date the Award is received by the party – Section 34 application is based on the award and not on the fraud of the respondent – Does not seek the relief of consequence of a mistake. (Para 44, 47, 49, 50)

       1950 SCR 852; (2001) 7 SCC 549; (2005) 4 SCC 239 – Relied upon

       Facts of the case:

       Originally one Mr. P. Kishan Lal carried on business and acquired several properties. On his death, Mr. P. Kishan Lal was survived by eight (8) legal heirs (Appellant Nos. 1 to 6 and Respondent Nos. 1 and 2).

       After the death of Mr. Kishan Lal, several disputes have cropped up on the division of properties. Patrtires went to arbitration.

       On 18.02.2010, the arbitrators passed a unanimous Award providing for the division of properties and businesses. The parties received the Award on 21.02.2010.

       After the pronouncement of the award, the Appellants entered into a Memorandum of Understanding (MoU) with the Respondents agreeing to give certain additional properties to Respondent No. 1, which were more than what were provided in the Award. After entering into the MoU, the Appellants were required to execute Gift and Release Deeds to give effect to the MoU. However, the Appellants delayed the execution of the Gift and Release Deeds as contemplated by the MoU.

       In the meanwhile, the three month period and the extended period of 30 days for challenging an Award under Section 34(3) of the Arbitration Act had expired. After the time limit expired, the Appellants filed an Execution Petition (EP) for execution of the Award. The trial court held that EP was not maintainable. On appeal, the High Court set aside the order of the trial court and held that the Execution Petition was maintainable and directed the trial court to decide it on merits.

       The Respondents on 08.02.2011 filed an application under Section 34(3) of the Arbitration Act for setting aside the Award. This filing was 236 days after the receipt of the Award by the Respondents. The application was accompanied by another application under Section 5 of the Limitation Act seeking condonation of the delay of 236 days.

       During the pendency of the aforesaid interim application, seeking condonation of the delay, the Respondents filed another application being I.A. No. 1977 of 2011 in I.A. No. 598 of 2011, seeking an order of the trial court to summon the Sub-Registrar to prove the veracity of the Memorandum of Understanding and to counter the allegations raised by the Appellants herein, as to the falsification and fabrication of the Memorandum dated 09.04.2010.

       Trial court dismissed the IA. No. 598 of 2011, pertaining to the condonation of delay in filing the Section 34 application.

       Respondents preferred four Civil Revision petitions, before the High Court. The High Court remanded the matter to the trial court concerning the applicability of Section 17 of the Limitation Act in an application under Section 34 of the Arbitration Act.

       Finding of the court:

       In the context of section 34, Act 1996 limitation period commences from the date the Award is received by the party.

       Result: Appeal allowed.