Sufficiency Of Reasons Over Number Of Days Is Considered While Determining Plea Of Condonation Of Delay U/S 37(1)(2) Of Arbitration Act: Delhi HC

Brief Facts:

The present appeal has been filed under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 to assail an order passed by the Single Judge, whereby he has dismissed the appellant's application seeking setting aside the Arbitral Award. The appeal was also accompanied by two applications, the first seeking condonation of 670 days delay in filing the appeal and the second 591 days delay in re-filing the appeal. The appellant initially filed an appeal with liberty to the appellant to file a review petition. Consequently, a review petition was filed by the appellant which was dismissed on 16.04.2021. Then the appellant filed the present appeal eighty days after the rejection of their review petition.

The appellant contended that the review petition and the appeal having been filed within 80 days from the dismissal of the review petition. So, it could be treated as barred by delay of 20 days, by excluding the sixty days time prescribed for filing an appeal. Therefore, this short delay should be condoned. However, the respondent argued that the appellant has given absolutely no justification for the delay in filing the appeal 80 days after the date of dismissal of its review petition as also of the inordinate delay in re-filing of the appeal.

Observation of the court:

The court observed that the appellant has miserably failed to show any cause, much less any 'sufficient cause' and/ or plausible reason to condone the inordinate delays of prolonged periods of 670 days delay in filing the appeal and 591 days delay in re-filing the appeal before the court. The reasons adduced by the appellant to explain the delay, both in filing and re-filing of the appeal, are extremely vague and cryptic and clearly show an absolutely casual approach adopted by the appellant in filing the appeal.

Moving further, the court held that the present appeal has been filed under Section 37 of the Act and arises out of a commercial dispute, where the parties are expected to act with utmost promptitude. And the appellant was expected to act diligently in filing the present appeal within the statutory period.

Then, the court relied on the judgment of the Supreme Court in Government of Maharashtra vs. M/s. Borse Brothers Engineers and Contractors Pvt. Ltd. (2021), wherein the court has summarized the position qua condonation of delay in a matter under the Act, which is permissible only in exceptional circumstances.

Thereafter, the court held that the appellant failed to demonstrate any plausible reasons for the delay caused in filing the present appeal. Also, there was not any exceptional circumstance(s) which precluded the appellant from filing the present appeal during the prescribed statutory period. The same is of vital importance as it is not merely the number of days of delay, which would be material for considering the application seeking condonation of delay, but it is the sufficiency of reasons for the delay which would be relevant to determine whether the delay should be condoned.

Finally, the court dismissed the appeal along with the applications because the reasons set out by the appellant for seeking condonation of delay(s), both, of 670 days delay in filing the appeal and 591 days delay in re-filing the appeal respectively cannot be falling within the category of either 'sufficient cause' or 'exceptional circumstances'.

Case Title: M/S SATYADHARA COMMUNICATIONS PVT LTD v. M/S INDIASIGN PVT LTD

Case Number: FAO(OS) (COMM) 66/2023

Counsel for the Appellant: Mr. Abid Ali Beeran, Adv appeared through VC

Counsel for the Respondent: Mr. Gaurav Kejriwal, Mr. Anmoldeep Singh and Mr. Happy Chaubey, Advs

Date of Judgment: 16.12.2024

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