Tossing Award File From One Table To Other By State Not Enough To Condone Delay ; Himachal Pradesh High Court

Brief Facts:

The objectors/applicants, State of Himachal Pradesh, filed an application under Section 34(3) of the Arbitration and Conciliation Act seeking condonation of delay in filing their objections under Section 34(1) of the Arbitration Act. The dispute revolved around an arbitral award rendered on 11.10.2023. This award dismissed both the claim of the M/s Mengi Engineering Company, respondent/non-applicant, and the counter-claim of the objectors/applicants. Regarding the counter-claim submitted by the objectors/applicants, the Arbitrator held that the cause of action had arisen on 13.11.1989 while the counter-claim itself was filed much later.

The objectors/applicants argued that it received a signed copy of the award dated 11.10.2023 on 27.10.2023. Due to the prolonged rainy season that lasted until October 2023, the staff of the Department were engaged in fieldwork for road restoration which resulted in delays in addressing the case file. Additionally, an amended award dated 14.12.2023 was received by the objectors/applicants on 26.12.2023. The process of seeking government opinion on the matter began on 29.02.2024 when objector/applicant No.2 submitted the case file to the Superintending Engineer. This file was subsequently forwarded to the Chief Engineer, HPPWD (SZ) and it underwent examination in the Legal Cell of the Engineer-in-Chief's office before being submitted to the Law Department. After further examination at the government level, the Law Department's opinion was communicated to objector/applicant No.1. The Engineer-in-Chief's office then informed objector/applicant No.2 of the government's decision. Following this, draft objections were submitted to the Legal Cell on 23.03.2024, vetted on 01.04.2024, and were eventually filed on 06.04.2024.

Observations by the High Court:

The High Court found the explanations provided in the application to be insufficient for justifying the delay. It held that the Applicants, who were challenging the award passed by the Arbitrator, did not present a convincing argument to excuse its tardiness.

The High Court noted that Section 34 of the Arbitration Act states a three-month period for filing objections from the date of receipt of the award. The award was dated 11th October 2023 and was received by the Applicants on 27th October 2023. Therefore, it held that the deadline for filing objections was 24th January 2024. An additional period of 30 days, which could have been extended, lapsed on 23rd February 2024. The objections were, however, filed only on 6th April 2024, well beyond the prescribed period.

The High Court held that the Applicants attempted to leverage the receipt of a signed copy of the amended award dated 14th December 2023 to explain its delay. However, the High Court noted that this amendment was merely a corrigendum issued to correct typographical errors in the original award, which was not a substantive change to the award itself. The corrigendum was received by the applicants on 26th December 2023, but even from this date, there was an additional delay of 11 days beyond the three-month limitation period.

The High Court held that the Applicants didn't provide a cogent explanation for its delay in filing the objections. Consequently, the Application to condone the delay lacked merit. Therefore, the application was dismissed by the High Court.

Case Title: State of H.P. and another vs M/s Mengi Engineering Company

Case Number: OMP(M) No.26 of 2024 a/w Arb. Case No.790 of 2024

Advocate for the Applicant: Mr. L.N. Sharma, Additional Advocate General with Ms. Leena Guleria, Deputy Advocate General.

Advocate for the Respondent: Nemo

Date of Judgment: 9^th Sept

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