Delay In Filling Appeal Under Arbitration Act Cannot Be Condoned Without Good Reason: Allahabad High Court

While deciding an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, the Allahabad High Court has held that a delay in filling the appeal could not be condoned without finding compelling reasons for the same.

Appellant approached the High Court under Section 37 of the Act of 1996 after a delay of 393 days.

The Court relied on M/s N.V. International v. State of Asam and Ors. wherein the Apex Court added a grace period of 30 days to the standard period of 90 days available for filling an appeal under Section 37 of the Act. This was done keeping in mind the objective of speedy resolution of all arbitral disputes, which would have been the ultimate priority of the framers of the Act of 1996. However, the Supreme Court held that an inordinate delay of more than 120 days would not be liable to be condoned.

The Court relied on the judgement in Government of Maharashtra (Water Resources Department) Represented by Executive Engineer v. M/s Borse Brothers Engineers & Contractors Pvt. Ltd. where it was held that a delay in filling the appeal was to be allowed by way of an exception and not by way of rule.

“In a fit case in which a party has otherwise acted bona fide and not in a negligent manner, a short delay beyond such period can, in the discretion of the court, be condoned, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the first party's inaction, negligence or laches,” held the Apex Court.

Further, the Court relied on National Highway Authority of India v. Smt. Sampata Devi and Ors. where the Allahabad High Court concluded that delay in filling an appeal, beyond the permissible limit of 60 days, without any 'sufficient cause' as defined by Section 5 of the Limitation Act, would be held to be time barred.

Reliance was also placed on the judgement in Pathapati Subbah Reddy (Died) By L.Rs. and Ors. v. The Special Deputy Collector (LA) where the Supreme Court held that the law of limitation was based on a public policy that there would be an end to litigation by forfeiting the right to remedy rather than the right itself. It was also held that a right that had not been exercised for a long time would cease to exist after a period of time.

The Court held that since Arbitration Act was a legislation for speedy redressal, any delay in filing can be condoned only if a very strong case has been made by the appellant to do so and reasons for delay have been explained.

“The Supreme Court has deprecated the practice of taking lenient view and stated that just because the Courts, on earlier occasions, had taken lenient view would not entitle the appellants as a matter of right to be entitled to condonation of delay where no proper explanation was provided by them,” stated Justice Shekhar B. Saraf.

The Court observed that the only reason provided for the delay in filling the appeal was that counsel for the appellant had been suffering from serious illness. Additionally, no documents had been provided supporting the reasons given in the affidavit. Finding the contentions of the appellants to be without any rationale, the Court found no reason to condone the delay.

“In fact, it is crystal clear that the appellants have acted in a lackadaisical manner. It is clear that this appeal has been filed with a delay of 393 days. The filling of this appeal is a mere attempt to cloak the laissez faire attitude taken by the appellants,” held the Court.

Accordingly, the delay application was rejected and the appeal was consequently dismissed as being barred by limitation.

Case Title: Nirankar Dutt Tyagi and Anr. vs. N.H.I. Unit Dehradun and Anr. 2024 LiveLaw (AB) 323 [APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 593 of 2023 ]

Citation: 2024 LiveLaw (AB) 323

Counsel for Appellant: Pankaj Dubey, Santosh Kumar Srivastava

Counsel for Respondent: Pranjal Mehrotra

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