Section 5 Limitation Act Cannot Be Invoked To Condone Delay Beyond Period Prescribed U/Sec 34(3) Arbitration Act: Supreme Court

The Supreme Court, in a judgment delivered last month (16th December 2021), held that Section 5 of Limitation Act cannot be applied to condone the delay beyond the period prescribed under Section 34(3) of  Arbitration and Conciliation Act, 1996.

In this case, petition under Section 34 was filed before the High Court with a delay of 185 days beyond the time period allowed under Section 34 (3) of the Act. The singe judge refused to condone the delay. In appeal, the Division Bench condoned it and directed to place it before Single bench for admission. This order was assailed before the Supreme Court.

Thus the question of law before the Apex Court was whether the delay is condonable by exercise of power under Section 5 of Limitation Act?

Section 34(3) provides that an application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

Referring to the judgments in Union of India vs. Popular Construction Co. (2001) 8 SCC 470 Himachal Pradesh & Anr. vs. Himachal Techno Engineers & Anr. (2010) 12 SCC 210 ,  P. Radha Bai vs. P. Ashok Kumar (2019) 13 SCC 44 and Chintels India Limited vs. Bhayana Biuilders Private Limited (2021) 4 SCC 602, the bench comprising CJI NV Ramana, AS Bopanna and Hima Kohli observed:

"The scope available for condonation of delay being self contained in the proviso to Section 34(3) and Section 5 of Limitation Act not being applicable has been taken note by this Court in its earlier decisions, which we may note.."

The court noted that the Division bench of the High Court relied on Collector, Land Acquisition, Anantnag and Another vs. Mst. Katiji and Others AIR 1987 SC 1353 to condone the delay. Allowing the appeal, the bench observed thus:

No ­doubt the delay of 197 days may not seem too inordinate. In appropriate cases the delay is to be condoned so as not to defeat the meritorious case. However, that would arise only when the power under Section 5 of Limitation Act is available to be exercised. The case of Katiji (supra) is one where such power was available to be exercised as it was not excluded. In the instant case where limitation is prescribed, the extent to which it can be condoned is circumscribed and it has been held by this Court that Section 5 of Limitation Act is not applicable to condone the delay beyond the period prescribed under Section 34(3) of Act 1996, the learned Division Bench was not justified in condoning the delay in a casual manner. The order dated 24.09.2012 is not sustainable, the same is therefore set aside and the order of learned Single Judge is restored

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