[Arbitration Act] Limitation Does Not Stop If Initial Filing Is Non Est, Date Of Filing Must Be Reckoned From Date Of Refiling: Delhi HC

Background Facts

The award under challenge was passed on 29.12.2023 and was served upon the parties by the Learned Sole Arbitrator on the same day at 1: 19 p.m. The limitation period of 3 months for filing the petition expired on 28.03.2024. The maximum condonable period of delay lapsed on 27.04.2024. The present petition under Section 34 of the Arbitration and Conciliation Act was first filed on 28.03.2024. The said petition was under objection on 01.04.2024; it was marked as defective and was sent for refilling. Subsequently, the petition came to be refilled on 29.06.2024.

Contentions

The Counsel for the Respondents took the preliminary objection to the maintainability of the present petition on the ground of delay and asserted that it was beyond the condonable period prescribed under Section 34(3) of the Arbitration and Conciliation Act. It was argued that the initial filing on 28.03.2024 was missing inter alia, impugned Award, Statement of Truth, Vakalatnama, signature of the party and counsel. Since it was not accompanied by a copy of the award, the filing was non est with defects being non-curable.

The first re-filing was made on 29.06.2024, i.e. after 89 days of delay from the date of first objection/defects i.e. 01.04.2024 and this date ought to be treated as the actual date of filing of the petition. It was further contended that the delay in re-filing also requires a satisfactory explanation, which is lacking, as the Petitioner's application for condonation of delay fails to present substantive grounds.

The Counsel for the Petitioner conceded that the initial filing was submitted without the award and other material documents. However, it was contended that this was due to an inadvertent error as the wrong/draft version of the petition was uploaded lacking the Award, Affidavits, Statement of Truth and other essential documents.

It was submitted that the delay in refilling of the petition was on account of DIAC's failure to provide copies of the arbitral records to the Petitioner in a timely manner. Since the delay was not attributable to the Petitioner but rather to the failure of the DIAC and the Arbitrator to furnish the requisite documents, the delay beyond the limitation period of three months and 30 days can be condoned and the Petition for setting aside the arbitral award should be heard.

The Petitioner placed reliance on the decision of this Court in Ambrosia Corner House Pvt. Ltd. v. Hangro S. Food 2023 SCC OnLine Del 517, to argue that in the said case, too, the initial petition was filed without any documents and the material documents, including the impugned arbitral award which came to be filed separately in Part IV of the paper book after the maximum condonable period from the date of receipt of the arbitral award had expired.

Observations

The Court observed that the issues that arise for consideration are whether the petition is liable to be dismissed due to the initial filing being non-est and whether the delay in filing/re-filing of the petition has been sufficiently explained.

The Court noted that while Section 34 of the Arbitration and Conciliation Act prescribes the grounds for making an application to challenge an award but does not specify any procedure for filing such an application. What amounts to a non-est filing is neither prescribed in the Arbitration and Conciliation Act nor in the Delhi High Court Rules.

The Court relied on its recent full bench decision in Pragati Construction Consultants v. Union of India and Another 2025 SCC OnLine Del 636, wherein it was observed that an initial filing is considered to be non est if the application under Section 34 Arbitration and Conciliation Act is so deficient so as not to be considered as a filing at all. Even if such a deficient filing is made within the period of limitation, the Court will not consider the same to have been filed in law and the period of limitation for filing the same shall not stop and shall continue to run. It was further observed that filing of the Arbitral Award under challenge along with the application under Section 34 of the Arbitration and Conciliation Act is not a mere procedural formality but an essential requirement and non filing of the same would make the application non est in the eyes of law.

Applying the law to the facts of the case, the Court was of the opinion that given the nature of defects pointed out by the Registry on 01.04.2024 and the Petitioner's failure to re-file the petition with the maximum condonable period of 3 days after 3 months, the petition filed on 28.03.2024 without the award was not a valid filing. The Court further observed that the only reasoning given by the Petitioner that the wrong file was inadvertently uploaded and the defects remained uncured despite the Registry's observations due to DIAC's failure to provide copies of arbitral award cannot be accepted.

The Court observed that the first/initial filing was therefore non est, implying that it could not be considered as filing in any sense. The initial filing being non est, the limitation time did not stop and the date of filing must be reckoned from the date of refiling, i.e., 29.06.2024, which was beyond the prescribed period of 3 months and 30 day. Lastly, the Petitioner had not satisfied the Court to invoke its inherent powers under Section 151, CPC.

Accordingly, the Petition was dismissed.

Case Title: Sudesh Hans v. Gian Chand Hans and Another

Citation: 2025 LiveLaw (Del) 281

Case Number: O.M.P. 5/2024

Appearance:

For Petitioner - Mr. Jinendra Jain, Mr. Harshit, Mr. Krishna, Ms. Bijay, Mr. Manoj Gautam and Mr.Manoj, Advocates

For Respondent - Ms. Sangeeta Sondhi & Mr. Daksh Jain, Advocates

Date: 25.02.2025

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