The Benefit Of Section 14 Of The Limitation Act Can Be Invoked For Exclusion Of Time In A Proceeding Under Section 34 Of The Arbitration And Conciliation Act: Calcutta High Court

Brief Facts:
Baid Power Services Private Limited (Petitioner) entered into an agreement with the Bihar Medical Services and Infrastructure Corporation Limited (Respondent) on April 15, 2014 for the supply of equipment, which allegedly did not function properly.

The Respondent filed a case under Section 18(1) of the Micro, Small and Medium Enterprises Development (MSME) Act. The MSME Facilitation Council passed an ex parte award on May 12, 2021, recording no settlement.

The Respondent, challenging the award, filed a writ petition instead of an appeal due to the onerous requirement of depositing 75% of the awarded amount under the MSME Act. The writ petition was dismissed on the ground of availability of an efficacious alternative remedy by way of challenge under Section 34 of the 1996 Act. The Respondent sought exclusion of the time taken during the writ petition from the limitation period for filing an application under Section 34.

Observations:
The Court considered whether the time spent pursuing a writ petition could be excluded from the limitation period for filing an application under Section 34 of the Arbitration and Conciliation Act, 1996. The Court, relying on the Judgment of the Supreme Court in Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department [(2008) 7 SCC 169], observed that “the benefit of Section 14 of the Limitation Act can also be invoked for exclusion of time in a proceeding under Section 34 of the 1996 Act.”

The Court affirmed that the onerous nature of the alternative remedy in the perception of the petitioner was sufficient justification for it to bona fide approach the writ court. The Court referred to the case of Himmatlal Harilal Mehta v. State of Madhya Pradesh and Ors. [AIR 1954 SC 403], where the Supreme Court observed that if the remedy provided by an Act is of an onerous and burdensome character, a writ petition may be maintained under Article 226 of the Constitution.

The Court noted that there are a plethora of judgments of the Supreme Court which lay down that in cases of gross jurisdictional error, the writ jurisdiction cannot be completely shut out despite the availability of an alternative remedy. Further, the Court observed that “inherent lack of jurisdiction is an issue which can be raised at any point of time and might not be waived by any of the parties to the dispute.”

The Court, relying upon Section 14 of the Limitation Act, held that the period spent by the petitioner in proceeding with the writ petition before the learned Single Judge is excluded from the limitation period in preferring the application under Section 34 of the 1996 Act. Thus, the Court deemed the challenge to have been filed within the statutory limitation period.

The Court listed AP 757 of 2023 along with GA 2 of 2023, AP 758 of 2023 and EC 5 of 2024 for hearing on September 24, 2024.

Case Title: Baid Power Services Private Limited vs The Bihar Medical Services and Infrastructure Corporation Limited

Case Number: EC/5/2024, AP/757/2023, AP/758/2023

Date of Order: 06.09.2024

Appearance: Mr. Umesh Prasad Singh, Sr. Adv., Mr. Kumar Manish, Adv., Mr. Surendra Kumar, Adv., Ms. Amrita Pandey, Adv. (for Baid Power Services Private Limited)

Mr. Pranit Bag, Adv., Mr. Anuj Mishra, Adv., Mr. R. R. Modi, Adv., Mr. Anousko Das, Adv. (for The Bihar Medical Services and Infrastructure Corporation Limited)

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