Petition Filed After Expiry Of Limitation Period U/S 34(3) Of Arbitration Act Cannot Be Entertained Unless Sufficient Cause Is Shown: Himachal Pradesh HC

Brief Facts

Award was passed on 06.11.2023 in favour of the non-applicant/respondent by the learned Sole Arbitrator. The State of Himachal Pradesh, feeling aggrieved against the aforesaid award, has preferred objections under Section 34 of the Arbitration & Conciliation Act, 1996. These objections have been preferred twenty-four days beyond the period of three months prescribed under Section 34(3) of the Act. Hence, this application has been moved for condoning the delay in filing the objections under Section 34 of the Act.

Signed copy of the award was received by the applicants/objectors on 07.11.2023 itself. Three months' period available under Section 34 (3) of the Act for preferring objections against the award lapsed on 07.02.2024. The objections were preferred on 02.03.2024 i.e. on 114th day from the date of passing of the award or in other words 24th day after the expiry of three months' period from the date of receipt of the award.

Submissions:

The applicants submitted that after receipt of the signed copy of the award on 07.11.2023, applicant No.3, Executive Engineer, District Shimla, H.P., vide his letter dated 29.01.2024, submitted a copy of the award to the office of the Engineer-in-Chief, HPPWD, Shimla or further necessary action.

That the matter was examined at the Government level in consultation with Law Department. The opinion of Law Department was conveyed by the applicant No.1-State of HP through Principal Secretary (Public Works) on 21.02.2024. In view of above, it was submitted that the delay in filing the objections was neither intentional nor willful but had taken place for the reasons beyond the control of the applicants/objectors. Prayer was made for condoning the delay.

The respondent/non-applicant submitted that no justifiable cause has been assigned by the applicants/objectors for taking about two months in mere forwarding the signed copy of the award dated 06.11.2023 to the Superintending Engineer and that sufficient cause has not been shown by the applicants/objectors in order to condone the delay in moving the objections. Prayer was made to dismiss the application.

Observations:

The court, at the outset, noted that as per Section 34 (3) of the Act, objections can be filed against the arbitral award within a period of three months from the date of receipt of the award or from the date of disposal of the request made under Section 33 of the Act. In terms of the proviso to Section 34(3) of the Act, in case the Court is satisfied that the applicant was prevented by sufficient cause from making the application against the arbitral award within the prescribed period of three months, it may entertain the application within a further period of thirty days, but not thereafter.

The court further noted that objections were not preferred within the prescribed period of three months from the date of receipt of the arbitral award. The objections are, however, within the further period of thirty days, which can be made available to a party in given facts and circumstances, in terms of proviso to Section 34(3) of the Act.

The court noted that in State of West Bengal represented through Secretary & Ors. Vs. Rajpath Contractors and Engineers Ltd., 2024 the Supreme Court has held that the application of sections 4 and 5 of the Limitation Act have been excluded to the petition under section 34 of the Arbitration Act therefore the delay has to be condoned in light of proviso to section 34(3) of the Act on sufficient cause being shown.

The court referred to another judgment of the Supreme Court in P. Radha Vs. Bai and others Vs. P. Ashok Kumar and another, 2019 wherein it was held that Section 34 is the only remedy for challenging an award passed under Part-1 of the Act. Section 34(3) of the Act contains Limitation provision, which is inbuilt into the remedy provision. One does not have to look at the Limitation Act or any other provision for identifying the limitation period for challenging an award passed under Part–I of the Arbitration Act

In Government of Maharashtra (Water Resources Department) Represented by Executive Engineer. Vs. Borse Brothers Engineers and Contractors Private Limited, 2021 the Supreme Court has held that different yardstick for condonation of delay cannot be laid down merely because Government is involved. No special treatment can be accorded to the Government from the provisions of Section 34 of the Act, the court noted.

In the instant case, the court noted that the applicants are not just required to show sufficient cause for the period of twenty-four days beyond the prescribed period of three months, they are mandated by the proviso to Section 34(3) of the Act to explain as to why the objections could not be preferred within the prescribed period of three months.

The court concluded that since no cause much less sufficient cause was shown by the applicant for the delay in sending the signed copy of the award after its receipt to the relevant authority for taking further actions, delay cannot be condoned as per proviso to section 34(3) of the Act.Accordingly, the present application was dismissed.

Case Title: Engineer-in-Chief & Ors. Versus Dev Raj

Case Reference:OMP(M) No. 25 of 2024 in Arb. Case No. 851 of 2024

Judgment Date: 22/11/2024

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