Liberty To File Fresh Application Not Fresh Cause Of Action, Limitation U/S 34(3) Of Arbitration Act Cannot Be Extended: Delhi High Court

Additionally, the court held that it is trite law that the statutorily prescribed period of 120 days under Section 34(3) of the Act, including the 30-day condonable delay, can be extended in no circumstances. Therefore, the application was clearly barred under Section 34(3) of the Act.

Brief Facts:

The appellant issued a tender inviting bids for renovation of its office and the respondent was awarded the contract for refurbishment and renovation. The value of the entire contract was initially fixed at Rs.3,65,00,000/- but was later reduced to Rs. 3,14,95,840/- and the work was to be completed within a period of 80 days. It was agreed between the parties that if the work was not completed by the respondent within the agreed 80 days, the appellant would be entitled to liquidated damages of Rs.5,00,000/- per day, a term which was also encapsulated in the contract. There was a delay of e 6½ days and liquidated damages of Rs. 32,50,000/- were levied on the respondent. After this, the respondent invoked arbitration and then the award was passed in favour of the respondent.

Aggrieved by the award, the appellant filed an application under Section 34 of the Act for want of pecuniary jurisdiction albeit with liberty to move an appropriate application before the appropriate Court. Then, the appellant, after waiting for over two months, chose to file a fresh application under Section 34 of the Act before the Trial Court. Thereafter, the Trial Court rejected the application on the grounds that it has been filed beyond the period of limitation as provided under the Act. Being aggrieved by the impugned order, the appellant filed an appeal under 37 of the Act to assail the order passed by the Trial Court.

Observation of the court:

The court held that mere liberty to file a fresh application before the competent Court does not amount to a fresh cause of action occurring in the appellant's favour. The relevant date(s) of the Award always remained unchanged, and therefore even after availing the benefit of the period under Section 14 of the Limitation Act, the appellant's application was barred by limitation. Therefore, despite the appellant being granted benefit of Section 14 of the Limitation Act for the entire period when its application under Section 34 of the Act remained pending before this Court. The fresh application, as filed before the Trial Court which was filed on the 134th day was clearly barred under Section 34(3) of the Act.

Further, the court held that the appellant's plea that even if the application before the Trial Court found to be barred for a delay of 14 days, this short period ought to have been condoned. Since the appellant being a government body, it was required to get various administrative approvals before filing the fresh application.

Moreover, the court held that it is trite law that the statutorily prescribed period of 120 days under Section 34(3) of the Act, including the 30 days condonable delay, can in no circumstance be extended. Therefore, the application filed on the 134th day was clearly barred under Section 34(3) of the Act. Finally, the court held the appeal being meritless and dismissed the applications.

Case Title: NATIONAL HEALTH AUTHORITY v. M S INTERMARC

Case Number: FAO (COMM) 137/2024

Counsel for the Petitioner: Mr. Sushil Kumar Pandey, SPC with Ms. Richa Pandey, Adv.

Counsel for the Respondent: Mr. Prasouk Jain, Ms. Shalini Nair and Mr. Rohan, Advs.

Date of Judgment: 12.11.2024

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