Limitation For Appeal U/S 37 Of Arbitration Act Is Governed By Article 116 Of Limitation Act, Delay Not To Be Condoned In Mechanical Manner: Bombay HC

It also held that as per judgment of the Supreme Court in Executive Engineer v. Borse Brothers Engineers and Contractors Private Limited (2021), the limitation period under section 37 of the Arbitration Act is governed by Article 116 of the Limitation Act, 1963 (“Limitation Act”) which provides for a 90 days time period. The delay in filing the appeal beyond 90 days can be condoned under section 5 of the Limitation Act but only when sufficient cause is demonstrated.

Brief Facts:

The present application has been filed seeking condonation of delay in filing the appeal under section 37 of the Arbitration and Conciliation Act,1996 (Arbitration Act).

Contentions:

The applicant submitted that the proceedings under Section 34 of the Arbitration Act had been handled by a local advocate in the District Court, and due to internal procedures and multiple stakeholders being involved, the impugned judgment could not be challenged in time.

It was also argued that the present advocates were approached with the complete record of the lower Court proceedings. Transferring the papers from Ratnagiri and re-building the paper trail was difficult therefore the delay should be condoned.

Per contra, the respondent submitted that it is the very same advocate that handled proceedings before the District Court who has filed the present Appeal and the Interim Application for condonation of delay and the application is per se a mis-statement therefore on this ground alone the conduct being inequitable, the delay should not be condoned.

It was also argued that the Supreme Court in Mahanagar Telephone Nigam V/s. State of Maharashtra & Ors.(2013) held that a party which files misleading submissions should not be given the benefit of condonation of delay. The condonation of delay being an equitable remedy, the inequitable conduct would erode the credibility of the person indulging in it.

Observations:

The court at the outset observed that the case set up by the appellant rests on a false foundation as the present appeal has been filed by the same advocates who handled the case at the district court under section 34 of the Arbitration Act.

It further observed that the appellant being a state agency must be more cautious while filing an appeal and special treatment cannot be given to the appellant just because it is a government entity.

The court noted that the Supreme Court in Borse Brothers (supra) and Postmaster General v. Living Media (India) Ltd. (2012) held that delay cannot be condoned in a mechanical manner when the delay in filing the appeal is caused by the appellant who was well conversant with the case including the arm of the state government cannot wriggle out of this.

The court further observed that after the Supreme Court judgment in Borse Brothers (supra), the limitation period prescribed under Article 116 of the Limitation Act would govern the appeal under section 37 of the Arbitration Act. As per this article, the appeal has to be filed within 90 days. The delay can be condoned on the sufficient cause being shown under section 5 of the Limitation Act.

However, the Apex Court observed that while condoning the delay under this section, the court must also consider the objective of the Arbitration Act which is to promote swift resolution of disputes.

It also said that considering the swift resolution of disputes provided by Arbitration, the parliament has consciously chosen the compensation matters arising from the National Highways Act, 1956 (“NH Act”) to be governed by the Arbitration Act.

The court concluded that in light of the above discussion, the court cannot condone a delay of 124 days in filing the present appeal. Accordingly, the present application was dismissed.

Case Title: Executive Engineer National Highway Division Versus Sanjay Shankar Surve & Ors

Citation: 2025 LiveLaw (Bom) 61

Ms Kajal Gupta a/w. Shweta Singh i/b. M.V. Kini & Co., Advocate for Applicant/Appellant.

Ms Revati Desai i/b. Chetan Mali, Advocate for Respondents.

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