Arbitration Act Aims For Speedy Redressal, Delay In Filing Appeal Can Only Be Allowed If Party Makes Very Strong Case For Delay: Allahabad High Court

The Allahabad High Court single bench of Justice Shekhar B Saraf held that the Arbitration Act is a legislation for speedy redressal. Therefore, the delay in filing the appeal can only be allowed if the Appellant makes out a very strong case and explains the reasons for the delay. The High Court held that the Appellant didn't provide specific reasons for the delay or provide any document to explain the delay.

Brief Facts:

The Appellant approached the Allahabad High Court (“High Court”) and filed an appeal under Section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). The High Court dismissed the petition, noting that the petition was filed after a delay of four months. Feeling aggrieved, the Appellant filed an appeal under Section 37 of the Arbitration Act.

Observations by the High Court:

The High Court invoked settled legal principles established by the Supreme Court to address the issue of filing an appeal under Section 37 of the Arbitration and Conciliation Act. 

The High Court referred to the decision of the Supreme Court in M/s N.V. International v. State of Asam & Ors. and noted that the SC extended the statutory period of 90 days for filing appeals under Section 37 of the Arbitration Act by an additional grace period of 30 days, in accordance with Section 5 of the Limitation Act. However, the SC emphasized that delays exceeding 120 days were not eligible to be condoned.

Furthermore, the High Court referred to paragraph 61 of the SC judgment in Government of Maharashtra (Water Resources Department) Represented by Executive Engineer v. M/s Borse Brothers Engineers & Contractors Pvt. Ltd. [(2021) 6 SCC 460], which highlighted the imperative of speedy disposal in arbitration matters. The High Court held that delays beyond specified periods should be condoned only in exceptional cases, considering factors such as the party's bona fide actions and absence of negligence.

Further, the Supreme Court in Pathapati Subba Reddy (Died) By L.Rs. & Ors v. The Special Deputy Collector (LA) held that while courts may consider factors such as substantial justice, the discretion to condone delays remains discretionary and should not be exercised arbitrarily. The SC stressed that delay condonation applications must adhere to statutory provisions and should not be granted solely based on the imposition of conditions.

The High Court held that the Arbitration Act's purpose is to make an expeditious resolution and that the delay in filing appeals could only be permitted under compelling circumstances with adequate justification. It held that the reasons provided for the delay by the Appellant were unsubstantiated, lacking specificity, and devoid of supporting documentation. It held that the explanation offered, regarding the failure of counsel to inform the department about the order, was insufficient to warrant delay condonation.

Consequently, the High Court dismissed the appeal.

Case Title: National Highways Authority Of India vs Shri Krishna Uchchter Madhyamic Vidhyalaya And 2 Others 2024 LiveLaw (AB) 270

Citation: 2024 LiveLaw (AB) 270

Case Number: APPEAL UNDER SECTION 37 OF ARBITRATION AND  CONCILIATION ACT 1996 DEFECTIVE No. - 108 of 2024 

Advocate for the Appellant: Dhananjay Awasthi 

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