Special Treatment Cannot Be Given To Govt For Delay In Filing Appeal U/S 37 Of Arbitration Act: Delhi High Court

The Delhi High Court bench of Ms. Justice Rekha Palli and Mr. Justice Saurabh Banerjee has affirmed that just because the appellant is government that doesn't mean that a special treatment will be given while condoning the delay in filing the appeal under section 37 of the Arbitration Act.

Brief Facts

This appeal has been filed under section 37 of the Arbitration Act challenging the order passed by the learned Single Judge. The Ld. single judge has rejected the petition under section 34 of the Arbitration Act. Along with the appeal, a delay condonation application has also been filed.

Contentions

The appellant submitted that though the application inadvertently mentions 121 days, the appeal is barred only by 112 days. In support of the application she submits that the delay in filing of the appeal has occurred primarily because of the procedural delays involved in filing an appeal on behalf of the Union of India (UoI). Furthermore, the filing of the appeal was also delayed for about thirty days during which period she was attending to her ailing father.

That In M/s Jaitely Construction Co. v. Union of India (2023) the Apex Court while condoning the delay of 244 days in preferring an appeal under Section 37 of the Act, has clarified that in exceptional cases the delay in filing an appeal under Section 37 can be condoned even beyond the stipulated period of limitation

Per contra, the respondent submitted that the delay in filing an appeal under section 37 of the Act can be condoned even beyond the period of limitation does not imply that the inordinate delay of 112 days can be condoned without sufficient cause being shown.

That even if the 30 days period during which the learned counsel for the appellant claims she was under a personal difficulty were to be ignored, the appeal would still be barred by 82 days for which there is no justifiable explanation.

That that it is trite law that in a matter pertaining to the Arbitration and Conciliation Act as also those pertaining to the Commercial Courts Act, condonation of delay in filing an appeal can be granted by way of an exception and not by way of a rule. Furthermore, merely because the appellant is the UoI, it cannot claim that a lenient view should be adopted.

Court's Analysis

The court went through the sequence of events leading to delay in filing the present appeal and noted that even though the impugned order was passed on 31.07.2023, the case file was handed over to the Government counsel only on 12.09.2023, when 42 days out of the 60 days of the limitation period had already expired.There is no explanation for the period from 03.10.2023 to 25.10.2023 on which date, learned counsel for the appellant had urged that her father became unwell and therefore, she could not devote time to draft the appeal till 17.11.2023 on account of her father's ill health.

After getting out of the personal difficulty, the counsel for the appellant started drafting the present appeal then it was realised that more documents were required in which a significant time was lost and the appeal could only be filed on 24 January, 2024.

This explanation of the appellant did not convince the court which observed that in our considered view, the explanation for the remaining 82 days of delay is absolutely sketchy and vague.

The contention of the appellant that being a government entity, it should be given a special treatment as it required prior approvals before an appeal could be filed which led to the unnecessary delay. However, this argument was also not accepted by the court and the court observed that “this cannot imply that despite these approvals being sought belatedly, the delay should be condoned.”

It was also noted that in the present case it is evident that the appellant has given no explanation whatsoever for the period between 31.07.2023 to 12.09.2023 and thereafter, again for the period between 20.11.2023 to 17.01.2024. We also find that it is the appellant's own case that though the learned counsel for the appellant had tried to reach out to the department for providing the missing documents on 20.11.2023, she received no response and was supplied the documents belatedly. This in itself is sufficient for us to hold that the appellant has been most negligent in pursuing the appeal.

In Government of Maharastra v. M/s Borse Brothers Engineers & Contractors Pvt Ltd., 2021 the Supreme Court has held that merely because the government is involved, a different yardstick for condonation of delay cannot be laid down.

The Supreme Court has further held that “given object of speedy disposal sought to be achieved both under the Arbitration Act and the Commercial Courts Act, for appeals filed under section 37 of the Arbitration Act that are governed by Articles 116 and 117 of the Limitation Act or section 13(1A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule.”

In the present, it was observed that the reasons set out by the appellant for seeking condonation of delay cannot be said to be falling within the category of either 'sufficient cause' or 'exceptional circumstances'.

The court made an important observations that “it is not merely the number of days of delay, which would be material for considering the application seeking condonation of delay but it is the sufficiency of reasons for the delay which would be material to determine whether the delay should be condoned.” Accordingly, the present application along the appeal was dismissed.

Case Title: Union Of India versus Besco Limited (Wagon Division)

Case Number: FAO(OS) (COMM) 22/2024, CM APPL. 8757/2024-Stay & CM APPL. 8758/2024

Date Of Judgment: 27/11/2024

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