Courts Not Expressly Barred From Dismissing Petitions Under Arbitration Act For Non-Prosecution: Gujarat High Court

The Gujarat High Court held that negligence or inaction on the part of counsel cannot justify condonation of unexplained and long delay. The court further held that the court is not prohibited from dismissing the petitions under section 34 for non prosecution. Justice Maulik J. Shelat held that “there is no express bar under the Act, 1996 not to dismiss such applications for non-prosecution. True, Section 19 of the Act, 1996 would suggests that Arbitration Tribunal not bound by the provisions of CPC and Evidence Act. It would not mean that the Court is powerless to dismiss the matter for non prosecution, when party not turn up and pursue its case. According to my view, every Court has such power to dismiss/reject the matter for non-prosecution, unless specifically/expressly barred under any law.” Background: Dismissing two writ petitions filed by Gujarat Industrial Development Corporation (GIDC), the court upheld the Ahmedabad City Civil Court's order of rejecting the plea for restoration of applications under section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) which had been dismissed for non-prosecution in 2013. The petitioner submitted that it depended completely on its advocate who failed to inform it of the dismissal of petitions under section 34. It came to know about the dismissal when a Jangam Warrant was received following which it immediately filed restoration applications. It was further contended that the application under section 34 cannot be dismissed for default since the act does not provide for such dismissal. Per contra, the petitioner's negligence and prolonged indifference cannot be excused under any circumstances. Findings: The court observed that from the records, it is clear that the petitioner demonstrated a lackadaisical approach in pursuing its case. The execution notice received by the petitioner in 2015 was a wake up call but the petitioner failed to check the status of its applications till 2016. It held that “The record clearly indicates that the petitioner made no attempt to ascertain the status of its applications after 2013, nor did it act against its counsel for negligence. Such indifference cannot be condoned under the guise of bureaucratic procedure.” The Court relied on the Supreme Court's judgment in Rajneesh Kumar & Anr. v. Ved Prakash where it was held that the delay cannot be condoned on grounds of counsel's negligence. The Apex Court had held that “even if the concerned lawyer was negligent, this cannot be a ground to condone long and inordinate delay. The litigant owes a duty to be vigilant of his own rights and cannot throw the entire blame on the head of the advocate.” The court rejected the petitioner's plea that the petitions could not be dismissed for non-prosecution. It held that “there is no express bar in the Arbitration and Conciliation Act, 1996 preventing dismissal for default. Every court has inherent power to dismiss a matter for non-prosecution unless expressly prohibited.” Rejecting the present petitions, the court concluded that “Law of limitation is based on public policy to ensure an end to litigation. Courts cannot condone inordinate delay when negligence and want of due diligence are evident. The maxim vigilantibus, non dormientibus, jura subveniunt — the law assists those who are watchful and not those who sleep — governs this principle.” Case Title: GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION Versus M/S THE INDIAN HUME PIPE COMPANY LTD & ANR. Case Number: R/SPECIAL CIVIL APPLICATION NO. 12057 of 2025 With R/SPECIAL CIVIL APPLICATION NO. 10602 of 2023 Judgment Date: 03/10/2025 Click Here To Read/Download The Order Citation : 2025 LiveLaw (Guj) 175

Courts Not Expressly Barred From Dismissing Petitions Under Arbitration Act For Non-Prosecution: Gujarat High Court

Mohd Malik Chauhan

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