Applicability Of Section 5 Of Limitation Act To Petition U/S 34 Of Arbitration Act Is Excluded: Himachal Pradesh HC

The Himachal Pradesh High Court Bench of Ms. Justice Jyotsna Rewal Dua held that the prescribed period under Section 34(3) of the Arbitration Act is three months and further that given the language used in proviso to Sub-Section 3 of Section 34 of the Act, applicability of Section 5 of Limitation Act to the petition under Section 34 of the Act has been excluded.

Brief Facts

Award was passed by the learned Arbitrator on 20.02.2023.Signed copy of the award was received by the applicants/objectors on 20.02.2023 itself. Three months' period available under Section 34 (3) of the Act for preferring objections against the award lapsed on 20.05.2023. The objections were preferred on 16.06.2023 i.e. on 117th day from the date of passing of the award or in other words 27th day after the expiry of three months' period from the date of receipt of the award.

Hence, this application has been moved under Section 34(3) of the Act for condoning the delay in filing the objections under Section 34 of the Act.

Contentions

The applicant submitted that the delay in filing the objections was neither intentional nor willful but had taken place for the reasons beyond the control of the applicants/objectors.

It was further submitted that after receipt of the signed copy of the award on 20.02.2023, applicant No.2, vide his letter dated 11.04.2023, submitted a copy of the award to the office of the Superintending Engineer 11th Circle HPPWD, Rampur, District Shimla for further necessary action.

It was further submitted that the two months' period from 20.02.2023 (date of receipt of signed copy of the award) to 11.04.2023 (forwarding the same to the concerned Superintending Engineer) was within the period of three months available to the applicants/objectors under Section 34 of the Act, therefore, the applicants/ objectors are not required to explain the reasons for not taking any action during this period of about two months.

Per contra, the respondents submitted that no justifiable cause has been assigned by the applicants/objectors for taking about two months in mere forwarding the signed copy of the award dated 20.02.2023 to the Superintending Engineer for taking further necessary action; That according to the applicants/objectors, signed copy of the award was received by them on 20.02.2023, but, it was forwarded to the concerned Superintending Engineer, only on 11.04.2023. This period of fifty days has gone absolutely unexplained.

Court's Analysis

The court at the outset analysed the interplay between section 34 of the Arbitration Act and Section 5 of the Limitation Act. The court further referred to the Supreme Court judgment in P. Radha Vs. Bai and others Vs. P. Ashok Kumar and another (2019) wherein it was held that proviso to Section 34 (3) of the Act though provides for condoning the delay, however unlike Section 5 of the Limitation Act, the delay can be condoned only for a period of thirty days, that too on showing sufficient cause.

The Apex Court in the above case further held that “under Section 34(3) of the Act, the commencement period for computing the limitation period is the date of receipt of the award or the date of the disposal of request under Section 33 (correction/additional award). Section 34 is the only remedy for challenging an award passed under Part-1 of the Act.

The court continued to observe that Section 34(3) of the Act contains Limitation provision, which is inbuilt into the remedy provision. One does not have to look at the Limitation Act or any other provision for identifying the limitation period for challenging an award passed under Part–I of the Arbitration Act.”

The court also observed that no special treatment can be given to the government and reliance was placed on the Supreme Court judgment in Postmaster General and others Versus Living Media India Limited and another (2012) wherein it was held that held that different yardstick for condonation of delay cannot be laid down merely because Government is involved. No special treatment can be accorded to the Government from the provisions of Section 34 of the Act.

The court further referred to the Supreme Court judgment in Pathpati Subba Reddy (died) by L.Rs. and others vs. Special Deputy Collector (LA) (2018) wherein it was held that Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence.

The concluded that in light of provisions of Section 34 of the Act and the law laid down on the subject, there is no escape from conclusion that the applicants/objectors have not been able to furnish any cause much less sufficient cause for condoning the delay in not filing their objections against the award within the prescribed period of three months.

In view of above discussion, no case for condoning the delay is made out. Accordingly, the application is dismissed. Consequently, the appeal is also dismissed.

Case Title: The State of H.P. & Anr. V. M/s Garg Sons Estate Promoters Pvt. Ltd

Citation: 2024 LiveLaw (HP) 67

Case Reference: OMP(M) No. 74 of 2023

Judgment Date: 22/10/2024

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