Limitation in arbitral award challenges: refusal to condone delay is appealable, and sufficient cause can justify condonation.

An order rejecting condonation of delay in proceedings to set aside an arbitral award was treated as a refusal to set aside the award, so it was appealable under Section 39(1)(vi) of the Arbitration Act, 1940 and a revision under Section 115 CPC did not lie. The expression "refusing to set aside an award" was held to include refusal caused by failure to satisfy limitation requirements. On the facts, the delay was satisfactorily explained by incorrect legal advice and procedural confusion, and condonation was justified. The challenge to the award was therefore allowed to proceed on merits, and the High Court's order condoning delay and remanding the matter was sustained.

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Issues: (i) Whether an order rejecting an application under Section 5 of the Limitation Act, 1963 in proceedings to set aside an award under Section 30 of the Arbitration Act, 1940 was appealable under Section 39(1)(vi) of that Act, and therefore not revisable under Section 115 of the Code of Civil Procedure. (ii) Whether sufficient cause was shown for condonation of delay in filing the application to set aside the award.

Issue (i): Whether an order rejecting an application under Section 5 of the Limitation Act, 1963 in proceedings to set aside an award under Section 30 of the Arbitration Act, 1940 was appealable under Section 39(1)(vi) of that Act, and therefore not revisable under Section 115 of the Code of Civil Procedure.

Analysis: An application to set aside an award, when rejected on the ground of limitation, operates as a refusal to set aside the award. The expression "refusing to set aside an award" in Section 39(1)(vi) is not confined to a refusal on merits and includes a refusal occasioned by failure to satisfy the law of limitation. Reading Sections 17 and 39 of the Arbitration Act, 1940 with Section 5 of the Limitation Act, 1963, the court held that once the application for condonation fails, the challenge to the award is concluded in the same manner as a direct refusal under Section 30. The revisional jurisdiction under Section 115 of the Code of Civil Procedure was therefore unavailable.

Conclusion: The order was appealable under Section 39(1)(vi) of the Arbitration Act, 1940 and a revision under Section 115 of the Code of Civil Procedure did not lie.

Issue (ii): Whether sufficient cause was shown for condonation of delay in filing the application to set aside the award.

Analysis: The delay was explained by the respondent on the basis of incorrect legal advice and procedural confusion attributable to counsel. The court treated the explanation as credible, noting that the respondent had acted earlier to challenge the award and that the error lay in the advice received before the trial court. The court also invoked its power under Article 142 of the Constitution of India to avoid a remand that would serve no useful purpose, since the High Court had already examined the material and given reasons for condoning delay.

Conclusion: Sufficient cause was made out and condonation of delay was justified.

Final Conclusion: The challenge to the award was permitted to proceed, and the High Court's decision to condone delay and remand the matter for decision on merits was sustained.

Ratio Decidendi: An order rejecting an application to condone delay in seeking to set aside an arbitral award amounts to a refusal to set aside the award and is appealable under Section 39(1)(vi) of the Arbitration Act, 1940; where delay is satisfactorily explained, the court may condone it and permit the challenge to be heard on merits.

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