2024 (4) TMI 1287 - HC - Indian Laws

Appeal dismissed for filing arbitral award challenge beyond Section 34(3) limitation period despite court closure

MYPREFERRED TRANSFORMATION AND HOSPITALITY PVT LTD & ANR. Versus FARIDABAD IMPLEMENTS PVT. LTD.

HC dismissed appeal challenging arbitral award where petition was filed beyond Section 34(3) limitation period. Though the 30-day extended period expired ... Condonation of delay of period beyond thirty days in filing an application under Section 34 of the A&C Act - petition was filed beyond the period of limitation as prescribed under Section 34(3) of the A&C Act - last day of the said period falls on the day when the Court is closed and the application is filed immediately after the said date - challenge to Arbitral Award - HELD THAT:- In terms of Section 16 of the NGT Act, an appeal against certain orders could be preferred to the National Green Tribunal (hereafter NGT) within the period of thirty days from the date of communication of those orders. The proviso to Section 16 of the NGT Act expressly provides that if the NGT is satisfied that the appellant was prevented by sufficient cause from filing an appeal within the said period of thirty days, it could allow it to be filed within 'a further period not exceeding sixty days'. In the said case, the period of ninety days expired on 12.07.2020, which was a Sunday. The appellant filed the appeal on the next date, that is, on 13.07.2020. The Supreme Court in Sridevi Datla v. Union of India & Ors. [2021 (3) TMI 1465 - SUPREME COURT] held that the Limitation Act (including Section 4 of the Limitation Act) was inapplicable, however, the benefit of Section 10 of the General Clauses Act would be available - the Supreme Court had proceeded on the basis that where a period of delay that can be condoned is prescribed and the same expires on a holiday, then the act should be considered done within the prescribed period if it is done on the next date. A plain reading of Section 10 of the General Clauses Act indicates that it also contemplates a case where the Central Act or Regulation allows an 'act to be done or taken in any Court'. Therefore, the key question is whether the language of Section 10 of the General Clauses Act could be read expansively to also cover the act of filing a petition within the period of thirty days after the expiry of the period of limitation of three months. Undisputedly, if a person satisfies the Court that he had sufficient cause that prevented him from filing the petition within the prescribed period, it would be permissible for the said applicant to file a petition under Section 34 of the A&C Act within the period of thirty days after the expiry of the period of three months. It would follow that if the last date of such period, during which the applicant was allowed to file an application (albeit subject to satisfying the Court that he was prevented from filing the petition within the prescribed period) or a day when the Court was closed, by virtue of Section 10 of the General Clauses Act, the said act would be deemed to be done within the said period if it was done on the day when the Court reopened. It is clear from the plain language of the notification that for the purposes of limitation, the Court reopened on 04.07.2022. The fact that the Registry of the Court was accepting filings from 27.06.2022 to 02.07.2022 is material to determine whether the appellants were prevented by sufficient cause from filing the petition prior to 04.07.2022 but would have little impact on the applicability of Section 10 of the General Clauses Act if otherwise applicable. Whether Section 10 of the General Clauses Act is applicable? - HELD THAT:- The decision of the Supreme Court in Sridevi Datla v. Union of India & Ors. does suggest that Section 10 of the General Clauses Act would be applicable in cases where a special statute contains an express provision regarding limitation and the Limitation Act (including Section 4 of the Limitation Act), is inapplicable. It is unable to accept that the delay in filing the petition could be condoned by the Court in terms of Section 34(3) of the A&C Act - appeal dismissed. The core legal question considered by the Court was whether the thirty-day period of delay that a Court may condone under the proviso to Section 34(3) of the Arbitration & Conciliation Act, 1996 (A&C Act) is extended when the last day of this period falls on a day when the Court is closed, such as during vacations, and the application is filed on the next date when the Court reopens.Additional issues addressed included the applicability of Section 10 of the General Clauses Act, 1897 to extend the condonable delay period in such circumstances, and the relevance and interplay of the Limitation Act, 1963 and its Section 4 in relation to the computation of limitation periods and condonation of delay under the A&C Act.Further, the Court examined the precedential value and applicability of two Supreme Court decisions: Assam Urban Water Supply & Sewerage Board v. Subhash Projects & Marketing Limited, which dealt with limitation and condonation under the Limitation Act, and Sridevi Datla v. Union of India & Ors., which interpreted Section 10 of the General Clauses Act in the context of delay under a special statute.Lastly, the Court considered the binding effect of the recent Supreme Court ruling in Bhimashankara Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Limited, which clarified the non-applicability of Section 10 of the General Clauses Act to the condonable delay period under Section 34(3) of the A&C Act.Issue-wise Detailed Analysis1. Whether the thirty-day condonable delay under Section 34(3) of the A&C Act is extended if the last day falls on a Court holiday or vacationThe Court began by identifying that the petition under Section 34 of the A&C Act to set aside the arbitral award was filed beyond the prescribed limitation period of three months but within the additional thirty-day period which the Court may condone upon sufficient cause being shown.The appellants filed the petition immediately after the Court reopened from summer vacations, claiming that the thirty-day condonable period expired during the Court's closure and hence, by virtue of Section 10 of the General Clauses Act, the period should be extended to the next working day.The Court noted that the Registry was open before the official reopening date but for limitation purposes, the Court reopened only on the stated date. Thus, the question was whether the condonable delay period is extended to the reopening day if the last day falls on a holiday.2. Applicability of Section 10 of the General Clauses Act, 1897Section 10 of the General Clauses Act provides that when the last day for doing an act falls on a day when the Court or office is closed, the act done on the next day when the Court reopens shall be deemed to be done within time, except where the Limitation Act applies.The appellants relied on the Supreme Court decision in Sridevi Datla v. Union of India & Ors., where the Court held that Section 10 of the General Clauses Act applied to extend the time for filing an appeal under the National Green Tribunal Act, 2010, when the last day fell on a holiday.The Court observed that in Sridevi Datla, the Limitation Act was held inapplicable as the special statute contained its own limitation provisions and condonation mechanism. The Court emphasized the distinction between the Limitation Act's prescribed period and discretionary condonable periods under special statutes.3. Applicability of Section 4 of the Limitation Act, 1963The respondent relied on the Supreme Court's decision in Assam Urban Water Supply & Sewerage Board v. Subhash Projects & Marketing Limited, which held that Section 4 of the Limitation Act applies only to the prescribed period of limitation and not to the discretionary condonable period of thirty days under Section 34(3) of the A&C Act.The Court noted that Section 4 of the Limitation Act allows extension of limitation if the last day falls on a holiday, but since the thirty-day condonable period is not a period of limitation but a discretionary extension, Section 4 does not apply to it.4. Binding effect of Bhimashankara Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries LimitedThe Court referred to the recent Supreme Court ruling which explicitly held that Section 10 of the General Clauses Act does not apply to the condonable delay period under Section 34(3) of the A&C Act. The Court observed that the proviso to Section 10 excludes its application to any act or proceeding to which the Limitation Act applies, and since limitation provisions under the Arbitration Act are governed by the Limitation Act, Section 10 is inapplicable.The Supreme Court in that decision also criticized the Sridevi Datla judgment for not considering the binding Assam Urban decision and clarified that the condonable delay under Section 34(3) is a discretionary period and not a limitation period, thus not extendable by Section 10 of the General Clauses Act.5. Application of law to factsThe Court assumed the award was received by the appellants on 14.02.2022, making the limitation period expire on 14.05.2022. By virtue of the Supreme Court's suo motu extension, the limitation was extended to 29.05.2022. The Court was closed for summer vacations from 04.06.2022 to 03.07.2022, and the petition was filed on 04.07.2022.The Court found that the petition was filed beyond the condonable period of thirty days after expiry of limitation and that the delay could not be condoned by extending the thirty-day period to the reopening day under Section 10 of the General Clauses Act.The Court also noted that the Registry's acceptance of filings before the reopening date was irrelevant for limitation purposes, which were fixed by notification to the reopening day.6. Treatment of competing argumentsThe appellants argued for an expansive interpretation of Section 10 of the General Clauses Act to allow extension of the condonable delay period when the last day falls on a holiday, relying on Sridevi Datla. They also contended that the Court below did not consider whether sufficient cause existed for delay.The respondents relied on Assam Urban and Bhimashankara Sahakari rulings to submit that neither Section 4 of the Limitation Act nor Section 10 of the General Clauses Act applies to the condonable delay period under Section 34(3) of the A&C Act, and thus the delay could not be condoned.The Court found the latter line of authority binding and persuasive, holding that the condonable delay is a discretionary period and not a limitation period; hence, the provisions of the Limitation Act and Section 10 of the General Clauses Act do not apply to extend it.7. Conclusion on the issuesThe Court concluded that the thirty-day condonable period under the proviso to Section 34(3) of the A&C Act does not stand extended if the last day falls on a day when the Court is closed. Section 10 of the General Clauses Act is inapplicable to extend this period due to the express exclusion of acts governed by the Limitation Act.Accordingly, the Court dismissed the appeal and upheld the dismissal of the petition for setting aside the arbitral award on the ground of delay beyond the condonable period.Significant Holdings'The period of 30 days beyond three months which the court may extend on sufficient cause being shown under the proviso appended to sub-section (3) of Section 34 of the 1996 Act being not the 'period of limitation' or, in other words, the 'prescribed period', in our opinion, Section 4 of the 1963 Act is not, at all, attracted to the facts of the present case.''Section 10 of the General Clauses Act, 1897 stipulates that when the last date for doing something falls on a public holiday, the act 'shall be considered as done'... if it 'is done or taken on the next day afterwards on which the Court or office is open'. This provision applies to all Central Acts enacted after the said Act was brought into force.''Section 10 of the General Clauses Act is not applicable in respect of the period of delay, which could be condoned by the Court in terms of the proviso to Section 34(3) of the A&C Act. Such a contention is untenable in light of the proviso to Section 10 of the General Clauses Act, 1897, which specifically excludes the application of Section 10 of the General Clauses Act, 1897 to any act or proceeding to which the Limitation Act, 1877 applies.''The benefit of exclusion of period during which the Court is closed shall be available when the application for setting aside award is filed within 'prescribed period of limitation' and shall not be available in respect of period extendable by Court in exercise of its discretion.''Applying the law laid down by this Court in Assam Urban, it cannot be said that the High Court... have committed any error in refusing to condone the delay caused in preferring application under Section 34 of the Arbitration and Conciliation Act, 1996 which was beyond the period prescribed under Section 34(3) of the Arbitration and Conciliation Act, 1996.'