TaxTMI 
TaxTMI 
2018 (12) TMI 388
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....nternal water supply, sanitary installation and internal electrification. Due to differences with regard to the performance of the construction work, the parties were referred to arbitration. On 27 October 2014, the arbitrator made an award in favour of the appellant and directed the respondent to pay a sum of Rs.9,96,98,355/- with simple interest @ 10% per annum from 1 January 2009 till actual payment. The respondent received the copy of the award on 31 October 2014. 3. Aggrieved by the award, the respondent filed an application O.A No.2/2015 under Section 34 of the 1996 Act on 30 January 2015 before the District Judge, Port Blair for setting aside the arbitral award. During the pendency of the arbitration proceedings, the appellant had filed an application AP No 91 of 2008 under Section 9 of the 1996 Act before the High Court of Calcutta praying for an injunction on encashment of bank guarantee against the respondent and the application was duly contested by the respondent. 4. On 12 February 2016, the District Judge dismissed the respondent's application under Section 34 of the 1996 Act for want of jurisdiction. The District Judge observed: "...According to the provision of S....
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....de only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3)... (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter." Section 34 provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award "in accordance with" sub-section (2) and sub-section (3). Sub-section (2) relates to the grounds for setting aside an award. An application filed beyond the period mentioned in sub-section 3 of Section 34, would not be an application "in accordance with" that sub-section. By virtue of Section 34(3), recourse to the court against an arbitral award cannot be beyond the period prescri....
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....on, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the court could entertain an application to set aside the award beyond the extended period under the proviso, would render the phrase "but not thereafter" wholly otiose. No principle of interpretation would justify such a result. ...Here the history and scheme of the 1996 Act support the conclusion that the time-limit prescribed under Section 34 to challenge an award is absolute and unextendible by court under Section 5 of the Limitation Act... " 10 Section 14 of the Limitation Act, 1963 provides thus: "14. Exclusion of time of proceeding bona fide in court without jurisdiction. - (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from....
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....s the provisions of the Limitation Act, 1963 applicable to arbitration proceedings. The proceedings under Section 34 are for the purpose of challenging the award whereas the proceeding referred to under Section 43 are the original proceedings which can be equated with a suit in a court. Hence, Section 43 incorporating the Limitation Act will apply to the proceedings in the arbitration as it applies to the proceedings of a suit in the court. Sub-section (4) of Section 43, inter alia, provides that where the court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the court shall be excluded in computing the time prescribed by the Limitation Act, 1963, for the commencement of the proceedings with respect to the dispute so submitted. If the period between the commencement of the arbitration proceedings till the award is set aside by the court, has to be excluded in computing the period of limitation provided for any proceedings with respect to the dispute, there is no good reason as to why it should not be held that the provisions of Section 14 of the Limitation Act would be applicable to an application submi....
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....along with an application for condonation of delay of 514 days. 12 The contention of Mr Aryama Sundaram, learned senior counsel for the appellant is that even if the benefit of Section 14 of the Limitation Act is extended to the respondent in filing the application under Section 34 of the 1996 Act, there would still be a delay of 131 days which could not be condoned in view of the specific statutory limitation prescribed under Section 34(3) of the 1996 Act. The learned senior counsel has tendered the following tabulated chart: DELAY CHART Particulars No. of Days No. of Days A. Award received on 31 October 2014 Application under Section 34 filed in the Calcutta High Court on 28 March 2016 Total no. of days 514 B. Less: Period between the date of filing application under Section 34 in District Court, Port Blair on 30 January 2015 and date of dismissal of the application on 12 February 2016 [Applying Section 14 of the Limitation Act] 379 C. Less: Period between the application for certified copy of the order dated 12 February 2016 filed on 29 February 2016 and receipt of certified ....
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....the period spent in pursuing the proceedings before the District Judge, Port Blair, the petition under Section 34 was filed much beyond the outer period of ninety days. 15 The respondent has relied on the decision of this Court in Union of India v Tecco Trichy Engineers & Contractors (2005) 4 SCC 239, where this Court had to decide the effective date from which the limitation within the meaning of subsection (3) of Section 34 of the Act shall be calculated. The Chief Project Manager on behalf of the Southern Railway had entered into a contract with a contractor for construction of a railway bridge. Disputes between the parties were referred to arbitration and an award was delivered in the office of the General Manager, Southern Railway. The Chief Engineer preferred an application against the award under Section 34 of the 1996 Act before the High Court. The learned Single Judge and the Division Bench of the High Court rejected the application holding it as barred by limitation. This Court reversed the order of the High Court and condoned the application for delay. This Court observed that in huge organisations like the Railways having different divisional heads and various departme....