TaxTMI 
TaxTMI 
2021 (2) TMI 510
X X X X Extracts X X X X
X X X X Extracts X X X X
....igh Court of Delhi in the impugned judgment dated 04.12.2020. The question raised in this appeal is whether a learned single Judge's order refusing to condone the Appellant's delay in filing an application under section 34 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act, 1996") is an appealable order under section 37(1)(c) of the said Act. After considering, in particular, two judgments of this Court, the High Court held: "18. We have considered the rival contentions. Though, as observed by us in the hearing on 5th November, 2020, in view of BGS SGS Soma JV supra having referred to the grounds under Section 34 in entirety and not confined to Section 34(2) only, we were inclined to differentiate between a case of return of an application under Section 34 on the ground of the Court to which it is presented not having territorial jurisdiction, on the one hand and rejection of an application under Section 34 on the ground of having not been filed within the prescribed time, on the other hand, but in view of the Supreme Court having been approached against Ramdas Construction Co. supra, expressly holding an appeal as the one before us, to be not maintainable und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt but may also be by the Commercial Courts of the country. No other remedy would be available to the persons aggrieved by the award, against the decision of any Commercial Court in the country refusing to condone the delay in applying for setting aside of the award, leaving such persons either with the option of accepting / remaining bound by the award even if having excellent grounds for setting aside of the same or of approaching the Supreme Court under Article 136 of the Constitution of India, thereby putting an avoidable burden on the Supreme Court which, as per the scheme of the Constitution of India, was envisaged to hear limited number of matters entailing constitutional issues and not to hear matters of condonation of delay. Though undoubtedly the scheme of expediency and limited judicial intervention is ingrained in the Arbitration Act but at the same time it cannot be forgotten that the Act nevertheless provides remedies against the arbitral award and it is felt that to vest the order, of any Commercial Court in the country refusing to condone the delay in applying for setting aside of the award, and which delay can be for varying reasons as diverse as the social, geog....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aves Ltd. v. M/s Annapurna Electronics and Ors. ILR 2015 KAR 4199, Delhi - Harmanprit Singh Sidhu v. Arcadia Shares & Stock Brokers Pvt. Ltd. (2016) 234 DLT 30 and Calcutta - Damodar Valley Corporation v. Sanjay Singh Rathor 2018 SCC OnLine Cal 4014 High Courts to argue that an order refusing to condone delay stands on a completely different footing from an order which condones delay, as the latter order cannot be said to impart any finality to the proceeding, as, when an order condones delay, it cannot be said that the court has refused to set aside an award as it may ultimately set aside the aforesaid award on the grounds mentioned in section 34(2) of the Arbitration Act, 1996. He further argued that the judgment of the Allahabad High Court in Union of India v. Radha Krishna Seth and Anr., 2005 SCC OnLine All 8400 and that of the Bombay High Court in State of Maharashtra v. Ramdas Construction Co. 2006 (6) Mah. L.J. 678 did not state the law correctly and ought to be overruled by this Court. He argued that where a right of appeal is granted by statute, a dismissal on a preliminary ground is nevertheless a dismissal of the appeal, since it cannot be heard thereafter. He also argue....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... materia with section 39 of the 1940 Act. According to him, section 39 of the 1940 Act is materially different, and concerns itself with grounds that were made out under section 30 of the said Act, which grounds were completely different from the grounds that could be made out under section 34(2) and (2A) of the 1996 Act. Therefore, Shri Rohatgi argued that section 37 needs to be interpreted on its own terms, and that consequently, this Court's judgment in Essar Constructions (supra) would not be applicable. He relied strongly upon section 5 of the Arbitration Act, 1996, by which it was statutorily made clear that judicial intervention is to be minimal in the arbitration process. For this purpose he also relied upon the Statement of Objects and Reasons for enacting the Arbitration Act, 1996. He then went on to state that section 37 of the Arbitration Act, 1996 in fact carries out this object. He stressed that this object was reinforced first, by the non-obstante clause contained in section 37(1); and second, by the fact that the grounds of appeal contained in section 37 are exhaustive, and makes explicit that an appeal shall lie only from the following orders "and from no others". ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....econd appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or takeaway any right to appeal to the Supreme Court." 6. Since we are directly concerned with section 37(1)(c), it is important to advert to the language of section 34 as well. Section 34(1) reads as follows: "34. Application for setting aside arbitral award.- (1) 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)." 7. Section 34(2) and (2A) then sets out the grounds on which an arbitral award may be set aside. Section 34(3), which again is material for decision of the question raised in this appeal, reads as follows: "(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 t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ry to first set out section 39 of 1940 Act, which reads as under: "39. Appealable orders:- (1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order: An order - (i) superseding an arbitration; (ii) on an award stated in the form of a special case; (iii) modifying or correcting an award; (iv) filing or refusing to file an arbitration agreement; (v) staying or refusing to stay legal proceedings where there is an arbitration agreement; (vi) setting aside or refusing to set aside an award; Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court. (2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court." 11. The question which the Court was required to answer was set out as follows: "5. But was the Civil Judge's order dismissing the respondent's application under Section 5 at all r....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 15. The procedure appears to have been approved by the Supreme Court in the case of Union of India v. Union Builders [AIR 1985 Cal 337 (DB)] where on an appeal to the Supreme Court from an order dismissing an application under Section 30 on the ground of delay, the appeal was remanded to the High Court to be disposed of. 16. The position should be no different in courts where a separate application under Section 5 of the Limitation Act is required to be filed. If the various High Courts' decisions noted earlier are correct, then the application under Section 5 being dismissed, the application under Section 30 would consequently also have to be dismissed although this might be a mere formality. The end result would be the same. xxx xxx xxx 21. Section 39(1)(vi) of the Arbitration Act, 1940 does not indicate the grounds on which the court may refuse to set aside the award. There is nothing in its language to exclude a refusal to set aside the award because the application to set aside the award is barred by limitation. By dismissing the application albeit under Section 5, the assailability of the award is concluded as far as the court rejecting the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d also in Fairgrowth Investments Ltd. v. Custodian [(2004) 11 SCC 472] . There can be no quarrel with the proposition that Section 5 of the Limitation Act providing for condonation of delay is excluded by Section 34(3) of the Act. 9. But the question in the instant case is not about the applicability of Section 5 of the Limitation Act, and the question really is whether the appeal was maintainable. The High Court did not consider this aspect. The appeal is clearly maintainable. Therefore, the order of the High Court is set aside. The High Court shall deal with the matter and examine the respective stand on merits treating the appeal to be maintainable." 16. Likewise, in Fuerst Day Lawson Ltd. (supra) this Court held: "37. These general principles are culled out from the decisions of this Court rendered under Section 104 CPC and various other Acts, as noted above. But there is another set of decisions of this Court on the question under consideration rendered in the context of Section 39 of the 1940 Act. Section 39 of the erstwhile Act contained the provision of appeal and provided as follows: "39.Appealable orders.-(1) An appeal shall lie from the foll....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d in essence the provisions of Section 39 of the 1940 Act or Section 37 of the 1996 Act are the same as Section 50 of the 1996 Act. Section 39 of the 1940 Act says no more and no less than what is stipulated in Section 50 of the 1996 Act. But there may be a different reason to contend that Section 39 of the 1940 Act or its equivalent Section 37 of the 1996 Act are fundamentally different from Section 50 of the 1996 Act and hence, the decisions rendered under Section 39 of the 1940 Act may not have any application to the facts arising under Section 50 of the 1996 Act. But for that we need to take a look at the basic scheme of the 1996 Act and its relevant provisions." 19. The reasoning in Essar Constructions (supra) commends itself to us, being on a pari materia provision to that contained in section 37(1)(c) of the Arbitration Act, 1996. We may only add that the reasoning of the aforesaid judgment is further strengthened by our analysis of the additional words "under section 34" which occur in section 37(1)(c), and which are absent in section 39(1)(vi) [the pari materia provision to section 34 of the Arbitration Act, 1996 being section 30 of the Arbitration Act, 1940]. 20. In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs and make an arbitral award. (6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34." 22. Given the fact that the "effect doctrine" is part and parcel of the statutory provision for appeal under section 37, and the express language of section 37(1)(c), it is difficult to accede to the argument of Shri Rohatgi. 23. We now come to the judgment in Simplex Infrastructures Ltd. (supra). In this judgment, what was argued before this Court is set out with reference to the Division Bench judgment under appeal as follows: "11. The Division Bench of the High Court, however, made a fine distinction by holding that the judgment of the learned Single Judge of condoning delay in filing of the petition under Section 34 of the Act was without jurisdiction and not in terms of the provisions of the Act. It is not possible to countenance this approach. The Division Bench, in our opinion, was not right in observing that the decision in Tanusree Art Printers [Tanusree Art Printers v. Rabindra Nath Pal, 2000 SCC OnLine Cal 217] being of a Special Bench of three Judges of the same court, was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to exercise of jurisdiction under Section 34(3) of the Act. In other words, whether the prayer for condonation of delay can be accepted or whether the application deserves to be rejected, is a matter well within the jurisdiction of that court." 25. This judgment does not in any manner militate against what has been held by us. In answer to the question as to whether a single Judge's judgment condoning delay in filing an application under section 34 was without jurisdiction, this Court correctly held that such an order is in exercise of jurisdiction conferred by the statute. This judgment therefore cannot be said to be an authority for the proposition that, as the converse position to the facts contained in the present appeal before us has been held to be not appealable, it must follow that even where delay is not condoned, the same position obtains. This would fly in the face of the reasoning contained in this judgment, as well as the reasoning contained in Essar Constructions (supra), which has commended itself to us. 26. We now come to this Court's judgment in BGS SGS Soma (supra). As correctly pointed out by Shri Rao, the question before this Court in BGS SGS Soma (supra)....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an arbitral award under Section 34. We are unable to accept this proposition. By virtue of the impugned order, the arbitral award dated 10-9-2013 has not been set aside. Nor has the court, at this stage, refused to set aside the said arbitral award under Section 34 of the A&C Act. In fact, the appellant in whose favour the award has been made, would only be aggrieved if the award were to have been set aside in whole or in part. That has not happened. What the learned single Judge has done is to have condoned the delay in re-filing of the petition under Section 34. This has not, in any way, impacted the award." 17. The reasoning in this judgment in Harmanprit Singh Sidhu commends itself to us, as a distinction is made between judgments which either set aside, or refuse to set aside, an arbitral award after the court applies its mind to Section 34 of the Arbitration Act, 1996, as against preliminary orders of condonation of delay, which do not in any way impact the arbitral award that has been assailed." 28. It is well settled that judgments are not to be construed like Euclid's theorems (see Amar Nath Om Prakash v. State of Punjab (1985) 1 SCC 345), but all observations....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... truism of Lord Halsbury that a case is only an authority for what it actually decides and not for what may seem to follow logically from it." 29. The context in which paragraph 17 of BGS SGS Soma (supra) was made, was a context in which an application under section 34 would have to be returned to the Court which had jurisdiction to decide a section 34 application, dependent upon where the seat of the arbitral tribunal was located. In this context, it was held that a mere preliminary step, which did not lead to the application being rejected finally, cannot be characterised as an order which would result in the application's fate being sealed once and for all. The Court's focus was not on the language of section 37(1)(c), nor were any arguments addressed as to its correct interpretation. As a matter of fact, Harmanprit Singh Sidhu (supra) itself went on to hold: "13. In sum, the impugned order does not fall within the category of appealable orders specified in Section 37(1) of the A&C Act. Therefore, even if the provisions of Section 37(1) are read with Section 13 of the Commercial Courts Act, the present appeal is not maintainable. This, however, does not mean that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-section (3) of section 34 of the Act provides that an application for setting aside may be made after three months have elapsed from the date on which the party making such 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. This provision of law expressly reveals that the legislature has provided a specific period of limitation for filing an application for setting aside of the award and simultaneously the Court has been given discretion to extend such period only by thirty days, and not beyond the said period of thirty days. The provision is very clear in that regard. However, the scope of enquiry under sub-section (3) is restricted to the cause for delay in filing the application but it does not relate to the merits of the application for setting aside of the award. Being so, an order which is to be passed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 34(1) for the purpose of appeal under section 37(1) of the Act." 32. This judgment cannot be said to state the law correctly as it does not advert to the decision of this Court in Essar Constructions (supra), and is against the interpretation of section 37(1)(c) of the Arbitration Act, 1996 given by us above. We may also add that this Court, in dismissing the Civil Appeal against the aforesaid judgment, held: "1. The appellants before this Court, in the first instance, impugned the award rendered by the Chief Engineer on 30.06.2005, by preferring an appeal before the District Judge, Nagpur. The District Judge, Nagpur, declined to entertain the appeal on merits, as he found the same barred by limitation, and as such, the application for condonation of delay was dismissed. The District Judge, Nagpur in his order dated 23.12.2005 recorded as under: "17. In nut-shell, what emerges from the material placed on the record is that the applicants or in other words, party making application under Section 34 duly received the award on 4.7.2005, but approached this Court on 18.11.2005. Time in between 4.7.2005 and 18.11.2005 was consumed in taking administrative decis....