Section 14 Of Limitation Act Applicable To Proceedings U/S 34 Of Arbitration And Conciliation Act: Delhi High Court Reiterates

The Delhi High Court has held that Section 14 of the Limitation Act, which provides for exclusion of time consumed in civil proceedings initiated before a Court not having the jurisdiction, applies to proceedings under Section 34 of the A&C Act. The bench of Justice Jyoti Singh excluded 1239 days spent in prosecuting the petition under Section 34 petition before a Court not having the pecuniary jurisdiction. The Court observed that a party prosecuting its case with due diligence, in good faith and under a bonafide mistake before a Court not having the jurisdiction would get the benefit of Section 14 of the Limitation Act and the time consumed in such proceedings would stand excluded from the purview of limitation. Facts The present petition was filed by the Petitioners to challenge an award dated 08.06.2018 issued by the learned sole Arbitrator. This award stemmed from reference No.8N/CHD/(6)/17/LS 6508, concerning a contract order dated 05.06.2013 placed on the Respondent by the Petitioners. The contract pertained to the construction of a Seed Store with a capacity of 35,000 quintals, which encompassed the construction of boundary walls, roads, and electrical works, among other components. In the impugned award, the learned sole Arbitrator partially allowed claim Nos.1, 3, 4, 7, 8, 9, and 10 of the Respondent. In response, the Petitioners contested the award by filing a petition identified as ARBTN. No.5043/2018 under Section 34 of the 1996 Act before the District Judge. It's worth noting that this petition was submitted within the prescribed statutory time limit of three months specified by Section 34(3) of the 1996 Act. However, nearly three years later, precisely on 25.09.2021, the petition was dismissed on grounds of non-maintainability due to a lack of pecuniary jurisdiction. The dismissal was based on the assertion that the Statement of Claim presented by the Respondent indicated claims exceeding Rs.2 Crores. The petitioner was under a bonfide belief that under Section 12(2) of the Commercial Courts Act, only the principal amount is to be counter for the purpose of determining the pecuniary jurisdiction, therefore, the petitioner had filed the petition before the District Court as the principal amount was Rs. 1.92 Crores approximately. Interestingly, the respondent had also filed its objections to the award before the same court. Challenging this decision, the Petitioners filed an appeal with this Court, denoted as FAO(COMM.) No.200/2021 under Section 37(1)(b) of the 1996 Act. The Court, in an order dated 14.12.2021, upheld the dismissal, finding no flaws in the impugned order. However, the Court clarified that this dismissal would not prevent the Petitioners from initiating a petition under Section 34 of the 1996 Act in accordance with the law, provided it is presented before a Court of competent jurisdiction. Pursuant to the liberty granted by the High Court, the Petitioners filed the present petition on 31.01.2022 along with an application under Section 14 of the Limitation Act r/w Section 151 of CPC. Contention of the Parties The petitioner made the following submissions in favour of the application: Petitioners promptly initiated a Section 34 petition on 06.09.2018 before the learned District and Sessions Judge at Patiala House Courts. This was within the stipulated three-month limitation period.The Petitioners believed that the Respondent's interest claims were not to be included under Section 12(2) of the Commercial Courts Act, 2015, leading to a total claim value of Rs.1,92,49,235/-, thereby establishing the District Court's pecuniary jurisdiction.The issue of lacking pecuniary jurisdiction only emerged on 07.08.2021. The petition was ultimately dismissed on 25.09.2021, after a three-year period. Subsequently, the Petitioners challenged this order by appealing on 06.12.2021 under Section 37(1)(b) of the 1996 Act. Although the appeal was dismissed, the Division Bench observed that such dismissal wouldn't hinder the Petitioners from filing a Section 34 petition before a Court of competent jurisdiction.In view of the Covid-19, the Supreme Court directed the exclusion of the period from 15.03.2020 to 28.02.2022. An alternative perspective was presented: the initial Section 34 petition was filed with a balance period of 2 days remaining within the three-month limitation period prescribed by Section 34(3). Benefiting from Section 14, the period from 06.09.2018 to 14.12.2021 could be excluded. This exclusion, coupled with the extension of 2 days until 28.02.2022 per the Supreme Court's order, validated the petition filed on 31.01.2022 as within limitation. The respondent made the following counter-arguments against the application: The respondent contested the Section 14 application, arguing that the Section 34 petition was filed after a 1334-day delay from the award's date...

Section 14 Of Limitation Act Applicable To Proceedings U/S 34 Of Arbitration And Conciliation Act: Delhi High Court Reiterates

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Section 14 Of Limitation Act Applicable To Proceedings U/S 34 Of Arbitration And Conciliation Act: Delhi High Court Reiterates

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