Petition U/S 34 Of The A&C Act Dismissed Twice For Non-Prosecution, Delhi High Court Denies Benefit Of Section 14 Of Limitation Act Citing Lack Of Diligent Prosecution

The bench of Justices Rajiv Shadkher and Tara Vitasta Ganju held that the fact that a petition was dismissed in default on two occasions, shows complete lack of due diligence in its prosecution.

The Court held that benefit of Section 14 of the Limitation Act, which exempt a period covered by litigious activity and protects a litigant against the bar of limitation when a proceeding is dismissed on account of a technical defect instead of being decided on merits, would not be extended to a party that fails to diligently pursue a matter.

Facts

The dispute stemmed from a contract for the execution of Power House Electrical equipment at District Saharanpur, awarded to the Respondent by the Appellant through a contract dated 28.09.1988. Arbitration ensued due to disputes between the parties, resulting in an Arbitral Award dated 15.03.2001 in favor of the Respondent. Aggrieved thereby, the appellant challenged the award under Section 34 of the A&C Act.

The Section 34 Petition faced procedural challenges, including transfers between different courts (Saharanpur and Patiala House Courts, New Delhi) and dismissals in default on two counts. The Appellant, citing legal advice, withdrew the case from the District Judge at Saharanpur and filed it before the District Courts in Delhi.

Again, the Section 34 Petition faced jurisdictional issues and was eventually filed before a Single Judge of the Court on 25.08.2018. The court noted that the proceedings took an unusual 17 years to reach adjudication and dismissed the petition as barred by limitation.

Aggrieved thereby, the appellant filed an appeal under Section 37 of the A&C Act against the dismissal of the Appellant's application under Section 14 of the Limitation Act, seeking to condone a substantial delay of 6263 days in filing a petition under Section 34 of the Act which resulted in the dismissal of the petition.

Contention of the Parties

Contentions of the Appellant

• The Appellant asserted entitlement to exclude the time spent in Saharanpur and Patiala House Courts, justifying actions based on legal advice.
• Emphasized pursuing the case in good faith and diligence, attributing the filing in the wrong court to incorrect advice.

Contentions of the Respondent

• The Respondent highlighted the Appellant's multiple filings in different courts, knowing the lack of jurisdiction.
• Argued that the Appellant failed to demonstrate due diligence and good faith in prosecuting the case.

Analysis by the Court

The court analyzed the conditions of Section 14 of the Limitation Act, emphasizing the need for due diligence, good faith, defect of jurisdiction, and the same matter in issue.

The court found the Appellant's conduct lacking in due diligence, pointing to dismissals in default, delays, and filing in courts lacking jurisdiction. The Court observed that the petition was dismissed in default on two occasions, which shows complete lack of due diligence in its prosecution.

The Court held that the application of Section 14 of the Limitation Act is not available to a petitioner who, through lack of diligence, allowed its Section 34 petition under the Arbitration and Conciliation Act to be dismissed twice for non-prosecution.

The court pointed out the lack of explanation for the repeated dismissals. The court observed that the appellant failed to provide a reasonable explanation for filing in the wrong court, demonstrating a lack of due diligence and care.

The Court concluded that the pre-conditions for the application under Section 14 were not satisfied, leading to the dismissal of the appeal.

Case Title: U.P. Jal Vidyut Nigam Ltd v. C.G. Power & Industrial Solution Ltd

Citation: 2023 LiveLaw (Del) 1297

Date: 12.12.2023

Counsel for the Appellant: Mr. Pradeep Mishra and Mr. Daleep Dhyani, Advs.

Counsel for the Respondent: Mr. Ramesh Singh, Sr. Adv. with Ms. Monisha Handa and Mr. Mohit D. Ram, Advs.

Click Here To Read/Download The Order