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Non-Delivery Of Signed Copy Cannot Save Limitation; Chhattisgarh High Court Affirms Section 34 Dismissal

Parina Katyal
26 Sep 2022 2:30 PM GMT
Non-Delivery Of Signed Copy Cannot Save Limitation; Chhattisgarh High Court Affirms Section 34 Dismissal
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The Chhattisgarh High Court has ruled that though the delivery of signed copy of the arbitral award to each of the parties to the arbitral proceedings is sine qua non, however, if the award debtor had already become aware of the award, enabling him to file an application to set aside the award, mere non-delivery of the signed copy cannot be said to cause any prejudice to him. The...

The Chhattisgarh High Court has ruled that though the delivery of signed copy of the arbitral award to each of the parties to the arbitral proceedings is sine qua non, however, if the award debtor had already become aware of the award, enabling him to file an application to set aside the award, mere non-delivery of the signed copy cannot be said to cause any prejudice to him.

The Single Bench of Justice Arvind Singh Chandel was dealing with an appeal filed by the applicant under Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act), against the order of the District Court dismissing the applicant's application to set aside the arbitral award on the ground of limitation.

The Court held that despite the fact that the applicant had not received the signed copy of the award, as required under Section 31(5) of the A&C Act, the applicant had filed an application against the award after a lapse of one year after becoming aware of the award and hence, the lower court had rightly dismissed the application on ground of limitation.

The respondent no. 1- Bhola Prasad Agrawal's land was acquired under the National Highways Act, 1956 (NHA), and the competent authority passed an order granting compensation under Section 3G of the NHA. The first respondent filed an application before the Arbitrator seeking enhancement of the compensation. The arbitrator passed an award enhancing the compensation to be awarded to the first respondent. Challenging the arbitral award, the Appellant- the Union of India, filed an application under Section 34 of the A&C Act before the District Court, which was dismissed on the ground of limitation. Against this, the Union of India filed an appeal before the Chhattisgarh High Court under Section 37 of the A&C Act.

The appellant/Union of India submitted before the High Court that it came to know about the award passed by the Arbitrator only when the respondent no. 1 made a representation to the competent authority under the NHA for disbursement of the award amount.

The appellant contended that the arbitral award was not delivered to it, as required under Section 31(5) of the A&C Act, adding that the certified copy of the award was yet to be provided to it.

Arguing that the limitation for filing an application under Section 34 would commence a day after the receipt of the award by the party, the Union of India contended that to complete the arbitral proceedings, it is mandatory to supply the signed copy of the award to both the parties. Further, it contended that since the signed copy of the award was not supplied to it, the arbitral proceedings cannot be said to be completed.

Section 31(5) of the A&C Act provides that after the arbitral award is made, a signed copy of the award shall be delivered to each party. As per Section 34 (3), the limitation period for filing an application under Section 34 to set aside an arbitral award is 3 months from the date of receipt of the arbitral award. The proviso to Section 34 (3) provides that the Court is empowered to condone the delay by a further period of 30 days.

The High Court noted that the Supreme Court in Consolidated Engineering Enterprises versus Principal Secretary, Irrigation Department (2008) had ruled that since the proviso to Section 34(3) is a specific legislation, it excludes the applicability of the general provisions contained in Section 5 of the Limitation Act, 1963 and, therefore, the Court has no discretion to extend the limitation beyond 30 days.

Further, the Court held that in view of Section 31(5), after the passing of the arbitral award, delivery of a signed copy of the award to each of the parties is sine qua non.

The Bench referred to the decision of the Supreme Court in Dakshin Haryana Bijli Vitran Nigam Limited versus Navigant Technologies Private Limited (2021), where the Apex Court had ruled that the date on which a signed copy of the final award is received by the parties, is the only date recognised by law from which the period of limitation for filing an application under Section 34 of the A&C Act would commence.

The Court noted that though the arbitral award was passed in 2018, the appellant filed an application to set aside the award after a lapse of more than 1 year and 10 months from the passing of the award. Further, it observed that none of the parties to the arbitral proceeding were delivered a signed copy of the arbitral award, as required under Section 31(5).

The Bench added that the appellant was yet to be supplied with a signed copy or a certified copy of the arbitral award, and hence, he had no occasion to file an application under Section 34 of the A&C Act; however, despite that the appellant filed an application to set aside the arbitral award.

While noting that the appellant came to know about the arbitral award when the respondent no. 1 moved an application before the competent authority seeking enhancement of the compensation on the basis of the award, the Court observed that the appellant became aware that it had to file an objection against the award after it sought a legal opinion in January, 2019. The Court added that yet the appellant filed an application under Section 34 after a lapse of one year in January, 2020.

The Bench held that the object of delivering a signed copy of the arbitral award to each of the parties to the arbitral proceedings is to enable the parties to become aware of the contents of the award, so that they can proceed in accordance with law to challenge the award.

However, the Court ruled that since the appellant had already become aware of the award when the respondent no. 1/land owner had moved the application seeking enhancement of the compensation, mere non-delivery of the signed copy of the award, as required under Section 31(5), did not create any prejudice to the appellant.

"This Court is of the view that provision of delivery of a signed copy of the arbitral award to each of the parties to the proceeding is meant for the purpose that the parties should aware of the contents of the award passed and if any of them has grievance, he can proceed further in accordance with law. As observed earlier, the Appellant had already become aware of the award when Respondent 1 moved the application before Respondent 2 for enhancement of the compensation on the basis of arbitral award dated 7.3.2018 and a legal opinion on this had also been obtained by the Appellant from the Advocate on 20.1.2019. Therefore, mere non-delivery of a signed copy of the award as contained in Section 31(5) of the Arbitration Act does not create any prejudice to the Appellant. Accordingly, in my considered view, the District Judge has rightly rejected the appeal/application moved under Section 34(2) of the Arbitration Act on the ground of limitation."

The Court thus dismissed the appeal.

Case Title: Union of India versus Bhola Prasad Agrawal & Anr.

Dated: 21.9.2022 (Chhattisgarh High Court, Bilaspur)

Counsel for the Appellant: Mr. Ramakant Mishra, Assistant Solicitor General

Counsel for the Respondent: Mr. Abhishek Vinod Deshmukh and Mr. Anurag Singh, Advocates; Mr. Rahul Jha, Government Advocate

Citation: 2022 LiveLaw (Chh) 69 

Click Here To Read/Download Order

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