The Rajasthan High Court has observed that the provision of Section 5 of the Indian Limitation Act does not apply to the proceedings contained under Section 34 of the Arbitration and Conciliation Act, 1996.
Justice Anoop Kumar Dhand, while dismissing an appeal preferred by the State government observed,
"In view of the discussions made above, this Court of the opinion that the application under Section 34(3) of the Act of 1996 filed by the appellant for setting aside the arbitral award dated 29.07.2000 was beyond the mandatory period of limitation permitted under the Act of 1996. Hence, the same could not have been entertained by taking the recourse of the provisions of the Limitation Act."
The court observed that the proviso to Section 34(3) of the Act of 1996 empowers the court if it is satisfied that the applicant was prevented by sufficient cause from making application within the said period of three months to further extend the period and filing of the application for setting aside the arbitral award by 30 days but not thereafter.
It was opined by the court that the application for setting aside the arbitral award may not be made after three months after having elapsed from the date on which the party making that application had received the arbitral award. The court noted that the trial court has taken all these facts into consideration and rejected the objections raised by the appellant-State of Rajasthan by treating the same as beyond limitation.
Further, the court said that it is not in dispute that the arbitral award was passed on 29.07.2000 and the objections were filed by the appellant-State of Rajasthan under Section 34 of the Act of 1996 on 21.11.2000. It is an admitted position of law that the application for setting aside the arbitral award can be filed within a period of three months and it is not in dispute that the objection came to be filed before the court concerned on 21.11.2000, thus the same was presented after the expiry of the limitation period, added the court.
Essentially, a work contract was given to the respondents for renewal work of pever and Hot Mix plant in 14 Km. Length on Agra Road, NH-11 for which Agreement No.26, year 1993-94 was executed between the parties. There was an arbitration clause in this Agreement to resolve the dispute. During the progress of the work, dispute arose between the parties.. After hearing both sides, the Arbitrator passed an award of Rs. 4,33,161.79/- with interest @ 18% from 25.04.1997 till its actual payment vide award dated 29.07.2000.
Thereafter, an application before the trial court for passing a decree in terms of the award dated 29.07.2000 as the award was not satisfied. When the notices of this application were served upon the appellant-State, the appellant submitted an objection on 22.02.2001 by filing reply of the aforesaid application in respect of the award dated 29.07.2000. Since there was delay in filing objections, hence an application under Section 5 of the Limitation Act was submitted for condoning the delay.
The trial court rejected the objections vide impugned order dated 30.08.2008 by holding that the objections were not filed within the time of limitation prescribed under Section 34 (3) of the Act of 1996 and also held that the objections cannot be decided on merits as the same were beyond limitation. Aggrieved by the same, the instant miscellaneous appeal has been preferred by the State of Rajasthan.
The counsel for the appellant submitted that the copy of the award was not made available to the officer-in-charge of the appellant by the Arbitrator. Hence delay has occurred in filing the objections but the court below has committed an illegality in rejecting the objections by treating the same as time barred, he added.
The respondent's counsel submitted that the matter was contested by the appellant before the Arbitrator and the Arbitrator passed the award on 29.07.2000 after hearing both sides and a copy of the award was forwarded to the Chief Engineer, PWD (National Highway), Jaipur. He also submitted that the appellant was well aware about the passing of the award, as they have participated in the entire arbitral proceedings. He added that now the objections were submitted beyond the prescribed period of limitation contained under Section 34(3) of the Act of 1996, which were not maintainable in the light of Apex Court's decision of Union of India Vs. Popular Construction Co. [2001 (3) Arb. LR 345 (SC)].
Adv. Pankaj Chaudhary for Dy. GC Rohit Choudhary appeared for the appellants while Adv. R.P. Garg appeared for the respondent.
Case Title: State Of Rajasthan & Anr. v. M/s. Godhara Construction CompanyCitation: 2022 LiveLaw (Raj) 162