Vidya Prakashan Mandir Ltd. vs. Shri Shyam Construction Company

AFR

Court No. - 3

Case :- FIRST APPEAL FROM ORDER No. - 2444 of 2018

Appellant :- M/S Vidya Prakashan Mandir Ltd. Respondent :- M/S Shri Shyam Construction Company Counsel for Appellant :- Swetashwa Agarwal,Sri Anurag Khanna Counsel for Respondent :- Kiran Kumar Arora

Hon'ble Pankaj Mithal,J. Hon'ble Rajiv Joshi,J.

Heard Sri Anurag Khanna, Senior Counsel assisted by Ms. Himadari Batra, learned counsel for the appellant and Sri K.K. Arora, learned counsel for the respondent.

The appellant has preferred this appeal against the judgement and order dated 27.04.2018 passed by the District Judge, Meerut rejecting application of the appellant filed under Section 34 of the Arbitration and Conciliation Act, 1996 (here-in-after referred to as the Act) for setting aside the arbitral award dated 27.12.2010 as corrected/revised on 11.01.2011 as barred by limitation.

It appears from the facts as stated in the appeal as well as in the impugned order that an arbitral award was passed on 27.12.2010 in connection with the dispute between the parties. It was corrected/revised on 11.01.2011 under Section 33 of the Act. A signed copy of the award was provided to the parties including the appellant in January, 2011.

The application under Section 34 of the Act was filed on 13.11.2013 along with an application to condone the delay in filing it allegedly claiming benefit of Section 14 of the Limitation Act.

The limitation for filing application under Section 34 of the Act is provided under Sub-Section (3) of Section 34 of the Act and it is three months from the date on which the party making the application had received the arbitral award or the date on which a request for the modification of the award is accepted.

In simple words, the limitation for filing an application

under Section 34 of the Act is 3 months from the receipt of the arbitral award or the acceptance of the request for the modification of the award.

The proviso to Sub-Section (3) of Section 34 of the Act empowers the court to entertain an application under Section 34 of the Act even after three months but not beyond further period of 30 days. Thus, the power to condone the delay, if any, in filing of the application under Section 34 of the Act is limited only for one extra month and not any further.

In the present case, on the face of the record, the application under Section 34 of the Act was not filed within limitation of three months or even within four months of the receipt of the award but much afterwords i.e. with the lapse of about two years and 260 days and thus was beyond the competence of the court to entertain it or condone the delay in filing it.

The submission of Sri Anurag Khanna, Senior Counsel for the appellant is that after the correction/revision of the award, an execution was filed by the other side on 25.04.2011 so as to execute it. The appellant had filed objections therein stating that as the award is not properly stamped it is not executable reserving the rights of filing objections under Section 34 of the Act. The appropriate stamp duty on the award was paid on 29.10.2013 whereupon the appellant filed application under Section 34 of the Act. The appellant had been pursuing the execution proceedings bonafidely and as such the period spent by it in contesting the execution proceedings is liable to be excluded.

He has placed reliance upon the decision of the Supreme Court in the case of Commissioner, Madhya Pradesh Housing Board and others Vs. Mohanlal and Company (2016) 14 SCC 199 wherein the Apex Court has accepted on principle that the provision of Section 14 of the Limitation Act applies to the proceedings under the Act for the purposes of excluding the time spent by a person in bonafidely pursuing a remedy in the wrong court.

There are no two opinions that the provisions of Section 14 of the Limitation Act would apply for excluding time spent bonafidely in pursuing proceedings before a wrong court. However, for the purposes of applying Section 14 of the Limitation Act the Supreme Court in the said very judgement has clearly laid down five essential conditions which are necessary to be fulfilled before the benefit of Section 14 of the Limitation Act can be granted. The said conditions are:-

(i) both prior and subsequent proceedings are civil proceedings prosecuted by same party;

(ii) prior proceedings had been prosecuted with due diligence and in good faith;

(iii) failure of prior proceeding was due to defect of jurisdiction or other cause of like nature;

(iv) earlier proceeding and latter proceeding must relate to same matter in issue; and

(v) both the proceedings are in a court

A very reading of the aforesaid conditions specially condition Nos.(iii) and (iv) reveals that Section 14 of the Limitation Act applies where the parties have been bonafidely pursuing proceedings in a wrong court having no jurisdiction in the matter and the earlier proceedings relate to the matter in issue in the subsequent proceedings.

The proceedings for the execution of the award are entirely different to the proceedings for setting aside the arbitral award under Section 34 of the Act. In the execution proceedings the appellant was opposing the execution of the award may be on a variety of grounds primarily for the reason that it was not executable but there was no challenge to the award itself or a prayer for setting aside the award. Thus, there was no challenge to the award in the execution proceedings. Therefore, ex facie the two proceedings does not relate to the same matter. Accordingly, the appellant does not fulfil one of the conditions laid down by the Supreme Court for the applicability of Section 14 of the Limitation Act.

It is not the case of the appellant that the execution of the aforesaid award was in a court which had no jurisdiction, therefore, there was no defect of jurisdiction in prosecuting the implementation of the award.

In this view of the matter, one and other essential condition for applying the Section 14 of the Limitation Act to the effect that the earlier proceedings have failed due to defect of jurisdiction also does not stand fulfilled in the present case.

In view of the above the two of the basic conditions for applying Section 14 of the Limitation Act so as to exclude the time spent by the appellant in pursuing the other remedy namely condition Nos.(iii) and (iv) as laid down by the Supreme Court in Commissioner, Madhya Pradesh Housing Board and others (Supra) does not stand satisfied to enable the appellant to get the benefit of Section 14 of the Limitation Act.

It may be important to note that the period of limitation prescribed under Section 34(3) of the Act is absolute and unextendable beyond the period of 3 months and 30 days.

A Division Bench of this court in Suman Devi Vs. Additional Commissioner (Administration) 2018 (5) ADJ 636 (DB) after considering the decision of the Supreme Court in Commissioner, Madhya Pradesh Housing Board and others (Supra) held that 3 months and 30 days is the maximum period of limitation under Section 34(3) of the Act and the said period is not extendable as Section 5 of the Limitation Act has no application. The benefit of Section 14 of the Limitation Act cannot be allowed if the proceedings pursued earlier by the party are of a different nature.

It is for the party, who seeks to get the period extended for any reason, may be under Section 14 of the Limitation Act has to prove that he is so entitle to the benefit otherwise Section 14 of the Limitation Act would have no application.

In view of the aforesaid facts and circumstances, even though Section 14 of the Limitation Act may be applicable to proceedings under the Act, nonetheless as the conditions necessary for applying it do not stand satisfied, we do not feel that the court below has committed any mistake in rejecting the application of the appellant under Section 34 of the Act as barred by limitation.

The appeal is devoid of merit and is dismissed.

Order Date :- 23.5.2018 piyush