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Court / Forum : High Court of Delhi
Citation : OMP (COMM) 26/2019
Coram : Justice Jyoti Singh
Subject : Section 34 of the Arbitration and Conciliation Act, 1996 (“1996 Act”) | Section 14 of Limitation Act, 1963 (“1963 Act”)
Date of Decision : 2020-06-04

Brief Facts

  • The present petition (“Petition”) has been filed under Section 34 of the 1996 Act challenging an award dated April 25, 2018 (“Award”) passed by the Ld. Arbitral Tribunal along with application bearing number I.A. 719/2019 for excluding the time of 30 days in filing the present Petition under Section 14 of the 1963 Act and application bearing number I.A. 720/2019 seeking condonation of delay of 91 days in re-filing the Petition and the reasons stated therein for the delay in re-filing is that there was ‘bereavement in the family` and the Petition could not be re-filed on time.
  • The Petition was earlier filed on August 28,2018 before Saket District Court but was later withdrawn on ground of lack of pecuniary jurisdiction on August 31, 2018 with the liberty to file fresh petition in appropriate Court.
  • Thereafter, the Petition was filed before High Court of Delhi on September 11, 2018 and subsequently the certain defects were raised by the Registry at different point of time:
    • Defect were raised on September 14, 2018 by the Registry
    • Petition refiled on September 25, 2018 (Second Filing), which was within the extended period of 30 days under proviso to Section 34(3) of the 1996 Act and also within 30 days available under the Delhi High Court Rules, for curing the defects.
    • Defects were again raised by the Registry on September 26, 2018 and the Petition was re-filed on October 30, 2018.
    • Petition was checked and defects were notified on October 31, 2018 and the Petition was again re-filed on November 13, 2018.
    • Defect were again notified on November 14, 2018, the Petition was re-filed on December 21, 2018.
    • Thereafter, Court was closed on account of Winter Vacations between December 22, 2018 and January 04, 2019.
    • Defects were notified by the Registry on January 05, 2019 and re-filing was done on January 08, 2019 and the Petition was finally cleared on January 16, 2019.

Issues

  1. Whether the Petitioner can take the benefit of condonation of delay under the 1963 Act if the filing is found to be a non-est filing?

Decision

  • It was observed by the Court that the defects notified by the Registry indicated that on initial filing, the Petition lacked vital documents as required by the laid down parameters of a valid filing. While the re-filing was done on September 25, 2018, but most of the defects were not cured, despite the Petitioner knowing that the outer limit of 120th day was expiring on September 29, 2018.
  • Thus, it was held that it was obvious that the re-filing was callously done and only with a view to stop limitation. Thereafter, the refiling done on October 30, 2018 was again without removing substantial objections. By this date the period of 120 days were over and any subsequent removal of objections come to the Petitioner's aid.
  • The Court relied upon the observations of the Division Bench in Delhi Development Authority v. Durga Construction Co. ,  2013 (139) DRJ 133 (DB), that once the petition was cured of all the defects and filed, the said date would be a date of fresh filing and not re-filing. Since in the present case, the said date goes beyond the 120th day, Petition would be treated as having been initially filed beyond the limitation period and the extended period of 30 days.
  • It was further noted that the intent of the Legislature in prescribing a strict limitation period to challenge an Award is to further the object of expeditious disposal under the Alternate Dispute Resolution Mechanism and in case the party aggrieved by the Award, is permitted to challenge the Award without any fetters of limitation and a liberal approach is adopted, the entire purpose would be frustrated.
  • It was further observed that the filing of wholly insufficient, inadequate petitions, classified as a mere ‘bunch of paper` is a non-est filing and cannot stop limitation. If the Court was to hold that non-filing of Vakalatnama, Statement of Truth is a curable defect and it is open to an Objector to file a petition, lacking the vital documents and then cure the defects at his will, it would clearly be against the principles laid down in these judgments. Therefore, permitting a party, aggrieved by an Award, to file hopelessly inadequate petitions to stop limitation and then argue that the defects are curable will also put the intent of the Legislature, to provide a strict and inelastic limitation period, to a naught.
  • Additionally, it would be wholly unfair to the party who has an Award in its favour, to wait endlessly, as even the enforcement proceedings would have to await the dismissal of the Objection Petition.
  • Therefore, the Court held that the Petition as filed during the extended period of 30 days, under Proviso to Section 34(3) of the 1996 Act, was a non-est filing and thus the application seeking condonation of delay in re-filing cannot be allowed. Accordingly, the Petition was dismissed.

Vipul Ganda is a Delhi based Advocate practicing largely at the Delhi High Court. His practice focus is Dispute Resolution and Litigation and his practice areas include Arbitration, Commercial, Civil, Constitutional, Corporate and Criminal Litigation.