Vipul Ganda is an Independent Litigation Counsel with over 14 years of experience and a proven track record in Litigation and Dispute Resolution.

Sharma Kalypso Pvt. Ltd. Versus Engineers India Limited


Court / Forum : High Court of Delhi
Citation : O.M.P. (I) 363/2019
Coram : Ms. Justice Jyoti Singh
Subject : Section 34 of Arbitration and Conciliation Act, 1996 (“1996 Act”)
Date of Decision : 2020-06-18

Brief Facts

  • The present petition has been filed under Section 34 of the 1996 Act against the award dated April 23, 2019 (“Award”) passed by the Arbitral Tribunal. The Petitioner has filed an application for condonation of delay of 1 day in filing the present petition and an application seeking condonation of delay of 8 days in re-filing.

Issues

  1. Whether there was a delay of one day in the initial filing of the petition in the present matter?
  2. Whether the filing could be termed as non-est and if not, whether the Petitioner is entitled to condonation of delay in re-filing or not?

Decision

  • The Court observed that Section 34 (3) of 1996 Act provides a limitation period of 3 months for filing objections against an Award. Under the Proviso to the section, Court has the power to condone the delay in filing beyond the statutory period of 3 months, provided the petition is filed within 30 days and the party shows ‘sufficient cause`, which prevented it from filing the petition within statutory period of 3 months. The period of limitation as held by the Supreme Court in Union of India v. Popular Construction, (2001) 8 SCC 470 and Simplex Infrastructure Limited vs. Union of India, 2019 (2) SCC 455 is very stringent and inflexible and Court has no power to condone the delay of even 1 day beyond the 3 months and 30 days.
  • With respect to the first issue, the Court observed that the Award in the present case was passed on April 23, 2019 and was served on the Petitioner on the same day. Petition was filed in this Court on July 23, 2019. Therefore, for the purpose of calculating the three months` period, the date of April 23, 2019 would have to be excluded. Thus, the three months` statutory period for filing the objections under Section 34(3) of the 1996 Act would expire on July 23, 2019. Therefore, it was held that the Petition was filed within the limitation period of three months under the 1996 Act.
  • With respect to the first part of the second issue the Court observed that it is settled law that in case the petition filed originally is a non-est filing, then, as and when a valid petition is filed, the said date will be treated as a date of fresh filing. It is equally settled that in case a proper petition is filed, but it has certain defects which are not fundamental to the filing but are only perfunctory, then the Courts have to adopt a liberal approach in re-filing, provided the delay is not unduly long and the party is able to show ‘sufficient cause` that prevented the re-filing within a reasonable period.
  • The Court also referred the judgement of SKS Power Generation (Chhattisgarh) Ltd. vs. ISC Projects Private Limited, 2019 SCC OnLine Del 8006, whereby a the Court while examining the petition filed, as a matter of record, found that the petition was filed without any affidavit, Vakalatnama or documents and therefore, held that it was only a ‘bunch of papers` and not a proper petition. In the case of Oil and Natural Gas Corporation Ltd v. Joint Venture of Sai Rama Engineering Enterprises (Sree) & Megha Engineering & Infrastructure Limited (Meil), 2019 SCC OnLine Del 10456, the Court laid down certain basic parameters, which cumulatively, must be fulfilled, in order to term the filing as a ‘proper` filing.
  • Therefore, a petition, when filed, can be termed as a ‘bunch of papers` when it lacks all the parameters, however, when the petition substantially complies with most of the parameters when it is filed, it cannot be said that a mere ‘bunch of papers` is filed. This expression is intended to apply to a situation where the petition is filed without Vakalatnama, Statement of Truth, Signatures, Court Fees etc. cumulatively, and is hopelessly inadequate and insufficient or contain defects which are fundamental to the institution of the proceedings, the filing would be non-est and of no consequence. In such a case, benefit of initial filing cannot be given and the date on which defects are cured, would be the date of initial filing.
  • The Court observed that in the present matter, the defect sheet showing the defects notified by the Registry, after the initial filing, reveals that a Vakalatnama was filed alongwith the petition, although there were some defects with respect to the identification, etc. After the defects were notified with respect to the Vakalatnama, the Petitioner removed the defects and filed a fresh Vakalatnama on August 23, 2019. Thus, the Court opined that once a Vakalatnama was initially filed, though with certain defects, a filing of a fresh Vakalatnama, without any defect, cannot be treated as a deficiency of a threshold which could lead to dismissal of a petition as ‘non-est`.
  • It was noted that filing of a mere bunch of papers cannot stop limitation and applicants who are not diligent and carelessly file some papers, without vital documents only to stop limitation, cannot be given the benefit of condonation of delay. The underlying rationale is to prevent mischief by entertaining a wholly inadequate petition. However, the present petition was filed substantially compliant with all requirements and supported by vital documents, including Vakalatnama, though it had defects.
  • With respect to the second part of the issue, the Court observed that re-filing of a petition is governed by the Delhi High Court Rules which require re-filing to be done within a time of 7 days at a time and 30 days in aggregate.
  • In the present matter, the re-filing of the petition was done within aggregate of 30 days, as per Rule 5 of the Delhi High Court Rules, from the date the objections were first marked on July 25, 2019.
  • Thus, the Court held that once the initial filing is within the 3 months limitation period or the extended 30 days, and is a valid filing, then refilling has to be looked at with a liberal approach. Secondly, even if the re-filing is beyond the period specified under Section 34(3) of the Act, it can be condoned.
  • Accordingly, the Court held that the delay of 38 days in re-filing had been sufficiently explained and deserved to be condoned. The application seeking condonation of delay of one day in filing the petition was disposed of as infructuous. Application seeking condonation of delay in re-filing was allowed and the delay was condoned.

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.