M/S Chintels India Limited Versus Bhayana Builders Pvt. Ltd.
Court / Forum : High Court of Delhi
Case Number : O.M.P. (COMM) 444/2019
Coram : Ms. Justice Jyoti Singh
Subject : Section 34 of Arbitration and Conciliation Act, 1996 (“1996 Act”)
Date of Decision : June 4, 2020
- The present petition has been filed under Section 34 of the 1996 Act challenging an award dated May 3, 2019 (“Award”) passed by the Arbitral Tribunal whereby certain claims of the Respondent have been allowed and those of the Petitioner have been rejected.
- Applications for condonation of delay of 28 days in filing and 16 days in re-filing the petition, respectively has filed by the Petitioner. It is admitted in the application that the petition was filed beyond the initial 3 months limitation period under Section 34(3) of the 1996 Act.
- It is also stated that the counsel in the present petition was not appearing for the Petitioner before the Arbitral Tribunal and the case was being prosecuted by another counsel. After the Tribunal published the Award, the counsel appearing before the Tribunal, expressed his inability to continue further in the matter and returned the record. The present counsel received the record in or around third week of August and on account of the voluminous record and complex and technical nature of the issues, it was not possible to file the application immediately. It was further averred that the delay is not deliberate and could not have been avoided by the Petitioner. It was noted that this is the only reason given in the Application filed for condonation of delay.
- Whether a delay of more than three months can be condoned for filing objections against an award under section 34 of the 1996 Act?
- Section 34(3) of the 1996 Act provides a limitation period of 3 months for filing objections against an Arbitral Award. Proviso to Section 34(3) of the Act provides an extended period of 30 days for filing the application and the Court has the discretion to condone the delay, provided sufficient cause is shown by the party which prevented it from approaching the Court, in the limitation period of 3 months. It is clearly held by the Supreme Court in the case of Simplex Infrastructure vs. Union of India, 2019 2 SCC 455 that an application for setting aside the Award could be made within three months, extendable by a further period of 30 days on showing sufficient cause and not thereafter and the use of the words “but not thereafter” in the Proviso makes it clear that extension cannot be beyond 30 days.
- A plain reading of Section 34(3) of the 1996 Act and its proviso can lead to only one conclusion that the outer limit within which the Court has the power to condone the delay is 120 days. Once the delay in filing the petition exceeds, even one day beyond the outer limit of 120 days, Court has no power to condone the delay. It has been repeatedly emphasized by the Courts that the period of limitation under Section 34(3) of the 1996 Act is inelastic, as the intention of the Legislature is to provide a speedy and expeditious mechanism of adjudication in arbitration matters.
- It was held by the Court that in the present case the Petitioner was aware that the petition was being filed beyond the 3 months period and ought to have filed the application for condonation of delay, along with the petition. Further, the reasons given in the said application were far from meeting the requirement of “sufficient cause‟ under proviso to Section 34 (3) of the 1996 Act, to enable the Court to exercise its discretion and condone the delay.
- It was also observed that the record of filing indicated that when the petition was initially filed, there were defects in the Vakalatnama and the Statement of Truth and as the Petitioner has been unable to show any sufficient cause for condonation of delay, therefore, the Court held that even after assuming in favour of the Petitioner that the filing was not a non-est filing, the Petitioner cannot succeed. Thus, delay was not condoned.