Judgment of the Supreme Court concerning the applicability of the Limitation Act, 1963, and the General Clauses Act, 1897, to challenges against arbitral awardsunder Section 34(3) of the Arbitration and Conciliation Act, 1996. The Court considered whether Section 4 of the Limitation Act, which extends the filing period when a court is closed, applies to the 30-day grace period under Section 34(3) of the ACA. Ultimately, the court affirmed the High Court’s decision that the Section 34 application was barred by limitation, concluding that Section 4 of the Limitation Act only applies to the initial three-month limitation period, and the General Clauses Act does not apply when the Limitation Act is applicable. While acknowledging potential harshness, the Court deferred to established legal precedent.
(A) Arbitration and Conciliation Act, 1996, Section 34(3), 43(1) – Limitation Act, 1963, Section 4 and 29A – General Clauses Act, 1897, Section 10 – Arbitration award – Limitation to Challenge – Whether the benefit of the additional 30 days under the proviso to Section 34(3), which expired during the vacation, can be given when the petition is filed immediately after reopening in exercise of power under Section 4 of the Act, 1963 – The appellants received the arbitral award on 14.02.2022 – The 3- month limitation period for filing the application under Section 34(3) of the ACA expired on 29.05.2022, on which date the court was functioning, but closed after five days for vacation commencing from 04.06.2022 to 03.07.2022 – The application under Section 34 was filed immediately on the court’s reopening, i.e. 04.07.2022 – The High Court single judge under Section 34 and the High Court division bench under Section 37 dismissed the petition as barred by limitation – Held that in light of the current position of law, the Section 34 application preferred by the appellant is barred by limitation based on the following conclusions: (i) There is no wholesale exclusion of Sections 4 to 24 of the Limitation Act when calculating the limitation period under Section 34(3) of the ACA – (ii) Section 4 of the Limitation Act applies to Section 34(3) of the ACA only to the extent when the 3-month period expires on a court holiday. It does not aid the applicant hereinafter when the 30-day condonable period expires on a court holiday – In view of the applicability of Section 4 of the Limitation Act to Section 34 proceedings, Section 10 of the GCA does not apply and will not benefit the applicant when the 30- day condonable period expires on a court holiday – Application preferred by the appellant under Section 34 of the ACA stands dismissed as it was filed beyond the condonable period of 30 days, which conclusively and absolutely expired on 28.06.2022 – Judgment and order passed by the High affirmed and the appeal liable to be dismissed.
(Para 1, 37 and 38)
(B) Arbitration and Conciliation Act, 1996, Section 34(3), 43(1) – Limitation Act, 1963, Section 4 and 29A – General Clauses Act, 1897, Section 10 – Arbitration award – Challenge as to – Limitation – Whether the benefit of the additional 30 days under the proviso to Section 34(3), which expired during the vacation, can be given when the petition is filed immediately after reopening in exercise of power under Section 4 of the Act, 1963 – Held that Section 4 of the Limitation Act applies to Section 34(3) of the ACA – Section 4 of the Limitation Act benefits a party only when the “prescribed period’’, i.e. the 3-month limitation period under Section 34(3) expires on a court holiday – In such a situation, the application under Section 34 will be considered as having been filed within the limitation period if it is filed on the next working day of the court – Section 4 of the Limitation Act does not come to the aid of the party when the 3-month limitation period expires on a day when the court was working. The 30-day condonable period expiring during the court holidays will not survive and neither Section 4, nor any other provision of the Limitation Act, will inure to the benefit of the party to enable filing of the Section 34 application immediately after reopening – Since Section 4 of the Limitation Act applies to proceedings under Section 34 of the ACA, the applicability of Section 10 of the GCA stands excluded in view of the express wording of its proviso that excludes the applicability of the provision when the Limitation Act applies.
(Para 35)
My Preferred Transformation And V. M/S. Faridabad Implements Pvt. Ltd.
Supreme Court: 2025 INSC 56: (DoJ 10-01-2025)
