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2011 DIGILAW 294 (CAL)

UNION OF INDIA v. Durga Iron Stores

2011-03-02

ASHOKE KUMAR DASADHIKARI

body2011
JUDGMENT 1. THE petitioner No. 1, the Union of India, acting through the General Manager, Eastern Railway, under the Ministry of Railways, has filed this application for condonation of delay under sub-section (3) of section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") praying condonation of delay so that the Award dated November 14, 2007, passed by the Sole Arbitrator, could be challenged by it under section 34 of the Act. 2. IT would appear from the averments made in the application that the Award dated November 14, 2007 was served by the Sole Arbitrator upon the respondent and the Award was received by the office of the petitioners on November 15, 2007 and the petitioners decided to file the application for setting aside the Award passed by the Sole Arbitrator on November 14, 2007. The learned Advocate was contacted to draw the setting aside application and to file the same within the statutory period of limitation. But the application was not filed within 90 days and in fact the application for setting aside the Award with the application for condonation of delay was filed after a period of 108 days delay due to unavoidable circumstances which were beyond the control of the petitioners. 3. IT was contended that the Award was scrutinised by various departments for appreciation of the same. Thereafter a scam was detected whereby the officials of the Railways had connived with the award holder and suppressed the impugned Award from being challenged. 4. IT is also stated that serious irregularities were noticed in the procedure followed by the department of the Eastern Railway in challenging the impugned Award dated November 14, 2007. IT is stated that the Railway officials and the Award holder, in collusion, had deliberately suppressed the Award from being challenged by filing the application within time. The scam had occurred in the department of the Railways which had resulted in the subject Award not being challenged within the statutory time fixed. IT is stated that the Railway authorities, after detection of the scam, have filed this application for condonation of delay along with the section 34 application thereby challenging the Award. The learned Counsel for the petitioners point out that they have suspended two officers and transferred one for the aforementioned reason. 5. IT is stated that the Railway authorities, after detection of the scam, have filed this application for condonation of delay along with the section 34 application thereby challenging the Award. The learned Counsel for the petitioners point out that they have suspended two officers and transferred one for the aforementioned reason. 5. THE learned Counsel for the petitioners submitted that fraud had been practised and therefore the delay of 108 days should be condoned by following the principles of the Limitation Act. 6. THE learned Counsel for the petitioners has cited two decisions of the Hon'ble Supreme Court reported in AIR 2006 SC 2525 (State of Goa vs. Western Builders). THE other decision cited by the learned Counsel for the petitioners is reported in AIR 2009 SC 2577 . The learned Counsel for the respondent submitted that in view of subsection (3) of section 34 of the Act, the petitioners are entitled to question the Award within 90 days and they can file an application for condonation of delay with proper and valid reasons within 30 days thereafter and not beyond that. The learned Counsel for the respondent referred to sub-section (3) of section 34 of the Act. Sub-section (3) of section 34 of the Act is reproduced hereinbelow: "(3) an application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months, it may entertain the application within a further period of 30 days, but not thereafter." 7. HE further contended that the proviso under sub-section (3) of section 34 of the Act makes it clear that even in case of non-filing of section 34 application within 90 days, the statute has given power to the Court to condone the delay for 30 days more and not beyond that. HE further contended that the proviso under sub-section (3) of section 34 of the Act makes it clear that even in case of non-filing of section 34 application within 90 days, the statute has given power to the Court to condone the delay for 30 days more and not beyond that. The words added in the proviso, "it may entertain the application within a further period of 30 days but not thereafter" and the words "not thereafter" guarantee a greater significance and the Court has no power or authority to extend the time beyond thirty days after expiry of 90 days within which an Award could be questioned under section 34 of the Act. 8. THE learned Counsel further submitted that even after expiry of 90 days, there is a delay of 108 days which under no circumstances could be condoned by this Court in view of the specific bar under the Act under proviso of sub-section (3) of section 34 of the Act. According to the learned Counsel, the Award was passed on November 14, 2007 which was served on November 15, 2007 and it could have been questioned without any application for limitation in between November 15, 2007 to February 13, 2008. Further, the Court was granted discretion to condone the delay for another 30 days which is completed by March 15, 2008. However, this application for condonation of delay has been filed much later, i.e. on June 2, 2008 and therefore there is no scope for condoning the delay nor the Court is empowered to condone such delay under the Act. He submits that so far as the Limitation Act is concerned, that has got no manner of application in the instant case since the specific time limit has been prescribed and/or stipulated under the Act itself. 9. THE learned Counsel cited two Division Bench decisions of this Court, one is reported in 2010(1) CHN 143 and the other is reported in AIR 2008 Calcutta 6 (State of West Bengal vs. Afcons Infrastructure Ltd.). 10. HEARD the learned Counsel for both the sides. Considered the averments made in the application and in the affidavit in opposition. 9. THE learned Counsel cited two Division Bench decisions of this Court, one is reported in 2010(1) CHN 143 and the other is reported in AIR 2008 Calcutta 6 (State of West Bengal vs. Afcons Infrastructure Ltd.). 10. HEARD the learned Counsel for both the sides. Considered the averments made in the application and in the affidavit in opposition. In my opinion, sub-section (3) of section 34 of the Act makes it clear that the petitioners, if want to question the Award, had to file an application under section 34 of the Act within 90 days and in extreme circumstances, for valid and appropriate reasons, the challenge could be made within a period of 30 days more; of course with an application for condonation of delay for those 30 days. However, the section itself is quite clear and it is specifically mentioned in the section that the application for setting aside cannot be entertained beyond 120 days. There is a clear bar to entertain the application under section 34 which is well-settled. 11. THE judgments cited by the learned Counsel for the respondent are very clear in that regard. THE judgment delivered by the Division Bench of this Court in the case of State of West Bengal vs. Afcons Infrastructure Ltd. (supra), it was clearly held that the time stipulated under the Act itself under no circumstances could be extended and therefore there is no scope for condoning the delay of 108 days by this Court. 12. THE Hon'ble Division Bench of this Court in paragraph 6 of the judgment quoted some paragraphs from the decision of the Hon'ble Supreme Court reported in AIR 2001 SC 4010 , (Union of India vs. Popular Construction) and in that judgment the Hon'ble Supreme Court has interpreted the clause "but not thereafter" and said that the limitation is fixed under the Act itself and there is no scope for applying section 5 of the Limitation Act. In paragraph 7 of the Supreme Court's judgment, it was clearly held to the effect that "to hold that the Court could entertain an application to set aside the award beyond the extended period under the proviso would render the phrase 'but not thereafter' whole otiose and no manner of interpretation would justify such a result". In paragraph 7 of the Supreme Court's judgment, it was clearly held to the effect that "to hold that the Court could entertain an application to set aside the award beyond the extended period under the proviso would render the phrase 'but not thereafter' whole otiose and no manner of interpretation would justify such a result". The next judgment cited by the learned Counsel for the respondent in the case of Rafik alias Rafik vs. Magma Leasing Ltd. and Anr. (supra), it was clearly held that in sub-section (3) of section 34 of the Act, the period of limitation for filing such application is prescribed and the limitation is three months from the date on which the party, making the application under section 34 of the Act, had received the arbitral award or if the request had been made under section 33 of the Act form the date on which that request had been disposed by the arbitral tribunal. Under the proviso to sub-section (3) of section 34 of the Act, the Court may entertain an application under section 34 of the Act within a further period of thirty days provided the Court is satisfied that the applicant is prevented by sufficient cause from making the application within the said period of three months, not thereafter. 13. IN view of these two decisions, there is no scope for extending the time and/or condoning the delay of 108 days, thereby allowing the petitioners to question the Award passed by the Sole Arbitrator. 14. THE judgment cited by the learned Counsel for the petitioners reported in AIR 2006 SC 2525 do not help the petitioner. However, the Hon'ble Supreme Court in that case has decided that "it is only by virtue of subsection (2) of section 29 of the Limitation Act its operation is excluded to that extent of the area which is covered under the Arbitration and Conciliation Act, 1996". In the instant case, under section 34, by virtue of sub-section (3), only for the filing of the application for setting aside the Award a period has been prescribed as three months and the delay can be condoned to the extent of thirty days. In my opinion, this judgment do not help the petitioners in any manner. In the instant case, under section 34, by virtue of sub-section (3), only for the filing of the application for setting aside the Award a period has been prescribed as three months and the delay can be condoned to the extent of thirty days. In my opinion, this judgment do not help the petitioners in any manner. The other case cited by the learned Counsel for the respondents, being State of Karnataka vs. Y. Moideen Unihee (dead by LRs) and Ors., which was a case where the section 5 was applicable and the case itself was not related to any of the provisions under the Act and therefor this also do not help the petitioners' contention. 15. LASTLY, the petitioners contended that fraud has been practised and have drawn attention of this Court by showing two suspension orders and one transfer order which however do not prove that any fraud has been practised by any one of them. 16. UNDER such circumstances, I am of the view that the delay for 108 days could not be condoned by this Court and accordingly the said application for condonation of delay is rejected and the resultant effect is that section 34 application is not entertained by this Court and the same is also dismissed.