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2014 DIGILAW 277 (UTT)

Reliable Filling Station v. Union of India

2014-07-10

U.C.DHYANI

body2014
Judgment U.C. Dhyani, J. The appellants filed an application under Section 5 of the Limitation Act to condone the delay in filing the objections under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the arbitral award. Learned District Judge, Haridwar, by the judgment and order under challenge held that Section 5 of the Limitation Act has no application to the Arbitration and Conciliation Act, 1996. 2) It was held by Hon’ble Supreme Court in Union of India vs. Popular Construction Co., (2001) 8 SCC 470 , that the time limit prescribed under Section 34 of the Arbitration and Conciliation Act, 1996 (here-in-after referred to as ‘the Act’) to challenge an award is absolute and cannot be extended under Section 5 of the Limitation Act. 3) It will be worthwhile to reproduce here-in-below the observations made by Hon’ble Apex Court in paragraphs nos. 14 and 16 of the aforesaid judgment. The same read as under: “14. Here the history and scheme of the 1996 Act support the conclusion that the time-limit prescribed under Section 34 to challenge an award is absolute and unextendible by court under Section 5 of the Limitation Act. The arbitration and Conciliation Bill, 1995 which preceded the 1996 Act stated as one of its main objectives the need “to minimize the supervisory role of courts in the arbitral process”. This objective has found expression in Section 5 of the Act which prescribes the extent of judicial intervention in no uncertain terms: “5. Extent of judicial intervention. –Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.” 16. Furthermore, Section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award “in accordance with” sub-section (2) and sub-section (3). Sub-section (2) relates to grounds for setting aside an award and is not relevant for our purposes. But an application filed beyond the period mentioned in Section 34, sub-section (3) would not be an application “in accordance with” that sub-section. Consequently by virtue of Section 34(1), recourse to the court against an arbitral award cannot be made beyond the period prescribed. But an application filed beyond the period mentioned in Section 34, sub-section (3) would not be an application “in accordance with” that sub-section. Consequently by virtue of Section 34(1), recourse to the court against an arbitral award cannot be made beyond the period prescribed. The importance of the period fixed under Section 34 is emphasised by the provisions of Section 36 which provide that “where the time for making an application to set aside the arbitral award under Section 34 has expired…..the award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a decree of the court” This is a significant departure from the provisions of the Arbitration Act, 1940. Under the 1940 Act, after the time to set aside the award expired, the court was required to “proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow” (Section 17). Now the consequence of the time expiring under Section 34 of the 1996 Act is that the award becomes immediately enforceable without any further act of the court. If there were any residual doubt on the interpretation of the language used in Section 34, the scheme of the 1996 Act would resolve the issue in favour of curtailment of the court’s powers by the exclusion of the operation of Section 5 of the Limitation Act”. 4) Learned counsel for the appellants conceded to the legal position that Section 5 of the Limitation Act has no application in filing objections against the arbitral award under Section 34 of the Act. 5) The contention of learned counsel for the appellants is that the appellants did not receive the arbitral award and it was the duty of the Arbitrator to have delivered a copy of the award to each party. Sub-section (5) of Section 31 of the Arbitration and Conciliation Act, 1996 says that after the arbitral award is made, a signed copy shall be delivered to each party. Sub-section (5) of Section 31 of the Arbitration and Conciliation Act, 1996 says that after the arbitral award is made, a signed copy shall be delivered to each party. Further, sub-section (3) of Section 34 of the Act says that 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 thirty days, but not thereafter. 6) The matter is, therefore, remitted back to the learned District Judge, Haridwar to consider the applications of the appellants from the aforesaid point of view, in as much as, it is the specific contention of learned counsel for the appellants that no copy of the arbitral award was delivered to them. Learned District Judge, Haridwar is requested to dispose of the objections of the appellants in the light of sub-section (5) of Section 31 and sub-section (3) of Section 34 of the Act. 7) All the appeals are, accordingly, disposed of at the admission stage itself.