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2018 DIGILAW 9 (JK)

State Of J&K v. Hussain Brothers

2018-01-23

M.K.HANJURA

body2018
JUDGMENT : M.K. Hanjura, J. The State of J&K, through Commissioner Secretary to Government, Health and Medical Education Department, Srinagar, has filed an application seeking the indulgence of this Court in condoning the delay of 234 days in filing the Arbitration Application, inter alia, on the grounds that the Award dated 15-09-2015, passed by the Arbitrator, was filed before the High Court and vide order dated 28-09-2015 of this Court, the parties were given a liberty to take recourse to the appropriate remedial measures, if they so choose. 2. It is further contended that immediately after observing that the Award has been passed, steps to implement the same were taken. However, on the perusal of the record and the examination of the Award, the authorities thought it expedient to file an application u/s 34 of the Jammu and Kashmir State Arbitration and Conciliation Act, 1987. This process consumed some time, which, was beyond the control of the applicant State. The delay caused is neither intentional nor deliberate and the State did not show any laxity in pursuing the matter. The applicant - State has proceeded to state that since the impugned Award is patently illegal and contrary to the facts, therefore, the State has a strong case on merits and it is sure to succeed in it. In the end it has been prayed that the ends of justice demand that the delay, caused in filing the Arbitration Application, be condoned by allowing the application for the condonation of delay. 3. The respondent non applicant has filed the objections in opposition to the application for condonation of delay, wherein he has urged that the parties were given liberty by the Hon'ble High Court to take recourse to the remedial measures vide order dated 28-09-2015. It is further stated that the copy of the Award dated 15-09-2015 was received by the applicant - State when the same was filed before the Hon'ble High Court by the Arbitrator. It is further contended that the applicant State has asserted that it took steps to implement the Award. However, during the examination of the record, the State deemed it appropriate to question the validity of the Award in terms of section 34 of the Arbitration and Conciliation Act. It is further contended that the applicant State has asserted that it took steps to implement the Award. However, during the examination of the record, the State deemed it appropriate to question the validity of the Award in terms of section 34 of the Arbitration and Conciliation Act. Section 34 of the Act provides that an aggrieved party can challenge the validity of the Award within a period three months with a grace period of one month and there is no scope for extension of time beyond the period of four months. The respondent non applicant has proceeded to state that in terms of the statutory provision, the Award has to be challenged within the period of three months, which period ended on 27-12-2015. It is averred that even if this period is stretched further by a month, still the application had to be filed on or before 27-01-2016. The application for the condonation of delay in filing the Arbitration Application has been filed in the month of July, 2016. It does not deserve any consideration and is liable to be rejected. There is no provision in the Arbitration and Conciliation Act, as would permit the Court to condone the delay or extend the period for filing such an application beyond four months and as a sequel thereto, the application deserves to be dismissed. 4. Heard and considered. 5. Sub section (3) of Section 34 of J&K Arbitration and Conciliation Act, 1997 (for short Act of 1997), assumes significance in the context of the decision of this petition and it is reproduced hereinbelow, word for word and letter for letter : “(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 thirty days, but not thereafter. “6. “6. Sub section (3) of Section 34 of the Act of 1997, cited above provides that the period prescribed for filing an application for setting aside the arbitral award is three months and this period shall run from the date on which the party filing the arbitration received the arbitral award subject to the rider that in case a request u/s 33 of the Act of 1997 is made to the Arbitrator, the said period of three months would, in that eventuality, run from the date on which that request is disposed of by the arbitral tribunal. It also provides that on the expiry of the period of three months, the Court has the power to entertain an application within a period of 30 days but not thereafter, if it is satisfied that the applicant was prevented by a sufficient cause from making the application within the said period of three months. 7. Reverting back to the facts of the instant case, the parties were given liberty by this Court to take recourse to remedial measures vide order dated 28-09-2015. On the analogy of sub section 3 of the Act of 1997 supra, the award had to be challenged within a period of three months from 28-09-2015. This period ended on 27-12-2015. The applicant State could also challenge the award within a period of one month from the date of the expiry of the period of three months on showing and establishing a sufficient cause. 8. The applicant State filed the application in the month of July, 2016. It is which is recklessly barred. The award had to be challenged within a period of three months, which could be extended to a further period of one month but could not be challenged thereafter on the phraseology of sub section (3) of section 34 of the Act of 1997. This position is no longer res-Integra. The apex Court of the country, in the case of Union of India versus Popular Construction Company, 2001 8 SCC 470 held as under : “12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are “but not thereafter” used in the proviso to sub-section (3). This position is no longer res-Integra. The apex Court of the country, in the case of Union of India versus Popular Construction Company, 2001 8 SCC 470 held as under : “12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are “but not thereafter” used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29 (2) of the Limitation Act, and would thereafter bar the application of Section 5 of that Act. Parliament did not need to go further. 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” wholly otiose. No principle of interpretation would justify such a result. 13. Apart from the language, “express exclusion” may follow from the scheme and object of the special or local law: “Even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent the nature of those provisions or the nature of the subjectmatter and scheme of the special law exclude their operation. “ 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. “ 15. The “Part” referred to in Section 5 is Part 1 of the 1996 Act which deals with domestic arbitrations. Section 34 is contained in Part I and is therefore subject to the sweep of the prohibition contained in Section 5 of the 1996 Act. “ 9. “ 15. The “Part” referred to in Section 5 is Part 1 of the 1996 Act which deals with domestic arbitrations. Section 34 is contained in Part I and is therefore subject to the sweep of the prohibition contained in Section 5 of the 1996 Act. “ 9. The same view has been repeated and reiterated by the Supreme Court of India in case titled State of Goa versus Western Builders, 2006 6 SCC 239 , wherein the following has been held : “The general proposition is that by virtue of Section 43 of the Act of 1996 the Limitation Act, 1963 applies to the Act of 1996 but by virtue of Section 29 (2) of the Limitation Act if any other period has been prescribed under the special enactment then that period of limitation will govern he proceedings under that enactment, and not the provisions of the Limitation Act. In the present case under the Act of 1996 the period of limitation for setting aside the award on any of the grounds mentioned in Section 34 (2) has been prescribed and that will govern. Likewise, the period of Condonation of delay . i. e. 30 days in the proviso to Section 34(2) will govern. Therefore, by virtue of Section 29(2) of the Limitation Act what is excluded in respect of an application for setting aside an award under Section 34 of the Act of 1996 is the applicability of Section 5 and Section 3 read with the Schedule to the Limitation Act, 1963. Therefore the application for condonation of delay up to a period of 30 days can be made before the court in respect of an application under Section 34 and not beyond that . . . “ 10. Looking at the instant case from the perspective of the law laid down above, section 29 (2) of the Limitation Act, provides that if any other period has been prescribed under the Special enactment, then that period of limitation will govern the proceedings under that enactment, and not the provisions of the Limitation Act. The phrase “but not thereafter” as it exists in section 34 of the Act of 1997, has to be understood to mean an express exclusion within the definition of section 29 (2) of the Limitation Act, as a corollary to which, section (5) of that Act will have no application to the petition on hand. The phrase “but not thereafter” as it exists in section 34 of the Act of 1997, has to be understood to mean an express exclusion within the definition of section 29 (2) of the Limitation Act, as a corollary to which, section (5) of that Act will have no application to the petition on hand. The period of limitation for setting aside the arbitral award on any of the grounds detailed in sub section (2) of section 34 of the Act of 1997, as prescribed under section 34 (3) of the Act of 1997 will hold the ground and the period of 30 days mentioned in the proviso added to section 34(3) of the Act of 1997, will govern under the enactment. 11. Since the applicant has not filed the application within the period prescribed u/s 34 (3) of the J&K Arbitration and Conciliation Act, 1997, therefore, the same cannot be maintained. It entails dismissal, and is, accordingly, dismissed along with all connected applications.