Punjab State Power Corporation Ltd. v. Gulati Metals
2021-11-18
TASHI RABSTAN
body2021
DigiLaw.ai
JUDGMENT : CM(7533/2021) 1. Petitioners-applicants have knocked the doors of this Court, after suffering an award dated 02.03.2020 fastening it with a liability of Rs. 6,04,97,579/- on account of interest on delayed payment by the Micro and Small Enterprises Facilitation Council, (MSEFC, for short) under Section 15 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter for brevity referred to as MSMED Act) with the petition (Arb. P. No. 51/2021) challenging the same on the grounds that the statutory conciliation proceedings were continuing, but, MSEFC, Jammu without adhering to the provisions, procedures and mandate of MSMED Act as also that of Arbitration & Conciliation Act, 1996 (for short A&C Act) and passed the award dated 02.03.2020 at the back of as well as without hearing the applicants, which is against public policy and also natural justice as the same came to be passed during the times when COVID-19 cases in the entire country were seeing a dangerous uncontrolled upsurge resulting in unprecedented death rate. To ensure that the said petition filed by the applicants under Section 34 of the A&C Act does not fail on account of the applicability of law of limitation, the applicants filed an application (CM No. 7533/2021) seeking condonation of delay in instituting the same on the footing that the limitation for all proceedings under General or Special laws, whether condonable or not, has initially been extended with effect from 15 of March 2020 by the Hon'ble Supreme Court vide its order dated 23.03.2020 and finally vide its order dated 23.09.2021 whereby the period to be excluded from limitation has been specified to be w.e.f. 15.03.2020 to 03.10.2021 besides additional 90 days period of limitation for all the persons by virtue of said order. 2.
2. Since, the non-applicant/respondent, namely, M/s Gulati Metals & Alloys was on caveat, so on issuance of notice the non-applicant/respondent entered appearance and filed objections resisting the petition challenging the award dated 02.03.2020 as also the application for condonation of delay on the grounds inter-alia that the petition filed under Section 34 of Arbitration and Conciliation Act is misconceived as the same had to be initiated in accordance with SRO 251 of 2017, Jammu and Kashmir Micro and Small Enterprises Facilitation Council Rules, 2017 and not under Arbitration and Conciliation Act; that the impact on the working of the petitioner's office due to onslaught of Covid-19 pandemic was only for a brief period, i.e. from March, 2020 to 6th May, 2020 and that the Petitioners-applicants admit to have reopened the offices w.e.f. 07.05.2020 as per communication of Dy. Chief Engineer/Personnel, PSPCL, Patiala dated 04.05.2020 bearing memo No. 1970/2019. With regard to the order passed by Hon'ble Supreme Court in suo moto proceedings in SMW(C) No. 3/2020, it has been urged by the respondent that the petitioners-applicants cannot bank upon the said order of the Supreme Court and claim extension of limitation period after admitting that its offices started functioning w.e.f. 07.05.2020. Moreover, restrictions imposed on movement in the State of Punjab w.e.f. March, 2020 due to lockdowns were relaxed subsequent to 01.05.2020 permitting the Government offices to work. Further it has been contended that the Government in the order dated 23.03.2020 amended its guidelines allowing activities even in the containment zones. Besides that, the Government offices throughout the State of Punjab, including that of the petitioners-applicants were functioning and performing all essential duties w.e.f. 07.05.2020 and the same was the position, particularly in the court proceedings in the Courts of UT of Jammu and Kashmir and Ladakh at Jammu. The Petitioners-applicants participated in the execution proceedings w.e.f. July, 2020 but applied for sanction for contesting the proceedings only after passing of order of personal appearance of the Managing Director by the executing court and thereafter sanction was granted on 14.09.2020. Thus, the applicants cannot be given benefit of the judgment passed by the Hon'ble Supreme Court.
The Petitioners-applicants participated in the execution proceedings w.e.f. July, 2020 but applied for sanction for contesting the proceedings only after passing of order of personal appearance of the Managing Director by the executing court and thereafter sanction was granted on 14.09.2020. Thus, the applicants cannot be given benefit of the judgment passed by the Hon'ble Supreme Court. Otherwise also, the normalcy, after the Covid-19 pandemic vis-a-vis legal proceedings and the resumption of the work, has now been long in force, so the Petitioners-applicants at this belated stage, cannot file an application seeking condonation of delay on the ground of exemption ordered by the Hon'ble Supreme Court as the delay of 477 days in filing the instant application is deliberate, unexplained and contradicts the record of the applicants, as such, the application is required to be dismissed. 3. Heard the Ld. Counsel for the parties and considered the written submissions made by them. 4. The moot question, that arise for the consideration of this Court, is whether there is any delay in filing the petition challenging the award dated 02.03.2020 and if so, whether this Court can condone the said delay. 5. Mr. Sharma, Ld. Senior Counsel appearing for the Petitioners-applicants has laid stress upon the order dated 23.09.2021 passed by the Hon'ble Supreme Court to urge that in the present case the limitation of three months to set aside the award under Section 34 (3) of Arbitration and Conciliation Act would start from 12.03.2020, i.e., the date on which intimation of the award was received by the applicant, and in normal circumstances the aforesaid period would have expired on 12.06.2020 but under proviso to Section 34 (3) further 30 days period can be extended. It is further submitted that since the lockdowns and restrictions were imposed in view of COVID-19 pandemic impacting working in the courts so in view of the orders passed by Hon'ble Supreme Court from time to time, the delay in filing the petition challenging the award has to be condoned. 6. On the other hand, Mr. Johal, Ld. Senior counsel arguing for the non-applicant/respondent submitted that this court has no power to condone the delay caused in filing the petition challenging the award, in view of judgments of Delhi High Court in New India Assurance Co.
6. On the other hand, Mr. Johal, Ld. Senior counsel arguing for the non-applicant/respondent submitted that this court has no power to condone the delay caused in filing the petition challenging the award, in view of judgments of Delhi High Court in New India Assurance Co. Ltd. V. Rudraksh Laminates Private Ltd. reported as 2021 (2) ArbiLR 628 and Supreme Court in Sagufa Ahmad and Others V. Upper Assam Plywood Products Pvt. Ltd. and others reported as (2021) 2 SCC 317 . 7. Considering rival contentions of both the sides and to decide the controversy involved in the present application reference to the orders passed by Hon'ble Supreme Court from time to time in Suo Moto Writ Petition (Civil) No. 3/2020 titled In Re: Cognizance for Extension of Limitation, becomes inevitable. 8. The Apex Court Vide order dated 23/03/2020 passed directions as under; "This Court has taken Suo Motu cognizance of the situation arising out of the challenge faced by the country and the court of Covid-19 Virus and resultant difficulties that may be faced by the litigants across the country in filing the petitions/applications/suits/appeals/of the proceedings within the limitation prescribed under the general law of limitation or under special laws (both Central and/or State) To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country including this court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general or Special laws whether condonable or not shall stand extended w.e.f. 15th March 2020 further order/s to be passed by this court in the present proceedings. We are exercising this power under Article 142 read with Article 141 of the Constitution of India and declare that this order is a binding order within the meaning of Article 141 and all Courts/Tribunals and authorities. This offer may be brought to the notice of all High Courts for being communicated to all subordinate Courts/Tribunals within their respective jurisdiction. Issue notice to all the Registrars General of the High Courts, returnable in four weeks." 9.
This offer may be brought to the notice of all High Courts for being communicated to all subordinate Courts/Tribunals within their respective jurisdiction. Issue notice to all the Registrars General of the High Courts, returnable in four weeks." 9. Again the Hon'ble Supreme Court on June 6, 2020 being approached through IA No. 48411/2020 passed the following order; "In view of this Court's earlier order dated 23.03.2020 passed in Suo Motu Writ Petition (Civil) No. 3/2020 and taking into consideration the effect of the Corona Virus (COVID 19) and resultant difficulties being faced by the lawyers and the litigants and with a view to obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country including this court, it is hereby ordered that all periods of limitation prescribed under the Arbitration and Conciliation Act, 1996 and under section 138 of the Negotiable Instruments Act 1881 shall be extended w.e.f. 15.03.2020 further orders to be passed by this Court in the present proceedings. In case the limitation has expired after 15.03.2020 that the period from 15.03.2020 the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown." 10. Disposing of the Writ Petition on March 8, 2021, the Apex Court made the following order; "1. Due to the onset of COVID-19 pandemic, this Court took suo motu cognizance of the situation arising from difficulties that might be faced by the litigants across the country in filing petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central or State). By an order dated 23.03.2020 this Court extended the period of limitation prescribed under the general law or special laws whether compoundable or not with effect from 15.03.2020 till further orders. The order dated 23.03.2020 was extended from time to time. Though, we have not seen the end of the pandemic, there is considerable improvement. The lockdown has been lifted and the country is returning to normalcy. Almost all the Courts and Tribunals are functioning either physically or by virtual mode.
The order dated 23.03.2020 was extended from time to time. Though, we have not seen the end of the pandemic, there is considerable improvement. The lockdown has been lifted and the country is returning to normalcy. Almost all the Courts and Tribunals are functioning either physically or by virtual mode. We are of the opinion that the order dated 23.03.2020 has served its purpose and in view of the changing scenario relating to the pandemic, the extension of limitation should come to an end. 2. We have considered the suggestions of the learned Attorney General for India regarding the future course of action. We deem it appropriate to issue the following directions:- 1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021. 2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply. 3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings. 4. The Government of India shall amend the guidelines for containment zones, to state. "Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements." 3. The Suo Motu Writ Petition is disposed of accordingly." 11.
4. The Government of India shall amend the guidelines for containment zones, to state. "Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements." 3. The Suo Motu Writ Petition is disposed of accordingly." 11. The Supreme Court thereafter, dealing with a Miscellaneous Application No. 665/2021 in SMW (C) No. 3/2020 passed the order on April 27, 2021 restoring its order dated March 23, 2020 and directed that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders. The relevant portion is extracted hereunder; "We also take judicial notice of the fact that the steep rise in COVID-19 Virus cases is not limited to Delhi alone but it has engulfed the entire nation. The extraordinary situation caused by the sudden and second outburst of COVID-19 Virus, thus, requires extraordinary measures to minimize the hardship of litigant-public in all the states. We, therefore, restore the order dated 23rd March, 2020 and in continuation of the 5 order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders. It is further clarified that the period from 14th March, 2021 till further orders shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings." 12. Dealing with another Miscellaneous Application No. 665 of 2021 in SMW (C) No. 3 of 2020 the Hon'ble Supreme Court finally by its order dated September 23, 2021 laid down in paras 6 & 8 as under; "6. The order dated 23.03.2020 was passed in view of the extraordinary health crisis. On 08.03.2021, the order dated 23.03.2020 was brought to an end, permitting the relaxation of period of limitation between 15.03.2020 and 14.03.2021.
The order dated 23.03.2020 was passed in view of the extraordinary health crisis. On 08.03.2021, the order dated 23.03.2020 was brought to an end, permitting the relaxation of period of limitation between 15.03.2020 and 14.03.2021. While doing so, it was made clear that the period of limitation would start from 15.03.2021. As the said order dated 08.03.2021 was only a one-time measure, in view of the pandemic, we are not inclined to modify the conditions contained in the order dated 08.03.2021. 8. Therefore, we dispose of the M.A. No. 665 of 2021 with the following directions:- I. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10. 2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021. II. In cases where the limitation would have expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03.10.2021. In the event the actual balance period of limitation remaining, with effect from 03.10.2021, is greater than 90 days, that longer period shall apply. III. The period from 15.03.2020 till 02.10.2021 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of 5 proceedings. IV. The Government of India shall amend the guidelines for containment zones, to state. "Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements." 13.
IV. The Government of India shall amend the guidelines for containment zones, to state. "Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements." 13. Normal rule of law of limitation is that once the limitation starts it would not stop, but, a conjoint reading of all the orders, passed by the Hon'ble Supreme Court from time to time while dealing with the limitation period during COVID-19 pandemic would leave no manner of doubt in concluding that an exception has been carved out and the prescribed period of limitation has been extended by excluding the period w.e.f. 15.03.2020 to 03.10.2020 while calculating the limitation. In other words, Hon'ble Supreme Court vide its order dated 23.09.2021 has excluded the period from 15.03.2020 to 03.10.2021 for the purpose of calculation of limitation period in any proceeding of whatsoever nature. The import of aforesaid orders of the Apex Court is so wide that no cause is required to be pleaded by the applicant/appellant/petitioner/plaintiff etc. in any proceeding lodged or to be lodged by it. 14. In the instant case the parties admit that the limitation has to be reckoned from 12.03.2020, i.e., the date when the Petitioners-applicants gained knowledge of the award and on going by the orders of the Hon'ble Supreme Court, particularly order dated 23.09.2021, the limitation to challenge the award dated 02.03.2020 still continues and did not end even till date. Thus, there was no need for the Petitioners-applicants to file application for condonation of delay because we have to exclude the period from 15.03.2020 to 03.10.2021 while calculating the limitation. The application filed by the Petitioners-applicants to set aside the award dated 02.03.2021 is within the prescribed limitation and there is no delay in filing the same. The question to condone the delay, if any, would arise only if there is delay in filing the application challenging the award and not otherwise. 15.
The application filed by the Petitioners-applicants to set aside the award dated 02.03.2021 is within the prescribed limitation and there is no delay in filing the same. The question to condone the delay, if any, would arise only if there is delay in filing the application challenging the award and not otherwise. 15. The judgment of the Hon'ble Supreme Court in 2021(2) SCC 317 referred to by the learned counsel for the respondent is not applicable to the facts of the present case for the reasons that in that case what was sought to be condoned was the period of condonation prescribed under proviso to Section 421(3) of the Companies Act 2013 and not the period of limitation which is sought in the case in hand. Likewise other judgments referred to by learned counsel for the respondent of Delhi High Court would also not apply to the facts of the present case as in that cases period of limitation had already expired prior to the passing of the orders by the Supreme Court extending/excluding limitation period. The present petition filed by petitioners-applicants in September, 2021, i.e., on 22.09.2021 is, thus, squarely covered by the extension of period of limitation/exclusion of period of limitation, as directed by the Hon'ble Supreme Court by its final order dated 23.09.2021. 16. Viewed thus, for what has been discussed above, this application being CM (7533/2021) deserves to be allowed which is, accordingly, allowed. Consequently, the delay of 477 days in filing the Arbitration Petition is condoned. Application No. CM (7533/2021) disposed of. 17. Arb. P. No. 51/2021, which is within the prescribed limitation period be listed for consideration on 06.12.2021.